AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is entered into as of May 8, 2009, among SOUTHERN MEDICAL & MOBILITY, INC. , an Alabama corporation (“ Southern ”), HASCO HOLDINGS, LLC , a Texas limited liability company and the sole shareholder of Southern (the “ Southern Shareholder ”), BBC GRAPHICS OF PALM BEACH, INC. , a Florida corporation (“ Parent ”) and SOUTHERN MEDICAL ACQUISITION, INC. , a Delaware corporation and a wholly-owned subsidiary of Parent (“ Merger Sub ”).

A.       Following discussions and negotiations between Southern and Parent, the Parties agreed upon a plan for Parent to acquire Southern through the statutory merger of Merger Sub with and into Southern, with Southern to survive as a subsidiary of Parent (the “ Merger ”) and the Parent, as the sole shareholder of Merger Sub, and the Board of Directors of Merger Sub, each has adopted and approved this Agreement.

B.       It is intended that the acquisition of Southern by Parent pursuant hereto shall qualify as a reverse subsidiary merger under the provisions of Section 368(a)(2)(E) of the Code.

C.       The respective Boards of Directors of Southern, the Parent and the Merger Sub has deem it advisable and in the best interests of their respective shareholders to consummate the business combination provided for herein.

NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements contained herein, the parties do hereby agree as follows:

(a)       “ Affiliate ” shall mean, as to any Person, any other Person controlled by, under the control of, or under common control with, such Person.  As used in this definition, “control” shall mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person which owns or holds directly or indirectly five per cent (5%) or more of the voting securities or five per cent (5%) or more of the partnership or other equity interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such other Person.

(b)       “ Agreement ” means this Agreement and Plan of Merger.

(c)       “ Applicable Law ” or “ Applicable Laws ” means any and all laws, ordinances, constitutions, regulations, statutes, treaties, rules, codes, licenses, certificates, franchises, permits, principles of common law, requirements and Orders adopted, enacted, implemented, promulgated, issued, entered or deemed applicable by or under the authority of any Governmental Body having jurisdiction over a specified Person or any of such Person’s properties or assets.

(d)       “ Articles of Merger ” has the meaning set forth in Section 2.2.

(e)       “ Best Efforts ” means the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible, provided, however, that a Person required to use Best Efforts under this Agreement will not be thereby required to take actions that would result in a Material Adverse Effect in the benefits to such Person of this Agreement and the Merger.

(f)       “ Breach” means any breach of, or any inaccuracy in, any representation or warranty or any breach of, or failure to perform or comply with, any covenant or obligation, in or of this Agreement or any other Contract.

(g)       “ Business ” means Southern’s business of sale and rental of durable medical equipment and supplies.

(h)       “ Business Day ” means any day other than (a) Saturday or Sunday or (b) any other day on which banks in Pennsylvania are permitted or required to be closed.

(i)        “ Certificates ” has the meaning set forth in Section 3.5(a).

(j)        “ Closing ” shall mean the exchange of the Shares for the Merger Consideration as set forth herein.

(k)       “ Closing Date ” shall mean the date on which the Closing, except for the physical tender of Certificates by holders of Shares, is completed.

(l)       “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

(m)       “ Code of Alabama ” shall mean the Code of Alabama 1975, Alabama Business Corporation Act, Sec 10-2B-1.01, et seq . and Alabama Business Entities Conversion and Merger Act, 10-15-1, et seq.

(n)       “ Competing Transaction ” has the meaning set forth in Section 7.6.

(o)       “ Confidential Information ” means any information pertaining to the business, operations, marketing, customers, financing, forecasts and plans of any Party provided to or learned by any other Party during the course of negotiation of the Merger.  Information shall be treated as Confidential Information whether such information has been marked “confidential” or in a similar manner.

(p)       “ Consent ” means any approval, consent, license, permits, ratification, waiver or other authorization.

(q)       “ Contract ” means any agreement, contract, lease, license, consensual obligation, promise, undertaking, understanding, commitment, arrangement, instrument or document (whether written or oral and whether express or implied), whether or not legally binding.

(r)       “ Damages ” shall have the meaning set forth in Section 9.2(a).

(s)        “DGCL” shall mean the Delaware General Corporation Law, as amended.

(t)       “ Disclosure Schedules ” means the disclosure schedules delivered by each Party to the other Parties as required by this Agreement on the date hereof and initialed by the Parties, as subsequently updated or supplemented by the Parties prior to the Closing.  The Disclosure Schedules will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Agreement. The Disclosure Schedules shall be attached hereto as Exhibit A and by reference made a part hereof.

(u)       “ Effective Time ” has the meaning set forth in Section 2.2.

(v)       “ Employee Benefit Plan ” has the meaning set forth in ERISA Section 3(3).

