STOCK EXCHANGE AGREEMENT

STOCK EXCHANGE AGREEMENT

THIS STOCK EXCHANGE AGREEMENT, made and entered into as of [August 19], 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Monte W. Smith and Mary Catherine Smith (“Mr. & Mrs. Smith”) the sole stockholders of Smith Systems Transportation, Inc., a Nebraska corporation, (“SSTI”), and SSTI for the purpose of its representations, warranties and deliverables set forth herein.

W I T N E S S E T H :

WHEREAS, IFSI is planning (a) to acquire one or more trucking companies and (b) to file a registration statement under the Securities Act of 1933 (“1933 Act) or the Securities Exchange Act of 1934 (“1934 Act”), for the purpose of becoming a “reporting company” and developing a public trading market for its common stock; and

WHEREAS, SSTI is a trucking company with its headquarters office located in Scottsbluff, Nebraska; and

WHEREAS, IFSI desires to acquire SSTI as a going concern by the means of an exchange of shares of IFSI’s common stock for all of SSTI’s issued and outstanding equity securities (“SSTI’s Securities”) and thereafter to operate SSTI as a wholly owned subsidiary; and

WHEREAS, Mr. & Mrs. Smith desire to exchange all of SSTI’s Securities that he owns for shares of IFSI’s common stock and for SSTI to be acquired by IFSI, as contemplated by this Agreement; and

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises and respective representations and warranties of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of consummating the transaction(s) contemplated herein, as follows:

ARTICLE I

PRELIMINARY MATTERS

Section 1.01. Recitals . The parties acknowledge the recitals herein above set forth in the preamble are correct, and are, by this reference, incorporated herein and are made a part of this Agreement.

Section 1.02. Exhibits and Schedules . Exhibits (which are documents to be executed and delivered at the Closing by the party identified therein or in the provision requiring such delivery) and Schedules (which are attachments setting forth information about a party identified therein or in the provision requiring such attachment) referred to herein and annexed hereto are, by this reference, incorporated herein and made a part of this Agreement, as if set forth fully herein.

Section 1.03. Use of words and phrases . Natural persons may be identified by last name, with such additional descriptors as may be desirable. The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders. The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

Section 1.04. Accounting terms . All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.

Section 1.05. Calculation of time lapse or passage; Action required on holidays . When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the day on which the event which starts the lapse or passage occurs as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month. Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated. If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

Section 1.06. Use of titles, headings and captions . The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions.

ARTICLE II

TERMS OF THE TRANSACTION S

Section 2.01.           Stock exchange transaction . In accordance with the terms of this Agreement, on the Closing Date, IFSI shall issue to Mr. & Mrs. Smith shares of its common stock and Mr. & Mrs. Smith shall deliver to IFSI all of SSTI’s Securities.

Section 2.02. Consideration . In exchange for SSTI’s Securities, IFSI shall deliver, at closing, 375,000 shares of its common stock to each of Mr. Smith and Mrs. Smith;

Section 2.03. Additional consideration based on performance . One year after the Closing, IFSI shall pay the sum of $125,000 to each of Mr. Smith and Mrs. Smith; provided, that the amount of such payment shall be reduced by an amount equal to the difference between the amount of SSTI’s gross revenues for the twelve month period ended on the last day of the month preceding the closing date and the twelve month period ending twelve months thereafter, subject in each case to normally occurring and extraordinary accounting adjustments, as made at the fiscal year end in which the respective twelve month period end.

Section 2.04. Federal income tax treatment . At or before the Closing Date, the parties shall agree on the value of each of the SSTI’s assets for federal income tax purposes and for GAAP purposes.

Section 2.05. Transaction costs. Each party shall pay all costs and expenses which it incurs in connection with this Agreement and the transactions contemplated hereby; except, IFSI shall pay all fees and reimbursable expenses which Mr. & Mrs. Smith may be obligated to pay (a) Chapman Associates and (b) Cordovano and Honeck LLP.

Section 2.06. Press releases . No party will issue a press release regarding the subject matter of this Agreement and the transaction contemplated hereby, either before or after closing, without the prior approval thereof by the other party and its counsel.

