SUNCREST GLOBAL ENERGY CORP (Form: 8-K, Received: 12/28/2007 17:27:55)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 20, 2007

SUNCREST GLOBAL ENERGY CORP.
(Exact name of registrant as specified in Charter)

Nevada	000-31355	81-0438093
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employee Identification No.)

124 N. First Street
Louisville, Kentucky 40202
(Address of Principal Executive Offices)

502-379-4788
(Issuer Telephone number)

3353 South Main Street
Salt Lake City, Utah 84115
(Address of Former Principal Executive Offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward Looking Statements

This Form 8-K and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively the “ Filings ”) contain or may contain forward looking statements and information that are based upon beliefs of, and information currently available to, Registrant’s management as well as estimates and assumptions made by Registrant’s management. When used in the filings the words “anticipate,” “believe,””estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to Registrant or Registrant’s management identify forward looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this report entitled “ Risk Factors ”) relating to Registrant’s industry, Registrant’s operations and results of operations and any businesses that may be acquired by Registrant. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Although Registrant believes that the expectations reflected in the forward looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with Registrant’s pro forma financial statements and the related notes that will be filed herein.

Item 1.01 Entry into a Material Definitive Agreement.

On December 20, 2007, Suncrest Global Energy Corp., a Nevada corporation (“ Suncrest Global Energy Corp. ”or “ Suncrest ”), entered into a Securities Exchange Agreement (the “ Exchange Agreement ”) with Beacon Enterprise Solutions Group, Inc., an Indiana corporation (“ Beacon ”), and Beacon’s shareholders. A copy of the Exchange Agreement is included as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The terms of the Exchange Agreement are described in more detail in Item 2.01, below.

Item 2.01 Completion of Acquisition or Disposition of Assets.

EXCHANGE AGREEMENT

On December 20, 2007, Suncrest and Beacon entered into the Exchange Agreement, which provided for the exchange of all Beacon Common Shares (“ Beacon Common Shares ”) and Beacon Series A Convertible Preferred Shares (“ Beacon Preferred Shares ”) for shares of common stock (“ Suncrest Common Stock ”) and shares of preferred stock (“ Suncrest Preferred Stock ”) in Suncrest Global Energy Corp. (the “ Share Exchange ”). The term “ Suncrest Preferred Stock ” refers to the Suncrest Preferred Stock after the amendment of the Restated Articles of Incorporation of Suncrest Global Energy Corp., as set forth below, and not to the existing preferred stock of Suncrest, described in “Description of Securities,” below.

Pursuant to the Exchange Agreement, Suncrest issued shares of Suncrest Common Stock to the holders of Beacon Common Shares. Each Beacon Common Share was exchanged for one share of Suncrest Common Stock. The Share Exchange has been consummated with respect to Beacon Common Shares but has not been consummated with respect to the Beacon Preferred Shares. Additionally, all outstanding promissory notes convertible into Beacon Common Shares and warrants for the purchase of Beacon Common Shares were exchanged for promissory notes convertible into shares of Suncrest Common Stock and warrants for the purchase of shares of Suncrest Common Stock, respectively. The persons who had been holders of Beacon Common Shares, or securities convertible into or exercisable for Beacon Common Shares, as of immediately before the Share Exchange became the holders of approximately 91.9% of the Suncrest Common Stock on a fully-diluted basis upon the consummation of the Share Exchange with respect to the Beacon Common Shares only. See ”Private Placement” and “Bridge Financing” below, for a description of these convertible promissory notes and warrants.

After the consummation of the Share Exchange with respect to the Beacon Common Shares, stockholders of Suncrest holding the requisite number of shares to approve such actions are expected to execute written consents to amend its Articles of Incorporation (the “ Articles of Incorporation ”) to effect the following actions: (i) to cancel

all existing authorized but unissued preferred stock, (ii) to designate a new class of preferred stock with rights, preferences and privileges equivalent to those of the Beacon Preferred Shares, and (iii) to change the name of Suncrest to “Beacon Enterprise Solutions Group, Inc.” A preliminary information statement (the “ Preliminary 14C Information Statement ”) describing these amendments will be filed no later than ten (10) days after the filing and dissemination of the Schedule 14f-1. A final information statement (the “ Final 14C Information Statement ”) will be filed after the comments of the Commission, if any, with respect to Preliminary 14C Information Statement have been addressed. The actions authorized and approved by the consents of the stockholders, including the amendments to the Articles of Incorporation, are expected to become effective twenty (20) days after the filing of the Final 14C Information Statement.

After the amendments to the Articles of Incorporation have become effective, the Share Exchange will be consummated with respect to the Beacon Preferred Shares. Each Beacon Preferred Share will be exchanged for one share of Suncrest Preferred Stock. The persons who had been holders of Beacon Preferred Shares will hold 100% of the outstanding Suncrest Preferred Stock.

Upon consummation of the Share Exchange of the Beacon Common Shares and the Beacon Preferred Shares, the persons who had been holders of Beacon Common Shares (or securities convertible into or exercisable for Beacon Common Shares) and Beacon Preferred Shares as of December 20, 2007 will collectively own approximately 93.3% of the Suncrest Common Stock on a fully-diluted, as-converted basis.

