AGREEMENT AND PLAN OF MERGER BY AND AMONG INCENTRA SOLUTIONS, INC. INCENTRA HELIO ACQUISITION CORP. HELIO SOLUTIONS, INC. AND DAVID CONDENSA, AS SHAREHOLDERS REPRESENTATIVE

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Title: AGREEMENT AND PLAN OF MERGER BY AND AMONG INCENTRA SOLUTIONS, INC. INCENTRA HELIO ACQUISITION CORP. HELIO SOLUTIONS, INC. AND DAVID CONDENSA, AS SHAREHOLDERS REPRESENTATIVE
Governing Law: Delaware Date: 8/23/2007
Industry: SOFTWR Law Firm: MBV Law LLP Sector: TECHNO

Search Agreement and Plan of Merger by:

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

INCENTRA SOLUTIONS, INC.

INCENTRA HELIO ACQUISITION CORP.

HELIO SOLUTIONS, INC.

AND

DAVID CONDENSA,

AS SHAREHOLDERS’ REPRESENTATIVE

Dated as of August ___, 2007

TABLE OF CONTENTS


			Page


RECITALS			10

ARTICLE I
THE MERGER			11

	Section 1.1	The Merger	11
	Section1.2	Closing	11
	Section 1.3	Effective Time	11
	Section 1.4	Effects of the Merger	11
	Section 1.5	Certificate of Incorporation and By-Laws of the Surviving Corporation	11
	Section 1.6	Directors and Officers	12

ARTICLE II
MERGER CONSIDERATION; EFFECT ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES			12

	Section 2.1	Merger Consideration	12
	Section 2.2	Fractional Shares	18
	Section 2.3	Exchange of Certificates	18
	Section 2.4	Certain Adjustments	19
	Section 2.5	Shares of Dissenting Shareholders	20
	Section 2.6	Tax-Free Reorganization	20

ARTICLE III
REPRESENTATIONS AND WARANTIES OF THE COMPANY			20

	Section 3.1	Organization, Standing and Corporate Power	21
	Section 3.2	Subsidiaries	21
	Section 3.3	Capital Structure	21
	Section 3.4	Authority; Noncontravention	22
	Section 3.5	Financial Statements; Undisclosed Liabilities	23
	Section 3.6	Material Contracts	25
	Section 3.7	Permits; Compliance with Applicable Laws	27
	Section 3.8	Absence of Litigation	28
	Section 3.9	Tax Matters	28
	Section 3.10	Employee Benefit Plans	30
	Section 3.11	Labor Matters	33
	Section 3.12	Environmental Matters	34
	Section 3.13	Intellectual Property	35
	Section 3.14	Insurance Matters	38

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	Section 3.15	Transactions with Affiliates	38
	Section 3.16	Voting Requirements	38
	Section 3.17	Brokers	38
	Section 3.18	Real Property	38
	Section 3.19	Tangible Personal Property	39
	Section 3.20	Powers of Attorney	39
	Section 3.21	Offers	39
	Section 3.22	Warranties	40
	Section 3.23	Investment Company	40
	Section 3.24	Board Approval	40
	Section 3.25	Books and Records	40
	Section 3.26	Status of Shares Being Transferred	40
	Section 3.27	Investment in Parent Common Stock	40
	Section 3.28	Disclosure	41
	Section 3.29	No Shareholder Competing Business	42

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT			42

	Section 4.1	Organization; Standing and Corporate Power	42
	Section 4.2	Capital Structure	43
	Section 4.3	Authority; Noncontravention	43
	Section 4.4	Parent Documents	44
	Section 4.5	Voting Requirements	44
	Section 4.6	Brokers	45
	Section 4.7	Board Approval	45
	Section 4.8	Books and Records	45
	Section 4.9	Sarbanes Oxley Act Compliance	45
	Section 4.10	Additional Representations	45
	Section 4.11	Litigation	46
	Section 4.12	Compliance	46
	Section 4.13	Contracts with Third Parties	46
	Section 4.14	Disclosure	46

ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS			47

	Section 5.1	Conduct of Business by the Company	47
	Section 5.2	Advice of Changes	48
	Section 5.3	No Solicitation by the Company	48
	Section 5.4	Conduct of Business by Parent	49
	Section 5.5	Transition	49