(w)       “ Encumbrance ” means and includes:

(a)       with respect to any personal property, any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agreement or lease or use agreement in the nature thereof, interest or other right or claim of third parties, whether voluntarily incurred or arising by operation of law, and including any agreement to grant or submit to any of the foregoing in the future; and

(b)       with respect to any real property (whether and including owned real estate or Leased Real Estate), any mortgage, lien, easement, interest, right-of-way, condemnation or eminent domain proceeding, encroachment, any building, use or other form of restriction, encumbrance or other claim (including adverse or prescriptive) or right of Third Parties (including Governmental Bodies), any lease or sublease, boundary dispute, and agreements with respect to any real property including: purchase, sale, right of first refusal, option, construction, building or property service, maintenance, property management, conditional or contingent sale, use or occupancy, franchise or concession, whether voluntarily incurred or arising by operation of law, and including any agreement to grant or submit to any of the foregoing in the future.

(x)       “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations issued by the Department of Labor pursuant to ERISA or any successor law.

(y)       “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

(z)       “ GAAP ” means at any particular time generally accepted accounting principles in the United States, consistently applied on a going concern basis, using consistent audit scope and materiality standards.

(aa)       “ Governing Documents ” means with respect to any particular entity, the articles or certificate of incorporation and the bylaws; all equityholders’ agreements, voting agreements, voting trust agreements, joint venture agreements, registration rights agreements or other agreements or documents relating to the organization, management or operation of any Person or relating to the rights, duties and obligations of the equityholders of any Person; and any amendment or supplement to any of the foregoing.

(bb)       “ Governmental Authorization ” means any Consent, license, registration or permit issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Applicable Law.

(cc)       “ Governmental Body ” means: (i) nation, state, county, city, town, borough, village, district, tribe or other jurisdiction; (ii) federal, state, local, municipal, foreign, tribal or other government; (iii) governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal or other entity exercising governmental or quasi-governmental powers); (iv) multinational organization or body; (v) body exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; or (vi) official of any of the foregoing.

(dd)       “ Improvements ” means all buildings, structures, fixtures and improvements located on Land, including those under construction.

(ee)       “ Indemnified Party ” has the meaning set forth in Section 9.3.

(ff)       “ Indemnifying Party ” has the meaning set forth in Section 9.3.

(gg)       “ IRS ” means the United States Internal Revenue Service and, to the extent relevant, the United States Department of the Treasury.

(hh)       “ Knowledge ” means actual knowledge without independent investigation.

(ii)       “ Land ” means all parcels and tracts of land in which any Person has an ownership or leasehold interest.

(jj)       “ Material Adverse Effect ” or “ Material Adverse Change ” means, in connection with any Person, any event, change or effect that is materially adverse, individually or in the aggregate, to the condition (financial or otherwise), properties, assets, liabilities, revenues, income, business, operations, results of operations or prospects of such Person, taken as a whole.

(kk)       “ Merger ” has the meaning set forth in the recitals.

(ll)       “ Merger Consideration ” has the meaning set forth in Section 3.2.

(mm)       “ Merger Sub ” has the meaning set forth in the preamble.

(nn)       “ Merger Sub Common Stock ” has the meaning set forth in Section 5.4.

(oo)       “ Order ” means any writ, directive, order, injunction, judgment, decree, ruling, assessment or arbitration award of any Governmental Body or arbitrator.

(pp)       “ Ordinary Course of Business ” means an action taken by a Person will be deemed to have been taken in the Ordinary Course of Business only if that action: (i) is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person; (ii) does not require authorization by the board of directors or shareholders of such Person (or by any Person or group of Persons exercising similar authority) and does not require any other separate or special authorization of any nature; and (iii) is similar in nature, scope and magnitude to actions customarily taken, without any separate or special authorization, in the ordinary course of the normal, day-to-day operations of other Persons that are in the same line of business as such Person.

(qq)       “ Parent ” has the meaning given in the preamble above.

(rr)       “ Parent Business ” means Parent’s business of identifying and acquiring, through merger, acquisition or sale of its common stock, an operating business with growth potential.

(ss)       “ Parent Common Stock ” means the common stock, par value $.001 per share, of Parent.

(tt)       “ Parent Contracts ” has the meaning set forth in Section 5.1(o).

(uu)       “ Parent’s Counsel ” means Ira S. Saul, PLC, 4126 Leonard Drive, Fairfax, Virginia 22030, Attn: Ira S. Saul, Esq.

(vv)       “ Parent Employee Plans ” has the meaning set forth in Section 5.1(r)(i).

(ww)        “ Parent Financial Information ” has the meaning set forth in Section 5.1(f).

(xx)       “ Parent Intellectual Property ” has the meaning set forth in Section 5.1(m).

(yy)       “ Parent Interim Balance Sheet ” has the meaning set forth in Section 5.1(f)(ii).

(zz)       “ Parent SEC Reports ” has the meaning set forth in Section 5.1(n).

(aaa)       “ Parent Tax Affiliate ” has the meaning set forth in Section 5.1(h)(i).

(bbb)       “ Party ” or “ Parties ” means Southern, Parent and/or Merger Sub.

(ccc)       “ Person ” shall mean an individual, company, partnership, limited liability company, limited liability partnership, joint venture, trust or unincorporated organization, joint stock corporation or other similar organization, government or any political subdivision thereof, or any other legal entity.