After the consummation of the Share Exchange with respect to both the Beacon Common Shares and Beacon Preferred Shares and upon the amendment of the Articles of Incorporation, Suncrest Global Energy Corp. will be renamed as “Beacon Enterprise Solutions Group, Inc.” For all purposes herein, Suncrest Global Energy Corp. after such consummation shall be referred to as “ New Beacon ,” and “ Suncrest Preferred Stock ” and “ Suncrest Common Stock ” shall be referred to as “ New Beacon Preferred Stock ” and “New Beacon Common Stock . ”

This current report contains summaries of the material terms of various agreements executed in connection with the transactions described herein. The summaries of these agreements are subject to, and qualified in their entirety by, reference to these agreements, all of which are incorporated herein by reference.

2007 BRIDGE FACILITY

On July 16, 2007, Beacon entered into a $500,000 bridge financing facility (the “ First Bridge Facility ”) provided by SHEND LLC (owned by Sherman Henderson, a member of Beacon’s Board of Directors) and ROBT LLC (owned by Robert Clarkson, a member of Beacon’s Board of Directors). The terms of the First Bridge Facility provided for the lending entities to make up to $500,000 in advances to Beacon on a discretionary basis at any time prior to a qualified private placement or public offering of Beacon’s securities.

On November 15, 2007, Beacon entered into a second bridge financing facility (the “ Second Bridge Facility ”), in the aggregate amount of $200,000, with John D. Rhodes, III (a member of Beacon’s Board of Directors) and another investor. The terms of the Second Bridge Facility were substantially similar to those of the First Bridge Facility. Collectively, the First Bridge Facility and the Second Bridge Facility are the “ 2007 Bridge Facility .”

The convertible promissory notes (the “ Bridge Notes ”) issued in the 2007 Bridge Facility bore interest at the prime rate and were to mature (i) in the event a Qualified Offering does not occur on or prior to December 31, 2007, on December 31, 2007; or (ii) in the event a Qualified Offering occurs on or prior to December 31, 2007, twenty-four (24) months after the date of the closing of the Qualified Offering (such date, the “ Maturity Date ”), where a “Qualified Offering” was defined as an equity offering in which the gross proceeds are at least $4,000,000. The holders of the Bridge Notes could also require prepayment of the advances in cash at any time after a Qualified Offering. The Bridge Notes issued in the First Bridge Facility were convertible, at the holder’s discretion, into an aggregate of 833,332 Beacon Common Shares, at a deemed conversion price of $0.60 per Beacon Common Share. The Bridge Notes issued in the Second Bridge Facility were convertible, at the holder’s discretion, into an aggregate of 333,332 Beacon Common Shares, at a deemed conversion price of $0.60 per Beacon Common Share.

Holders of the Bridge Notes also received warrants (“ Bridge Warrants ”) to purchase Beacon Common Shares. Of the Bridge Warrants to purchase 865,000 Beacon Common Shares, at a price of $1.00 per share, issued in the First Bridge Facility, the rights to purchase 625,000 Beacon Common Shares were immediately vested and exercisable on July 16, 2007. The remaining 240,000 warrants would vest at a rate of 10,000 shares per month from the date of a Qualified Offering for each month that the loan remained outstanding until the Maturity Date. Of the Bridge Warrants to purchase 346,000 Beacon Common Shares, at a price of $1.00 per share, issued in the Second Bridge Facility, the rights to purchase 250,000 Beacon Common Shares were immediately vested and exercisable, and the remaining 96,000 warrants would vest a rate of 4,000 shares per month from the date of a Qualified Offering for each month that the loan remained outstanding until the Maturity Date. Upon full conversion of the Bridge Notes into Beacon Common Shares or upon the Maturity Date, all remaining unvested Bridge Warrants would automatically vest and become exercisable. If prepayment of the advances after a Qualified Offering and prior to the maturity date is required, all remaining unvested Bridge Warrants would be forfeited and canceled. The Bridge Warrants provided for expiration on June 30, 2012.

On December 20, 2007, the Bridge Notes and Bridge Warrants were exchanged for convertible promissory notes (the “ Exchanged Bridge Notes ”) and warrants (the “ Exchanged Bridge Warrants ”) to purchase shares of New Beacon Common Stock, with terms substantially similar to those set forth above. As such, New Beacon is obligated to the terms of the Exchanged Bridge Notes and Exchanged Bridge Warrants. The form of the Exchanged Bridge Notes and the related Exchanged Bridge Warrants, along with a schedule of related party holders, is attached hereto as Exhibit 4.1. Exhibit 10.1 incorporates by reference Exhibit 4.1 filed herein.

PRIVATE PLACEMENT

Beacon entered into a preferred stock purchase agreement with The Placement Agent (“ The Placement Agent ”), a New York-based securities broker-dealer, pursuant to which The Placement Agent and other accredited investors (to whom we refer as the “ The Placement Agent Investor Group ”) have made a cash investment in Beacon (the “ Private Placement ”). Under the agreements comprising the Private Placement, Beacon was authorized to issue to the The Placement Agent Investor Group units (the “ Units ”), comprised of (i) 100 Beacon Preferred Shares and (ii) a five year warrant to purchase 66,667 Beacon Common Shares at a purchase price of $1.00 per Beacon Common Share (the “ Investor Warrants ”). The purchase price was $100,000.00 per Unit. A total of 24.339 Units have been sold and issued in the Private Placement representing an aggregate investment of $2,433,900.

