PURCHASE AGREEMENT

Warrant Agreement

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SUNAIR ELECTRONICS INC | COCONUT PALM CAPITAL INVESTORS II, LTD.,

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Title: PURCHASE AGREEMENT
Governing Law: Florida Date: 11/17/2004
Industry: COMEQP Law Firm: Hunton & Williams;Akerman Senterfitt Sector: TECHNO

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EXHIBIT 2.1

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (the "AGREEMENT") is made and entered into as

of November 17, 2004 by and among SUNAIR ELECTRONICS, INC., a Florida

corporation (the "COMPANY"), and COCONUT PALM CAPITAL INVESTORS II, LTD., a

Florida limited partnership (the "PURCHASER").

1. AUTHORIZATION. The Company has authorized the issuance and sale to

the Purchaser, subject to the terms and conditions of this Agreement, of up to

Five Million (5,000,000) Units (as herein defined) for a purchase price per Unit

of Five Dollars ($5.00). For purposes of this Agreement, the term "UNIT" means

(a) one (1) share of the Company's common stock, par value $0.10 per share (the

"COMMON STOCK"), (b) warrants to purchase an additional one (1) share of Common

Stock for each share of Common Stock purchased hereunder at an exercise price of

$6.00 per share of Common Stock exercisable in whole or in part at any time and

from time to time on or after the date of issuance of such warrants on the

applicable Closing Date (as herein defined) and at or before 5:00 p.m. on the

third anniversary thereof, pursuant to the terms of the warrant certificate

substantially in the form of EXHIBIT A attached hereto, (c) warrants to purchase

an additional one (1) share of Common Stock for each share of Common Stock

purchased hereunder, at an exercise price of $7.00 per share of Common Stock

exercisable in whole or in part at any time and from time to time on or after

the date of issuance of such warrants on the applicable Closing Date and at or

before 5:00 p.m. on the fifth anniversary thereof, pursuant to the terms of the

warrant certificate substantially in the form of EXHIBIT B attached hereto.

2. AGREEMENT TO SELL AND PURCHASE.

(a) On the basis of the representations and warranties

contained in this Agreement, and subject to its terms and conditions, (i) on the

First Closing Date (as herein defined), the Company shall issue and sell to the

Purchaser, and the Purchaser shall purchase from the Company, Three Million

(3,000,000) Units (the "INITIAL UNITS") for a purchase price per Unit of Five

Dollars ($5.00) or an aggregate purchase price of Fifteen Million Dollars

($15,000,000) (the "FIRST CLOSING PURCHASE PRICE") and (ii) if the Purchaser

shall exercise the Additional Purchase Option (as herein defined) in accordance

with Section 2(b) hereof, then on the Second Closing Date (as herein defined),

the Company shall issue and sell to the Purchaser, and the Purchaser shall

purchase from the Company, Two Million (2,000,000) Units (the "ADDITIONAL

UNITS") (or such fewer number of Additional Units as the Purchaser in its sole

discretion shall elect pursuant to Section 2(b) below), for a purchase price per

Unit of Five Dollars ($5.00) or up to an aggregate purchase price of Ten Million

Dollars ($10,000,000) if all Two Million Units are purchased (the "SECOND

CLOSING PURCHASE PRICE"). The aggregate amount of the First Closing Purchase

Price and the Second Closing Purchase Price paid by the Purchaser pursuant to

this Agreement is hereinafter referred to as the "PURCHASE PRICE."

(b) The Purchaser shall have the right, but not the

obligation, to purchase some or all (at the Purchaser's option) of the

Additional Units on the terms set forth herein (the "ADDITIONAL PURCHASE

OPTION"). The Purchaser may exercise the Additional Purchase Option only one

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time by delivering written notice of exercise to the Company at any time after

the date hereof until five (5) days prior to the First Closing Date (the

"ADDITIONAL PURCHASE EXERCISE NOTICE"). The Additional Purchase Exercise Notice

shall set forth the number of Additional Shares (as herein defined) and

Additional Warrants (as herein defined) that the Purchaser desires to purchase.

The parties agree that the closing of the Additional Purchase Option shall be

simultaneous with the First Closing Date, however, if, despite their best

efforts, the parties are unable to close the Additional Purchase Option at such

time, then the parties shall mutually agree on a closing date (not later than

seven (7) business days after the First Closing Date) on which to consummate the

purchase and sale (if necessary, the "SECOND CLOSING DATE"). Upon the

Purchaser's exercise of the Additional Purchase Option, the Company shall be

obligated to issue and sell to the Purchaser that number of Additional Units

that the Purchaser desires to purchase as set forth in the Additional Purchase

Exercise Notice delivered to the Company, at the purchase price per Unit of Five

Dollars ($5.00), up to the maximum number of Additional Units.