ARTICLE VI
ADDITIONAL AGREEMENTS			49

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	Section 6.1	Access to Information; Confidentiality	49
	Section 6.2	Commercially Reasonable Efforts	50
	Section 6.3	Fees and Expenses	51
	Section 6.4	Public Announcements	51
	Section 6.5	Regulation D	51
	Section 6.6	Shareholders Covenant Not to Compete	52
	Section 6.7	Parent Audit of Company	52

ARTICLE VII
CONDITIONS PRECEDENT			52

	Section 7.1	Conditions to Each Party’s Obligation to Consummate the Merger	52
	Section 7.2	Conditions to Obligations of Parent and Merger Sub	53
	Section 7.3	Conditions to Obligations of the Shareholders	55
	Section 7.4	Frustration of Closing Conditions	56

ARTICLE VIII
INDEMNIFICATION; ARBITRATION			57

	Section 8.1	Survival of Representations and Warranties	57
	Section 8.2	Indemnification by Shareholders	57
	Section 8.3	Indemnification by Parent	59
	Section 8.4	Claims and Procedures	59
	Section 8.5	Arbitration	61
	Section 8.6	Shareholders’ Representative	61

ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER			63

	Section 9.1	Termination	63
	Section 9.2	Effect of Termination	64
	Section 9.3	Amendment	64
	Section 9.4	Extension; Waiver	64

ARTICLE X
GENERAL PROVISIONS			65

	Section 10.1	Notices	65
	Section 10.2	Definitions	66
	Section 10.3	Interpretation	66
	Section 10.4	Counterparts	67
	Section 10.5	Entire Agreement; no Third-Party Beneficiaries	67
	Section 10.6	Governing Law	67

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Section 10.7	Assignment	67
Section 10.8	Consent to Jurisdiction	67
Section 10.9	Headings	68
Section 10.10	Severability	68
Section 10.11	Enforcement	68

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EXHIBITS

Exhibit A - Surviving Corporation Certificate of Incorporation

Exhibit B - Form of Escrow Agreement

Exhibit C - Form of Employment Agreements

Exhibit D –Form of Registration Rights Agreements

Exhibit E - Form of Legal Opinion of Counsel to the Company and Shareholders

Exhibit F - Form of Lock-Up and Voting Agreement

Exhibit G - Form of Legal Opinion of Counsel to Parent

Exhibit H - Mutual Release and Settlement Agreement

Exhibit I - Form of Joinder Agreement

SCHEDULES

Company Disclosure Schedule

Parent Disclosure Schedule

Page 6

INDEX OF DEFINED TERMS


DEFINED TERMS		SECTION

DEFINED

Affiliate		Section 9.3(a)
Agreement		Preamble
Cash Consideration		Section 2.1(b)
Certificate of Merger		Section 1.3
CGCL		Preamble
Closing		Section 1.2
Closing Date		Section 1.2
Closing Statement		Section 1.2(c)(i)
Closing Net Working Capital		Section 2.1(e)(i)
Code		Section 2.9(e)
Company		Preamble
Company Acquisition Proposal		Section 4.3(a)
Company Certificate of Incorporation		Section 2.2(b)
Company Common Stock		Preamble
Company Disclosure Schedule		Article II
Company Financial Statements		Section 2.5(a)
Company IP Agreements		Section 2.13(g)
Company Material Contracts		Section 2.6(b)
Company Permitted Lien		Section 2.19
Competing Business		Section 5.9
DGCL		Preamble
Dispute		Section 7.3
Earn Out Payment		Section 1.1
EBITDA		Section 2.11(f)(vi)
Effective Time		Section 1.3
Employee Plans		Section 2.10(a)
Employment Agreements		Section 6.2(h)
Encumbrance		Section 9.3(c)
Environmental Laws		Section 2.12(d)(i)
Environmental Permits		Section 2.12(d)(ii)
ERISA		Section 2.10(a)
ERISA Affiliate		Section 2.10(a)
Escrow Agreement		Section 2.1(d)
Escrow Deposit		Section 2.1(d)
Escrow Account		Section 2.1(d)
Escrow Fund		Section 2.1(d)
Escrow Termination Date		Section 1.2(d)
Excluded Assets		Section 1.3
Fair Market Value		Section 2.1(e)(iv)
Fiduciary		Section 2.10(e)