Each of the Beacon Preferred Shares has certain rights, preferences and privileges, including: (i) a stated value per share of $1,000 (the “ Stated Value ”); (ii) dividends of 10% on the Stated Value payable in cash annually or as a stock dividend in additional Beacon Preferred Shares; (iii) optional conversion into 1,333.33 Beacon Common Shares and mandatory conversion upon the occurrence of events relating to a secondary public offering or stock price or trading volume; (iv) antidilution provisions, including full ratchet antidilution protection for certain unauthorized offerings; (v) a liquidation preference equal to the sum of 125% of the Stated Value and all accrued but unpaid dividends; (vi) upon a change of control transaction, a premium equal to the liquidation preference in addition to the amounts payable on the common shares into which the Beacon Preferred Shares are convertible; and (vii) certain negative covenants regarding the declaration of dividends, the issuance of additional preferred stock and the issuance of debt. The rights, preferences and privileges of the Beacon Preferred Shares are set forth in detail in Beacon’s Amended and Restated Articles of Incorporation, attached hereto as Exhibit 99.8.

After the amendment of the Articles of Incorporation, the Suncrest Preferred Stock will have equivalent rights, preferences and privileges as the Beacon Preferred Shares, as set forth above.

The Investor Warrants, which in the aggregate (assuming all Units are sold) have the right to purchase up to 2,500,000 Beacon Common Shares, have a five year exercise period and an exercise price of $1.00 per Beacon Common Share, payable in cash on the exercise date. The exercise price is subject to adjustment upon certain

occurrences specified in the Investor Warrants. Investor Warrants to purchase 1,622,600 Beacon Common Shares have been issued in the Private Placement.

The Placement Agent has acted as Beacon’s nonexclusive advisor in connection with the Private Placement. Beacon has agreed to pay The Placement Agent a cash offering fee of up to $520,000, a merger and acquisition advisory fee of $125,000 and an expense reimbursement of $50,000 (of which $10,000 has been paid) in connection with the closing of the Private Placement. Additionally, Beacon has agreed to issue a warrant to purchase up to 1,040,000 Beacon Common Shares (the “ The Placement Agent Warrant ”), which has been earned with respect to 632,814 Beacon Common Shares at an exercise price of $1.00 per share and a five year exercise period. In connection with the Private Placement, Beacon has agreed to issue warrants to purchase up to 600,000 Beacon Common Shares at $1.00 per share and a five year exercise period (the “ The Placement Agent Affiliate Warrants ”) to certain affiliates of The Placement Agent.

The outstanding warrants for the purchase of Beacon Common Shares, including the Investor Warrants, the The Placement Agent Warrant and the The Placement Agent Affiliate Warrants, were exchanged for warrants for the purchase of shares of Suncrest Common Stock (the “ Exchanged Investor Warrants ,” the “ Exchanged The Placement Agent Warrant ,” and the “ Exchanged The Placement Agent Affiliate Warrants ,” respectively) at the time that the Share Exchange was consummated with respect to the Beacon Common Shares. The forms of the Exchanged Investor Warrants, the Exchanged The Placement Agent Warrant and the Exchanged The Placement Agent Affiliate Warrants are attached hereto as Exhibits 10.2, 10.3 and 10.4.

PHASE I ACQUISITIONS

Beacon used the proceeds of the Private Placement to consummate the acquisitions (the “ Phase I Acquisitions ”) of five different entities in furtherance of its business plan, as described in more detail below.

Pursuant to the Asset Purchase Agreement (the “ ADS Purchase Agreement ”) dated October 15, 2007, by and between Beacon and Advance Data Systems d/b/a ADSnetcurve (“ ADSnetcurve ”), Beacon purchased substantially all of the operating assets of ADSnetcurve in exchange for (i) Six Hundred Thousand Dollars ($600,000) in cash; (ii) 700,000 Beacon Common Shares; and (iii) a secured promissory note (the “ ADS Note ”) in the principal amount of Three Hundred Thousand Dollars ($300,000). In addition, Beacon has delivered a working capital adjustment of $116,049 into escrow, pending a final calculation of ADSnetcurve’s working capital. The ADSnetcurve asset purchase was consummated on December 20, 2007. The ADS Purchase Agreement is attached as Exhibit 10.5.

The ADS Note has term of 48 months, bearing interest at the prime rate, and is secured by the assets acquired from ADSnetcurve. The ADS Note contains a prepayment provision such that Beacon will be required to make additional principal payments equal to 3.2% of the net amount received by Beacon from any future equity capital raised, in excess of $1,000,000, until such time as the ADS Note has been paid in full. If, upon the first anniversary of the closing of this transaction, the annual revenue generated from the business assets acquired in the acquisition of the assets of ADSnetcurve drops below $1,800,000, the principal amount of the ADS Note will be reduced by the same percentage as the percentage difference between the actual revenue and $1,800,000, up to 10% of the purchase price. Beacon may also apply any rights of set-off that it has under the terms of the purchase agreement with ADSnetcurve against payments due under the ADS Note. The ADS Note is attached as Exhibit 10.6.

