AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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DMG MERGER SUB, INC | DUNCAN MEDIA GROUP, INC | MORLEX, INC

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Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 2/11/2008
Law Firm: Nixon Peabody

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

among

MORLEX, INC.

DMG MERGER SUB, INC.

AND

DUNCAN MEDIA GROUP, INC.

February 7, 2008

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS		1

ARTICLE II GENERAL; CLOSING; CLOSING DELIVERABLES		1

2.1	THE MERGER	1
2.2	EFFECTIVE TIME OF THE MERGER	1
2.3	EFFECT OF THE MERGER	1
2.4	CHARTER; BY-LAWS; OFFICERS AND DIRECTORS OF SURVIVING CORPORATION	2
2.5	CLOSING	2

ARTICLE III CONVERSION OF SECURITIES		2

3.1	EFFECT ON THE STOCK OF THE CONSTITUENT CORPORATIONS	2
3.2	FRACTIONAL SHARES	4
3.3	EXCHANGE OF SHARES AND CERTIFICATES	4
3.4	RESALE RESTRICTIONS	5

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		6

4.1	ORGANIZATION AND GOOD STANDING	6
4.2	CAPITALIZATION	7
4.3	CORPORATE AUTHORITY	7
4.4	GOVERNMENTAL FILINGS AND CONSENTS	8
4.5	NO VIOLATIONS	8
4.6	FINANCIAL STATEMENTS	9
4.7	ABSENCE OF CERTAIN CHANGES AND EVENTS	10
4.8	ACTIONS; ORDERS	11
4.9	TAXES	12
4.10	EMPLOYEE BENEFITS	14
4.11	LABOR MATTERS	14
4.12	COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS; ETC.	14
4.13	LEASED REAL PROPERTY; PERSONAL PROPERTY	15
4.14	CONTRACTS; NO DEFAULT	16
4.15	INSURANCE	17
4.16	ENVIRONMENTAL MATTERS	18
4.17	BROKERS AND FINDERS	19
4.18	NO UNDISCLOSED LIABILITIES	19
4.19	INTELLECTUAL PROPERTY.	19
4.20	BANK ACCOUNTS	23
4.21	INTERCOMPANY ACCOUNTS	23
4.22	PARENT SHAREHOLDERS	23
4.23	DISCLOSURE	23


ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		23

5.1	ORGANIZATION AND QUALIFICATION	23
5.2	CAPITALIZATION	24
5.3	ISSUANCE OF THE SHARES	25
5.4	AUTHORITY RELATIVE TO THIS AGREEMENT.	25
5.5	NO CONFLICTS, REQUIRED FILINGS AND CONSENTS	25
5.6	SEC REPORTS	25
5.7	SCOPE OF OPERATIONS; COMPLIANCE WITH LAWS	26
5.8	LIABILITIES AND CONTRACTS	26
5.9	LITIGATION	26
5.10	BROKERS	27
5.11	BUSINESS OF MERGER SUB	27
5.12	ASSETS	27
5.13	RESTRICTIONS ON BUSINESS ACTIVITY OF PARENT	27
5.14	ABSENCE OF CERTAIN CHANGES AND EVENTS.	27

ARTICLE VI COVENANTS		27

6.1	CONDUCT OF BUSINESS	27
6.2	ACCESS	28
6.3	REQUIRED APPROVALS	28
6.4	REASONABLE BEST EFFORTS	28
6.5	PUBLICITY	29
6.6	CONFIDENTIALITY	29
6.7	FURTHER ASSURANCES	29
6.8	NOTIFICATIONS	29
6.9	EXPENSES	30
6.10	SEC FILINGS	30
6.11	STOCKHOLDER APPROVAL	30
6.12	TAX TREATMENT	30
6.13	FINANCIAL STATEMENTS	31
6.14	ACCOUNTING CERTIFICATES	31
6.15	EXTINGUISHMENT OF LIABILITIES	31
6.16	FINANCING	31
6.17	STOCK PURCHASE AGREEMENT	31

ARTICLE VII CONDITIONS TO CLOSE		32

7.1	CONDITIONS TO EACH PARTY’S OBLIGATION TO EFFECT THE MERGER	32
7.2	CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB	32
7.3	CONDITIONS TO THE OBLIGATIONS OF THE COMPANY	32

ARTICLE VIII SURVIVAL		34

8.1	SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS	34

ARTICLE IX TERMINATION, AMENDMENT AND WAIVER		34

9.1	TERMINATION	34
9.2	EFFECT OF TERMINATION	34
9.3	FEES AND EXPENSES	35


ARTICLE X MISCELLANEOUS PROVISIONS		35

10.1	ASSIGNMENTS; SUCCESSORS: NO THIRD PARTY RIGHTS	35
10.2	ENTIRE AGREEMENT	35
10.3	AMENDMENT OR MODIFICATION	35
10.4	NOTICES	35
10.5	GOVERNING LAW	38
10.6	CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	38
10.7	SEVERABILITY	39
10.8	WAIVER OF CONDITIONS	39
10.9	DESCRIPTIVE HEADINGS; CONSTRUCTION	39
10.10	COUNTERPARTS	40
10.11	TIME IS OF THE ESSENCE	40