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GAAP		Section 2.1(e)
Government Entities		Section 2.4(c)
Governmental Entity		Section 2.4(c)
Hazardous Substances		Section 2.12(d)(iii)
Indemnified party		Section 7.2(a)
Indemnifying party		Section 7.2(a)
Initial Consideration		Section 1.1
Intellectual Property		Section 2.13(a)
IRS		Section 2.10(g)
Knowledge		Section 9.3(d)
Liens		Section 2.4(d)
Material adverse change		Section 9.3(e)
Material adverse effect		Section 9.3(e)
Merger		Preamble
Merger Consideration		Section 2.1(b)
Merger Sub		Preamble
Measurement Period		Section 2.1(f)(i)
Measurement Period Earn Out Payment		Section 2.1(f)(i)
Multi-Employer Plans		Section 2.10(d)
Net Working Capital		Section 1.2(c)
NVGL		Preamble
NWC Deficit		Section 2.1(e)(iii)
NWC Excess		Section 2.1(e)(iv)
Other Company Documents		Section 2.7(c)
Over 90 Collections		Section 1.2(c)(iv)
Person		Section 9.3(f)
Parent		Preamble
Parent Common Stock		Section 3.2(a)
Parent Employee Stock Options		Section 3.2(a)
Parent Indemnified Parties		Section 7.1(a)
Parent Losses		Section 7.1(a)
Parent SEC Documents		Section 3.4(a)
Parent Preferred Stock		Section 3.2(a)
Parent Shares		Section 2.1(a)(ii)
Parent Stock Plans		Section 3.2(a)
Permits		Section 2.7(a)
Release		Section 2.12(d)(iv)
Registration Rights Agreement		Section 6.2(i)
Requisite Regulatory Approvals		Section 6.1(b)
Restraints		Section 6.1(c)
Sarbanes Oxley Act		Section 3.9
SEC		Section 3.4(a)
Secretary		Section 1.3
Securities Act		Section 2.24(a)
Shareholder Indemnified Parties		Section 7.1(b)
Shareholder Losses		Section 7.1(b)

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Shareholders		Preamble
Shares		Recitals
Software		Section 2.13(a)
Subsidiary		Section 9.3(g)
Surviving Corporation		Section 1.1
Tangible Personal Property		Section 2.18
Tax		Section 2.9(i)(i)
Taxes		Section 2.9(i)(i)
Tax Return		Section 2.9(i)(ii)
Third Party Rights		Section 2.13(d)
Working Capital		Section 6.2(e)

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of August ___, 2007, by and among INCENTRA SOLUTIONS, INC., a Nevada corporation (“Parent”), INCENTRA HELIO ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), HELIO SOLUTIONS, INC., a California corporation (the “Company”), and DAVID CONDENSA, as Shareholders’ Representative (as defined in Section 8.6).

RECITALS

WHEREAS, each of Parent, Merger Sub and the Company desire Parent to consummate a business combination with the Company in a transaction whereby, upon the terms and subject to the conditions set forth in this Agreement, the Company will merge with and into Merger Sub (the “Merger”), each outstanding share of Common Stock of the Company (“Company Common Stock”) (other than Dissenting Shares (as defined herein), will be converted into the right to receive the Merger Consideration, and Merger Sub will be the surviving corporation in the Merger;

WHEREAS, the Board of Directors of the Company has unanimously determined and resolved that the Merger and all of the transactions contemplated by this Agreement are in the best interest of the holders of Company Common Stock and that the Merger is fair and advisable, and has approved this Agreement in accordance with the California General Corporation Law, as amended (the “CGCL”), and has further resolved unanimously to recommend to all holders of Company Common Stock that they authorize, approve and adopt this Agreement and the transactions contemplated hereby; and

WHEREAS, the Boards of Directors of Parent and Merger Sub have unanimously determined and resolved that the Merger and all of the transactions contemplated by this Agreement are in the best interest of Parent and the holders of Parent Common Stock and has adopted this Agreement in accordance with the Nevada General Corporation Law, as amended (the “NVGCL”) and Parent, as sole Shareholder of Merger Sub, has adopted this Agreement in accordance with the Delaware General Corporation Law, as amended (the “DGCL”).

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows:

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ARTICLE I

THE MERGER

SECTION 1.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, at the Effective Time, the Company shall be merged with and into Merger Sub and Merger Sub shall be the surviving corporation in the Merger (the “Surviving Corporation”) and, as such, Merger Sub shall continue its corporate existence as a direct, wholly owned subsidiary of Parent under the laws of the State of Delaware, and the separate corporate existence of the Company thereupon shall cease.