(ddd)       “ Proceeding ” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

(eee)       “ Real Property ” means any Land and Improvements and all privileges, rights, easements, hereditaments and appurtenances belonging to or for the benefit of any Land, including all easements appurtenant to and for the benefit of any Land (a “ Dominant Parcel ”) for, and as the primary means of access between, the Dominant Parcel and a public way, or for any other use upon which lawful use of the Dominant Parcel for the purposes for which it is presently being used is dependent, and all rights existing in and to any streets, alleys, passages and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof) and vaults beneath any such streets.

(fff)       “ Real Property Lease ” means any lease or rental agreement pertaining to the occupancy of any improved space on any Land.

(ggg)        “ Related Person ” means with respect to any Person: (i) any Person that directly or indirectly controls, is directly or indirectly controlled by or is directly or indirectly under common control with such specified Person; (ii) any Person that holds a Material Interest in such specified Person; (iii) each Person that serves as a director, officer, partner, executor or trustee of such specified Person (or in a similar capacity); (iv) any Person in which such specified Person holds a Material Interest; (v) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity), and (vi) for any Person who is an individual, any Person who is a member of such Person’s Family.

For purposes of this definition, (a) “ Control ” (including “controlling,” “controlled by,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and shall be construed as such term is used in the rules promulgated under the Securities Act; (b) the “ Family ” of an individual includes (i) the individual, (ii) the individual’s spouse, (iii) any other natural person who is related to the individual or the individual’s spouse within the second degree and (iv) any other natural person who resides with such individual; and (c) “ Material Interest ” means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities or other voting interests representing at least ten percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

(hhh)       “ Representative ” means with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other representative of that Person.

(iii)       “ SEC ” means the United States Securities and Exchange Commission.

(jjj)        “ Securities Act ” means the Securities Act of 1933, as amended.

(kkk)       “ Security Interest ” means any mortgage, pledge, security interest, Encumbrance, charge, claim, or other lien, other than:  (a) mechanic’s, materialmen’s and similar liens; (b) liens for Taxes not yet due and payable or for Taxes that the taxpayer is contesting in good faith through appropriate Proceedings; (c) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation; (d) liens arising in connection with sales of foreign receivables; (e) liens on goods in transit incurred pursuant to documentary letters of credit; (f) purchase money liens and liens securing rental payments under capital lease arrangements; and (g) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

(lll)       “ Shareholder ” has the meaning set forth in the preamble.

(mmm)       “ Shares ” shall mean all issued and outstanding shares of Southern’s voting common stock, par value $1.00 per share.

(nnn)       “ Southern ” has the meaning set forth in the preamble.

(ooo)       “ Southern  Balance Sheet ” has the meaning set forth in Section 4.6(b).

(ppp)       “ Southern Board ” has the meaning set forth in Section 4.4.

(qqq)       “ Southern Contracts ” has the meaning set forth in Section 4.15.

(rrr)       “ Southern Employee Plans ” has the meaning set forth in Section 4.18.

(sss)       “ Southern Financial Information ” has the meaning set forth in Section 4.6 below.

(ttt)       “ Southern Intellectual Property ” has the meaning set forth in Section 4.13(a).

(uuu)        “ Southern Option ” has the meaning set forth in Section 3.3.

(vvv)       “ Southern Shareholder ” is HASCO Holdings, LLC

(www)       “ Southern Tax Affiliate ” has the meaning set forth in Section 4.8(a).

(xxx)       “ Southern Warrant ” has the meaning set forth in Section 3.4.

(yyy)       “ Subsidiary ” means with respect to any Person (the “ Owner ”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred), are held by the Owner or one or more of its Subsidiaries.

(zzz)       “ Surviving Corporation ” has the meaning set forth in Section 2.1.

(aaaa)       “ Tangible Personal Property ” means all machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles and other items of tangible personal property of every kind owned or leased by a Party (wherever located and whether or not carried on a Party’s books), together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto.

(bbbb)       “ Tax ” or “ Taxes ” means, with respect to any Person, (i) all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise, license, withholding, payroll, employment, excise, severance, stamp, occupation, commercial rent, premium, property or windfall profit taxes, alternative or add-on minimum taxes, customs duties and other taxes, fees, assessments or charges of any kind whatsoever, together with all interest and penalties, additions to tax and other additional amounts imposed by any taxing authority (domestic or foreign) on such person (if any) and (ii) any liability for the payment of any amount of the type described in clause (i) above as a result of (A) being a “transferee” (within the meaning of Section 6901 of the Code or any Applicable Law) of another person, (B) being a member of an affiliated, combined or consolidated group or (C) a contractual arrangement or otherwise.

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

(dddd)       “ Third Party ” means a Person that is not a Party to this Agreement.

2.1        The Merger .   Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL and the Code of Alabama, at the Effective Time, Merger Sub shall be merged with and into Southern in accordance with the provisions of Title 8, § 252 of the DGCL and the Code of Alabama 1975, Alabama Business Corporation Act, § 10-2B-1.01, et seq . and Alabama Business Entities Conversion and Merger Act, § 10-15-1, et seq. Following the Effective Time, the separate existence of Merger Sub shall cease, and Southern shall continue as the surviving corporation in the Merger (hereinafter sometimes referred to as the “Surviving Corporation”) as a business corporation incorporated under the laws of the State of Alabama under the name “Southern Medical & Mobility, Inc.” and shall succeed to and assume all the rights and obligations of Merger Sub in accordance with the DGCL and the Code of Alabama.