ANNEXES, SCHEDULES AND EXHIBITS

Annexes

Annex I	Definitions


Schedules

Schedule 4.1	Organization
Schedule 4.2	Capitalization
Schedule 4.4	Consents
Schedule 4.5	Noncontravention
Schedule 4.6	Financials
Schedule 4.7	Absence of Changes or Events
Schedule 4.8	Actions; Orders
Schedule 4.9	Tax Matters
Schedule 4.10	Employee Benefits
Schedule 4.11	Labor Matters
Schedule 4.12	Compliance with Laws
Schedule 4.13	Leased Property
Schedule 4.14	Contracts
Schedule 4.15	Insurance
Schedule 4.16	Environmental Matters
Schedule 4.18	No Undisclosed Liabilities
Schedule 4.19	Intellectual Property
Schedule 4.20	Bank Accounts
Schedule 4.21	Intercompany Accounts

Schedule I	List of Executive Officers or Employees with Knowledge


Exhibits
Exhibit A	Certificate of Merger
Exhibit B-1	Form of Officer’s Certificate of the Company
Exhibit B-2	Form of Officer’s Certificate of Parent and Merger Sub
Exhibit C	Form of Legal Opinion of Counsel to Parent and Merger Sub

AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of February 7, 2008, by and among MORLEX, INC. , a Colorado corporation (“ Parent ”), DMG MERGER SUB, INC. , a Delaware corporation (“ Merger Sub ”) and DUNCAN MEDIA GROUP, INC. , a Delaware corporation (the “ Company ”).

WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company have approved the merger of the Merger Sub with and into the Company, with the Company being the surviving corporation as a wholly-owned subsidiary of Parent (the “ Merger ”), all upon the terms and subject to the conditions set forth herein; and

WHEREAS, it is intended that, for federal income tax purposes, the Merger is one of a series of integrated transactions qualifying under the provisions of Section 351 of the Code (as defined in Section 4.8(a) );

NOW, THEREFORE, in consideration of the premises and the mutual benefits to be derived from this Agreement and the representations, warranties, covenants, agreements and conditions contained herein, the parties hereto hereby agree as set forth below.

ARTICLE I

DEFINITIONS

Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to such terms in Annex I hereto.

ARTICLE II

GENERAL; CLOSING; CLOSING DELIVERABLES

2.1 The Merger .

In accordance with, and subject to, the terms and conditions of this Agreement, the Certificate of Merger, a form of which is attached hereto as Exhibit A (the “ Certificate of Merger ”), and the DGCL (as defined in Section 2.5 below), at the Effective Time (as defined in Section 2.2 below) the Merger Sub shall be merged with and into the Company, which, at and after the Effective Time, shall be and is hereinafter sometimes referred to as the “ Surviving Corporation .” The name of the Surviving Corporation shall be Duncan Media Group, Inc. The Company and Merger Sub are hereinafter sometimes collectively referred to as the “ Constituent Corporations .”

2.2 Effective Time of the Merger .

The Merger shall become effective upon the filing by the Company of the Certificate of Merger with the Secretary of State of the State of Delaware and the acceptance thereof by such Secretary of State and by making all other filings or recordings required under the DGCL. The Certificate of Merger shall be executed and delivered in the manner provided under the DGCL. The time when the Merger shall become effective is referred to in this Agreement as the “ Effective Time .”

2.3 Effect of the Merger .

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Except as specifically set forth in this Agreement or in the Certificate of Merger, at the Effective Time, the separate existence and corporate organization of the Merger Sub shall cease, the Merger Sub shall be merged with and into the Surviving Corporation and the Merger shall have the effects provided in the DGCL. Without limiting the generality of the foregoing, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Merger Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.

2.4 Charter; By-Laws; Officers and Directors of Surviving Corporation .

From and after the Effective Time, (a) the certificate of incorporation of the Company shall be the certificate of incorporation of the Surviving Corporation until altered, amended or repealed as provided in the DGCL; (b) the bylaws of the Company shall be the bylaws of the Surviving Corporation, unless and until altered, amended or repealed as provided in the DGCL, the Surviving Corporation’s certificate of incorporation or such bylaws; and (c) the officers and directors of the Company shall become the officers and directors, respectively, of the Surviving Corporation, unless and until removed or until their respective terms of office shall have expired in accordance with the DGCL or the Surviving Corporation’s certificate of incorporation or bylaws, as applicable.

2.5 Closing .

The closing of the Transactions (the “ Closing ”) will take place as promptly as practicable (and in any event within two business days) after satisfaction or waiver of the conditions set forth in Article VII (other than conditions that require the delivery of documents, which may be satisfied at the Closing), but no later than February 28, 2008. The Closing shall be held at such time and place as agreed to in writing by the parties hereto. The date on which the Closing occurs is referred to herein as the “ Closing Date ”. At the Closing, each of Parent and the Company shall deliver the agreements, certificates and other documents required to be delivered and which have not been delivered prior to the Closing. At the end of the Closing, the Company shall file with the Secretary of State of the State of Delaware the Certificate of Merger with respect to the Merger pursuant to and in compliance with this Agreement and the General Corporation Law of the State of Delaware (the “ DGCL ”).