Pursuant to the Asset Purchase Agreement (the “ CETCON Purchase Agreement ”) dated October 15, 2007, by and between Beacon and CETCON Incorporated (“ CETCON ”), Beacon purchased substantially all of the operating assets of CETCON in exchange for (i) Seven Hundred Thousand Dollars ($700,000) in cash; (ii) 900,000 Beacon Common Shares; and (iii) a secured promissory note (the “ CETCON Note ”) in the principal amount of Six Hundred Thousand Dollars ($600,000). Of this consideration, 450,000 Beacon Common Shares were placed into escrow to secure CETCON’s obligations under the asset purchase agreement. The CETCON asset purchase was consummated on December 20, 2007. The CETCON Purchase Agreement is attached as Exhibit 10.7.

The CETCON Note has a term of 60 months, bearing interest at 8% APR. The CETCON Note provides for monthly principal and interest payments and is secured by the assets acquired by Beacon in the acquisition transaction (subordinate only to existing senior debt assumed in the acquisition). If, by the first anniversary of the closing of this transaction, the annual revenue generated from the operating assets and business acquired from

CETCON is less than $2,000,000, the principal amount of the CETCON Note will be reduced by the same percentage as the percentage difference between the actual revenue and $2,000,000. Beacon may also apply any rights of set-off that it has under the terms of the purchase agreement with CETCON against payments due under the CETCON Note. The CETCON Note is attached as Exhibit 10.8.

Pursuant to the Asset Purchase Agreement (the “ Strategic Purchase Agreement ”) dated October 15, 2007, by and between Beacon and Strategic Communications, LLC (“ Strategic ”), Beacon purchased substantially all of the operating assets of Strategic in exchange for (i) Five Hundred Sixty-Two Thousand Five Hundred Dollars ($562,500); and (ii) 200,000 Beacon Common Shares. Beacon assumed an aggregate of $500,000 in operating liabilities of Strategic. The Strategic Purchase Agreement is attached as Exhibit 10.9. The entire consideration to Strategic was placed into escrow at closing. In lieu of cash in the same amount, Beacon placed a promissory note (the “ Strategic Note ”) in the principal amount of $342,000 into escrow. The Strategic Note matures upon the earlier of satisfaction of certain funding conditions or December 31, 2008 and may be prepaid at any time before maturity. The Strategic Note is attached as Exhibit 10.10.

Of the cash consideration paid into escrow, $131,500 was paid to certain creditors of Strategic out of escrow and 40,000 Beacon Common Shares were transferred to certain creditors of Strategic (who are accredited investors). An additional $60,000 of cash and 120,000 Beacon Common Shares are reserved for the settlement of claims against Strategic. The remainder of the consideration is held in escrow in support of Strategic’s indemnification obligations to Beacon, including obligations to pay off certain obligations in the approximate aggregate amount of $342,000 to Federal, state and local tax authorities secured by liens on the assets of Strategic that were transferred to Beacon, under the terms of the asset purchase agreement, as amended. The Strategic asset purchase was consummated on December 20, 2007.

Pursuant to the Asset Purchase Agreement (the “ RFK Purchase Agreement ”) dated October 15, 2007, by and between Beacon and RFK Communications, LLC (“ RFK ”), Beacon purchased substantially all of the operating assets of RFK in exchange for (i) 300,000 Beacon Common Shares and (ii) a secured promissory note (the “ RFK Note ”) in the principal amount of Five Hundred Sixty Two Thousand Five Hundred Dollars ($562,500). The RFK asset purchase was consummated on December 20, 2007. The RFK Purchase Agreement is attached as Exhibit 10.11.

The RFK Note has a term of 60 months, bearing interest at 8% APR. The RFK Note provides for monthly principal and interest payments and is secured by certain assets acquired from RFK. If, by December 20, 2008, the annual revenue that is generated from the business and operations acquired from RFK and Strategic is less than a minimum threshold of $4,500,000, the principal amount of the RFK Note will be reduced by the same percentage as the percentage difference between the actual revenue and that minimum threshold. Beacon may also apply any rights of set-off that it has under the terms of the purchase agreement with RFK against payments due under the RFK Note. The RFK Note is attached as Exhibit 10.12.

In connection with the Strategic and RFK asset purchases, Beacon purchased the personal goodwill of Richard C. Mills and S. Kathy Mills for 625,000 Beacon Common Shares on December 20, 2007.

Pursuant to the Agreement and Plan of Merger (the “ BHS Agreement ”) dated October 15, 2007, by and between Beacon and Bell Haun Systems, Inc. (“ BHS ”), BHS was merged with and into a wholly-owned subsidiary of Beacon in exchange for 500,000 Beacon Common Shares. Of this consideration, 250,000 Common Shares were placed into escrow to secure BHS’s obligations under the merger agreement. Under the terms of the merger agreement, the acquisition subsidiary shall be merged with and into Beacon. The BHS merger was consummated on December 20, 2007. The BHS Agreement is attached as Exhibit 10.13.