2.2        Effective Time Of The Merger .  The Merger shall become effective at such time (the “ Effective Time ”) as a duly executed Certificate of Merger is filed with the Secretary of State of the State of Delaware and a Certificate of Merger is filed with the Secretary of State of Alabama.

2.3        Closing .  The Closing will take place at the offices of Ira S. Saul, PLC on a date and at the time to be agreed upon by the parties (the “ Closing Date ”), following satisfaction or waiver of the conditions set forth in Article VIII or such other time, date and place as Parent, Merger Sub and Southern may agree.

2.4        Surviving Corporation .

(a)       The Articles of Incorporation of Southern shall be the Articles of Incorporation of the Surviving Corporation, until duly amended in accordance with the terms thereof and of the Code of Alabama.

(b)       The By-laws of Southern shall be the By-laws of the Surviving Corporation until duly amended in accordance with their terms and as provided by the Certificate of Incorporation of the Surviving Corporation and the DGCL.

(c)       Those individuals set forth on Schedule 2.4 shall, from and after the Effective Time, be the directors of the Surviving Corporation until their respective successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s Articles of Incorporation, By-laws, and Code of Alabama.

(d)       Those individuals set forth on Schedule 2.4 shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s Articles of Incorporation and By-laws.

(e)       If at any time after the Effective Time, any party shall consider that any further deeds, assignments, conveyances, agreements, documents, instruments or assurances in law or any other things are necessary or desirable to vest, perfect, confirm or record in the Surviving Corporation the title to any property, rights, privileges, powers and franchises of Merger Sub by reason of, or as a result of, the Merger, or otherwise to carry out the provisions of this Agreement, the remaining parties, as applicable, shall execute and deliver, upon request, any instruments or assurances, and do all other things necessary or proper to vest, perfect, confirm or record title to such property, rights, privileges, powers and franchises in the Surviving Corporation, and otherwise to carry out the provisions of this Agreement.

3.1        Effect on Merger Sub Capital Stock .  At the Effective Time, each share of the common stock of Merger Sub, issued and outstanding immediately prior to the Effective Time, shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into one fully paid and non-assessable share of common stock, no stated par value per share, of the Surviving Corporation.

3.2        Effect on Shares .

(a)       As of the Effective Time, by virtue of the Merger and without any action on the part of Southern, the one (1) issued and outstanding Share immediately prior to the Effective Time shall be converted into the right to receive 554,676,000 shares of Parent Common Stock, provided that, such amount shall be adjusted to ensure that the Southern Shareholder owns that number of shares of Parent Common Stock equal to a minimum of 50% of the Parent Common Stock calculated on a fully diluted basis on the Closing Date.

3.3        Effect on Options .  (Not applicable. No Southern Options outstanding)

3.4        Effect on Warrants .  (Not applicable. No Southern Warrants outstanding)

3.5        Exchange of Certificates; Payment .

(a)       The Southern Shareholder shall surrender to Parent at the Effective Time the certificates representing all of the outstanding Shares (“ Certificates ”), duly endorsed in blank, or accompanied by blank stock powers, with signatures guaranteed in a manner reasonably acceptable to Parent’s Counsel.  The Southern Shareholder shall use reasonable commercial efforts to cure promptly any deficiencies with respect to the endorsement of any certificate or other documents of conveyance with respect to such Certificate or with respect to the stock powers accompanying any such Certificate.  Upon such surrender, the Southern Shareholder shall be entitled to receive the Merger Consideration by delivery of certificates evidencing ownership of shares of Parent Common Stock.

(b)       At and after the Effective Time, until the Certificates have been surrendered, such Certificates shall be deemed to evidence only the right to receive the appropriate Merger Consideration.

(c)        After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of Shares.  If, after the Effective Time, any Certificate(s) representing Shares is or are presented to the Surviving Corporation, they shall be canceled and exchanged for the appropriate Merger Consideration as provided for, and in accordance with, the provisions of this Article III.

As a material inducement for Parent and Merger Sub to enter into this Agreement and to consummate the transactions contemplated hereby, each of Southern and the Southern Shareholder, jointly and severally makes the following representations and warranties as of the date hereof and as of the Closing Date, each of which is relied upon by Parent and Merger Sub regardless of any investigation made or information obtained by Parent (unless and to the extent specifically and expressly waived in writing by Parent on or before the Closing Date):

4.1        Organization and Good Standing

(a)       Southern is a corporation duly organized, validly existing and in good standing under the laws of the State of Alabama. Southern is duly qualified to do business as a foreign corporation and is in good standing under the laws of each state or other 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 qualification and the failure to be so qualified would have a Material Adverse Effect on Southern.   Schedule 4.1(a) contains a complete and accurate list of every jurisdiction in which Southern is qualified to do business.