ARTICLE III

CLOSING OF THE TRANSACTION

Section 3.01. Location, date and time of the Closing . The Closing of the transaction contemplated by this Agreement shall take place on ____________, 2008, at 2:00 p.m. ("Closing Date”). The Closing shall take place at a location agreed to by the parties. The acts and deliveries which occur on the Closing Date for the purpose of consummating the transactions contemplated by this Agreement and the event itself is referred to herein as the “Closing”.

Section 3.02.     Mr. & Mrs. Smith’s and SSTI’s deliveries at the Closing . At the Closing, Mr. & Mrs. Smith and SSTI will deliver to IFSI:

Section 3.03. IFSI’s and Mr. Henley’s deliveries at the Closing . At the Closing, IFSI will deliver to Mr. & Mrs. Smith

Section 3.04. Closing Memorandum and receipts . As evidence that all parties deem the Closing to have been completed and the transactions contemplated by this Agreement to have been consummated, the parties jointly will execute and deliver a Closing Memorandum, in the form of Exhibit “C” , acknowledging such completion and consummation.

Section 3.06. Waiver of conditions . Notwithstanding Section 12.03, any condition to the Closing which is to the benefit of any party and which is not satisfied prior to or at the Closing, excluding nevertheless any provision of this Agreement which by its terms is to be performed in the future, will be deemed to be waived by the benefited party or otherwise satisfied and waived by virtue of that party executing the Closing Memorandum, except to the extent any such unsatisfied or unperformed condition is expressly preserved by listing it in the Closing Memorandum for satisfaction or performance after the Closing.

Section 3.07. Further assurances. At any time and from time to time after the Closing, at the reasonable request of any party and without further consideration, any other party(ies) shall execute and deliver such other instruments and documents reasonably desirable or necessary to complete and confirm the transactions contemplated by this Agreement.

Section 3.08. Conditions precedent to IFSI’s obligation to Close . All obligations of IFSI hereunder are subject, at the option of IFSI, to the fulfillment of each of the following conditions at or prior to the Closing, and SSTI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled:

(a) All representations and warranties of SSTI and of Mr. & Mrs. Smith contained herein and in any document delivered pursuant hereto shall be true and correct in all material respects when made and shall be deemed to have been made again and given at and as of the date of the Closing of the transaction contemplated by this Agreement, and shall then be true and correct in all material respects, except for changes in the ordinary course of business after the date hereof in conformity with the representations, covenants and agreements contained herein.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by SSTI and by Mr. & Mrs. Smith at or before the Closing shall have been duly and properly performed in all material respects to IFSI’s reasonable satisfaction.

(c) Since the date of this Agreement there shall not have occurred any Material Adverse Effect. The term “Material Adverse Effect” shall mean any material adverse change in SSTI or its operating or financial condition, prospects (financial or otherwise), business, properties or assets of SSTI.

(d) All documents required to be delivered to IFSI at or prior to the Closing shall have been so delivered.

(e) The transaction contemplated by this Agreement shall have been approved in writing by SSTI’s board of directors.

(f) SSTI shall have not suffered or incurred a material damage, destruction or loss not fully covered by insurance and which has a materially adverse affect on its business and operations.

(g) IFSI shall have received a certificate of good standing for SSTI and each subsidiary issued by the secretary of state of its state of organization and of each state in which it and its subsidiary is qualified or required to be qualified to do business as a foreign corporation.

[2007 (?) Fiscal Year End 3/31]

(i) IFSI shall have received unaudited financial statements of SSTI for the fiscal years ended March 31, 2007 and 2008 and unaudited financial statements for each of the interim quarterly periods ended subsequent thereto, which interim quarterly period shall not show any materially adverse results of operation when compared to 2008, the financial condition and performance of SSTI disclosed in such financial statements being to the reasonable satisfaction of IFSI in relation to unaudited financial statements delivered prior to execution and delivery of this Agreement.

Section 3.09. Conditions precedent to the SSTI obligation to Close . All obligations of SSTI at the Closing are subject, at the option of SSTI, to the fulfillment of each of the following conditions at or prior to the Closing, and IFSI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled.

(a) All representations and warranties of IFSI contained herein or in any document delivered pursuant hereto shall be true and correct in all material respects when made and as of the Closing.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by IFSI at or before the Closing shall have been duly and properly performed in all material respects to SSTI and Mr. & Mrs. Smith’s reasonable satisfaction.