SECTION 1.2 Closing. Subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to consummation of the Merger contained in Article VII hereof, the closing of the Merger (the “Closing”) shall take place at 9:00 a.m., Denver, CO time, on a date to be specified by the parties (the “Closing Date”), which date shall not be later than the third business day next following the satisfaction or, to the extent permitted by applicable law, waiver of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or, to the extent permitted by applicable law, waiver of those conditions), unless another time or date is agreed to by the parties hereto. The Closing will be held at the offices of Parent, located at 1140 Pearl Street, Boulder, CO 80302 or at such other location as is agreed to by the parties hereto.

SECTION 1.3 Effective Time. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing the parties shall cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware (the “Secretary”) a certificate of merger in form and substance acceptable to the parties hereto (the “Certificate of Merger”) duly executed and so filed in accordance with the DGCL and shall make all other filings and recordings required under the DGCL and CGCL to effectuate the Merger and the transactions contemplated by this Agreement. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary, or at such subsequent date or time as Parent and the Company mutually shall agree and specify in the Certificate of Merger (the time the Merger becomes so effective being hereinafter referred to as the “Effective Time”). The parties shall cooperate with each other and take all commercially reasonable action to pre-position and/or pre-clear the Certificate of Merger with the Secretary of State of Delaware so that the Certificate of Merger is accepted and becomes effective on the Closing Date.

SECTION 1.4 Effects of the Merger. The Merger shall have the effects set forth in the DGCL.

SECTION 1.5 Certificate of Incorporation and By-laws of the Surviving Corporation. The certificate of incorporation of Merger Sub as set forth in Exhibit A attached hereto shall be the certificate of incorporation of the Surviving Corporation until thereafter amended or restated as provided therein or by applicable law. The by-laws of

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Merger Sub in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until thereafter amended or restated as provided therein or by applicable law.

SECTION 1.6 Directors and Officers. The directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be and become the directors of the Surviving Corporation until their successors shall have been duly elected and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and by-laws of the Surviving Corporation and the DGCL; provided that the board of directors of the Merger Sub shall be comprised of two (2) directors, consisting of Thomas P. Sweeney III and Matthew G. Richman. The officers of Merger Sub at the Effective Time shall, from and after the Effective Time, be and become the officers of the Surviving Corporation until their successors shall have been duly appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and the by-laws of the Surviving Corporation.

ARTICLE II

MERGER CONSIDERATION; EFFECT ON CAPITAL STOCK; EXCHANGE
OF CERTIFICATES

SECTION 2.1 Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holders of any of the following securities:

(a) The Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares, as defined in Section 2.5 hereof) shall be converted into the right for each stockholder of the Company, as set forth in Section 3.3(a) of the Company Disclosure Schedule (the “Shareholders”) to receive his or her respective pro rata share of:


		(i) cash in the amount of Three Million Four Hundred Thousand Dollars ($3,400,000.00); and

		(ii) Five Million shares of Parent’s unregistered common stock, par value $.001 per share (the “Parent Shares”).

		(iii) For purposes of this Agreement, a Shareholder’s pro rata share shall be such Shareholder’s percentage interest in the total number of shares of Company Common Stock as set forth in Section 3.3(a) of the Company Disclosure Schedule.

(b) For purposes of this Agreement, the payment pursuant to Section 2.1(a)(i) shall be referred to as the “Cash Consideration”, and the term “Merger Consideration” shall mean, collectively, the Parent Shares and the Cash Consideration. At the Closing, Parent shall (i) pay the Cash Consideration described in Section 2.1(a)(i), less the Escrow

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Deposit (as defined in Section 2.1(c) hereof), to the Shareholders by wire transfer of immediately available U.S. federal funds to such accounts as the Shareholders may direct by written notice delivered to Parent or Parent’s counsel; and (ii) issue and deliver stock certificates to the Shareholders representing their respective pro rata shares of the Parent Shares.

(c) Simultaneously with the Closing, Shareholders’ Representative and Parent shall enter into an escrow agreement (the “Escrow Agreement”) with an escrow agent selected by Parent and reasonably acceptable to the Shareholder Representative (the “Escrow Agent”) substantially in the form of Exhibit B hereto. Pursuant to the terms of the Escrow Agreement, Parent shall deposit Seven Hundred Fifty Thousand Dollars ($750,000.00) of the Cash Consideration (the “Escrow Deposit”) into an interest bearing escrow account, which account is to be managed by the Escrow Agent (the “Escrow Account”). Any Escrow Deposit, any interest thereon, and any other property in the Escrow Account are referred to as the “Escrow Fund”. The Escrow Fund shall be available to satisfy any NWC Deficit (as defined in Section 2.1(d)(iii) below) and any amounts owed by Shareholders to Parent pursuant to Article VIII of this Agreement and the terms of the Escrow Agreement (which amounts shall be paid first from the Escrow Fund until the Escrow Fund is exhausted). Distributions from the Escrow Account shall be governed by the terms and conditions of the Escrow Agreement. The adoption of this Agreement and the approval of the transactions contemplated herein by Shareholders shall constitute approval of the Escrow Agreement and all of the arrangements relating thereto, including, without limitation, the placement of the Escrow Deposit in escrow.

