STOCK EXCHANGEAGREEMENT

STOCK EXCHANGEAGREEMENT

THIS STOCK EXCHANGEAGREEMENT, made and entered into as of August 25, 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Mark Morris (“Mr. Morris”) the sole stockholder of Morris Transportation, Inc., an Arkansas corporation, (“MTI”), and MTI 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, MTI is a trucking company with its headquarters office located in Hamburg, Arkansas; and

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

WHEREAS, Mr. Morris desires to exchange all of MTI’s Securities that he owns for shares of IFSI’s common stock and for MTI 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. Morris shares of its common stock and Mr. Morris shall deliver to IFSI all of MTI’s Securities.

Section 2.02. Consideration . In exchange for MTI’s Securities, IFSI shall deliver to Mr. Morris, at Closing, (i) 2,500,000 shares of IFSI’s common stock (ii) a promissory note in the principal amount of $250,000 with the terms described in Section 2.03 (iii) installment payment of $750,000 as provided in Section 2.04.

Section 2.03. Terms of promissory note . The promissory note required by clause (ii) of Section 2.02 shall have a maturity date of one year after the Closing, an interest at a rate of eight percent per annum payable at maturity and shall be convertible in lieu of payment at maturity at the election of the registered holder into additional shares of IFSI’s common stock, the number of such shares determined by dividing the principal amount of and accrued interest on the note by $1; provided, that the principal amount of such note can be reduced based on performance of Net Operating Profits company remains intact, holds its own business wise, no cash put in by holding company for failing business and company remains profitable, otherwise note is reduced dollar for dollar.  It is not a negative if holding company board decides to put in additional funds to bring in new business.

                   Section 2.04 Installment payments based on performance .

(a) Within 90 days after the Closing, IFSI shall pay to Mr. Morris the sum of $750,000 in cash, provided that the date for payment of this amount shall be extended for a period not to exceed 60 days so long as IFSI is diligently pursuing refinancing of MTI’s equipment to MTI’s satisfaction. The $250,000 remaining balance shall be paid in a promissory note subject to performance of Net Operation Profits as described in Section 2.03.           

Section 2.05. Federal income tax treatment . At or before the Closing Date, the parties shall agree on the value of each of the assets of MTI for federal income tax purposes and for GAAP purposes.

Section 2.06. 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. Morris may be obligated to pay to Cordovano and Honeck LLP, arising from its engagement as MTI’s auditor.

Section 2.07. 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 September ____, 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. Morris’s and MTI’s deliveries at the Closing . At the Closing, Mr. Morris and MTI 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. Morris

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 MTI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled:

(a) All representations and warranties of MTI and of Mr. Morris 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 MTI and of Mr. Morris 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 MTI or its operating or financial condition, prospects (financial or otherwise), business, properties or assets of MTI.

(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 MTI’s board of directors.

(f) MTI 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 MTI 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.

(i) IFSI shall have received financial statements of MTI for December 31, 2006 and 2007 and for each of the interim quarterly periods ended subsequent thereto prepared in accordance with generally accepted accounting principles, which interim quarterly period shall not show any materially adverse results of operation when compared to 2007, the financial condition and performance of MTI disclosed in such financial statements being to the reasonable satisfaction of IFSI in relation to financial statements delivered prior to execution and delivery of this Agreement.

Section 3.09. Conditions precedent to the MTI obligation to Close . All obligations of MTI at the Closing are subject, at the option of MTI, 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 MTI and Mr. Morris’s reasonable satisfaction.

(c) All documents required to be delivered to MTI 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.

(e) MTI 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.

(f) MTI shall have received audited financial statements of IFSI that will be complete and available coincidentally with the MTI audit and will be for the same period, ending with the quarter preceding the Closing. The audits are to be available prior to funding.

                   (g) MTI shall have received a listing of IFSI’s shareholders and/or investors.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

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

(a) MTI 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) MTI 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 MTI’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 MTI and Morris, threatened which if determined adversely to MTI would result in a revocation, cancellation of or material limitation or restriction on MTI 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 MTI and constitutes the legal, valid and binding obligation of MTI 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 MTI and Morris, 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 MTI or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by MTI, from which MTI benefits or which is desirable in the conduct of MTI’s business.

(f) To the best knowledge of MTI and Morris, 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 MTI is subject is required in connection with the execution and delivery of this Agreement by MTI and the consummation of the transactions contemplated hereby.

(g) The information MTI has delivered to IFSI relating to MTI was, to the best knowledge of MTI and Morris, on the date reflected in each such item of information accurate in all material respects and, to the best knowledge of MTI and Morris, such information at the date hereof taken as a whole provides full and fair disclosure of all material information relating to MTI and does not, to the best knowledge of MTI and Morris,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) MTI has conducted its business in the ordinary course for the last three years or since inception, whichever is less.

(i) Neither MTI nor any employee, to MTI 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 MTI’s business, or a gift or similar benefit in any amount or value which might subject MTI to damage or penalty in civil, criminal or governmental litigation or proceedings.

(j) MTI’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 MTI 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. MTI’s financial records are maintained in accordance with good business practice.

(k)MTI 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 MTI’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 MTI are in good operating condition and repair, are suitable for the purposes used, are adequate and sufficient for MTI’s current operations and are directly related to MTI’s business.

(l) All of the material contracts, agreements, leases, licenses and commitments of MTI (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 MTI’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 MTI.

(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 MTI’s knowledge threatened, against or relating to MTI, its directors, officers or employees with respect to MTI or its business or for which MTI may have an indemnity obligation, it properties, assets or business or the transaction contemplated by this Agreement and MTI 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 MTI with respect to employees’ withholding and social security taxes have been made. MTI 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 MTI for the extension of time for the assessment of any tax and MTI is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

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

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

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

(r) MTI 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 MTI producing results of operations which are materially different from MTI’s recent operations.

(s) Mr. Morris will have operational control through a proxy or other mechanism, to operate MTI in all daily operations as an ongoing concern with authority to carry out those duties, barring interference with IFSI’s overall objectives.

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 already 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 MTI 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 Morris, 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 MTI 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 MTI or of IFSI, and their respective officers, pursuant to the terms of this Agreement shall be deemed representations and warranties made by MTI 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 MTI 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, MTI will conduct its business and affairs only in the ordinary course and consistent with its prior practice and shall endeavor to 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 MTI’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 MTI 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, MTI 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 MTI, 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.

(c) IFSI shall open its corporate records and financial books to MTI for its or its agents and representatives review.

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 . MTI 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 MTI 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 MTI.

Section 5.04. Action to preserve MTI’s business and assets . Notwithstanding anything contained in this Agreement to the contrary, MTI will not take or fail to take any action that in MTI’s reasonable business judgment, is likely to give rise to a substantial penalty or a claim for damages by any third party against MTI, 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 MTI 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, MTI 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. MTI will afford IFSI an opportunity to ask questions and receive answers thereto in furtherance of its duly diligent examination of MTI. Any such furnishing of such information or any investigation shall not affect that party’s right to rely on the other party’s representations and warranties made in this Agreement or in connection herewith or pursuant hereto, except to