(c) All documents required to be delivered to SSTI at or prior to the Closing shall have been so delivered.

(d) The transaction contemplated by this Agreement shall have been approved in writing by IFSI’s board of directors.

(f) SSTI shall have received a certificate of good standing for IFSI issued by the secretary of state of its state of organization and of each state in which it is qualified or required to be qualified to do business as a foreign corporation.

(g) SSTI shall have received audited financial statements of IFSI for the period of inception to the end of the calendar month preceding the Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Section 4.01. Representations and warranties of SSTI and Mr. & Mrs. Smith . Each of SSTI (as used in the following representations and warranties with respect to status or condition, “SSTI” includes every subsidiary of SSTI, all of which are identified in Schedule 1) and Mr. & Mrs. Smith represent and warrant, jointly and severally, to IFSI, as follows:

[This includes 60% of SST Financial L.L.C.]

(a) SSTI is a duly organized and an existing entity in good standing under the laws of its state of incorporation and has full corporate power to execute, deliver and perform this Agreement.

(b) SSTI is qualified to do business and in good standing in each state and jurisdiction in which the nature of its activities and ownership of property require it to be qualified as a foreign corporation.

(c) All licenses required for the conduct of SSTI’s businesses in intra and interstate commerce are in full force and effect, all such licenses being transferable in the event the transactions contemplated pursuant to this Agreement are deemed to be a transfer under applicable statutes and regulations; and, there is no proceeding of any nature pending or, to the best knowledge of SSTI and Smith, threatened which if determined adversely to SSTI would result in a revocation, cancellation of or material limitation or restriction on SSTI and the conduct of its or any subsidiary’s business as it is presently conducted.

(d) This Agreement has been duly and validly authorized, executed and delivered by SSTI and constitutes the legal, valid and binding obligation of SSTI enforceable against it, in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting stockholders and creditors rights generally and to general equitable principles.

(e) To the best knowledge of SSTI and Smith, the execution of this Agreement and consummation of the transactions contemplated hereby does not conflict with and will not result in any adverse consequences to or material breach of any agreement (financing or otherwise), mortgage, instrument, judgment, decree, law or governmental regulation, license, permit or authorization by SSTI or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by SSTI, from which SSTI benefits or which is desirable in the conduct of SSTI’s business.

(f) To the best knowledge of SSTI and Smith, except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state or subdivision thereof or any self-regulatory body to which SSTI is subject is required in connection with the execution and delivery of this Agreement by SSTI and the consummation of the transactions contemplated hereby.

(g) The information SSTI has delivered to IFSI relating to SSTI was, to the best knowledge of SSTI and Smith, on the date reflected in each such item of information accurate in all material respects and, to the best knowledge of SSTI and Smith, such information at the date hereof taken as a whole provides full and fair disclosure of all material information relating to SSTI and does not, to the best knowledge of SSTI and Smith,omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(h) SSTI has conducted its business in the ordinary course for the last three years or since inception, whichever is less.

(i) Neither SSTI nor any employee, to SSTI best knowledge, has since inception given or agreed to give any gift or similar benefit valued at more than $20 annually to any customer, supplier, governmental employee or other person who is or may be or have been in a position to help or hinder SSTI’s business, or a gift or similar benefit in any amount or value which might subject SSTI to damage or penalty in civil, criminal or governmental litigation or proceedings.

(j) SSTI’s financial statements delivered to IFSI have been prepared in accordance with generally accepted accounting principles consistently applied and maintained throughout the periods indicated, fairly present the financial condition of SSTI in all material respects at the dates and the results of operations for the periods indicated, contain all normally recurring adjustments and do not omit to disclose any contingent, undisclosed or hidden liabilities. SSTI’s financial records are maintained in accordance with good business practice.

(k)SSTI has good, marketable and insurable title to all of its properties and assets, including intangible assets, if any, which it owns or uses in its business or purports to own, including, without limitation, those reflected in its books and records and in the balance sheet, both tangible and intangible None of the properties and assets are subject to any mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, except as expressly set forth in the notes to SSTI’s financial statements as securing specific liabilities or subject to specific capital leases and have arisen only in the ordinary course of business. All of the properties and assets owned, leased or used by SSTI are in good operating condition and repair, are suitable for the purposes used, are adequate and sufficient for SSTI’s current operations and are directly related to SSTI’s business.