(d) (i) As promptly as practicable, but no later than ninety (90) days after the Closing Date, Parent shall cause to be prepared and delivered to the Shareholders’ Representative a closing statement (the “Closing Statement”) presenting the Net Working Capital (defined in accordance with generally accepted accounting principles (“GAAP”) as current assets minus current liabilities) as of the end of business on the Closing Date (“Closing Net Working Capital”). Accounts receivable included within Net Working Capital for this purpose shall be valued at face value if the age of the receivable is ninety (90) days or less , and at zero (0) if the age of the receivable is more than ninety (90) days; provided, however receivables aged more than ninety (90) days shall be valued at the face value with respect to purchase orders that have extended terms as a result of extended terms granted to the Company by its vendors, all of which purchase orders are identified in Section __ of Schedule III hereto. Shareholders’ Representative shall have twenty (20) days from receipt of the Closing Statement to dispute the calculation of Net Working Capital by Parent. Shareholders’ Representative shall provide notice to Parent of any such dispute in accordance with the notice provisions of Section 10.1 below. In the event no notice of dispute is provided to Parent, the Closing Statement shall be deemed final and binding on the parties. In the event Shareholders and Parent are not able to agree within thirty (30) days of receipt of the Closing Statement by the Shareholders’ Representative on such calculation, it shall be submitted to a mutually agreed upon independent public accounting firm for final resolution in accordance with the guidelines as provided herein.

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	(ii) The independent accounting firm selected by Parent and Shareholders’ Representative will be a firm with offices in more than one location. Each party may present financial information to the accounting firm for review within ten (10) days of selection of the firm provided that all such information is simultaneously provided to the other party. No such firm will be engaged that does not undertake to provide its final determination within thirty (30) days of submission of all materials to be reviewed. The decision of the selected accounting firm will be presented in a written report to include the basis for all adjustments made to the Closing Statement. The fees of the accounting firm will be paid one-half by the Parent and one-half by the Shareholders.

	(iii) In the event Closing Net Working Capital is less than One Million Eight Hundred Thousand Dollars ($1,800,000.00), the shortfall shall be referred to herein as the “NWC Deficit”, the Purchase Price shall be reduced by the amount of the NWC Deficit, and an amount equal to the NWC Deficit shall be released from the Escrow Account to Parent. As soon as reasonably practicable (which shall in any case be within fifteen (15) days after the Closing Statement is deemed final), the Parties shall execute and deliver to the Escrow Agent joint instructions as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent to liquidate such portion of the Escrow Fund as required and deliver to Parent funds from the Escrow Fund in an amount equal to the NWC Deficit. In the event the Escrow Fund is less than the NWC Deficit, then each Shareholder shall, within fifteen (15) days of the Closing Working Capital Statement being deemed final, pay to Parent his or her pro rata share of the amount by which the NWC Deficit exceeds the Escrow Fund.

	(iv) In the event Closing Net Working Capital is greater than Two Million Two Hundred Thousand Dollars ($2,200,000.00), the excess shall be referred to herein as the “NWC Excess”, the Purchase Price shall be increased by the amount of the NWC Excess, and an amount equal to the NWC Excess shall be paid to Shareholders in their respective pro rata shares by Parent within fifteen (15) days after the Closing Statement is deemed to be final.

	(v) As soon as reasonably practicable (which shall in any case be within fifteen (15) days after the twelve (12) month anniversary date hereof), the Parties shall execute and deliver to the Escrow Agent joint instructions, as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent immediately to liquidate the Escrow Fund and deliver to Shareholders or Incentra (together with interest earned thereon in proportion to the distribution being made), as designated in such joint instructions, funds then remaining in the Escrow Fund, less the aggregate amount of all disputed amounts relating to any claims made pursuant to Section 8.2 of this Agreement, if any, not paid or otherwise resolved by the aforementioned date. If any such claims are pending resulting in disputed amounts remaining in escrow, the Parties shall, as soon as reasonably practicable after the resolution of such claim, execute and deliver to

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	the Escrow Agent joint instructions (which shall be within fifteen (15) days of such resolution) as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent to liquidate the Escrow Fund and deliver the funds then remaining in escrow in accordance with the resolution of the claim or dispute.