issuable hereunder are hereinafter collectively referred to as the "SHARES," and

the Shares purchased by the Purchaser pursuant to this Agreement are hereinafter

collectively referred to as the "PURCHASED SHARES." The aggregate warrants to

purchase shares of Common Stock comprising a portion of the Units issuable

hereunder are hereinafter collectively referred to as the "WARRANTS," and the

Warrants purchased by the Purchaser pursuant to this Agreement are hereinafter

collectively referred to as the "PURCHASED WARRANTS." The shares of Common Stock

issuable upon exercise of or otherwise pursuant to the Warrants are hereinafter

collectively referred to as the "WARRANT SHARES," and the shares of Common Stock

issuable upon exercise of or otherwise pursuant to the Purchased Warrants are

hereinafter collectively referred to as the "PURCHASED WARRANT SHARES." The

Shares, the Warrants and the Warrant Shares are sometimes hereinafter

collectively referred to as the "SECURITIES," and the Purchased Shares, the

Purchased Warrants and the Purchased Warrant Shares are sometimes hereinafter

collectively referred to as the "PURCHASED SECURITIES." The Shares and Warrants

constituting the Additional Units are referred to herein as the "ADDITIONAL

SHARES" and the "ADDITIONAL WARRANTS."

(d) The Purchaser shall provide to the Company on or prior to

Closing a form of Schedule 13D to be filed with the Securities and Exchange

Commission (the "SEC") due to Purchaser's beneficial ownership subsequent to the

First Closing of more than five percent (5%) of the outstanding Common Stock of

the Company.

3. PAYMENT AND DELIVERY; TERMINATION.

(a) Payment for the Initial Units shall be made to the Company

by the Purchaser by wire transfer in immediately available funds in accordance

with wire instructions provided by the Company against delivery of the Initial

Units and all other documents and items required to be delivered hereunder by

the Company to the Purchaser at the First Closing (such payment and delivery

hereinafter referred to as the "FIRST CLOSING") at 10:00 a.m., Miami time, on

the date that is between two (2) and five (5) days following the date that all

of the conditions precedent set forth in Section 4 and Section 5 have been

satisfied or waived by the party to whom such performance is owed, at the

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offices of Akerman Senterfitt, One Southeast Third Avenue, 28th Floor, Miami,

Florida ("AKERMAN SENTERFITT"), or at such other time on the same or such other

date and at such other location, as shall be agreed by the Company and the

Purchaser, subject to the terms and conditions of this Agreement. The time and

date of the First Closing are hereinafter referred to as the "FIRST CLOSING

DATE."

(b) Payment for the Additional Units to be purchased by the

Purchaser hereunder shall be made to the Company by the Purchaser by wire

transfer in immediately available funds in accordance with wire instructions

provided by the Company against delivery of such Additional Units and any other

documents or items required hereunder to be delivered by the Company to the

Purchaser at the Second Closing (such payment and delivery hereinafter referred

to as the "SECOND CLOSING") on the date and at the time agreed to by the Company

and the Purchaser after receipt by the Company of the Additional Purchase

Exercise Notice, which Second Closing shall occur on the First Closing Date,

unless the parties, despite their best efforts, are unable to close on such

date, in which case the Second Closing shall occur on a mutually determined date

not later than seven (7) business days after the First Closing Date, subject to

the terms and conditions of this Agreement. The Second Closing shall occur at

the offices of Akerman Senterfitt or such other location as shall be agreed by

the Company and the Purchaser.

phrase "APPLICABLE CLOSING" shall refer to and mean the First Closing or the

Second Closing, as the context shall reasonably require, and the term "CLOSING

DATE" or the phrase "APPLICABLE CLOSING DATE" shall refer to and mean the First

Closing Date or the Second Closing Date, as the context shall reasonably

require.

(d) Certificates evidencing the Purchased Shares and the

Purchased Warrants purchased by the Purchaser hereunder shall be registered in

the name of the Purchaser. The certificates evidencing the Purchased Shares and

the Purchased Warrants purchased by the Purchaser hereunder shall be authorized

for issuance by the Company by written authorization to its transfer agent on

the applicable Closing Date, with any transfer taxes payable in connection with

the transfer of such Purchased Shares and the Purchased Warrants to the

Purchaser duly paid, against payment of the Purchase Price therefor.

(e) This Agreement and the transactions contemplated hereby

may be terminated by the Purchaser and the Company at any time prior to the

First Closing Date by mutual consent of the parties, or by either of the

Purchaser or the Company if the First Closing shall not have occurred by June 1,

2005.

4. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The Company's obligations

to issue the Units to the Purchaser and consummate the transactions contemplated

by this Agreement on the applicable Closing Date are subject to satisfaction of

the following conditions:

(a) The Company shall have received on the applicable Closing

Date immediately available funds in the amount of the Purchase Price for the

Units to be issued and delivered on such Closing Date;

(b) All representations and warranties of the Purchaser

contained in this Agreement shall be true and correct in all material respects

(if not qualified by materiality) or in all respects (if qualified by

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materiality) at and as of the applicable Closing with the same effect as though

such representations and warranties were made at and as of such Closing;

material respects with all the covenants and agreements required by this

Agreement to be performed or complied with by the Purchaser hereunder at or

prior to the applicable Closing;