The agreement with BHS provides for consideration contingent upon performance, and Beacon agreed to evidence this obligation via a promissory note (the “ BHS Earnout Note ”) in the maximum principal amount of $480,374. If during the first twelve months post closing, gross profit generated by the business acquired from BHS reaches or exceeds $1,094,114, the prior shareholders of BHS will be paid $240,187, plus $0.22 per $1.00 of such excess, up to a maximum aggregate principal amount of $480,374, in the form of a promissory note to be paid in equal installments over the following sixty months at 8% APR. If the gross profit generated from BHS during the first twelve months is less than $1,094,114 but greater than $853,927, the amount of the performance based

compensation will be reduced by the amount of the shortfall. If the gross profit generated by BHS during the first twelve months is less than $853,927, then the BHS Earnout Note shall be cancelled. The BHS Earnout Note is attached as Exhibit 10.14.

In addition, Beacon agreed to directly assume certain liabilities of BHS for rent owing to a partnership owned by the principals of BHS. Accordingly, Beacon issued two promissory notes (the “ BHS Rent Notes ”) in the principal amounts of $50,500 and $68,500, each to bear interest at the rate of 8% APR and payable over a period of sixty (60) months commencing on December 20, 2008. The BHS Rent Notes are attached as Exhibit 10.15.

SHARE EXCHANGE

As noted above, the Beacon Common Shares, and all Beacon securities convertible into or exercisable for Beacon Common Shares, have been exchanged for shares of Suncrest Common Stock or securities convertible into or exercisable for Suncrest Common Stock, as applicable. After the amendment of the Articles of Incorporation of Suncrest to authorize shares of Suncrest Preferred Stock with rights, privileges and preferences equivalent to those of the Beacon Preferred Shares, the Beacon Preferred Shares will be exchanged for shares of Suncrest Preferred Stock.

Suncrest Global Energy Corp. is currently authorized under its Restated Articles of Incorporation to issue 70,000,000 shares of Suncrest Common Stock and 5,000,000 shares of Suncrest Preferred Stock.

As of immediately prior to the Share Exchange, there were 1,273,121 shares of Suncrest Common Stock issued and outstanding and no shares of Suncrest Preferred Stock issued and outstanding.

At the consummation of the Share Exchange with respect to the Beacon Common Shares, 9,194,900 shares of Suncrest Common Stock were issued in exchange for 9,194,900 Beacon Common Shares, which constituted all of the outstanding Beacon Common Shares. In addition, warrants to purchase 4,066,414 Beacon Common Shares were exchanged for warrants to purchase 4,066,414 shares of Suncrest Common Stock, and promissory notes convertible into 1,166,664 Beacon Common Shares were exchanged for promissory notes convertible into 1,166,664 shares of Suncrest Common Stock.

After the Articles of Incorporation are amended, as described in “Exchange Agreement” above, the Share Exchange will be consummated as to the Beacon Preferred Shares.

After the consummation of the Share Exchange with respect to Beacon Preferred Shares, there will be up to 4,000 shares of Suncrest Preferred Stock issued and outstanding, which are convertible into a total of up to 5,333,333 shares of Suncrest Common Stock. A total of 4,000 shares of Suncrest Preferred Stock will be issued in exchange for 4,000 Beacon Preferred Shares, which will constitute all of the outstanding Beacon Preferred Shares. As of December 20, 2007, there are 2,433.9 Beacon Preferred Shares issued and outstanding, which are convertible into 3,245,200 Beacon Common Shares. The 2,433.9 Beacon Preferred Shares now issued and outstanding will be exchanged for 2,433.9 shares of Suncrest Preferred Stock.

Accordingly, after the consummation of the Share Exchange, Suncrest will own all outstanding Beacon Common Shares and Beacon Preferred Shares. Beacon shall continue as an operating subsidiary of Beacon.

The issuance of Suncrest Common Stock and Suncrest Preferred Stock in exchange for the Beacon Common Shares and Beacon Preferred Shares is intended to be exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(2) thereof.

Of the 10,468,021 shares of Suncrest Common Stock that will be outstanding immediately after the Share Exchange, only 1,273,121 shares will be freely tradable without restriction under the Securities Act of 1933. The remaining shares will be “restricted securities” as that term is defined in Rule 144 under the Securities Act which will be freely tradable subject to applicable holding period, volume and other limitations under Rule 144. In addition, Suncrest Common Stock that is issuable upon conversion of the Suncrest Preferred Stock or the exercise of the warrants will also be eligible to become freely tradable subject to applicable holding period, volume and other limitations under Rule 144.

In connection with the Share Exchange, Beacon paid a transaction fee of $305,000 to Suncrest prior to the Share Exchange, which was used to pay Suncrest’s expenses associated with the Share Exchange.

In connection with the closing of the Share Exchange, Beacon and Suncrest Global Energy Corp. filed a joint press release announcing the closing and the completion of the Share Exchange and the completion of the Private Placement, a copy of which is included as Exhibit 99.1 to this Current Report on Form 8-K.

Except for the Exchange Agreement and the transactions contemplated thereby, neither Beacon, nor any of the directors or officers of Beacon serving prior to the consummation of the Share Exchange, had any material relationship with Suncrest or any of Suncrest’s stockholders.

REGISTRATION RIGHTS

Pursuant to a Registration Rights Agreement between Suncrest and the The Placement Agent Investor Group entered into in connection with the Private Placement (the “ Registration Rights Agreement ”), New Beacon will be required after the Share Exchange to register their “Registrable Securities” with the SEC so those securities can be publicly sold.