(e) Subject to the conditions set forth below, Parent will pay Shareholders their respective pro rata shares of Measurement Period Earn Out Payments, as defined below and to be computed as follows:


	(i) For the first twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “First Measurement Period”), in the event Company’s EBITDA is in excess of Two Million Dollars ($2,000,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “First Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the First Measurement Period, up to a maximum First Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The First Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the First Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(i) determined by dividing one-half (1/2) of the total First Measurement Period Earn Out Payment by One Dollar ($1.00). In the event First Measurement Period EBITDA exceeds Four Million Dollars ($4,000,000.00), the excess EBITDA above Four Million Dollars ($4,000,000.00) shall be carried over and considered EBITDA earned for the Second Measurement Period and thus included in the determination of the Second Measurement Period Earn Out Payment.

	(ii) For the second twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “Second Measurement Period”), in the event Company’s EBITDA is in excess of Two Million Five Hundred Thousand Dollars ($2,500,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “Second Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the Second Measurement Period, up to a maximum Second Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The Second Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the Second Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(ii) determined by dividing one-half (1/2) of the total Second Measurement Period Earn Out Payment by the greater of One Dollar ($1.00) or ninety percent (90%) of the Fair Market Value of Parent Common Stock (as defined in Section 2.1(e)(iv) below) at the end of the Second Measurement Period (the “Second Period Determination Date”). In the event

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	Second Measurement Period EBITDA exceeds Five Million Dollars ($5,000,000.00), the excess EBITDA above Five Million Dollars ($5,000,000.00) shall be carried over and considered EBITDA earned for the Third Measurement Period and thus included in the determination of the Third Measurement Period Earn Out Payment.

	(iii) For the third twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “Third Measurement Period”), in the event Company’s EBITDA is in excess of Three Million Dollars ($3,000,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “Third Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the Third Measurement Period, up to a maximum Third Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The Third Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the Third Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(iii) determined by dividing one-half (1/2) of the total Third Measurement Period Earn Out Payment by the greater of Two Dollars ($2.00) or ninety percent (90%) of the Fair Market Value of Parent Common Stock (as defined in Section 2.1(f)(iv) below) at the end of the Third Measurement Period (the “Third Period Determination Date”).

	(iv) For purposes of this Agreement, the Fair Market Value of Parent Common Stock, shall be: (i) if the Company’s common stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the average of the closing price, reported for the last five (5) business days immediately preceding and including the Determination Date, or (ii) if the Company’s common stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board, then the mean of the average of the closing prices reported for the last five (5) business days immediately preceding and including the Determination Date.

	(v) In the event that Company EBITDA for any individual Measurement Period is less than the respective EBITDA threshold for that Measurement Period, there shall be no Measurement Period Earn Out Payment for that Measurement Period.

	(vi) In the event Company EBITDA for any individual Measurement Period is less than the amount of EBITDA required for a Measurement Period Earn Out Payment for that Measurement Period and the Company’s aggregate EBITDA for the three Measurement Periods is greater than Seven Million Five

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	Hundred Thousand Dollars ($7,500,000.00), an adjustment to the earn-out consideration will be calculated whereby Parent shall pay Shareholders their respective pro rata shares of an amount equal to the difference between (y) the actual aggregate EBIDTA over the three Measurement Periods, up to a maximum of Fifteen Million Dollars ($15,000,000.00), and (z) the actual Measurement Period Earn Out Payments made by Parent to Shareholders pursuant to Sections 2.1(e)(i) - (iii) above (the “Adjusting Earn Out Payment”). Any payment pursuant to this Section 2.1(e)(vi) shall be made within ninety (90) days of the end of the final Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock. The number of shares of unregistered Parent Common Stock to be issued shall be determined by dividing one-half (1/2) of the Adjusting Earn Out Payment by the greater of Two Dollars ($2.00) or ninety percent (90%) of the per share Fair Market Value of Parent’s unregistered Common Stock.