(b)       Southern has no Subsidiary and does not own any shares of capital stock or other securities of any other Person.

(c)       Southern Shareholder is a limited liability company duly organized validly existing and in good standing under the laws of the State of Texas.

4.2        Corporate Documents    Schedule 4.2 shall consist of true and correct copies of:

(a)       the Governing Documents, as amended, of Southern;

(b)       the minute book of Southern containing all existing records of all Proceedings, Consents, actions and meetings of the shareholders and Board of Directors of Southern; and

(c)        the stock transfer ledger of Southern and a shareholder list setting forth all owners of the capital stock of Southern as they appear in the stock transfer ledger of Southern.

4.3        Capitalization of Southern .   The entire authorized capital stock of Southern consists (a) of ten (10) shares of common stock having no stated par value per share, of which one (1) share is issued and outstanding; and (b) zero (0) shares of preferred stock.  All of Southern’s issued and outstanding shares of common stock have been duly authorized, are validly issued, fully paid and nonassessable, and are held of record by the stockholders listed on the shareholder list attached as Schedule 4.3 .    Other than this Agreement or as set forth on Schedule 4.3 , there are no outstanding or authorized options, warrants, rights, contracts, calls, puts, rights to subscribe, conversion rights, registration rights or other agreements or commitments to which Southern is a party or which are binding upon Southern providing for the issuance, disposition or acquisition of any of its capital stock, nor any outstanding or authorized stock appreciation, phantom stock or similar rights with respect to Southern.

4.4        Authorization of Transaction .

(a)       Southern has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  On the Closing Date, this Agreement shall be duly and validly authorized by all necessary action on the part of Southern in accordance with Applicable Laws and Southern’s Governing Documents.  This Agreement constitutes the valid and legally binding obligation of Southern, enforceable in accordance with its terms and conditions.  Other than filing the appropriate Articles of Merger, Southern does not need to give any notice to, make any filing with, or obtain any Consent of any Governmental Body in order to consummate the Merger.  The Board of Directors of Southern (the “ Southern Board ”) has duly and validly authorized the execution and delivery of this Agreement and approved the consummation of the transactions contemplated hereby, and has taken all corporate actions required to be taken by the Southern’s Board for the consummation of the Merger.

(b)       Southern Shareholder has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  On the Closing Date, this Agreement shall be duly and validly authorized by all necessary action on the part of Southern Shareholder in accordance with the Texas Limited Liability Company Act.  This Agreement constitutes the valid and legally binding obligation of Southern Shareholder, enforceable in accordance with its terms and conditions.  The Manager and Members of Southern Shareholder) have duly and validly authorized the execution and delivery of this Agreement and approved the consummation of the transactions contemplated hereby, and have taken all company actions required to be taken for the consummation of the Merger.

4.5        Noncontravention .  Neither the execution and delivery of this Agreement, nor consummation of the Merger, by Southern and Southern Shareholder will:

(a)       violate any Applicable Law, Order, stipulation, charge or other restriction of any Governmental Body to which Southern or Southern Shareholder is subject or any provision of the Governing Documents of Southern or Southern Shareholder; or

(b)       conflict with, result in a Breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify or cancel, or require any notice under any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other arrangement to which Southern or Southern Shareholder is a party or by which either is bound or to which any of their respective asets is subject (or result in the imposition of any Security Interest upon any of its assets), except where the violation, conflict, Breach, default, acceleration, termination, modification, cancellation, failure to give notice, or Security Interest would not have a Material Adverse Effect on the financial condition of Southern or Southern Shareholder or on the ability of the Parties to consummate the Merger.

4.6        Southern Financial Information .   Schedule 4.6 shall include the following financial information (collectively, the “ Southern Financial Information ”): audited balance sheets and statements of income, changes in stockholders’ equity and cash flow as of and for the years ended December 31, 2008 and December 31, 2007 (“Southern Financial Information for 2008”) , for Southern.

4.7        Events Subsequent to Southern Financial Information for 2008 .  Since the date of the Southern Financial Information for 2008, there has not been, occurred or arisen, with respect to Southern:

(a)       any change or amendment in its Governing Documents;

(b)       any reclassification, split up or other change in, or amendment of or modification to, the rights of the holders of any of its capital stock;

(c)       any direct or indirect redemption, purchase or acquisition by any Person of any of its capital stock or of any interest in or right to acquire any such stock;

(d)       any issuance, sale, or other disposition of any capital stock, or any grant of any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any capital stock;

(e)       any declaration, set aside, or payment of any dividend or any distribution with respect to its capital stock (whether in cash or in kind) or any redemption, purchase, or other acquisition of any of its capital stock;

(f)       the organization of any Subsidiary or the acquisition of any shares of capital stock by any Person or any equity or ownership interest in any business;

(g)       any damage, destruction or loss of any of the its properties or assets whether or not covered by insurance;

(h)       any sale, lease, transfer, or assignment of any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business;

(i)       the execution of, or any other commitment to any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) outside the Ordinary Course of Business;

(j)       any acceleration, termination, modification, or cancellation of any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) involving more than $10,000 to which it is a party or by which it is bound;