(d) The Company shall have received from the Purchaser on the

applicable Closing Date a certificate, dated as of the applicable Closing Date

and signed by an executive officer of the Purchaser, to the effect that the

representations and warranties of the Purchaser contained in this Agreement are

true and correct in all material respects (if not qualified by materiality) or

in all respects (if qualified by materiality) at and as of the applicable

Closing with the same effect as though such representations and warranties were

made at and as of such Closing and that the Purchaser has performed and complied

in all material respects with all of the covenants and agreements required by

this Agreement to be performed or complied with by the Purchaser hereunder at or

prior to the applicable Closing;

(e) All material governmental and/or regulatory consents,

approvals, orders or authorizations necessary for the consummation of the

transactions contemplated hereby shall have been obtained, all material

governmental and/or regulatory filings and notices necessary for the

consummation of the transactions contemplated hereby shall have been made or

given, as the case may be, and all material third-party consents necessary for

the consummation of the transactions contemplated hereby shall have been

obtained;

(f) The Purchaser shall have delivered or caused to be

delivered to the Company at the applicable Closing an opinion of counsel for the

Purchaser, dated the applicable Closing Date, to the effect set forth in EXHIBIT

C ("PURCHASER'S OPINION OF COUNSEL");

(g) The shareholders of the Company shall have (i) approved

the issuance to the Purchaser of the Units and any other terms of this Agreement

if and as required by applicable law, (ii) approved expanding the Company's

Board of Directors from 5 to 7 members and (iii) approved the amendments to the

Company's Articles of Incorporation as set forth in the Articles of Amendment

attached hereto as EXHIBIT D ;

(h) All material documents, instruments and other items

required by this Agreement to be delivered by the Purchaser to the Company at or

prior to the applicable Closing shall have been delivered to the Company at or

prior to the applicable Closing.

(i) Between the date hereof and the applicable Closing Date,

there shall not have occurred any material adverse event affecting the

Purchaser.

(j) the absence of a withdrawal of the approval of the

transaction by the Company's Board of Directors where such withdrawal resulted

from the board's determination that its fiduciary duties required such

withdrawal pursuant to Section 8(n) below.

(k) the Company shall have entered into definitive employment

agreements with the designated management team under the terms and conditions

acceptable to Company on date of the First Closing Date and performance by any

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of the designated management team has not been prohibited or enjoined by a

judicial or administrative order or other agreement enforcing any

non-competition, non-solicitation or other restrictive covenant or agreement to

which any such member of the designated management team is a party.

(l) the Company shall have received Executed Employment

Agreements from James Laurent and Synnott Durham in a form acceptable to both

the Company and the Purchaser on or before the First Closing Date.

5. CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligations of the

Purchaser to purchase and pay for the Units and consummate the transactions

contemplated by this Agreement on the applicable Closing Date are subject to the

following conditions:

(a) All representations and warranties of the Company

contained in this Agreement shall be true and correct in all material respects

(if not qualified by materiality) or in all respects (if qualified by

materiality) at and as of the applicable Closing with the same effect as though

such representations and warranties were made at and as of such Closing;

(b) The Company shall have performed and complied in all

material respects with all the covenants and agreements required by this

Agreement to be performed or complied with by the Company hereunder at or prior

to the applicable Closing;

applicable Closing Date a certificate, dated as of the applicable Closing Date

and signed by an executive officer of the Company, to the effect that the

representations and warranties of the Company contained in this Agreement are

true and correct in all material respects (if not qualified by materiality) or

in all respects (if qualified by materiality) at and as of the applicable

Closing with the same effect as though such representations and warranties were

made at and as of such Closing and that the Company has performed and complied

in all material respects with all of the covenants and agreements required by

this Agreement to be performed or complied with by the Company hereunder at or

prior to the applicable Closing;

(d) All material governmental and/or regulatory consents,

approvals, orders or authorizations necessary for the consummation of the

transactions contemplated hereby shall have been obtained, all material

governmental and/or regulatory filings and notices necessary for the

consummation of the transactions contemplated hereby shall have been made or

given, as the case may be, and all material third-party consents necessary for

the consummation of the transactions contemplated hereby shall have been

obtained;

(e) The Company shall have authorized for issuance by written

authorization to its transfer agent at the applicable Closing duly executed

certificates representing the Purchased Shares to be delivered at such Closing

registered in the name of the Purchaser;

(f) The Company shall have executed and delivered to the

Purchaser at the applicable Closing warrant certificates for the Purchased

Warrants to be delivered at such Closing in the respective forms set forth in

Exhibits A and B hereto registered in the name of the Purchaser;

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(g) The Company shall have delivered or caused to be delivered

to the Purchaser at the time of execution of this Agreement the Voting Agreement

in the form attached hereto as EXHIBIT E (the "VOTING AGREEMENT") duly executed

by Michael Herman;

(h) The Company shall have delivered or caused to be delivered

to the Purchaser at the First Closing an opinion of counsel for the Company,

dated the applicable Closing Date, to the effect set forth in EXHIBIT F

("COMPANY'S OPINION OF COUNSEL");