ARTICLE III

CONVERSION OF SECURITIES

3.1 Effect on the Stock of the Constituent Corporations . As of the Effective Time, by virtue of the Merger and without any action on the part of the holders of any shares of stock of the Constituent Corporations:

(a) Conversion of Merger Sub Stock . Each share of common stock of Merger Sub, par value $.001 per share, issued and outstanding immediately prior to the Effective Time shall be converted into and become one fully paid and nonassessable share of common stock, par value $.001 per share, of the Surviving Corporation.

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(b) Cancellation of Treasury Shares or Shares held by Parent or Merger Sub . Each share of capital stock of the Company that is held in the treasury of the Company or issued and owned by Parent or Merger Sub immediately prior to the Effective Time shall automatically be cancelled and retired without any conversion thereof and shall cease to exist, and no consideration shall be delivered in exchange therefor.

(c) Cancellation of Stock Option Plans and Agreements . Any and all stock option plans or agreements of the Company that are set forth in Schedule 4.10 of the Disclosure Schedule, and any stock option grants made in connection therewith, to the extent that they remain unvested as of the Effective Time, shall automatically be terminated and shall cease to exist, and no issuances or payments shall be required thereunder, other than with respect to those shares already committed to be issued pursuant to options to acquire shares of Company Common Stock outstanding and vested at the Effective Time under any such Company stock option plans (individually, a " Company Stock Option " and collectively, the " Company Stock Options "). The Company shall cause the holders of all vested options to acquire shares of Company Common Stock under all Company Stock Options to exercise such stock options immediately prior to the Effective Time.

(d) Conversion of Company Common Stock . Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time, other than shares to be cancelled in accordance with Section 3.1(b) , and subject to Section 3.1(g) , shall automatically be converted into and become the right to receive 0.5433 (the “ Exchange Ratio ”) fully paid and nonassessable shares of common stock, par value $0.001 per share, of Parent (“ Parent Common Stock ”) which, in addition to any cash in lieu of any fractional interests pursuant to Section 3.2 , shall constitute the merger consideration (the “ Merger Consideration ”). As of the Effective Time, shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate representing any such Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration upon surrender of such certificate. In no event shall interest be paid or accrued on the Merger Consideration.

(e) Company Preferred Stock . From and after the Effective Time, the Company’s Preferred Stock (as defined below) immediately prior to the Effective Time will be deemed the preferred stock of the Surviving Corporation (“ Surviving Corp. Preferred Stock ”). From and after the Effective Time, the Certificate of Designations of the Company’s Preferred Stock shall be the Certificate of Designations of the Surviving Corp. Preferred Stock until altered, amended or repealed as provided in the DGCL. As promptly as practicable following the Closing, each share of Surviving Corp. Preferred Stock issued and outstanding shall be converted into Parent Preferred Stock and/or Parent Common Stock on such terms as determined by the Board of Directors of Parent, with the consent of the holders of the Surviving Corp. Preferred Stock to the extent required.

(f) Adjustments to Exchange Ratio . The Exchange Ratio shall be adjusted to reflect fully the appropriate effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Common Stock), reorganization, recapitalization, reclassification or other like change with respect to Parent Common Stock or Company Common Stock having a record date on or after the date hereof and prior to the Effective Time.

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(g) Dissent Rights . Notwithstanding anything in this Agreement to the contrary, shares (“ Dissent Shares ”) of the Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by any person who is entitled to demand and properly demands payment of the fair value of such Dissent Shares pursuant to, and who complies in all respects with, the DGCL shall not be converted into Merger Consideration as provided in Section 3.1(d) , but rather the holders of Dissent Shares shall be entitled to payment of the fair market value of such Dissent Shares in accordance with the DGCL; provided , however , that if any such holder shall fail to perfect or otherwise shall waive, withdraw or lose the right to receive payment of fair market value under the DGCL, then the right of such holder to be paid the fair value of such holder’s Dissent Shares shall cease and such Dissent Shares shall be deemed to have been converted as of the Effective Time into, and to have become exchangeable solely for the right to receive, Merger Consideration as provided in Section 3.1(d) . Notwithstanding anything in this Agreement to the contrary, any amounts to be paid pursuant to this Section 3.1(g) other than Merger Consideration shall be paid by the Surviving Corporation and not by Parent.

3.2 Fractional Shares . No certificates representing fractional shares of Parent Common Stock shall be issued in connection with the Merger, and such fractional shares shall not entitle the owner thereof to any rights of a stockholder of Parent. In lieu of any such fractional shares, each holder of shares of Company Common Stock exchanged pursuant to Section 3.1(d) who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock (after taking into account all shares of Company Common Stock then held by such holder) shall receive cash (without interest) in an amount equal to the product of such fractional part of a share of Parent Common Stock multiplied by the average of the closing prices of the Parent Common Stock on the OTCBB as reported on the OTCBB for the 10 consecutive trading days ending on the second trading day prior to the Closing Date, or, in the event that there has been no trading of Parent Common Stock during such 10-day period, the last available closing price of the Parent Common Stock on the OTCBB.