(k)       any Security Interest or Encumbrance imposed upon any of its assets, tangible or intangible;

(l)       any grant of any license or sublicense of any rights under or with respect to any Southern Intellectual Property;

(m)       any sale, assignment or transfer (including transfers to any employees, affiliates or shareholders) of any Southern Intellectual Property;

(n)       any capital expenditure (or series of related capital expenditures) involving more than $10,000 and outside the Ordinary Course of Business;

(o)       any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans, and acquisitions) involving more than $10,000 and outside the Ordinary Course of Business;

(p)       any issuance of any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation involving more than $10,000;

(q)       any delay or postponement of the payment of accounts payable or other liabilities;

(r)       any cancellation, compromise, waiver, or release of any right or claim (or series of related rights and claims) involving more than $10,000 and outside the Ordinary Course of Business;

(s)       any loan to, or any entrance into any other transaction with, any of its directors, officers, and employees either involving more than $1,000 individually or $5,000 in the aggregate;

(t)       the adoption, amendment, modification, or termination of any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees (or taken away any such action with respect to any other Employee Benefit Plan);

(u)       any employment contract or collective bargaining agreement, written or oral, or modified the terms of any existing such contract or agreement;

(v)       any increase in the base compensation of any of its directors, officers, and employees;

(w)       any charitable or other capital contribution in excess of $2,500;

(x)       any taking of other action or entering into any other transaction other than in the Ordinary Course of Business, or entering into any transaction with any insider of Southern, except as disclosed in this Agreement and the Disclosure Schedules;

(y)       any other event or occurrence that may have or could reasonably be expected to have a Material Adverse Effect on Southern (whether or not similar to any of the foregoing); or

(z)       any agreement or commitment, whether in writing or otherwise, to do any of the foregoing.

4.8        Tax Matters .

(a)       Except as set forth on Schedule 4.8 :  (i) Southern and (ii) each other Person included in any consolidated or combined Tax Return and part of an affiliated group, within the meaning of Section 1504 of the Code, of which Southern is or has been a member (“ Southern Tax Affiliate ”), for the years that it was a Southern Tax Affiliate:

(a)       has timely paid or caused to be paid all Taxes required to be paid by it through the date hereof and as of the Closing Date (including any Taxes shown due on any Tax Return);

(b)       has filed or caused to be filed in a timely and proper manner (within any applicable extension periods) all Tax Returns required to be filed by it with the appropriate Governmental Body in all jurisdictions in which such Tax Returns are required to be filed; and all tax returns filed on behalf of Southern and each Southern Tax Affiliate were complete and correct in all material respects; and

(c)       has not requested or caused to be requested any extension of time within which to file any Tax Return, which Tax Return has not since been filed.

(b)       Southern has previously delivered true, correct and complete copies of all Federal Tax Returns filed by or on behalf of Southern through the date hereof for the periods ending on or after December 31, 2007.

(c)       Except as set forth in Schedule 4.8(c) :

(a)       since January 1, 2006, neither Southern nor any Southern Tax Affiliate (for the years that it was a Southern Tax Affiliate) has been notified by the IRS or any other Governmental Body that any issues have been raised (and no such issues are currently pending) by the IRS or any other Governmental Body in connection with any Tax Return filed by or on behalf of Southern or any Southern Tax Affiliate; there are no pending Tax audits and no waivers of statutes of limitations have been given or requested with respect to Southern or any Southern Tax Affiliate (for years that it was a Southern Tax Affiliate); no Tax liens have been filed against Southern or unresolved deficiencies or additions to Taxes have been proposed, asserted or assessed against Southern or any Southern Tax Affiliate (for the years that it was a Southern Tax Affiliate);

(b)       full and adequate accrual has been made (A) on the Southern  Balance Sheet, and the books and records of Southern for all income taxes currently due and all accrued Taxes not yet due and payable by Southern for all periods ending on or prior to the Southern  Balance Sheet Date, and (B) on the books and records of Southern for all Taxes payable by Southern for all periods beginning after the Southern  Balance Sheet Date;

(c)       Southern has not incurred any liability for Taxes from and after the Southern Balance Sheet Date other than Taxes incurred in the Ordinary Course of Business and consistent with past practices;

(d)       Southern has not (A) made an election (or had an election made on its behalf by another person) to be treated as a “consenting corporation” under Section 341(f) of the Code or (B) a “personal holding company” within the meaning of Section 542 of the Code;

(e)       Southern has complied in all material respects with all Applicable Laws relating to the collection or withholding of Taxes (such as Taxes or withholding of Taxes from the wages of employees);

(f)       Southern has no liability in respect of any Tax sharing agreement with any Person and all Tax sharing agreements to which Southern has been bound have been terminated;

(g)       Southern has not incurred any liability to make any payments either alone or in conjunction with any other payments that:

(A)       shall be non-deductible under, or would otherwise constitute a “parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state local or foreign Applicable Law related to Taxes); or

(B)       are or may be subject to the imposition of an excise Tax under Section 4999 of the Code;