(i) The shareholders of the Company shall have approved the

purchase by the Purchaser of the Units and any other terms of this Agreement, if

and as required by applicable law. The shareholders of the Company and shall

have also approved expanding the Company's Board of Directors from five (5) to

seven (7) directors; and the Company's Board of Directors shall have appointed

Richard C. Rochon and Mario B. Ferrari and two additional designees by the

Purchaser to the Company's Board of Directors and appropriate documentation of

such approval shall have been presented to Purchaser's counsel;

(j) All actions required to be taken by the Company under

Section 607.0902 of the Florida Business Corporation Act necessary to cause the

acquisition by the Purchaser of the Securities pursuant to this Agreement to not

constitute a "control-share acquisition" as defined therein shall have been

taken and appropriate documentation of such approval shall have been presented

to Purchaser's counsel;

(k) The Company shall have provided to the Purchaser a true

and correct copy, certified by the Company's secretary, of the resolutions of

the Company's Board of Directors approving this Agreement and the transactions

contemplated hereby; and the Company's shareholders shall have approved, and the

Company shall have caused to be filed and effective with the Florida Secretary

of State, the amendments to the Company's Articles of Incorporation set forth on

EXHIBIT D attached hereto;

(l) Between the date hereof and the applicable Closing Date,

(i) there shall not have occurred any material adverse event affecting the

Company or any of its subsidiaries or any of their respective businesses,

operations, financial conditions, assets or liabilities (contingent or

otherwise) and (ii) the Company shall not have restated or announced its

intention to restate any portion of its financial statements as included in any

filing with the SEC or in any press release or other form of media;

(m) All material documents, instruments and other items

required by this Agreement to be delivered by the Company to the Purchaser at or

prior to the applicable Closing shall have been delivered to the Purchaser at or

prior to the applicable Closing.

(n) The Company shall have entered into definitive employment

agreements with the designated management team under the terms and conditions

acceptable to the Purchaser on the date of the First Closing Date and

performance by any of the designated management team has not been prohibited or

enjoined by a judicial or administrative order or other agreement enforcing any

non-competition, non-solicitation or other restrictive covenant or agreement to

which any such member of the designated management team is a party.

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(o) The Company shall make any public announcement regarding

the Purchaser's involvement, the designated management team, or the capital

raise, subject to the Purchaser's discretion, except that the Company may make

such disclosures which it believes in good faith to be required by law or by the

terms of any listing agreement with or the requirements of a securities

exchange.

(p) The Purchaser shall have received Executed Employment

Agreements from James Laurent and Synnott Durham in a form acceptable to both

the Purchaser and the Company on or before the Closing Date.

6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The

Company represents and warrants to, and covenants with, the Purchaser that:

(a) The Company has on a timely basis filed all forms, reports

and documents required to be filed by it with the SEC since October 1, 2001.

Except to the extent available on the SEC's web site through the Electronic Data

Gathering, Analysis and Retrieval System ("EDGAR") two (2) days prior to the

date of this Agreement, SCHEDULE 6(A) lists, or the Company has delivered to the

Purchaser copies in the form filed with the SEC of, (i) the Company's Annual

Reports on Form 10-KSB for each fiscal year of the Company beginning since

October 1, 2001, (ii) the Company's Quarterly Reports on Form 10-QSB for each of

the first three fiscal quarters in each of the fiscal years of the Company

referred to in clause (i) above, (iii) all proxy statements relating to the

Company's meetings of shareholders (whether annual or special) held, and all

information statements relating to shareholder consents since the beginning of

the first fiscal year referred to in clause (i) above, (iv) all certifications

and statements required by (x) the SEC's Order dated June 27, 2002 pursuant to

Section 21(a)(1) of the Securities Exchange Act of 1934, as amended (the

"EXCHANGE ACT") (File No. 4-460), (y) Rule 13a-14 or 15d-14 under the Exchange

Act or (z) 18 U.S.C. ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002

("SOX")) with respect to any report referred to in clause (i), (ii) or (iii)

above, (v) all other forms, reports, registration statements and other documents

(other than preliminary materials if the corresponding definitive materials have

been provided to the Purchaser pursuant to this Section 6(a)) filed by the

Company with the SEC since the beginning of the first fiscal year referred to in

clause (i) above (the forms, reports, registration statements and other

documents referred to in clauses (i), (ii), (iii), (iv) and (v) above are,

collectively, referred to as the "COMPANY SEC DOCUMENTS"), and (vi) all comment

letters received by the Company from the Staff of the SEC since October 1, 2001

and all responses to such comment letters by or on behalf of the Company. To the

date of the Second Closing Date, the Company SEC Documents (x) were or will be

prepared, in all material respects, in accordance with the requirements of the

Securities Act of 1933, as amended (the "SECURITIES ACT"), and the Exchange Act,

as the case may be, and the rules and regulations thereunder and (y) did not at

the time they were filed with the SEC, or will not at the time they are filed

with the SEC, contain any untrue statement of a material fact or omit to state a

material fact required to be stated therein or necessary in order to make the

statements made therein, in the light of the circumstances under which they were

made, not misleading. No subsidiary of the Company is or has been required to

file any form, report, registration statement or other document with the SEC.