	(vii) Notwithstanding anything herein to the contrary, One Million (1,000,000) shares of the Parent Shares issued to Shareholders at Closing pursuant to Section 2.1(a)(ii) above shall be deemed issued as an advance against Parent Common Stock to be issued in payment of Measurement Period Earn Out Payments such that Parent shall not be required to issue any new Parent Common Stock to Shareholders in payment of any Measurement Period Earn Out Payment unless and until Shareholders shall become entitled to receive, in the aggregate, in excess of One Million (1,000,000) shares of Parent Common Stock in payment of one or more Measurement Period Earn Out Payments, and then, and only then, Parent shall be required to issue to Shareholders only the number of shares of Parent Common Stock by which the total to which they are otherwise entitled pursuant to this Section 2.1(e) exceeds One Million (1,000,000). Parent shall not, however, be entitled to recover any Parent Shares issued to Shareholders at Closing which have not been applied to payment of one or more Measurement Period Earn Out Payments pursuant to this Section 2.1(e)(vii) as of the end of the third Measurement Period.

	(viii) For purposes of this Agreement, EBITDA shall be defined as the net income of the Company, as determined by generally accepted accounting principles, plus interest, taxes, depreciation and amortization and subject to the other restrictions or limitations on allocation of expenses as provided in this Agreement.The parties agree that no headquarters or overhead expenses or costs of Parent or its Affiliates or Subsidiaries or other charges of or from Parent, its affiliates or subsidiaries will be allocated or charged to Company for purposes of determining EBITDA under this Agreement, provided that direct costs incurred by Parent, its affiliates or subsidiaries for services provided to and paid for by customers of the Company to the Company, at rates agreed to by the Company and Parent with respect to such services, shall be included at such agreed upon rates for purposes of determining EBITDA hereunder. The parties agree that no new “line items” reflecting costs or expenses shall be permitted to be included as

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	an expense in arriving at this EBITDA, unless previously approved by the Shareholder Representative in his reasonable discretion. In the event of a merger, consolidation or other combination of the Company with another entity, the EBITDA calculation, for purposes of this Agreement, shall be made in a manner that as nearly as is reasonably possible reflects the EBITDA of the Company as it would have been but for such merger, consolidation or combination. Nothing in this Section 2.1(e) shall, however, be construed to prevent any such merger, consolidation or combination or the introduction of new goods and/or services to the line of goods and services provided by the Company. An accountant of Shareholders’ choosing shall be permitted to review and approve the computation of EBITDA following each of the Measurement Periods in question, which approval will not be unreasonably withheld.

	(ix) Parent shall have the right to withhold payment of any Measurement Period Earn Out Payment to a Shareholder up to the amount of the Shareholder’s pro rata liability for any claim reasonably made by Parent pursuant to Article VIII hereof to the extent such claim or claims (A) are not limited by the amount of the Shareholder’s pro rata share of the Escrow Funds in accordance with Section 8.2 below, and (B) exceed the Shareholder’s pro rata share of the then current Escrow Funds.

	(x) Notwithstanding anything herein to the contrary, in the event a Shareholder other than David Condensa resigns his or her employment with the Surviving Corporation during any Measurement Period, such Shareholder shall receive a percentage of his or her pro rata share of the Measurement Period Earn Out Payment for the Measurement Period during which he or she left equal to the percentage of such Measurement Period he or she was employed by Surviving Corporation during such Measurement Period, and shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for any future Measurement Period. In the event a Shareholder is terminated by the Surviving Corporation For Cause (as defined in his or her employment agreement), such Shareholder shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for the Measurement Period in which such termination For Cause occurred or for any future Measurement Period thereafter. Any Measurement Period Earn Out Payment forfeited by a Shareholder other than David Condensa pursuant to this Section 2.1(e)(x) shall be reallocated among the non-forfeiting Shareholders in their pro rata shares.

	(xi) In the event David Condensa resigns his or her employment with the Surviving Corporation without Good Reason (as defined in his or her employment agreement) during any Measurement Period, he shall receive a percentage of his pro rata share of the Measurement Period Earn Out Payment for the Measurement Period during which he left equal to the percentage of such Measurement Period he was employed by Surviving Corporation during such Measurement Period, and shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for any future Measurement Period. In the event David Condensa is terminated by the Surviving Corporation For Cause

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	(as defined in his employment agreement), he shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for the Measurement Period in which such termination For Cause occurred or for any future Measurement Period thereafter. Any Measurement Period Earn Out Payment forfeited by David Condensa pursuant to this Section 2.1(e)(xi) shall be forfeited in full and shall not be reallocated among non-forfeiting Shareholders.