(h)       Except as stated in Schedule 4.8(c), Southern has not agreed to (nor has any other Person agreed to on its behalf) and is not required to make any adjustments or changes on, before or after the Closing Date, to its accounting methods pursuant to Section 481 of the Code, and the IRS has not proposed any such adjustments or changes in the accounting methods of Southern ;

(i)       no claim has been made within the last three years by any taxing authority in a jurisdiction in which Southern does not file Tax Returns that Southern is or may be subject to taxation by that jurisdiction;

(j)       the consummation of the Merger will not trigger the realization or recognition of intercompany gain or income to Southern under the Federal consolidated return regulations with respect to Federal, state or local taxes; and

(k)       Southern is not currently, nor has it been at any time during the previous five years, a “U.S. real property holding corporation” and, therefore, the Shares are not “U.S. real property interests,” as such terms are defined in Section 897 of the Code.

4.9        Title to Assets .  Southern has good and marketable title to, or a valid leasehold interest in, the properties and assets owned or leased and used by it to operate the Business in the manner presently operated by Southern, as reflected in the Southern Financial Information.

4.10        Real Property .  Southern does not own or hold an ownership interest in any Real Property.

4.11        Leased Real Property . Schedule 4.11 contains a correct street address for all tracts, parcels and subdivided lots in which Southern has a leasehold interest and an accurate description of all Real Property Leases pursuant to which Southern has a leasehold interest.

4.12        Condition of Facilities .

(a)       Use of the Real Property of Southern for the various purposes for which it is presently being used is permitted as of right under all Applicable Laws related to zoning and is not subject to “permitted nonconforming” use or structure classifications.  All Improvements are in compliance with all Applicable Laws, including those pertaining to zoning, building and the disabled, are in good repair and in good condition, ordinary wear and tear excepted, and are free from latent and patent defects.  No part of any Improvement encroaches on any real property not included in the Real Property of Southern, and there are no buildings, structures, fixtures or other Improvements primarily situated on adjoining property which encroach on any part of the Land.

(b)       Each item of Tangible Personal Property is in good repair and good operating condition, ordinary wear and tear excepted, is suitable for immediate use in the Ordinary Course of Business and is free from latent and patent defects.  No item of Tangible Personal Property is in need of repair or replacement other than as part of routine maintenance in the Ordinary Course of Business.  Except as disclosed in, all Tangible Personal Property used in the Business is in the possession of Southern.

4.13        Southern Intellectual Property .

(a)       Southern owns, or is licensed or otherwise possesses legal enforceable rights to use all: (i) trademarks and service marks (registered or unregistered), trade dress, trade names and other names and slogans embodying business goodwill or indications of origin, all applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (ii) patentable inventions, technology, computer programs and software (including password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and all applications and patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals or extensions; (iii) trade secrets, including confidential and other non-public information (iv) copyrights in writings, designs, software programs, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto; (v) databases and all database rights; and (vi) Internet web sites, domain names and applications and registrations pertaining thereto (collectively, “ Southern Intellectual Property ”) that are used in the Business except for any such failures to own, be licensed or process that would not be reasonably likely to have a Material Adverse Effect.

(b)       Except as may be evidenced by patents issued after the date hereof, there are no conflicts with or infringements of any material Southern Intellectual Property by any third party and the conduct of the Business as currently conducted does not conflict with or infringe any proprietary right of a third party.

(c)        Schedule 4.13(c) sets forth a complete list of all patents, registrations and applications pertaining to the Southern Intellectual Property owned by Southern.  Except as set forth on Schedule 4.13(c) , all such Southern Intellectual Property listed is owned by Southern, free and clear of liens or Encumbrances of any nature.

(d)        Schedule 4.13(d) sets forth a complete list of all material licenses, sublicenses and other agreements in which Southern has granted rights to any person to use the Southern Intellectual Property.  Southern will not, as a result of the execution and delivery of this Agreement or the performance of its obligations under this Agreement, be in Breach of any license, sublicense or other agreement relating to the Southern Intellectual Property.

(e)       Southern owns or has the right to use all software currently used in and material to the Business.

4.14        Affiliate Transactions .  Except as set forth on Schedule 4.14 , no officer, director, or employee of Southern or any member of the immediate family of any such officer, director or employee, or any entity in which any of such persons owns any beneficial interest (other than any publicly-held corporation whose stock is traded on a national securities exchange or in the over-the-counter market and less than one percent of the stock of which is beneficially owned by any of such persons), has any agreement with Southern or any interest in any of their property of any nature, used in or pertaining to the Business (other than the ownership of capital stock of the corporation as disclosed in Section 4.3).  None of the foregoing Persons has any direct or indirect interest in any competitor, supplier or customer of Southern or in any Person from whom or to whom Southern leases any property or transacts business of any nature.

4.15        Contracts .   Schedule 4.15 is a true, complete and accurate list of all written or oral Contracts (including a brief description of all oral arrangements) executed by an officer or duly authorized employee of Southern or to which Southern is a party either:

(a)       involving more than $10,000, or

(b)       in the nature of a collective bargaining agreement, employment agreement, or severance agreement with any of its directors, officers and employees.