” Registrable Securities ” are (a) the shares of New Beacon Common Stock issuable upon the conversion of the New Beacon Preferred Stock, as well as any shares of New Beacon Common Stock issued as a stock dividend on, or as an antidilution adjustment with respect to, such shares of New Beacon Preferred Stock, and (b) the shares of New Beacon Common Stock issuable upon exercise of the Exchanged Investor Warrants, the Exchanged The Placement Agent Warrant and the Exchanged The Placement Agent Affiliate Warrants.

Under the Registration Rights Agreement, New Beacon shall prepare and file with the Commission a registration statement covering the resale of all of the Registrable Securities immediately following the consummation of the Share Exchange with respect to the Preferred Stock. New Beacon shall use its best efforts to cause such Registration Statement to be declared effective by the Commission, no later than June 30, 2008. The registration statement is to be on Form SB-1, Form SB-2 or Form S-3 (except if New Beacon is not then eligible to register for resale the Registrable Securities on Form SB-1, Form SB-2 or Form S-3, in which case the Registration Statement shall be on another appropriate form). New Beacon shall cause the Registration Statement to become effective and remain effective, until the earlier of the date when all Registrable Securities covered by the Registration Statement (a) have been sold pursuant to the registration statement or an exemption from the registration requirements of the Securities Act or (b) may be sold without any limitation pursuant to Rule 144(k) or any successor provision (the “ Effectiveness Period ”).

If, at any time during the Effectiveness Period, New Beacon shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, including without limitation, in connection with the registration of New Beacon’s securities in a subsequent financing, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then New Beacon shall include in such registration statement all of the Registrable Securities; provided , however , that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, New Beacon determines for any reason not to proceed with such registration, New Beacon shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in case of a determination by New Beacon to delay registration of its securities, New Beacon will be permitted to delay the registration of Registrable Securities for the same period as the delay in registering such other securities.

If a registration statement covering the resale of the Registrable Securities (i) is not declared effective by the Commission on or before the Mandatory Effective Date, and/or (ii) is declared effective by the Commission, but the holders of Registrable Securities cannot sell their respective Registrable Securities thereunder at any time after such registration statement is declared effective by the Commission (each being a “ Registration Failure ”), then New Beacon in each such case shall pay to the holders of Registrable Securities, for each thirty (30) day period (or

proportionally for any shorter period) of each Registration Failure, an amount in cash, as partial liquidated damages and not as a penalty, equal to one (1%) percent of the aggregate gross proceeds paid by such Holders for the Units. All liquidated damages as a result of such Registration Failure shall be paid on the 31st day following each initial Registration Failure and on each 30th day thereafter until such Registration Failure is cured by New Beacon. If New Beacon fails to pay any required liquidated damages in full by each required payment date, New Beacon shall pay interest thereon at a rate of 14% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the holders of Registrable Securities, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such accrued but unpaid interest thereon, are paid in full.

The Registration Rights Agreement is attached hereto as Exhibit 10.16.

BUSINESS

BUSINESS OF SUNCREST GLOBAL ENERGY CORP.

Suncrest Global Energy Corp. was incorporated in the state of Nevada on May 22, 1999 as Galaxy Specialties, Inc. On June 10, 2003 Suncrest acquired Coyote Oil Company, Inc. (“ Coyote Oil ”) as a wholly-owned subsidiary. Coyote Oil owned a proprietary process known as a mini oil refinery, but on August 7, 2006, Coyote Oil completed the sale of its mini oil refinery process to Ecodomaine Refining, Inc. After that date and until the Share Exchange, Suncrest and Coyote Oil conducted no further operations.

BUSINESS OF BEACON ENTERPRISE SOLUTIONS GROUP, INC.

In this discussion of the “Business of Beacon,” unless otherwise noted or required by the context, references to “ us ,” “ we ,” “ our ,” and similar terms refers to Beacon after the consummation of the Share Exchange.

Beacon was organized on June 6, 2007 and has been financed by the 2007 Bridge Facility and the Private Placement. Beacon’s long-term business strategy is to acquire and consolidate regional information technology and telecommunications businesses and service companies into an integrated, national provider of voice, data and voice over Internet Protocol (“ VOIP ”) communications services to medium-sized business enterprise customers (the “ MBE Market ”). The Phase I Acquisitions described above constituted the first phase of Beacon’s acquisition strategy. Consistent with our operating plan, we will continue to pursue the next phase of our acquisition strategy by exploring acquisition targets to build around our three state operating hub to grow Beacon into a large regional telecommunications provider with a strong Southeast/Midwest concentration and focus.

By offering a range of services, we believe that our flexibility and focus on project management will allow our customers to select the best information technology (“IT”) systems for their needs in a cost-effective manner. Beacon will offer services in the following areas: 1) systems and infrastructure design and engineering; 2) technology and equipment procurement and installation; 3) software development and support; and 4) maintenance and support.

Systems and Infrastructure Design and Engineering

Beacon plans to evaluate the information technology needs of its clients (including voice, data, video, and security needs) and design and engineer systems (i.e., hardware) and infrastructures (i.e., cabling and connectivity) to meet those needs at the enterprise level. Beacon proposes to design systems to take into account the existing facilities and technology of its clients, when appropriate, to minimize equipment replacement, and to align, calibrate and build enterprise systems properly and efficiently according to its clients’ specifications.