The Company maintains disclosure controls and procedures required by Rule 13a-15

or 15d-15 under the Exchange Act; and such controls and procedures are effective

to provide reasonable assurance that all material information concerning the

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Company and its subsidiaries is made known on a timely basis to the individuals

responsible for the preparation of the Company's filings with the SEC and other

public disclosure documents. Except as set forth on SCHEDULE 6(A), to the

Company's knowledge, except as otherwise disclosed in the Company SEC Documents,

each director and executive officer of the Company has filed with the SEC on a

timely basis all statements required by Section 16(a) of the Exchange Act and

the rules and regulations thereunder since October 1, 2001. As used in this

Section 6(a), the term "FILE" shall be broadly construed to include any manner

in which a document or information is furnished, supplied or otherwise made

available to the SEC.

(b) Except as otherwise disclosed in the Company SEC

Documents, the financial statements of the Company and its subsidiaries included

in the Company SEC Documents (including the related notes) complied as to form,

as of their respective dates of filing with the SEC, in all material respects

with applicable accounting requirements and the published rules and regulations

of the SEC with respect thereto (including, without limitation, Regulation S-X),

have been prepared in accordance with generally accepted accounting principles

in the United States ("GAAP") (except, in the case of unaudited statements, to

the extent permitted by Regulation S-X for Quarterly Reports on Form 10-QSB)

applied on a consistent basis during the periods and at the dates involved

(except as may be indicated in the notes thereto) and fairly present, in all

material respects, the consolidated financial condition of the Company and its

subsidiaries at the dates thereof and the consolidated results of operations and

cash flows for the periods then ended (subject, in the case of unaudited

statements, to notes or the absence thereof and normal year-end audit

adjustments that were not, or with respect to any such financial statements

contained in any Company SEC Documents to be filed subsequent to the date hereof

are not reasonably expected to be, material in amount or effect). Except (A) as

reflected in the Company's audited balance sheet at September 30, 2003 or

liabilities described in any notes thereto (or liabilities for which neither

accrual nor footnote disclosure is required pursuant to GAAP), (B) for

liabilities incurred in the ordinary course of business since September 30, 2003

consistent with past practice or in connection with this Agreement or the

transactions contemplated hereby, (C) otherwise disclosed in the Company SEC

Documents, or (D) otherwise set forth in SCHEDULE 6(B) hereto, to the knowledge

of the Company, neither the Company nor any of its subsidiaries has any material

liabilities or obligations of any nature. The Company has been in compliance

with all rules and regulations promulgated in response to SOX with respect to

non-audit services performed by BSS & S, certified public accountants since the

date of the enactment of such rules and regulations.

existing as a corporation in good standing under the laws of the jurisdiction of

its incorporation, (ii) has the corporate power and authority to own, lease, use

and operate its properties and to conduct its business as currently conducted

and as described in the Company SEC Documents and (iii) is duly qualified to

transact business and is in good standing in each jurisdiction in which the

conduct of its business or its ownership, leasing, use or operation of its

property requires such qualification, except in connection with the

representation in clause (iii) where the failure to be so qualified as a foreign

corporation would not have a material adverse effect on the Securities, the

assets, liabilities, business, properties, operations, financial condition or

results of operations of the Company and/or its subsidiaries, the transactions

contemplated hereby or by the agreements or instruments to be entered into in

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connection herewith or the authority or the ability of the Company to perform

its obligations under this Agreement, the Warrants or the other agreements or

instruments to be entered into in connection herewith (a "MATERIAL ADVERSE

EFFECT").

(d) Except as set forth in SCHEDULE 6(D), the Company SEC

Documents set forth the name of each subsidiary of the Company or other entity

in which the Company owns, directly or indirectly, any equity or debt interest

or any form of proprietary interest, or any obligation, right or option to

acquire any such interest, and the jurisdiction of its formation. Each

subsidiary of the Company has been duly incorporated, is validly existing as a

corporation in good standing under the laws of the jurisdiction of its

incorporation, has the corporate power and authority to own, lease, use and

operate its properties and to conduct its business as currently conducted and

described in the Company SEC Documents and is duly qualified to transact

business and is in good standing in each jurisdiction in which the conduct of

its business or its ownership, leasing, use or operation of property requires

such qualification, except where the failure to be so qualified would not have a

Material Adverse Effect. Except as set forth in SCHEDULE 6(D), all of the issued

shares of capital stock of each subsidiary of the Company have been duly and

validly authorized and issued, are fully paid and non-assessable and are owned

directly by the Company, free and clear of all liens, encumbrances, equities or

claims.

(e) Each of this Agreement, the Warrants, and the other

agreements and documents executed and/or delivered by the Company in connection

herewith has been duly authorized, executed and delivered by, and is a valid and

binding agreement of, the Company, enforceable in accordance with its terms,

subject to applicable bankruptcy, insolvency, reorganization, moratorium or

similar laws of general application affecting creditors' rights generally and

general principles of equity. The Company has all requisite corporate power and

authority to enter into and perform this Agreement, the Warrants, and the other

agreements and documents executed and/or delivered by the Company in connection

herewith and to consummate the transactions contemplated hereby and thereby and

to issue the Securities, in accordance with the terms hereof and thereof.