(l) All of the material contracts, agreements, leases, licenses and commitments of SSTI (other than those which have been fully performed), copies of all of which have been delivered to IFSI, are valid and binding, enforceable in accordance with their respective terms, in full force and effect and there is not there under with respect to any party thereto any existing default or event, which after the giving of notice or lapse of time or both, would constitute a default or result in a right to accelerate or loss of rights and none of such contracts, agreements, leases, licenses and commitments is, either when considered singly or in the aggregate with others, unduly burdensome, onerous or materially adverse to SSTI’s business, properties, assets, earnings or prospects, either before or after the Closing, or which would result in any material loss to or liability of SSTI.

(m) There is no claim, legal action, suit, arbitration, governmental investigation, or other legal or administrative proceeding, nor any order, decree, judgment or judgment in progress, pending or in effect or to SSTI’s knowledge threatened, against or relating to SSTI, its directors, officers or employees with respect to SSTI or its business or for which SSTI may have an indemnity obligation, it properties, assets or business or the transaction contemplated by this Agreement and SSTI does not know or have any reason to be aware of any basis for the same, including any basis for a claim of sexual harassment or racial or age discrimination.

(n) All taxes, including without limitation, income, property, special assessments, sales, use, franchise, intangibles, employees’ income withholding and social security taxes, including employer’s contribution, other than those for which a return or deposit is not yet due and have been disclosed to IFSI, imposed by the United States or any state, municipality, subdivision, authority, which are due and payable, and all interest and penalties thereon, unless disputed in good faith in proper proceedings and reserved for or set aside, have been paid in full and all tax returns required to be filed in connection therewith have been accurately prepared and timely filed and all deposits required by law to be made by SSTI with respect to employees’ withholding and social security taxes have been made. SSTI is not and has no reason to believe that it will be the subject of an audit by any taxing authority. There is not now in force any extension of time with respect to the date when tax return was or is due to be filed, or any waiver or agreement by SSTI for the extension of time for the assessment of any tax and SSTI is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

(o) SSTI does not have any employee benefit, pension or profit sharing plans subject to ERISA and no such plans to which SSTI is obligated or required to make contributions.

[Other than the 401K matching funds for up to $.03 per mile for drivers participating in our 401K Plan]

(p) None of SSTI’s employees are represented by a collective bargaining agent or subject to a collective bargaining agreement and SSTI considers its relations with its employees as a whole to be good. SSTI has disclosed to IFSI all employee salary, compensation and benefit agreements and no employee, other than Smith, has a written employment agreement.

(q) No person has guaranteed any obligation of SSTI, and SSTI has not guaranteed the obligation of any other person.

(r) SSTI and its management have no reason to believe or expect and do not believe or expect that any event or events will occur which will result in SSTI producing results of operations which are materially different from SSTI’s recent operations.

Section 4.02. IFSI’s representations and warranties . IFSI represents and warrants to IFSI that:

(a) IFSI is a duly incorporated and existing corporation in good standing under the laws of its state of incorporation and has full corporate power to execute and deliver this Agreement.

(b) This Agreement has been duly and validly authorized, executed and delivered by IFSI and constitutes the legal, valid and binding obligation of IFSI, enforceable against IFSI in accordance with its terms subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting shareholders and creditors rights generally and to general equitable principles.

(c) Except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state thereof is required in connection with the execution and delivery of this Agreement by IFSI and the consummation of the transactions contemplated hereby.

(d) The information IFSI have delivered to SSTI was on the date reflected in each such item of information accurate in all material respects and such information at the date hereof as a whole did not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(e) The information and financial statements IFSI has provided to Smith, on the date reflected in each element of information and financial statements, are accurate in all material respects and, to the knowledge of IFSI, such information at the date hereof taken as a whole provides, to the best knowledge of IFSI, full and fair disclosure of all material information relating to SSTI and does not, to the knowledge of IFSIomit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