3.3 Exchange of Shares and Certificates .

(a) Exchange Agent. At or prior to the Effective Time, Parent shall engage a nationally-recognized institution reasonably satisfactory to the Company to act as exchange agent in connection with the Merger (the “ Exchange Agent ”). At the Effective Time, Parent shall deposit with the Exchange Agent, in trust for the benefit of the holders of shares of Company Common Stock immediately prior to the Effective Time, certificates representing the shares of Parent Common Stock issuable pursuant to Section 3.1(d) . In addition, Parent shall make available by depositing with the Exchange Agent, as necessary from time to time after the Effective Time, cash in an amount sufficient to make the payments in lieu of fractional shares pursuant to Section 3.2 and any distributions to which holders of shares of Company Common Stock may be entitled pursuant to Section 3.3(d) . All cash and Parent Common Stock deposited with the Exchange Agent shall hereinafter be referred to as the “ Exchange Fund .”

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(b) At or after the Closing, each holder of a certificate representing the Company Common Stock (the “ Certificates ”) shall surrender and deliver such Certificate to the Exchange Agent together with a duly completed and executed transmittal letter. Upon such surrender and delivery, the holder shall receive the Merger Consideration. Until so surrendered and exchanged, each Certificate formerly representing an outstanding share of Company Common Stock shall, after the Effective Time, be deemed for all purposes to evidence only the right to receive the Merger Consideration.

(c) At the Effective Time, the stock transfer books of the Company shall be closed and no transfer of shares of Company Common Stock shall be recorded thereafter, other than transfers of shares of Company Common Stock that have occurred prior to the Effective Time. In the event that, after the Effective Time, Certificates are presented for transfer to the Company, Merger Sub or Parent, they shall be delivered to the Exchange Agent and exchanged for the Merger Consideration as provided for in this Section 3.3 .

(d) Any Merger Consideration that remains undistributed to the stockholders of the Company as of the Effective Time after four months have elapsed following the Effective Time shall be delivered to Parent by the Exchange Agent, upon demand, and any former stockholders of the Company who have not previously complied with this Section 3.3 shall thereafter look only to Parent for payment of their claim for the Merger Consideration or distributions with respect to Parent Common Stock.

(e) Neither the Exchange Agent, nor any of the Company, Merger Sub or Parent shall be liable to any holder of shares of Company Common Stock or Company Preferred Stock with respect to any Merger Consideration (or distributions with respect to Parent Common Stock) delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(f) In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall deliver the Merger Consideration and any distributions with respect to Parent Common Stock to which such holder is entitled in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the record holder thereof and the delivery of such bond as the Exchange Agent may reasonably require.

(g) No transfer taxes shall be payable by any stockholder of the Company in respect of the issuance of the Parent Common Stock under this Section 3.3 , except that if any Parent Common Stock is to be issued in a name other than that in which the Certificate surrendered has been registered, it shall be a condition of such issuance that the Person requesting such issuance shall pay to Parent any transfer taxes payable by reason thereof, or of any prior transfer of such surrendered Certificate, or establish to the satisfaction of Parent that such taxes have been paid or are not payable.

3.4 Resale Restrictions .

(a) The stockholders of the Company who received shares of Parent Common Stock as Merger Consideration may not offer or sell any shares of Parent Common Stock unless such offer or sale is made (i) pursuant to an effective registration of such Parent Common Stock under the Securities Act, or (ii) pursuant to an available exemption from the registration requirements of the Securities Act. Parent shall refuse to register the transfer of any Parent Common Stock not made in accordance with this Section 3.4 and for such purpose may place stop order instructions with its transfer agent with respect to the Parent Common Stock issued as Merger Consideration. A proposed transfer shall be deemed to comply with this Section 3.4 if the applicable stockholder delivers to Parent a legal opinion in form and substance satisfactory to Parent from counsel reasonably satisfactory to Parent to the effect that such transfer complies with this Section 3.4 .

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(b) During any time that a stockholder of the Company is not entitled to sell the shares of Parent Common Stock received as Merger Consideration such stockholder may not (i) offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer to dispose of, directly or indirectly, any shares of Parent Common Stock or any securities convertible into or exercisable or exchangeable for Parent Common Stock, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any Parent Common Stock (regardless of whether any of the transactions described in clause (i) or (ii) is to be settled by the delivery of Parent Common Stock or such other securities, in cash or otherwise).

(c) Each certificate representing shares of Parent Common Stock issued as Merger Consideration will bear the following legend or one substantially similar thereto:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ ACT ”), OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As used herein, (i) any reference to any event, change or effect being “ material ” with respect to the Company means an event, change or effect which is material in relation to the condition (financial or otherwise), properties, business, operations, prospects, assets or results of operations of the Company, and (ii) the term “ Material Adverse Effect ” on the Company means a material adverse effect on the condition (financial or otherwise), properties, business, operations, assets or results of operations of the Company.

The Company hereby represents and warrants to Parent and the Merger Sub, as of the date hereof and as of the Closing Date, as follows:

4.1 Organization and Good Standing .

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(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties or assets that it purports to own or use, and to perform all of its obligations under all Contracts. Subject to Schedule 4.1(a) of the Disclosure Schedule, the Company is duly qualified or licensed to do business as a foreign corporation and is in good standing as a foreign corporation in each jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such licensing, qualification or good standing, except for any failure to so license, qualify or be in such good standing, which, when taken together with all other such failures, has not had, does not have and could not reasonably be expected to have a Material Adverse Effect on the Company.