(f) The authorized capital stock of each of the Company and

its subsidiaries conforms as to legal matters to the description thereof

contained in the Company SEC Documents. As of the date of this Agreement, the

authorized capital stock of the Company consists only of 2,000,000 shares of

Preferred Stock of which no shares are issued and outstanding, 25,000,000 shares

of Common Stock of which 4,006,620 shares are issued and outstanding, 145,950

shares are reserved for issuance pursuant to the Company's stock option plans,

and no shares are reserved for issuance pursuant to securities (other than the

Warrants) exercisable for, or convertible into or exchangeable for shares of

Common Stock. All outstanding shares of capital stock of the Company are duly

authorized, validly issued, fully paid and nonassessable. No shares of capital

stock of the Company or any of its subsidiaries are subject to preemptive rights

or any other similar rights of the shareholders of the Company or any of its

subsidiaries or any liens or encumbrances imposed through the actions or failure

to act of the Company or any of its subsidiaries. Except as disclosed in

SCHEDULE 6(F) hereto, (i) there are no outstanding options, warrants, scrip,

rights to subscribe for, puts, calls, rights of first refusal, agreements,

understandings, claims or other commitments or rights of any character

whatsoever that have been granted by the Company relating to, or securities or

rights convertible into or exchangeable for any shares of capital stock of the

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Company or any of its subsidiaries, or arrangements by which the Company or any

of its subsidiaries is or may become bound to issue additional shares of capital

stock of the Company or any of its subsidiaries, (ii) there are no agreements or

arrangements under which the Company or any of its subsidiaries is obligated to

(except as provided in Section 9 hereof) and (iii) there are no anti-dilution or

price adjustment provisions contained in any security issued by the Company (or

in any agreement providing rights to security holders) that will be triggered by

the issuance of the Securities.

(g) The Shares and the Warrants have been duly authorized and,

when issued and delivered in accordance with the terms of this Agreement, will

be validly issued, fully paid and non-assessable, and free from all taxes,

liens, claims and encumbrances with respect to the issue thereof and will not be

subject to any preemptive or similar rights, except as provided for in this

Agreement. The Warrant Shares are duly authorized and reserved for issuance,

and, when issued upon exercise of or otherwise pursuant to the Warrants in

accordance with the terms thereof, will be, except with respect to the

"broker-assisted exercises" provided for in the Warrant during the time period

between exercise of the Warrants and payment by the broker of the exercise price

to the Company (the "BROKER ASSISTED EXERCISE EXCEPTION") which Warrant Shares

upon payment to the Company of the exercise price in full will be, validly

issued, fully paid and non-assessable, and free from all taxes, liens, claims

and encumbrances with respect to the issue thereof and will not be subject to

any preemptive rights or other similar rights, except as provided for in this

Agreement.

(h) Except as set forth in SCHEDULE 6(H) attached hereto and

except for the Broker Assisted Exercise Exception, the execution, delivery and

performance of this Agreement and the Warrants by the Company and the

consummation by the Company of the transactions contemplated hereby and thereby

(including, without limitation, the issuance of the Shares and the Warrants and

the issuance and reservation for issuance of the Warrant Shares) will not (i)