Southern has or will deliver prior to Closing to Parent a correct and complete copy of each Contract listed in Schedule 4.15 (the “ Southern Contracts ”).  Except as disclosed in Schedule 4.15 : (i) Southern has fully complied with all material terms of the Southern Contracts; (ii) other parties to the Southern Contracts have fully complied with the terms of the Southern Contracts; and (iii) there are no disputes or complaints with respect to nor has Southern received any notices (whether oral or in writing) that any other party to the Southern Contracts is terminating, intends to terminate or is considering terminating, any of the Southern Contracts listed or required to be listed in Schedule 4.15 .

4.16        Powers of Attorney .  There are no outstanding powers of attorney executed on behalf of Southern.

4.17        Litigation .

(a)       Except as set forth in Schedule 4.17(a) , there is no pending or, to Southern’s Knowledge, threatened Proceeding:

(a)       by or against Southern or that otherwise relates to or may affect the Business which, if adversely determined, would have a Material Adverse Effect; or

(b)       that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Merger.

To the Knowledge of Southern, no event has occurred or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Proceeding.  Southern has delivered to Parent copies of all pleadings, correspondence and other documents relating to each Proceeding listed in Schedule 4.17(a) .  There are no Proceedings listed or required to be listed in Schedule 4.17(a) that could reasonably be expected to have a Material Adverse Effect.

(b)       Except as set forth in Schedule 4.17(b) :

(a)       there is no material Order to which Southern or the Business is subject; and

(b)       to the Knowledge of Southern, no officer, director, agent or employee of Southern is subject to any Order that prohibits such officer, director, agent or employee from engaging in or continuing any conduct, activity or practice relating to the Business.

(c)       Except as set forth in Schedule 4.17(c) :

(a)       Southern has been and is in compliance with all of the terms and requirements of each Order to which it or the Business is or has been subject;

(b)       No event has occurred or circumstance exists that is reasonably likely to constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which Southern or the Business is subject; and

(c)       Southern has not received any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply with, any term or requirement of any Order to which Southern or the Business is subject.

4.18        Employee Benefits .

(a)        Schedule 4.18 lists all material (i) Employee Benefit Plans of Southern, (ii) bonus, stock option, stock purchase, stock appreciation right, incentive, deferred compensation, supplemental retirement, severance, and fringe benefit plans, programs, policies or arrangements, and (iii) employment or consulting agreements, for the benefit of, or relating to, any current or former employee (or any beneficiary thereof) of Southern, in the case of a plan described in (i) or (ii) above, that is currently maintained by Southern or with respect to which Southern has an obligation to contribute, and in the case of an agreement described in (iii) above, that is currently in effect (the “ Southern Employee Plans ”).  Southern has heretofore made available to Parent true and complete copies of the Southern Employee Plans and any amendments thereto, any related trust, insurance contract, summary plan description, and, to the extent required under ERISA or the Code, the most recent annual report on Form 5500 and summaries of material modifications.

(b)       Except as set forth on Schedule 4.18(b) , no Southern Employee Plan is (1) a “multiemployer plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA, (2) a “multiple employer plan” within the meaning of Section 3(40) of ERISA or Section 413(c) of the Code, or (3) is subject to Title IV of ERISA or Section 412 of the Code.

(c)       Except as set forth on Schedule 4.18(c) , there is no Proceeding pending or, to Southern’s Knowledge, threatened against the assets of any Southern Employee Plan or, with respect to any Southern Employee Plan, against Southern other than Proceedings that would not reasonably be expected to result in a Material Adverse Effect, and to Southern’s Knowledge there is no Proceeding pending or threatened in writing against any fiduciary of any Southern Employee Plan other than Proceedings that would not reasonably be expected to result in a Material Adverse Effect.

(d)       Each of the Southern Employee Plans has been operated and administered in all material respects in accordance with its terms and applicable law, including, but not limited to, ERISA and the Code.

(e)       Each of the Southern Employee Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination, notification, or opinion letter from the IRS.

(f)       Except as set forth on Schedule 4.18(f) , no director, officer, or employee of Southern will become entitled to retirement, severance or similar benefits or to enhanced or accelerated benefits (including any acceleration of vesting or lapsing of restrictions with respect to equity-based awards) under any Southern Employee Plan solely as a result of consummation of the Merger.

4.19        Banking Relationships .   Schedule 4.19 sets forth the names and locations of all banks, trust companies, savings and loan associations and other financial institutions at which Southern maintains safe deposit boxes or accounts of any nature and the names of all persons authorized to have access thereto, draw thereon or make withdrawals therefrom.

4.20        Insurance .   Schedule 4.20 is an accurate and complete description of all policies of insurance of any kind or nature, including, but not limited to, fire, liability, workmen’s compensation and other forms of insurance owned or held by or covering Southern or all or any portion of its property and assets.

4.21        Employees .

(a)        Schedule 4.21 contains a complete and accurate list of each employee of Southern, including each employee on leave of absence or layoff status, and such employee’s name, job title, date of hiring or engagement, date of commencement of employment or engagement, current compensation paid or payable, and service credited for purposes of vesting and eligibility to participate under any Southern Employee Pl