Technology and Equipment Procurement and Installation

Beacon plans to deliver the products from third party vendors and services needed to implement the systems and infrastructures designed for its clients. Specifically, Beacon expects to provide procurement for carrier services (including voice, video, data, Internet, local & long distance telephone applications), infrastructure services (including cabling and equipment); routers, servers and hubs; telephone systems, voicemail and general technology products.

Software Development and Support

Beacon plans to develop custom applications for its clients’ information technology systems, and provide all necessary management, hosting and technical support services in relation to those systems. Specifically, its services will include web application development, IT management and hosting services for scalable infrastructure solutions); and support services. Beacon has a Microsoft Certified network team available to assist on-site, on the phone, or over the Internet.

Maintenance and Support.

Beacon plans to install and connect its clients’ systems and infrastructure, and then maintain and support the telephone, wireless, voice messaging and other IT operations on an ongoing basis. Beacon can provide maintenance and support services for legacy systems as well.

The Phase I Acquisition entities provided the above services as part of their historical businesses. CETCON Incorporated provided systems design and engineering, ADSnetcurve provided software development and support, and Bell-Haun Systems, Inc. and Strategic Communications provided technology and equipment procurement, as well as installation, maintenance and support services.

Phase I Acquisitions

Beacon entered into acquisition agreements for the Phase I Acquisitions on October 15, 2007 and consummated the Phase I Acquisitions on December 20, 2007. Beacon paid an aggregate purchase price for the Phase I Acquisitions of $1,650,500 in cash, $1,804,500 in notes (excluding the BHS Earnout Note and the BHS Rent Notes), and 3,225,000 Beacon Common Shares. Beacon used the proceeds of the Private Placement to finance the Phase I Acquisitions.

On a pro forma combined basis, the Phase I Acquisitions generated revenue for the twelve (12) months ending December 31, 2006 of approximately $10.2 million and served more than 4,000 MBE Market customers doing business predominantly in Ohio, Kentucky and Indiana. See the summary table below.

2006 Audited	ADSnetcurve	Bell-Haun	CETCON	Strategic	Total
Headquarters	Louisville, KY	Columbus, OH	Cincinnati, OH	Louisville, KY

Years in Business	24	30	11	14	79

2006 Revenue	$1.8 million	$1.5 million	$1.8 million	$5.1 million	$10.2 million

2006 EBITDA (1)	$0.5 million	($0.1 million)	$0.4 million	($0.1 million)	$0.7 million

2006 Net Income	$0.4 million	($0.1 million)	$0.4 million	($0.3 million)	$0.4 million

# of Employees	32	14	11	21	78

Business Desription	IT services	Voice/Data Telecom	Network Design	Voice/Data Telecom

(1)

EBITDA is calculated by deducting operating expenses from operating income and excluding amounts related to interest expense, income tax expense or benefit, depreciation expense, amortization expense and any gain or loss on disposal of assets.

Client Base

Through the Phase I Acquisitions, Beacon acquired a client base that consisted of approximately 4,000 customers, which were predominantly MBEs with 25-2,500 end users each, as well as approximately 50 larger customers. We expect that most of our revenue will be derived from the MBE market.

Competitors

Beacon has numerous competitors in each one of its four service areas, many of which are substantially better capitalized, have more employees, have a longer operating history and are better known in the industry. However, management is not aware of any direct competitor in the middle-market service space that can provide all of these services without significant outsourcing or reselling, although IBM Global and others do present these services by relying upon outside consultants. Beacon believes that its integration of these services, particularly of its systems and software design and engineering capabilities, provides a distinct competitive advantage.

Technology & equipment procurement competitors include: AT&T, Qwest, Level 3, Broadwing, and Covad. Application development/support competitors include: Trigent, Inventa Technologies, and AAlpha. Competitors specific to the interconnect services include: BellSouth, Vonage, and Packet8. Competittors with respect to data/systems integration services include: Cisco, Datacomm Solutions, Dell, and Sun Microsystems.

Employees

Beacon currently employs approximately 80 persons as a result of the Phase I Acquisitions. In addition, Beacon has entered into an operating agreement with ADSnetcurve to employ a team of developers in India while Beacon acquires the necessary licensure to operate a business within India.. None of Beacon’s employees is subject to a collective bargaining agreement.

Facilities

Beacon currently maintains its offices at 124 N. First Street, Louisville, KY 40202 and our telephone number is (502) 379-4788.

On November 1, 2007, Beacon entered into an operating lease for its office space in Louisville, Kentucky. The lease term is for a period of four months commencing November 1, 2007 expiring February 28, 2008 for a base rent of $1,675 per month. Beacon plans to renew this lease on substantially similar terms for the remainder of fiscal year 2008. In addition, Beacon leases office space in Cincinnati, Ohio and Columbus, Ohio for amounts that are not deemed to be material.

Legal Proceedings

Beacon is not currently subject to any material legal proceedings.

Website

Beacon maintains a website at www.askbeacon.com . The reference to our web address does not constitute incorporation by reference of the information contained at this site.

Certain Relationships and Related Party Transactions

Bridge Financing

John D. Rhodes, III and affiliated entities of Sherman Henderson and Robert Clarkson hold Exchanged Bridge Notes in the aggregate principal amount of $600,000. Dr. Rhodes, Sherman Henderson and Robert Clarkson are all directors of Beacon, and Sherman Henderson and Robert Clarkson are 5% shareholders of Beacon.