conflict with or result in a violation of any provision of the Articles of

Incorporation or By-laws of the Company or (ii) violate or conflict with, or

result in a breach of any provision of, or constitute a default (or an event

which with notice or lapse of time or both could become a default) under, or

give to others any rights of termination, amendment, acceleration or

cancellation of, any agreement, indenture, patent, patent license or instrument

to which the Company or any of its subsidiaries is a party, except for such

violations, conflicts, breaches or defaults under agreements, licenses and

instruments which would not cause a Material Adverse Effect or (iii) to the

knowledge of the Company, result in a violation of any law, rule, regulation,

order, judgment or decree (including federal and state securities laws and

regulations and regulations of any self-regulatory organizations to which the

Company or any of its subsidiaries or their securities are subject) applicable

to the Company or any of its subsidiaries or by which any property or asset of

the Company or any of its subsidiaries is bound or affected, except for those

violations of law which would not cause a Material Adverse Effect. Neither the

Company nor any of its subsidiaries is in violation of its Articles of

Incorporation, By-laws or other organizational documents and, to the knowledge

of the Company, neither the Company nor any of its subsidiaries is in default

<PAGE>

(and no event has occurred which with notice or lapse of time or both could put

the Company or any of its subsidiaries in default) under, and neither the

Company nor any of its subsidiaries has taken any action or failed to take any

action that would give to others any rights of termination, amendment,

acceleration or cancellation of, any agreement, indenture or instrument to which

the Company or any of its subsidiaries is a party or by which any property or

assets of the Company or any of its subsidiaries is bound or affected, except

for such violations, conflicts, breaches or defaults under agreements, licenses

and instruments which would not cause a Material Adverse Effect. To the

knowledge of the Company, the businesses of the Company and its subsidiaries are

not being conducted in violation of any law, ordinance or regulation of any

governmental entity, except to the extent that the failure to so conduct such

businesses does not and will not have a Material Adverse Effect. Except as

specifically contemplated by this Agreement and as required under the Securities

Act and any applicable state securities laws and by the rules and regulations of

the American Stock Exchange National Market ("AMERICAN STOCK EXCHANGE"), to the

knowledge of the Company, the Company is not required to obtain any consent,

authorization or order of, or make any filing or registration with, any court,

governmental agency, regulatory agency, or self regulatory organization or stock

market or third party in order for it to execute, deliver or perform any of its

obligations under this Agreement, or the Warrants in accordance with the terms

hereof or thereof or to issue and sell the Securities in accordance with the

terms hereof, except for those consents the failure of which to obtain would not

have a Material Adverse Effect. All consents, authorizations, orders, filings

and registrations which the Company is required to obtain pursuant to the

preceding sentence have been obtained or effected or will be obtained or

effected on or prior to the First Closing Date and will be in full force and

effect as of the Second Closing Date. To the knowledge of the Company, the

Company is not in violation of the listing requirements of the American Stock

Exchange applicable to continued listings.

(i) Except as set forth on SCHEDULE 6(I) attached hereto,

there has not occurred any material adverse change, or any development involving

a prospective material adverse change, in the condition, financial or otherwise,

or in the earnings, business or operations of the Company and/or any of its

subsidiaries, taken as a whole, since June 30, 2004.

(j) Except as set forth on SCHEDULE 6(J), there are no legal

or governmental proceedings pending or, to the knowledge of the Company,

threatened, to which the Company or any of its subsidiaries is a party or to

which any of the properties of the Company or any of its subsidiaries is subject

other than proceedings accurately described in the Company SEC Documents or set

forth on SCHEDULE 6(J).

(k) Except as set forth in SCHEDULE 6(K) attached hereto or

the Company SEC Documents, and except where such has not had and could not

reasonably be expected to have a Material Adverse Effect, on the Company or, any

of its subsidiaries to the knowledge of the Company, the Company and each of its

subsidiaries (i) have obtained all applicable permits, licenses and other

authorizations, including the Company Permits (as herein defined), which are

required to be obtained under all applicable federal, state or local laws or any

applicable regulation, code, plan, order, decree, judgment, notice or demand

letter issued, entered, promulgated or approved thereunder relating to pollution

or protection of the environment ("ENVIRONMENTAL LAWS"), including laws relating

to emissions, discharges, releases or threatened releases of pollutants,

contaminants or hazardous or toxic material or wastes, including petroleum, into

ambient air, surface water, ground water or land or otherwise relating to the

manufacture, processing, distribution, use, treatment, storage, disposal,

transport or handling of pollutants, contaminants or hazardous or toxic

materials or wastes, including petroleum, by the Company or any of its

subsidiaries (or their respective agents); (ii) are in compliance with all

Environmental Laws and all terms and conditions of such required permits,

licenses and authorizations, and also are in compliance with all other

applicable limitations, restrictions, conditions, standards, prohibitions,

requirements, obligations, schedules and timetables contained in applicable

<PAGE>

Environmental Laws; (iii) as of the date hereof, are not aware of nor have

received notice of any uncured past or present violations of Environmental Laws

or any event, condition, circumstance, activity, practice, incident, action or

plan which is reasonably likely to interfere with or prevent continued

compliance with Environmental Laws or which could give rise to any material

capital expenditure or common law or statutory liability, or otherwise form the

basis of any claim, action, suit or proceeding against the Company or any of its

subsidiaries under any Environmental Law or otherwise based on or resulting from

the manufacture, processing, distribution, use, treatment, storage, disposal,

transport, handling, emission, discharge or release into the environment of any

pollutant, contaminant, or hazardous or toxic material or waste, including

petroleum; (iv) have taken all actions necessary under applicable Environmental

Laws to register any products or materials required to be registered by the

Company or any of its subsidiaries (or any of their respective agents)

thereunder and (v) none of the Company nor any of its subsidiaries has entered

into any agreement to undertake or pay for any response action of any kind or

nature or to pay any damages (including punitive damages), costs, fines or

penalties associated with any release or threatened release of any pollutant,

contaminant or hazardous or toxic material or waste, including petroleum, at any

location.

(l) The Company and its subsidiaries own or possess all

patents, patent rights, licenses, inventions, copyrights, know-how (including

trade secrets and other unpatented and/or unpatentable proprietary or

confidential information, systems or procedures), trademarks, service marks and

trade names currently employed by them in connection with the business now

operated by them, and neither the Company nor any of its subsidiaries has

received any notice of infringement of or conflict with asserted rights of

others with respect to any of the foregoing.

(m) To the knowledge of the Company, the Company is not, and

after giving effect to the offering and sale of the Securities and the

application of the proceeds thereof will not be, required to register as an

"INVESTMENT COMPANY" as such term is defined in the Investment Company Act of

1940, as amended.