	(xii) Notwithstanding anything herein to the contrary, in the event Parent or Surviving Corporation engages in any Fundamental Business Changes (as defined below) without the prior written consent of the Shareholder Representative, which consent shall not be unreasonably withheld or delayed, Parent shall pay the Shareholders, in their then applicable percentage interests, the sum of Fifteen Million Dollars ($15,000,000), less the amount of any Measurement Period Earn Out Payments already paid to the Shareholders (such difference, the “Accelerated Earn Out Payment”). The Accelerated Earn Out Payment shall be payable within ninety (90) days after the occurrence of the Fundamental Business Change (unless the prior consent of the Shareholder Representative was obtained) and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(xii) determined by dividing one-half (1/2) of the total Accelerated Earn Out Payment by the greater of One Dollars ($1.00) or the Fair Market Value of Parent Common Stock (as defined in Section 2.1(e)(iv)) at the time of the Fundamental Business Change. “Fundamental Business Change” shall mean (A) the termination of employment of Dave Condensa other than For Cause (as defined in his employment agreement) after Closing; (B) the resignation of Dave Condensa for Good Reason (as defined in his employment agreement); (C) a Change of Control (as defined below) of Parent or Surviving Corporation; (D) a change in the business strategy, fundamental areas of business or corporate objectives of the Surviving Corporation, other than changes consistent with the natural evolution of the business, as operated by the Company, or the industry that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; (G) any material changes in the accounting practices, revenue recognition policies, cost allocation methodologies or categories or types of operating expenses of the Surviving Corporation in a manner inconsistent with those used in the preparation of the prior financial statements of the Company (except to the extent necessary to comply with any changes in GAAP) that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; or (H) any acceleration of recognition of revenue or delay in incurrence of capital expenditures or expenses in a manner inconsistent with past practices of the Company (except to the extent necessary to comply with any changes in GAAP) that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; provided, however, in no event shall a Fundamental Business Change be deemed to have occurred as a result of the addition of services offered by Parent or its Affiliates to the Surviving Corporation’s line of business and accounting or revenue recognition practices required thereby, changes to accounting or revenue recognition practices to the extent necessary to comply with any changes in GAAP or SEC reporting

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requirements, or by any change in business strategy or accounting practices implemented by the Shareholder Representative in his capacity as an officer or manager of Surviving Corporation. “Change of Control” means any sale of voting securities or sale of assets (whether by sale, merger, consolidation, share exchange, or otherwise in one transaction or a series of transactions) of Parent or Surviving Corporation that results in any third party that is not a shareholder immediately prior to the Closing becoming the owner of securities or assets of the Surviving Corporation or Parent representing over fifty percent (50%) of the combined voting power of Surviving Corporation’s or Parent’s then outstanding securities or all or substantially all of their respective assets; provided, however, no Change of Control shall be deemed to have occurred as a result of any transfer or acquisition of Parent shares or other Parent securities by one or more Shareholders.

SECTION 2.2 Fractional Shares. No certificates representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of certificates representing Company capital stock (“Company Stock Certificates”), no dividend or distribution by Parent shall relate to such fractional share interests, and such fractional share interests shall not entitle the owner thereof to vote or to any rights as a Shareholder of Parent. Further, no holder of a Company Stock Certificate who otherwise would have been entitled to receive in the Merger a fractional share interest in exchange for such Company Stock Certificate shall have the right to receive cash payment in lieu thereof. In lieu of any such fractional shares or cash payment, (x) any such fractional share interest greater than or equal to one-half of a share (0.5) shall be rounded up to the next whole share number, and (y) any such fractional share less than one-half of a share (0.5) shall be rounded down to the preceding whole share number and the certificates representing shares of Parent Common Stock to be issued in the Merger shall reflect such adjustments.

SECTION 2.3 Exchange of Certificates. (a) At the Closing, the Shareholders shall surrender to the Parent all Company Stock Certificates in proper form for cancellation, and upon such surrender shall be entitled to receive in exchange therefor his or her respective Merger Consideration, including a certificate (or certificates) representing such whole number of shares of Parent Common Stock as such holder is entitled to receive pursuant to this Article II in such denominations and registered in such names as such holder may request. The shares represented by the Company Stock Certificate so surrendered shall forthwith be cancelled. Without limiting the generality of the foregoing (and notwithstanding any other provisions of this Agreement), no interest shall be paid or accrued in respect of any of the Merger Consideration payable to holders of Company Common Stock in accordance with this Article II. Until surrendered in accordance with this Section 2.3, each Company Stock Certificate shall be deemed at all times from and after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration.