STOCK PURCHASE AGREEMENT

Exhibit 10.1

Execution Copy

STOCK PURCHASE AGREEMENT

by and among

NASCENT WINE COMPANY, INC.,

a Nevada corporation,

THE PERSONS SET FORTH ON SCHEDULE A HERETO,

and

COMERCIAL TARGA, S.A. de C.V.,

a Mexican corporation

Dated as of October 29, 2007

TABLE OF CONTENTS

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STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of October 29, 2007 by and among NASCENT WINE COMPANY, INC., a Nevada corporation (“ Buyer ”), each of the Persons set forth on Schedule A hereto (“ Sellers ”), and COMERCIAL TARGA, S.A. de C.V., a Mexican corporation (the “ Company ”).

RECITALS

WHEREAS, Sellers own and are the record holders of 100% of the issued and outstanding capital stock of the Company as set forth on Schedule A (collectively, the “ Stock ”); and

                WHEREAS, each Seller desires to sell to Buyer all of the Stock owned by such Seller (except Rafael Morales Cuevas shall retain one share of the Stock following the Closing (as defined below)), and Buyer desires to purchase the Stock from Sellers, subject to the terms and conditions set forth in this Agreement.

                NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows:

Article I
Definitions

1.1           Definitions .  For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

“ Affiliate ” of any specified Person means (i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person and (ii) any five percent stockholder of such Person.  For purposes of this definition, “control” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Agreement ” means this Agreement and includes all of the schedules and exhibits annexed hereto.

“ Bankruptcy Laws ” means the United States Bankruptcy Code (Title 11, United States Code) and any state or federal Laws pertaining to insolvency, as the same may be amended from time to time.

“ Business Day ” means any weekday, except for any weekday on which banks are to close in California.

“ Buyer ” has the meaning set forth in the introduction to this Agreement.

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“ Buyer Indemnified Parties ” has the meaning set forth in Section 8.1(a).

“ Closing ” has the meaning set forth in Section 2.3.

“ Closing Date ” has the meaning set forth in Section 2.3.

“ Company ” has the meaning set forth in the introduction to this Agreement.

“ Company Current Financials ” has the meaning set forth in Section 3.8(b)(ii).

“ Company Historical Financials ” has the meaning set forth in Section 3.8(b).

“ Competing Transaction ” means any business combination or recapitalization involving the Company or any acquisition or purchase of all or a portion of the assets of, or any equity interest in, the Company or any other similar transaction with respect to the Company involving any Person or entity other than Buyer or its Affiliates (other than any sale by the company of inventory in the ordinary course of business).

“ Confidential Information ” means the confidential affairs and proprietary information of the Company, including all information, observations and data disclosed to, or developed or obtained by, Sellers while owning the Company if related to the Company’s business.

“ Contract ” means any contract, lease, license, purchase order, sales order, obligation or other agreement or binding commitment, whether or not in written form.

“ Court Order ” means any judgment, decree, injunction, order or ruling of any Governmental Authority or authority that is binding on any Person or its property under applicable Law.

“ Environmental Laws ” means any Law relating to Hazardous Substances, the protection of human health and safety, the environment or natural resources, including without limitation any Governmental Rule relating to the generation, use, processing, treatment, storage, release, transport or disposal of Hazardous Substances.

“ Escrow Agent ” means Corporate Stock Transfer or any successor thereto.

“ Escrow Agreement ” means the Escrow Agreement between the Escrow Agent, Sellers and Buyer in substantially the form set forth in Exhibit A hereto.

“ Escrow Funds ” has the meaning set forth in Section 2.2(b).

“ Governmental Authority ” means any (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature, or any political subdivision thereof, (b) federal, state, local, municipal, foreign or other government, or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, body or other entity and any court, arbitrator or other tribunal).

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“ Hazardous Material ” means any substance, material, liquid or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” “radioactive,” or words of similar meaning or effect, including, without limitation, petroleum and its by-products, asbestos, polychlorinated biphenyls, radon, mold, and urea formaldehyde insulation.

“ Indemnification Acknowledgment ” has the meaning set forth in Section 8.3(a)(ii).

“ Indemnitee ” has the meaning set forth in Section 8.3(a).

“ Indemnitor ” has the meaning set forth in Section 8.3(a).

“ Intellectual Property ” has the meaning set forth in Section 3.20.

“ Knowledge ” and “ Knowledge of the Company ” means, the actual knowledge or awareness of each Seller and any other officer or director of the Company and the knowledge or awareness that each such Person would have obtained after reasonable due diligence or inquiry in light of the circumstances.

“ Laws ” means any federal, state, local or foreign statute, code, law, ordinance, regulation, Court Order, judgment, writ, injunction, award or decree or rule of any Governmental Authority, including without limitation those covering environmental, energy, safety, health, transportation, bribery, record keeping, zoning, antidiscrimination, antitrust, wage and hour, and price and wage control matters, as well as any applicable principle of common law.

“ Licenses and Permits ” means all foreign, local, state and federal licenses, permits, registrations, certificates, Contracts, consents, accreditations and approvals necessary for the operation of the Business.

“ Lien ” means any lien (statutory or other), pledge, mortgage, deed of trust, assignment, deposit arrangement, priority, security interest, restriction on voting or disposition or other charge or encumbrance or other preemptive or preferential arrangement of any kind or nature whatsoever (including the interest of a lessor under a capitalized lease having substantially the same economic effect), any conditional sale or other title retention agreement, any lease in the nature thereof and the filing or existence of any financing statement or other similar form of notice under the Laws of any jurisdiction, any security agreement authorizing any Person to file such a financing statement, whether arising by contract, operation of law, or otherwise, or any restriction on the right to vote.

“ Losses ” means any and all damages, costs, liabilities, losses, judgments, settlements, awards, penalties, fines, expenses or other costs, including reasonable attorneys’ fees, expert fees and costs of investigation, enforcement and collection suffered or incurred by an Indemnified Party.

“ Material Adverse Effect ” means, (i) with respect to the Company or Sellers, a material adverse effect on either (A) the assets, operations, personnel, condition (financial or otherwise) or prospects of the Company, or (B) any of Sellers’ ability to consummate the transactions contemplated hereby, and (ii) with respect to Buyer, a material adverse effect on either (A) the

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assets, operations, personnel, condition (financial or otherwise) or prospects of Buyer, or (B) Buyer’s ability to consummate the transactions contemplated hereby.

“ Mexican GAAP ” means generally accepted accounting principles in effect in Mexico, consistently applied, as in effect on the date of this Agreement.

“ Noncompete Period ” has the meaning set forth in Section 6.6(a).

“ Notice of Claim ” has the meaning set forth in Section 8.3(a)(i).

“ Party ” and “ Parties ” means, individually and collectively, the Company, Sellers and Buyer.

“ Permitted Liens ” means (i) Liens and other exceptions to title that are disclosed on Schedule 1.1 ; and (ii) liens for Taxes, fees, levies, duties or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings which suspend the collection thereof.

“ Person ” means any individual, partnership, limited liability company, limited liability partnership, corporation, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity (or any department, agency or political subdivision thereof).

“ Pre-Closing Tax Period ” has the meaning set forth in Section 6.5(b).

“ Purchase Price ” has the meaning set forth in Section 2.2.

“ Real Property ” has the meaning set forth in Section 3.18

“ Release ” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching into the indoor or outdoor environment, and includes any migration of any Hazardous Material from or onto the properties owned or leased by the Company.

“ Related Party ” means (w) the Company, (x) any Affiliate of the Company, (y) any manager, officer or equity holder of the Company or of any Affiliate of the Company and (z) any Affiliate or family member of any Person described in clause (y) above.

“ Remedial Action ” means all actions to (i) clean up, remove, treat or in any other way address any Hazardous Material, (ii) prevent the Release of any Hazardous Material so it does not endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (iii) perform pre-remedial studies and investigations or post-remedial monitoring and care or (iv) to otherwise correct a condition of noncompliance with Environmental Laws.

“ Sellers ” has the meaning set forth in the introduction to this Agreement.

“ Solvent ” means, with respect to any Person, that at the time of determination:  (i) the present fair saleable value of the assets (i.e., the price a buyer is willing to pay for such asset in an arms-length transaction) of such Person will exceed the amount that will be required to pay

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the probable liability on the existing debts (whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent) of such Person as they become absolute and matured; (ii) the sum of the debts (whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent) of such Person will not exceed all of the property of such Person at a fair valuation; (iii) the assets of such Person do not constitute unreasonably small capital for such Person to carry on its businesses as now conducted or proposed to be conducted; and (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature.  For purposes of the preceding sentence, the amount of contingent obligations outstanding at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that are reasonably expected to become an actual or matured liability.

“ Stock ” has the meaning set forth in the Recitals to this Agreement.

“ Straddle Period ” has the meaning set forth in Section 6.5(c).

“ Subsidiary ” and “ Subsidiaries ” means, with respect to any Person, any other Person of which more than 50% of the total voting power of capital stock entitled to vote (without regard to the occurrence of any contingency) in the election of directors (or other Persons performing similar functions) are at the time directly or indirectly owned by such specified Person.

“ Tax ” or “ Taxes ” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, capital gain, intangible, environmental (including taxes under Section 59A of the Code or otherwise), custom duties, capital stock, profits, franchise, employee’s income withholding, foreign withholding, social security (or its equivalent), unemployment, disability, real property, personal property, sales, use, transfer, value added, registration, alternative or add-on minimum, estimated or other tax of any kind, including any interest, penalties or additions to tax in respect of the foregoing, whether disputed or not, and any obligation to indemnify, assume or succeed to the liability of any other Person in respect of the foregoing; and the term “ Tax Liability ” shall mean any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated, and whether due or to become due) with respect to Taxes.

“ Tax Determination ” has the meaning set forth in Section 6.5(f).

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

“ Third Party Claim ” means a claim or demand made by any Person, other than Buyer, Sellers or the Company, against an Indemnified Party.

“ Trademark Assignment Agreement ” means the Trademark Assignment Agreement between Julia Olavarri de Arana and Buyer dated as of the date hereof.

“ Transaction Documents ” means this Agreement, the Escrow Agreement, the Trademark Assignment Agreement and any document or instrument which shall be executed and delivered at the Closing by the Company, Sellers or Buyer, as the case may be.

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“ Welfare Plan ” means any other plan or program maintained for past or present employees of the Company, including without any limitation health insurance plan, life insurance plan, option plan, bonus plan, savings plan or severance plan, profit sharing, bonus, stock option, stock purchase, stock bonus, restricted stock, stock appreciation right, phantom stock or other equity-based compensation arrangement, vacation pay, holiday pay, tuition reimbursement, scholarship, severance, dependent care assistance, excess benefit, bonus, incentive compensation, salary continuation, supplemental retirement, deferred compensation, employee loan or loan guarantee program, split dollar, cafeteria plan, and other compensation arrangements and other material agreement, arrangement, plan, policy, practice or program related to employment, compensation or employee benefits whether written or unwritten, funded or unfunded, formal or informal, that are maintained or contributed to by the Company.

“ Working Capital Amount ” has the meaning set forth in Section 6.9.

“ U.S. GAAP ” means generally accepted accounting principles in effect in the United States of America, consistently applied, as in effect on the date of this Agreement.

Article II
Purchase and Sale

2.1           Purchase and Sale .  On the Closing Date, subject to the terms and conditions hereof, Sellers agree to sell, transfer, assign, convey and deliver to Buyer, and Buyer agrees to purchase from Sellers, all of the Stock (except Rafael Morales Cuevas shall retain one share of the Stock following the Closing), free and clear of all Liens.

2.2           Purchase Price .  Subject to the terms and conditions hereof, as consideration for the Stock and the agreements contained herein, the purchase price for the Stock shall be an aggregate of FOUR HUNDRED THOUSAND U.S. DOLLARS (U.S.$400,000) (the “ Purchase Price ”).  On the Closing Date, Buyer shall pay the Purchase Price as follows:

(a)           ONE HUNDRED FIFTY THOUSAND U.S. DOLLARS (U.S.$150,000) shall be paid in cash by wire transfer in immediately available funds to such account or accounts designated by Sellers to Buyer in writing; and

(b)           TWO HUNDRED FIFTY THOUSAND U.S. DOLLARS (U.S.$250,000) (the “ Escrow Funds ”) shall be deposited with the Escrow Agent, to be held and disbursed pursuant to the terms of the Escrow Agreement and in accordance with the terms of this Agreement.  The Escrow Funds shall be security for the indemnification obligations of Sellers pursuant to Section 8.1(a).

2.3           Establishment of Escrow Account .  At the Closing, Buyer and Sellers shall deliver the Escrow Agreement to the Escrow Agent, and Buyer shall deposit the Escrow Funds to be held by the Escrow Agent in an escrow account, all in accordance with the terms of the Escrow Agreement and this Agreement.  The Escrow Agent shall pay to Buyer or Sellers such amounts as are required by the terms of the Escrow Agreement in accordance with the Escrow Agreement and this Agreement.  Such amounts may be delivered to Buyer or Sellers, as the case may be, in accordance with the terms of the Escrow Agreement which shall, among other things, require

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disbursement to Sellers of the Escrow Funds on the six month anniversary of the Closing Date of an amount equal to the difference between (i) U.S.$250,000, and (ii) the aggregate of any amounts actually paid in satisfaction of any indemnification obligation of Sellers under Section 8.1(a) and the amount of any pending or outstanding claim for indemnification under such Section.  Each Seller consents to and approves of the use of the Escrow Funds to secure the indemnification rights of Buyer in the manner set forth in the Escrow Agreement and this Agreement.

2.4           Closing .  Subject to the terms and conditions hereof, the closing of the transactions contemplated by this Agreement (the “ Closing ”) shall be held at 10:00 a.m. local time on the later of (i) October 29, 2007, or (ii) the satisfaction or waiver of all conditions to closing contained herein, at the offices of Brownstein Hyatt Farber Schreck, P.C., 410 17 ^th Street, Suite 2200, Denver, Colorado 80202, or at such other time and/or place as the Parties otherwise agree (the “ Closing Date ”).

Article III
Representations and Warranties of the Company and Sellers

As a material inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated herein, the Company and Sellers hereby, jointly and severally, make the following representations and warranties to Buyer, subject to qualification by the disclosure schedules.  The information disclosed in any particular disclosure schedule shall be deemed to relate to and to qualify only the particular representation or warranty set forth in the corresponding numbered section in this Agreement and shall not be deemed to relate to or to qualify any other representation or warranty.

3.1           Organization and Qualification .  The Company is a corporation duly organized, validly existing and in good standing under the Laws of the Mexico.  The Company is duly qualified or licensed to do business in each jurisdiction in which the character of the properties or assets owned, leased or operated by it or the nature of the activities conducted makes such qualification or licensing necessary.

3.2           Corporate Power .  The Company has all requisite corporate power and authority necessary to own and/or lease and operate its properties and assets and to carry on its business as now conducted.  The Company has all requisite corporate power and authority to execute, deliver, carry out and perform its obligations under this Agreement and each other Transaction Document to which it is a party and to consummate the transactions contemplated hereby and thereby.

3.3           Authorization; Binding Obligations .  The execution, delivery and performance of this Agreement and each other Transaction Document to which the Company is a party and the consummation of the other transactions contemplated hereby and thereby, have been duly authorized by all requisite action on the part of the Company.  This Agreement has been duly executed and delivered by the Company and, at the Closing, each of the other Transaction Documents to which the Company is a party will be duly executed and delivered by the Company.  This Agreement is, and at the Closing each of the other Transaction Documents to which the Company is a party will be, a legal, valid and binding obligation of the Company,

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enforceable against the Company in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability, and except as rights of indemnity or contribution may be limited by securities Laws or the public policy underlying such Laws.

3.4           Conflict; Existing Defaults .

(a)           Neither the execution, delivery and performance by the Company of this Agreement or the other Transaction Documents to which the Company is a party nor the consummation of the transactions contemplated hereby or thereby, will conflict with, violate, or cause a default under, result in the imposition of any Lien under or give rise to a right of termination, acceleration, suspension, revocation, cancellation or amendment under, (i) the organizational documents of the Company, (ii) any Contract to which the Company is a party, or by which its assets are bound, or (iii) any applicable Laws.

(b)           The Company is not (i) in default, breach or violation of its organizational documents, as in effect as of the date hereof, as applicable, or (ii) in default, breach or violation of any Contract required to be disclosed on Schedule 3.9(a) to which it is a party or by which it or its assets is or may be bound, except, in the case of clause (ii), for such default, breach or violation as, individually or in the aggregate, is not likely to have a Material Adverse Effect.

3.5           Consents and Approvals .  No consent, approval or authorization of, or declaration, filing or registration with, any Governmental Authority or any other Person is required to be obtained or made by the Company in connection with the execution, delivery and performance of this Agreement or any other Transaction Document to which the Company is a party and the consummation of the transactions contemplated hereby and thereby.

3.6           Capitalization .  The Company’s authorized capital stock consists of 8,000 shares of Series A stock and 2,938,684  shares of Series B stock.  The issued and outstanding shares of common stock are owned as set forth on Schedule A .  All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable and were not issued in violation of any preemptive rights or Contract binding upon the Company or any applicable Laws.  Except as set forth on Schedule A , there are no outstanding (i) shares of capital stock or other voting securities of the Company, (ii) securities convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options, warrants or other rights to acquire from the Company or obligations of the Company to issue any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company, or (iv) equity equivalent interests in the ownership or earnings of the Company or stock appreciation, phantom stock, right of first refusal, commitment or other similar rights.  There are no voting trusts, proxies or other agreements or understandings with respect to the voting, registration or transfer of ownership of the Company’s capital stock.  The Company is not subject to any obligations (contingent or otherwise) to repurchase, redeem or otherwise acquire or retire any shares of its capital stock.  All dividends or distributions on securities of the Company that have been declared or authorized prior to the date of this Agreement have been paid in full or accrued for in the Historical Financials.

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3.7           Subsidiaries .  The Company has no Subsidiaries.  The Company does not own, directly or indirectly, any capital stock, partnership interest, joint venture interest or other equity interest of any other Person.

3.8           Financial Statements; Undisclosed Liabilities .

(a)           The books of account and other financial records of the Company, all of which have been made available to Buyer, are correct and complete in all material respects, represent actual bona fide transactions and have been maintained in accordance with sound business and accounting practices.  Each transaction is properly and accurately recorded in the books and records of the Company.  The Company maintains an adequate system of internal accounting controls and does not engage in or maintain any off-the-books accounts or transactions.

(b)           Attached hereto as Schedule 3.8 are the following (the financial statements referred to in clauses (i) and (ii) below being collectively referred to as the “ Company Historical Financials ”):

(i)            the Company’s audited balance sheets and statements of income, retained earnings and cash flows as of and for its fiscal years ended December 31, 2004, 2005 and 2006; and

(ii)           the Company’s unaudited interim balance sheet and statements of income, retained earnings and cash flows as of and for the six months ended June 30, 2007 (the “ Company Current Financials ”).

The Company Historical Financials (including, in each case, the related schedules and notes, if any) fairly present the financial condition, results of operations and changes in financial position of the Company as of and for the respective dates  and periods covered thereby and were prepared in accordance with Mexican GAAP applied on a consistent basis throughout the periods covered thereby subject, in the case of the Company Current Financials, to year-end audit adjustments (which will not be material) and the lack of footnotes and other presentation items.

(c)           Except as set forth on Schedule 3.8(c), the Company does not have any liabilities (whether known or unknown, whether direct or indirect, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for Taxes), except for (i) liabilities set forth in the Company Current Financials, and (ii) liabilities that have arisen after the Company Current Financials in the ordinary course of business.

(d)           On the date hereof and immediately prior to the Closing Date, the Company is Solvent.

3.9           Contracts .

(a)           Schedule 3.9(a) sets forth a true, correct and complete list of all Contracts to which the Company is a party or to which any of its assets or properties is bound:

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(i)            under which the Company is indemnified for or against any liability, or under which the Company is or could be obligated to indemnify any Person;

(ii)           under which the Company leases personal property from or to third parties under capitalized leases per annum or under operating leases;

(iii)          for the purchase or sale of products or other personal property or for the furnishing or receipt of services (A) that calls for performance over a period of more than one year or (B) in which the Company has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from any Person;

(iv)          (A) granting representation, marketing, manufacturing, purchase or distribution rights or (B) relating to Company Intellectual Property (including license, development or similar agreements);

(v)           under which the Company has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness for borrowed money;

(vi)          establishing or maintaining any partnership, joint venture or strategic alliance;

(vii)         under which there is or may be imposed a security interest or other Lien on any of its assets, whether tangible or intangible (other than security interests or Liens granted in favor of Buyer);

(viii)        concerning any confidentiality or non-solicitation obligations;

(ix)           under which the Company is restricted from carrying on its business or any part thereof, or from competing in any line of business or with any Person;

(x)            with officers, directors, employees or consultants of the Company, in each case involving payments by the Company in excess of U.S.$5,000 per annum;

(xi)           involving any Affiliates of the Company;

(xii)          under which the consequences of a default or termination would reasonably be expected to have, a Material Adverse Effect;

(xiii)         under which the Company will (A) receive aggregate payments from customers, (B) make aggregate payments to vendors or other suppliers or (C) make or receive aggregate payments to or from any other Persons, in each case in excess of U.S.$25,000 per annum (with specific reference to those agreements in excess of U.S.$500,000 per annum);

(xiv)        which are subject to termination or modification by any third party as a result of the transactions contemplated by this Agreement;

(xv)         not entered into in the ordinary course of business and not otherwise disclosed on Schedule 3.9(a) in response to any of the foregoing clauses; or

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(xvi)        are otherwise material to the Company’s business.

The Company has delivered to Buyer true, correct and complete copies of each such Contract.  To the extent that written Contracts do not exist, the Company has delivered to Buyer accurate summaries of the material terms and conditions of such oral Contracts.  Such Contracts constitute all material Contracts necessary for the Company to conduct its business as currently conducted.

(b)           (i) each Contract existing as of the date hereof is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability), and (ii) to the Knowledge of the Company, each Contract existing as of the date hereof is a legal, valid and binding obligation of the other parties thereto, enforceable against the other parties in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or conveyance or similar Laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability) and is in full force and effect.  The Company is and, to the Knowledge of the Company each other party to each Contract existing as of the date hereof are, in compliance with the terms thereof, and no default or event of default by the Company or any other party thereto exists thereunder.

3.10         Accounts Receivable .  All accounts receivable of the Company (a) are legal, valid and binding obligations of the Persons shown in the accounting records of the Company as the obligor with respect thereto, (b) arose out of bona fide sales actually made or services actually performed on or prior to such date in the ordinary course of business, (c) are not subject to discount, rebate, off-set, return privilege (other than return privileges granted in the ordinary course of business consistent with past practice) or claim, and (d) have been billed and are valid and collectible in the ordinary course of business.

3.11         Employees; Labor Relations .

(a)           The Company has previously provided to Buyer a correct and complete list of (i) all managers and executive officers of the Company, (ii) all other employees of or consultants to the Company, (iii) the current job title or relationship to the Company of each such Person and (iv) the amount of compensation (including bonuses and commissions or other benefits) paid to each such Person during the fiscal year ended December 31, 2006 and which each of them is expected to receive in the current fiscal year.

(b)           Except as otherwise disclosed on Schedule 3.11(b) , the Company is not a party to any written employment agreements, independent contractor or consulting agreements and sales representative (or similar) agreements, golden parachute agreements, change of control agreements and employee-related non-competition and non-solicitation or similar agreement, written or oral, with any Person.

(c)           (i) Except as otherwise disclosed on Schedule 3.11(c) , no employees of the Company are represented by any labor union or similar organization, (ii) the Company is not

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party to any collective bargaining or similar agreement covering any of its employees and (iii) no labor union or similar organization or group of employees has made a demand for recognition, filed a petition seeking a representation proceeding, given the Company notice of any intention to hold an election of a collective bargaining representative or engaged in any organizing activities at any time during the past three years.

(d)           (i) No strike, work stoppage, contract dispute or other labor disturbance involving any employees of the Company currently exists or, to the Company’s knowledge, is threatened and (ii) no investigation, action or proceeding by or before any governmental entity which relates to allegedly unfair or discriminatory employment or labor practices by the Company or the violation by the Company of any applicable Law relating to employment or labor practices is pending or, to the Company’s knowledge, threatened.

3.12         Welfare Plans .  Schedule 3.12 sets forth a correct and complete list of all Welfare Plans.  Except as otherwise disclosed on Schedule 3.12 :

(a)           each Welfare Plan and any related trust has been established, maintained, administered and funded in all material respects in compliance with all applicable Laws;

(b)           no transaction or omission has occurred with respect to any Welfare Plan or related trust that could subject the Company to any Tax or penalty under applicable Laws;

(c)           none of the Welfare Plans or any related trusts have any unfunded liabilities;

(d)           none of the Welfare Plans provides medical, health, life insurance or other welfare-type benefits to former employees of the Company or any Affiliate;

(e)           there are no actions, suits, investigations or other proceedings pending or, to the Company’s knowledge, threatened against any Plan or any related trust or any fiduciary thereof;

(f)            there are no outstanding Governmental Orders that name any Plan or any related trust or any fiduciary thereof or are directed to any Plan or related trust, any fiduciary thereof or any assets thereof;

(h)           there are no benefits or perquisites available to any employees of the Company that are not generally available to all employees of the Company.

The Company has delivered to Buyer true, correct and complete copies of all Welfare Plan documentation.

3.13         Taxes .  Except as set forth on Schedule 3.13 :

(a)           all Tax Returns with respect to Taxes which are required to be filed by or on behalf of the Company with any Governmental Authority have been properly prepared and filed and correctly state the Company’s Tax liability;

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(b)           the Company has paid, or has made adequate reserves on its books for the payment of, all Taxes shown to be due on such Tax Returns or claimed to be due by any Governmental Authority or which the Company otherwise is liable for or is required to withhold on behalf of any other Person;

(c)           the reserves and provisions for Taxes on the books of the Company are adequate for all open years and for its current fiscal period;

(d)           the Company has no knowledge of any proposed assessment of any additional Taxes by any governmental entity or of any basis for any such assessment (whether or not reserved against);

(e)           the Company is not currently being audited by any governmental entity, and no such audit is pending or, to the Company’s knowledge, threatened;

(f)            the Company has not given any waiver or extension of any period of limitation governing the time of assessment or collection of any Tax; and

(g)           the Company is not party to any Tax sharing or similar agreement with any other Person.

3.14         Litigation .  Except as otherwise disclosed on Schedule 3.14 , there is no pending or, to the Company’s knowledge, threatened investigation, action or proceeding against, relating to or affecting the Company or its assets or any officer, director or employee thereof in his or her capacity as such, by or before any Governmental Authority or arbitrator.  Schedule 3.14 sets forth a correct and complete list of each investigation, action and proceeding (a) described in the preceding sentence or (b) in which the Company is the plaintiff or initiating party, together with the parties thereto, the alleged basis therefore, the relief sought therein and the current status.

3.15         Transactions with Related Parties .  (a) none of the customers, suppliers, distributors or sales representatives of the Company are Related Parties; (b) none of the Company’s assets are owned or used by or leased to any Related Parties; (c) no Related Party is a party to any Business Agreement; and (d) no Related Party provides any legal, accounting or other services to the Company.