(n) Except as set forth on SCHEDULE 6(N), neither the Company

nor any affiliate (as defined in Rule 501(b) of Regulation D under the

Securities Act, an "AFFILIATE") of the Company has, directly, or through any

agent, (i) sold, offered for sale, solicited offers to buy or otherwise

negotiated in respect of, any security (as defined in the Securities Act) which

is or will be integrated with the offer or sale of the Securities in a manner

that would require the registration under the Securities Act of the Securities

or (ii) offered, solicited offers to buy or sold the Securities by any form of

general solicitation or general advertising (as those terms are used in

Regulation D under the Securities Act) or in any manner involving a public

offering within the meaning of Section 4(2) of the Securities Act; and neither

the Company nor any Affiliate of the Company will engage in any of the actions

described in clauses (i) and (ii) of this paragraph.

<PAGE>

(o) Subject to the accuracy of the Purchaser's representations

herein, and upon the advice of the Company's legal counsel, to the knowledge of

the Company, it is not necessary in connection with the offer, sale and delivery

of the Securities to the Purchaser in the manner contemplated by this Agreement

to register the Securities under the Securities Act.

(p) The Company shall comply with all requirements of the

American Stock Exchange with respect to the issuance of the Purchased Securities

and the listing of the Purchased Shares or the Purchased Warrant Shares and any

securities issued as a dividend thereon or in replacement thereof or otherwise

with respect thereto (collectively, the "COMMON SHARES") on the American Stock

Exchange.

(q) The Company has not taken and will not, in violation of

applicable law, take any action designed to or that might reasonably be expected

to cause or result in stabilization or manipulation of the price of the Common

Stock.

(r) The Company is eligible to file with the SEC a

registration statement on Form S-3 for purposes of registering the resale of the

Common Shares.

(s) Except as set forth in Section 9 hereof, no shareholder of

the Company has any right (which has not been waived) to require the Company to

Act in the Registration Statement (as defined in Section 9(a)) to be filed by

the Company on behalf of the Purchaser.

(t) Except in respect of any pest control business identified

by the Purchaser in accordance with Section 8(b) hereof, the Company is not in

discussions and has not reached any understanding, whether or not in writing,

regarding potential terms with respect to any transaction that would constitute

a business combination under Regulation S-X 11-01(a), where the business to be

acquired would constitute a significant subsidiary as defined in Rule 1-02(w) at

the 10% level.

(u) Except as otherwise disclosed in the Company SEC

Documents, the Company and each of its subsidiaries has made or filed, or

properly filed for an extension with respect to, all federal, state and foreign

income and all other tax returns, reports and declarations required by any

jurisdiction to which it is subject (unless and only to the extent that the

Company and each of its subsidiaries has set aside on its books provisions

reasonably adequate for the payment of all unpaid and unreported taxes) and has

paid all taxes and other governmental assessments and charges that are material

in amount, shown or determined to be due on such returns, reports and

declarations, except those being contested in good faith and has set aside on

its books provisions reasonably adequate for the payment of all taxes for

periods subsequent to the periods to which such returns, reports or declarations

apply. Except as otherwise disclosed in the Company SEC Documents or on SCHEDULE

6(U), there are no unpaid taxes in any material amount claimed to be due to the

taxing authority of any jurisdiction, and the officers of the Company know of no

basis for any such claim. Except as otherwise disclosed in the Company SEC

Documents, neither the Company nor any of its subsidiaries has executed a waiver

with respect to the statute of limitations relating to the assessment or

collection of any foreign, federal, state or local tax.

<PAGE>

(v) Except as otherwise disclosed in the Company SEC

Documents, except for arm's length transactions pursuant to which the Company or

any of its subsidiaries makes payments in the ordinary course of business upon

terms no less favorable than the Company or any of its subsidiaries could obtain

from third parties, each of which is set forth in the Company SEC Documents,

other than the grant of stock options and warrants disclosed on SCHEDULE 6(F)

and other than the employment agreements and retirement agreements disclosed on

SCHEDULE 6(F), none of the officers, directors, or employees of the Company or

any of its subsidiaries is presently a party to any transaction with the Company

or any of its subsidiaries (other than for services as employees, officers and

directors), including any contract, agreement or other arrangement providing for

the furnishing of services to or by, providing for rental of real or personal

property to or from, or otherwise requiring payments to or from any officer,

director or such employee or, to the knowledge of the Company, any corporation,

partnership, trust or other entity in which any officer, director, or any such

employee has a substantial interest or is an officer, director, trustee or

partner.

(w) All information relating to or concerning the Company or

any of its subsidiaries set forth in this Agreement is true and correct in all

material respects as of the date hereof and the Company has not omitted to state

any material fact necessary in order to make the statements made herein or

therein, in light of the circumstances under which they were made, not

misleading.

(x) The Company acknowledges that the Purchaser is acting

solely in its capacity of arm's length purchaser with respect to this Agreement

and the transactions contemplated hereby. The Company further represents to the

Purchaser that the Company's decision to enter into this Agreement has been

based solely on the independent evaluation by the Company and its

representatives.

(y) The Company and each of its subsidiaries are in possession

of all franchises, grants, authorizations, licenses, permits, easements,

variances, exemptions, consents, certificates, approvals and orders necessary to

own, lease and operate its properties and to carry on its business as it is now

being conducted (collectively, the "COMPANY PERMITS"), ex