Section 4.03. Nature and survival of representation and warranties; Remedies . All statements of fact contained in this Agreement, any certificate delivered pursuant to this Agreement, or any letter, document or other instrument delivered by or on behalf of SSTI or of IFSI, and their respective officers, pursuant to the terms of this Agreement shall be deemed representations and warranties made by SSTI or by IFSI, respectively, as the case may be, to each other under this Agreement. For purposes of this Section 4.03 and Section 11.01 only, any party or other person seeking to enforce, or claiming the benefit of, any representation and warranty under this Agreement is called a Claimant, and any party or other person against whom a right is claimed is called a Defendant. All representations and warranties of the parties shall survive the Closing; provided, however, that all representations and warranties shall terminate and expire, and be without further force and effect whatever from and after the one year from the date hereof, and neither IFSI, or SSTI shall have any liability whatsoever on account of any inaccurate representation or warranty or for any breach of warranty, unless a Claimant shall, on or prior to the expiration of such one year period, serve written notice on a Defendant, with a copy to the Defendant’s counsel, setting forth in reasonable detail the breach and any direct, incidental or consequential damages (including amounts) the Claimant may have suffered as a result of such breach.

ARTICLE V

COVENANTS OF THE PARTIES

Section 5.01. Conduct of business prior to Closing .

(a) From the date hereof to the Closing, SSTI will conduct its business and affairs only in the ordinary course and consistent with its prior practice and shall maintain, keep and preserve its assets and properties in good condition and repair and maintain insurance thereon in accordance with present practices, it will use its best efforts (i) to preserve its business and organization intact, (ii) to keep available to IFSI the services of SSTI’s present employees, agents and independent contractors, (iii) to preserve for the benefit of IFSI the goodwill of suppliers, customers, distributors, landlords and others having business relations with it, and (iv) to cooperate and use reasonable efforts to obtain the consent of any landlord or other party to any lease or contract with SSTI where the consent of such landlord or other party may be required by reason of the transactions contemplated hereby.

(b) From the date hereof to the Closing, SSTI shall not outside the ordinary course of business (i) dispose of any material assets, (ii) engage in any extraordinary transactions without IFSI’s prior approval, including but not limited to, directly or indirectly, soliciting, entertaining, encouraging inquiries or proposals or entering into negotiation or agreement with any third party for sale of assets by SSTI, sale of its equity securities or merger, consolidation or combination with any company, (iii) grant any salary or compensation increase to any employee, or (iv) make any commitment for capital expenditures, other than as disclosed to IFSI and approved by it.

Section 5.02. Notice of changes in information . Each party shall give the other party prompt written notice of any change in any of the information contained in their respective representations and warranties made in Article IV, or elsewhere in this Agreement, or the exhibits and schedules referred to herein or any written statements made or given in connection herewith which occurs prior to the Closing.

Section 5.03. Notice of extraordinary changes . SSTI shall advise IFSI with respect to any of the following events outside of ordinary course of business and which are materially adverse: (i) the entering into and cancellation or breach of contracts, agreements, licenses, commitments or other understandings or arrangements to which SSTI is a party, (ii) any changes in purchasing, pricing or selling policy, or, any changes in its sales, business or employee relations in general, and (iii) the filing or commencement of any litigation or governmental or agency proceedings against SSTI.

Section 5.04. Action to preserve SSTI’s business and assets . Notwithstanding anything contained in this Agreement to the contrary, SSTI will not take or fail to take any action that in SSTI’s reasonable business judgment, is likely to give rise to a substantial penalty or a claim for damages by any third party against SSTI, or is likely to result in losses, or is otherwise likely to prejudice in any material respect or unduly interfere with the conduct of its business and operations in the ordinary course consistent with prior practice, or is likely to result in a breach by SSTI of any of its representations, warranties or covenants contained in this Agreement (unless any such breach is first waived in writing by IFSI).

Section 5.05. Access to information and documents . Upon reasonable notice and during regular business hours, SSTI will give to IFSI, its attorneys, accountants and other representatives full access to its personnel (subject to reasonable approval as to the time thereof) and all properties, documents, contracts, books and records and will furnish copies of such documents (certified by officers, if so requested) and with such information with respect to its business, operations, affairs and prospects (financial and otherwise) as IFSI may from time to time request, and the party to whom the information is provided will not improperly disclose the same prior to the Closing. SSTI will afford IFSI an opportunity to ask questions and receive answers thereto in furtherance of its duly diligent examination of SSTI. Any such furnishing of such information or any investigation shall not affect that party’s right to rely on the other p