(b) The Company made available or delivered to Parent a true and complete copy of the Company’s Certificate of Incorporation and By-laws, each as amended to date (collectively, the “ Company’s Organizational Documents ”). The Company’s Organizational Documents so delivered are in full force and effect.

4.2 Capitalization .

(a) The authorized capital stock of the Company consists of 200,000,000 shares consisting of: (i) 100,000,000 shares of Common Stock, of which 10,000,000 shares of Common Stock are issued and outstanding and owned as set forth in Schedule 4.2(a) and (ii) 100,000,000 shares of 10% Series A Cumulative Preferred Stock, par value $.001 per share (the “ Preferred Stock ”), of which 4,000,000 shares of Preferred Stock are issued and outstanding and owned as set forth in Schedule 4.2(a) . All of the issued and outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable and have been issued in compliance with all applicable federal and state securities laws.

(b) Except as set forth in Schedule 4.2(c) of the Disclosure Schedule, there are no shares of capital stock or other securities of the Company (i) reserved for issuance or (ii) subject to preemptive rights or any outstanding subscriptions, options, warrants, calls, rights, convertible securities or other agreements or other instruments outstanding or in effect giving any Person the right to acquire any shares of capital stock or other securities of the Company or any commitments of any character relating to the issued or unissued capital stock or other securities of the Company. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter (“ Voting Debt ”).

4.3 Corporate Authority . The Company has the full legal right, requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform fully, its obligations under this Agreement and to allow it to consummate the transactions contemplated hereby. The execution and delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly authorized and approved by the Board of Directors of the Company and, except for shareholder approval (the “ Shareholder Approval ”), no other corporate proceeding with respect to the Company is necessary to authorize this Agreement or the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Company and constitutes valid and binding agreements of the Company, enforceable against the Company in accordance with its terms.

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4.4 Governmental Filings and Consents . Except as set forth in Schedule 4.4 of the Disclosure Schedule, no notices, reports, submissions or other filings (collectively, “ Filings ”) are required to be made by the Company with, nor are any consents, registrations, approvals, declarations, permits, expiration of any applicable waiting periods or authorizations (collectively, “ Consents ”) required to be obtained by the Company from, any foreign, federal, state, local, municipal, county or other governmental, quasi-governmental, administrative or regulatory authority, body, agency, court, tribunal, commission or other similar entity (including any branch, department or official thereof) (“ Governmental Entity ”), in connection with the execution or delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder, or the consummation by the Company of the transactions contemplated hereby.

4.5 No Violations . Except as set forth in Schedule 4.5 of the Disclosure Schedule, the execution and delivery by the Company of this Agreement, and the performance and consummation by the Company of any of the transactions contemplated hereby will not, directly or indirectly (with or without the giving of notice or the lapse of time or both):

(a) contravene, conflict with, or constitute or result in a breach or violation of, or a default under (i) any provision of the Company’s Organizational Documents; or (ii) any resolution adopted by the Board of Directors (or similar governing body) or the shareholders of the Company;

(b) contravene, conflict with, or constitute or result in a breach or violation of or a default under, or the acceleration of, or the triggering of any payment or other obligations pursuant to, any existing Benefit Plan (as defined in Section 4.10 below) or award made under any of the foregoing;

(c) contravene, conflict with, or constitute or result in a breach or violation of, or a default under, or the cancellation, modification or termination of, or the acceleration of, or the creation of a Lien on any material properties or assets owned or used by the Company pursuant to, or require the making of any Filing or the obtaining of any Consent under, any provision of any material agreement, license, lease, understanding, contract, loan, note, mortgage, indenture, promise, undertaking or other commitment or obligation (whether written or oral and express or implied) (a “ Contract ”), under which the Company is bound or is subject to any obligation or Liability or by which any of their respective assets owned or used are or may become bound (an “ Applicable Contract ”), in each case other than as set forth in Schedule 4.5(c) of the Disclosure Schedule; or

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(d) contravene, conflict with, or constitute or result in a breach or violation of any Law (as defined below), award, decision, injunction, judgment, decree, settlement, order, process, ruling, subpoena or verdict (whether temporary, preliminary or permanent) entered, issued, made or rendered by any court, administrative agency, arbitrator, Governmental Entity or other tribunal of competent jurisdiction (“ Order ”) or give any Governmental Entity or any other Person the right to challenge any of the transactions contemplated hereby or to exercise any remedy or obtain any relief under, any Law or any Order to which the Company, or any of the assets owned or used by the Company, are subject.

(e) For purposes of this Agreement, the term “ Law ” shall mean any federal, state, local, municipal, foreign, international, multinational, or other constitution, law, rule, standard, requirement, administrative ruling, order, ordinance, principle of common law, legal doctrine, code, regulation, statute, treaty or process. For purposes of this Agreement, the term “ Governmental Authorization ” shall mean any approval, franchise, certificate of authority, order, consent, judgment, decree, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Entity or pursuant to any Law.

4.6 Financial Statements .

(a) Schedule 4.6(a) of the Disclosure Schedule contains the following financial statements (collectively, the “ Financial Statements ”): (i) audited balance sheet of the Company (including the notes thereto, the “ 2006 Balance Sheet ”) at December 31, 2006 (the “ Balance Sheet Date ”), and the related audited statements of income, changes in stockholders’ equity and cash flow for the fiscal year then ended, together with the report thereon of Peterson Sullivan PLLC, independent certified public accountants, and (ii) an unaudited balance sheet of the Company at September 30, 2007 (the “ Interim Balance Sheet ”) and the related unaudited statements of income, changes in stockholders’ equity and cash flow for the nine (9) months then ended, including in each case the notes thereto.

(b) Subject to Schedule 4.6(b) of the Disclosure Schedule, the Financial Statements and notes fairly present the financial condition and the results of operations, changes in stockholders’ equity and cash flow of the Company at the respective dates of and for the periods referred to in such Financial Statements, all in accordance with United States generally accepted accounting principles (“ GAAP ”) applied on a consistent basis during the periods presented, subject, in the case of unaudited financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be material in amount or effect) and the absence of notes (that, if presented, would not differ materially from those included in the 2006 Balance Sheet). As of their respective dates, the Financial Statements did not, and any financial statements subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not materially misleading.

(c) Subject to Schedule 4.6(c) of the Disclosure Schedule, the Financial Statements were compiled from and are in accordance with the books and records of the Company. The books and records (including the books of account, minute books, stock record books and other records) of the Company, all of which have been made available to Parent, are true and complete in all material respects, have been maintained in accordance with sound business practices and accurately present and reflect in all material respects all of the transactions and actions therein described. At the Closing, all of those books and records shall be in the possession of the Company.

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4.7 Absence of Certain Changes and Events . Except as set forth in Schedule 4.7 of the Disclosure Schedule, since December 31, 2006 through and including the date of this Agreement, the Company has conducted the Business only in, and has not engaged in any transaction other than according to, the ordinary and usual course of its Business in a manner consistent with its past practice (“ Ordinary Course of Business ”), and there has not been any:

(a) change in the business, operations, properties, prospects, assets, or condition of the Company, including without limitation, change in the: (i) business organization of the Company (including all agency, brokerage and similar relationships of the Business); (ii) services provided by the officers, employees, agents or brokers of the Company; (iii) relationships and goodwill with customers, landlords, creditors, employees, agents, brokers and others having business relationships with the Company; or (iv) existing levels of insurance coverage of the Company that has had, does have or could reasonably be expected to have a Material Adverse Effect on the Company;

(b) (i) change in the authorized or issued capital stock of the Company; (ii) grant of any new or amendment of any existing stock option, warrant, or other right to purchase shares of capital stock of the Company; (iii) issuance of any security convertible into the capital stock of the Company; (iv) grant of any registration rights in respect of the capital stock of the Company; (v) reclassification, combination, split, subdivision, purchase, redemption, retirement, issuance, sale, or any other acquisition or disposition, directly or indirectly, by the Company of any shares of the capital stock of the Company; (vi) amendment of any material term of any outstanding security of the Company; or (vii) declaration, setting aside or payment of any dividend (whether in cash, securities or other property) or other distribution or payment in respect of the shares of the capital stock of the Company;

(d) (i) acquisition (including by way of merger, consolidation or acquisition of stock or assets) by the Company of any Person or any division thereof or material portion of the assets thereof; (ii) liquidation, dissolution or winding up of, or disposition of all or substantially all of the assets of, the Company; or (iii) organization of any new Company Subsidiary or joint venture by the Company;

(e) (i) increase in salary, bonus or other compensation (other than compensation increases made in the Ordinary Course of Business) of any employee, director or consultant of the Company; (ii) increase in benefits, material waivers or variations for the benefit of any such employee, director or consultant, material amendments, or payments or grants of awards that were not required, under any Benefit Plan, or adoption or execution of any new Benefit Plan (other than any such events in the Ordinary Course of Business); or (iii) establishment or adoption of, or amendment to, any collective bargaining agreement;

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(f) damage to or destruction or loss of any asset or property of the Company, whether or not covered by insurance, that has had, does have or could reasonably be expected to have a Material Adverse Effect on the Company;

(g) payment of, accrual or commitment for, capital expenditures in excess of $100,000 individually or $250,000 in the aggregate;

(h) except in each case in the Ordinary Course of Business, (i) incurrence of any Liability; (ii) making of any loans or advances; or (iii) payment, discharge or satisfaction of Liabilities reflected or reserved against in the Financial Statements or subsequently incurred in the Ordinary Course of Business;

(i) (i) cancellation or waiver of any claims or rights with a value to the Company in excess of $100,000; (ii) settlement or compromise of any Action other than such Actions in which the amount paid in settlement or compromise, including the cost to the Company of complying with any provision of such settlement or compromise other than cash payments, does not exceed $100,000; or (iii) other than in the Ordinary Course of Business, modification, amendment or termination of any material Applicable Contract;

(j) tax election made or changed, settlement of any material audit, filing of any amended Tax Returns or cancellation or termination of any insurance policy naming the Company as a beneficiary or loss-payable payee except in the Ordinary Course of Business;

(k) entrance into or amendment, renewal or extension of, any Contract of any type listed in Section 4.15 hereof; or

(l) agreement (whether written or oral and express or implied) by the Company to do any of the foregoing.

4.8 Actions; Orders .

(a) Except as set forth in Schedule 4.8(a) of the Disclosure Schedule, there are no civil, criminal, administrative, investigative or informal actions, audits, demands, suits, claims, arbitrations, hearings, litigations, disputes, investigations or other proceedings of any kind or nature (“ Actions ”) or Orders issued, pending or threatened in writing against the Company or any of its assets, at law, in equity or otherwise, in, before, by, or otherwise involving, any Governmental Entity, arbitrator or other Person that individually or in the aggregate, (i) have had, do have or could reasonably be expected to have a Material Adverse Effect on the Company or (ii) question or challenge the validity or legality of, or have the effect of prohibiting, preventing, restraining, restricting, delaying, making illegal or otherwise interfering with, this Agreement, the consummation of the transactions contemplated hereby or any action taken or proposed to be taken by the Company pursuant hereto or in connection with the transactions contemplated hereby. To the Knowledge (as defined below) of the Company, no event has occurred or circumstance exists that could reasonably be expected to give rise to or serve as a basis for the commencement of any such Action or the issuance of any such Order. For purposes of this Agreement, “ Knowledge ” means the knowledge of a particular fact or other matter, which the Company shall be deemed to have if: (a) any executive officer or other employee of the Company listed on Schedule I , is actually aware of such fact or other matter; or (b) that knowledge should have been acquired by such Person after making such due inquiry and exercising such due diligence as a prudent businessperson would have made or exercised in the management of his or her business affairs, including due inquiry of those officers, directors, key employees and professional advisers (including attorneys, accountants and consultants) of such Person who could reasonably be expected to have actual knowledge of the matters in question.

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(b) Except as set forth in Schedule 4.8(b) of the Disclosure Schedule, there is no Order to which the Company or any of the assets owned or used by the Company, is subject.

4.9 Taxes .

(a) Except as set forth in Schedule 4.9(a) of the Disclosure Schedule, (i) all Tax Returns that are or were required to be filed by or with respect to the Company have been filed on a timely basis (taking into account all extensions of due dates) in accordance with applicable Law, (ii) all Tax Returns referred to in clause (i) are true and complete in all material respects, (iii) all material Taxes due for the periods covered by such Tax Returns, including any Taxes payable pursuant to any assessment made by the Internal Revenue Service or other relevant taxing authority in respect of such periods, have been paid in full, and (iv) all estimated Taxes required to be paid in respect of the Company have been paid in full when due in accordance with applicable Law. The Company has delivered or made available to Parent true and complete copies of all Tax Returns filed by the Company since December 31, 2006, and Schedule 4.9(a) of the Disclosure Schedule contains a true and complete list of all such Tax Returns.

(b) Except as set forth in Schedule 4.9(b) of the Disclosure Schedule, (i) there is no material action, suit, proceeding, investigation, audit or claim now pending with respect to the Company in respect of any tax, nor has any material claim for additional Tax been asserted in writing by any taxing authority since December 31, 2006, (ii) since December 31, 2006, no claim has been made in writing by any taxing authority in a jurisdiction where the Company has not filed a Tax Return that it is or may be subject to tax by such jurisdiction, and (iii) the Company has not given or been requested to give a waiver or extension (or is or could be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of the Company or for which the Company is or is reasonably likely to be liable. No examinations, adjustments, assertions of deficiencies or assessments have been made by the Internal Revenue Service or the relevant state, local or foreign taxing authority with respect to any Tax Returns referred to in Section 4.9(a) hereof.

(c) Except as set forth in Schedule 4.9(c) of the Disclosure Schedule, the charges, accruals and reserves with respect to Taxes provided in the Interim Balance Sheet are adequate (determined in accordance with GAAP) to cover the aggregate liability of the Company Taxes in respect of all Pre-Closing Tax Periods for which Tax Returns have not yet been filed or for which Taxes are not yet due and payable.

(d) There is no tax sharing agreement, contract or intercompany account system in existence not reflected on the Company’s consolidated tax return or financial statements that would require any payment by the Company after the date of this Agreement. The Company has no liability for indemnification of third parties with respect to Taxes or any liability for Taxes as a transferee.

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(e) The Company has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(f) There are no Liens relating or attributable to Taxes with respect to, or in connection with, the assets of the Company other than Liens for current Taxes not yet due. There is no basis for the assertion of any claim for Taxes which, if adversely determined, would or is reasonably likely to result in the imposition of any Lien on the assets of the Company or otherwise adversely affect Parent, the Company or their use of such assets.

(g) All Taxes that the Company is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required by applicable Law, have been paid to the proper Governmental Entity or other Person.

(h) The Company has provided Parent with copies of all record retention agreements currently in effect between the Company and any taxing authority.

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

(j) The Company has not been a member of an affiliated group (within the meaning of Code § 1504(a)) filing a consolidated federal income Tax Return (other than a group the common parent of which is the Company) or (ii) except as set forth in Schedule 4.9(j) of the Disclosure Schedule, has any liability for the Taxes of any Person (other than any of the Company and its Subsidiaries) under Treasury Regulations § 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

(k) Except as set forth in Schedule 4.9(k) of the Disclosure Schedule, the Company will not be required to include in a taxable period ending after the Closing Date taxable income attributable to income that accrued in a prior taxable period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting or Section 481 of the Code or comparable provisions of state or local tax law, or for any other reason.

(l) The Company has not been a partner for tax purposes with respect to any joint venture, partnership, or other arrangement or contract which is treated as a partnership for tax purposes.

(m) The Company has not entered into any transaction identified as a “reportable transaction” or “listed transaction” for purposes of Code Section 6707A(c) or Treasury Regulations Sections 1.6011-4(b)(2) or 301.6111-2(b)(2).

(n) For purposes of this Agreement, the following terms shall have the following meanings:

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

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“ Pre-Closing Tax Period ” means any taxable year or period that ends on or before the Closing Date and, with respect to any taxable year or period beginning before and ending after the Closing Date, the portion of such taxable year or period ending on and including the Closing Date.

“ Tax Return ” means any return, report, notice, form, declaration, claim for refund, estimate, election, or information statement or other document relating to any tax, including any schedule or attachment thereto, and any amendment thereof.

4.10 Employee Benefits . (a) Except as set forth in Schedule 4.10 of the Disclosure Schedule, the Company does not maintain, contribute nor is it required to contribute to any Benefit Plan.

(a) For purposes of this Agreement, the following term shall have the following meaning:

“ Benefit Plan ” means any profit-sharing, pension, severance, thrift, savings, incentive, change of control, employment, retirement, bonus, deferred compensation, group life and health insurance and other employee benefit plan, agreement, arrangement or commitment, which is maintained, contributed to or required to be contributed to by the Company on behalf of any current or former employee, director or consultant of the Company.

4.11 Labor Matters . Except as set forth in Schedule 4.11 of the Disclosure Schedule, no material labor disturbance by the employees of the Company exists or is threatened in writing.

4.12 Compliance with Laws; Governmental Authorizations; etc .

(a) Except as set forth in Schedule 4.12(a) of the Disclosure Schedule:

(i) The Company is in compliance in all material respects with each Law (including Environmental Laws) that is or was applicable to it or to the conduct or operation of the Business or the ownership or use of any of its assets;

(ii) no event has occurred or circumstance exists that could reasonably be expected to (with or without the giving of notice or the lapse of time or both) constitute or result, directly or indirectly, in a violation by the Company of, or a failure on the part of the Company to comply in all material respects with, any Law; and

(iii) the Company has not received, at anytime, any notice or other communication (whether oral or written) from any Governmental Entity or any other Person regarding any actual, alleged, possible, or potential violation of or failure on the part of the Company to comply in all material respects with, any Law.

(b) Except as set forth in Schedule 4.12(b) of the Disclosure Schedule, the Company holds and maintains in full force and effect all material Governmental Authorizations required to conduct the Business in the manner and in all such jurisdictions as it is currently conducted and to permit the Company to own and use its properties and assets in the manner in which it currently owns and uses such assets.

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4.13 Leased Real Property; Personal Property .

(a) Schedule 4.13(a) of the Disclosure Schedule contains a true and complete list of (i) each parcel of real property leased or subleased or otherwise occupied by the Company as tenant or subtenant (the “ Leased Real Property ” together with a true and complete list of all such leases, subleases or other similar agreements and any amendments, modifications or extensions thereto (the “ Real Property Leases ”), and (ii) all Liens relating to or affecting the Company’s operations on any parcel of Leased Real Property. The Company does not own any parcel of real property.

(b) Subject to the terms of their respective Real Property Leases, the Company has a valid and subsisting leasehold estate in and the right to quiet enjoyment to the Leased Real Property for the full term of the lease thereof. Each Real Property Lease is a legal, valid and binding agreement, enforceable in accordance with its terms, of the Company and of each other Person that is a party thereto, and except as set forth in Schedule 4.13(b) of the Disclosure Schedule, there is no, and the Company has no Knowledge of any nor received notice of any, default (or any condition or event which, after notice or lapse of time or both, would constitute a default) thereunder. The Company has not assigned, sublet, transferred, hypothecated or otherwise disposed of its interest in any Real Property Lease. No penalties are accrued and unpaid under any Real Property Lease.

(c) The Company has delivered to Parent prior to the execution of this Agreement true and complete copies of all leases, and all amendments, modifications or extensions thereto, concerning the Leased Real Property.

(d) To the Knowledge of the Company, there are no condemnation or appropriation proceedings pending or threatened against any Leased Real Property or the improvements thereon.

(e) There is no Action, actual or threatened in writing, against the Company or the Leased Real Property by any Person which would materially affect the future use, occupancy or value of the Leased Real Property or any part thereof.

(f) Except as set forth in Schedule 4.13(f) of the Disclosure Schedule, the Company is in possession of and has good and marketable title to, or has valid leasehold interests in or valid rights under Contract to use, all tangible personal property used in the conduct of its business, including all tangible personal property reflected on the Financial Statements for the period ended and tangible personal property acquired since, other than property disposed of since such date in the Ordinary Course of Business. All such tangible personal property is free and clear of all Liens, other than Liens set forth in Schedule 4.13(f) of the Disclosure Schedule and Permitted Liens (as defined below), and is adequate and suitable for the conduct by the Company of the business presently conducted by them, and is in good working order and condition, ordinary wear and tear excepted, and its use complies in all material respects with all applicable Laws.

“ Permitted Liens ” shall mean the following: (a) Liens of carriers, warehousemen, artisans, bailees, mech

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