3.16         Licenses and Permits .

(a)           Schedule 3.16(a) lists all Licenses and Permits.  No other governmental authorizations are necessary or required for the Company to lawfully conduct its Business as currently conducted or for the Company to own, lease or use its assets.

(b)           Each of the Licenses and Permits is valid and in full force and effect.  The Company has not received any notice that remains outstanding from any Governmental Authority regarding any actual or proposed revocation, withdrawal, suspension, cancellation or termination (other than by expiration) of any material Licenses and Permits.  The transactions contemplated by this Agreement will not adversely affect the Company’s right to utilize the Licenses and Permits.  The Company has delivered to Buyer true, correct and complete copies of each License and Permit.

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3.17         Personal Property .  The Company has good and marketable title to all personal property purported to be owned by it and good leasehold title to all personal property purported to be leased by it, in each case free and clear of any Liens, other than Permitted Liens.  The Company’s machinery, equipment, vehicles and other tangible assets have been maintained in good working condition (normal wear and tear excepted).  The Company owns or properly leases all the assets necessary to and currently utilized in the operation of the Business.  No Seller owns any of the assets currently utilized in the Business.

3.18         Real Property .

(a)           Schedule 3.18 sets forth a correct and complete list of all real property owned, leased, occupied or used by the Company (collectively, the “ Real Property ”) and indicates whether such property is owned or leased by the Company.

(b)           Schedule 3.18 sets forth a correct and complete list of (i) all leases, subleases and other material agreements or rights pursuant to which any Person has the right to occupy or use any Real Property owned by the Company and (ii) all leases, subleases and other material agreements or rights pursuant to which the Company has the right to occupy or use any Real Property owned by others.

(c)           Except as set forth on Schedule 3.18 , the Company has good and marketable and fee simple title to all Real Property purported to be owned by it and good leasehold title to all Real Property purported to be leased by it, in each case free and clear of any Liens, other than Permitted Liens.

(d)           All buildings and other improvements located on the Real Property (including without limitation all water, sewer, gas, electrical and HVAC systems servicing the same) are in good repair and operating condition and are suitable for the purposes for which they are used.  The Real Property constitutes all real property, buildings and other improvements necessary for the Company to conduct its business as currently conducted and as currently planned to be conducted.

(e)           All buildings and other improvements located on the Real Property, and the use of the Real Property by the Company and all Persons claiming under it, comply with all Governmental Rules relating to zoning and land use and with all easements, covenants and other restrictions applicable to the Real Property, except where such non-compliance would, individually or in the aggregate, have a Material Adverse Effect.

(f)            The Real Property:  (i) is adequately serviced by all utilities necessary for the Company to conduct its business as currently conducted and as currently planned to be conducted thereon; (ii) has adequate means of ingress and egress, either directly or by means of perpetual easements or rights-of-way which run with the Real Property; (iii) has adequate parking that is sufficient to meet the needs of the Company’s employees and business invitees and to comply with applicable Laws; and (iv) is not located in whole or in part within an area identified as a flood hazard area by any Governmental Authority.

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3.19         Environmental Matters .

(a)           the operations of the Company is in compliance with all applicable Environmental Laws and all Licenses and Permits issued pursuant to the Environmental Laws or otherwise;

(b)           the Company has obtained all Licenses and Permits required to operate its business in compliance with all applicable Environmental Laws;

(c)           the operations of the Company have not resulted in Releases of Hazardous Material into the environment;

(d)           the Company is not the subject of any outstanding Court Order or Contract, nor, to the Knowledge of the Company, is it threatened to be the subject of any Court Order or Contract, with any Governmental Authority respecting (i) compliance with Environmental Laws, (ii) Remedial Action, or (iii) any Release or threatened Release of a Hazardous Material, and the Company has not received any written communication alleging that the Company may be in violation of any Environmental Law or any License or Permit issued pursuant to Environmental Law, or may have any liability under any Environmental Law;

(e)           there are no investigations of