Consulting Agreement

Beacon has a consulting arrangement with Mr. Rick Hughes, who is an immediate family member of the principal of Brook Street Enterprises, LLC, a stockholder of Beacon, for the provision of consulting services. Under this arrangement, Beacon is paying Mr. Hughes a monthly fee of $12,500.

Filing Status

Suncrest Global Energy Corp. has in the past filed reports with the SEC and will continue to do so as New Beacon. You can read and copy any materials we file with the SEC at its Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission, including us.

RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this report that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of New Beacon Common Stock could decline, and you may lose all or part of your investment.

Risks Relating to the Business

In this discussion of the “Risks Relating to the Business,” unless otherwise noted or required by the context, references to “ us ,” “ we ,” “ our ,” “ Beacon ” and similar terms refer to New Beacon, as defined above, which is comprised of the operating business of Beacon, as described above, after the consummation of the Share Exchange.

Beacon has no prior operating history and may not successfully implement its business plan.

Beacon is a development stage company with no prior operating history other than the business conducted independently by the four companies acquired in the four Phase I Acquisitions. New Beacon’s current and proposed operations are subject to all of the risks inherent in the establishment of a new business enterprise. New Beacon may not successfully implement its business plan. You must consider the likelihood of New Beacon’s success in light of the problems, delays and expenses frequently encountered in connection with a new business.

Beacon has had a history of losses.

Beacon has incurred organizational losses since its inception. While we expect to operate on a positive cash flow basis as a result of the initial Phase I Acquisitions, there can be no assurance that this will occur. Our ability to operate profitably is dependent upon our ability to operate the businesses in the Phase I Acquisitions in an economically successful manner. As a new company with no prior operating experience on an integrated basis, no assurances can be given that we will be able to do this. Our prospects must be considered in light of the numerous risks, expenses, delays and difficulties frequently encountered in the intensely competitive and high risk telecommunications and IT services industry, as well as the risks generally inherent in the acquisition of companies and successfully integrating them. There can be no assurance that we will ever achieve sustained recurring revenue and profitability on a consistent and growing basis.

Beacon’s success depends upon making and integrating acquisitions.

There can be no assurance that management will be able to successfully integrate and add value to the Phase I Acquisition companies. In addition, there can be no assurance that we will be successful in identifying, negotiating, closing, integrating and adding value with respect to any further acquisitions. Failure to either augment the revenue and profit of companies acquired or acquire new companies on an accretively valued basis would constitute a failure of our business plan and could mean that investors will fail to realize any return of their investment in Beacon.

Beacon will require additional financing.

Beacon will require substantial additional capital to implement its long-term business plan and make further acquisitions. There can be no assurance that such financing will be available to Beacon or, if it is, that it will be available on terms and at a valuation that would be accretive to the interests of current stockholders. In this regard, failure by Beacon to secure additional financing on favorable terms could have severe adverse consequences relative to Beacon’s ability to grow Beacon substantially through the additional acquisitions it contemplates, which ultimately could mean that Beacon may not be viable.

Rapid technological change and obsolescence could affect Beacon’s business.

Our business has long been known as one subject to rapid technology innovation, the result of which is the obsolescence of technologies superseded by such new innovation. Such developments could adversely affect the business and operations of Beacon in the future.

Beacon’s success depends upon agreements with third parties.

Our proposed business plan contemplates working with third party vendors in multiple aspects of the business. The success of our plan assumes successful relationships with third party vendors for network access as well as hardware and software products and services which Beacon seeks to offer and sell. If Beacon is unable to attract competent corporate partners, or if such partners’ efforts are inadequate, Beacon’s business could be harmed.

Beacon does not manufacture the equipment that it relies upon.

Beacon does not and will not have any of its own equipment or manufacturing capacity and must rely on agreements with third parties to supply all products used in Beacon’s business. An interruption in the supply of such equipment could harm the business of Beacon.

Beacon’s business is subject to inherent risks including those arising from customer acceptance, lost customers, market competition, customer liability and increasing expenses.

Customer Acceptance . Beacon’s intended customers may be unfamiliar with the services and technologies offered by Beacon for any number of reasons and therefore hesitant to use Beacon’s products and services. As a result, the sales cycle involved in obtaining new customers could be slower and more expensive than initially budgeted. Beacon will need to educate customers as to the benefits of its products and services, which education is costly and time consuming. Thus, Beacon cannot accurately forecast the timing and recognition of revenue from marketing of its products and services to new customers. Delays in market acceptance of Beacon’s products and services could harm Beacon.

Lost Customers . There is no guarantee that customers will continue to use the products and services of Beacon. The business is inherently very competitive on a price and service basis and there can be no assurance that Beacon, as a new entrant, will be successful with its business model in attracting and retaining customers.

Competition . There are many companies operating in Beacon’s basic market niche that have longer operating histories and greater financial, technical, marketing, sales, or other resources when compared to Beacon. While Beacon intends to enter into relationships with third parties to offset these competitive factors, there is no guarantee that Beacon will respond more effectively than its competitors to new or emerging products or changes in customer requirements. Increased competition, either from individual firms or collaborative ventures may harm

Beacon’s ability to sell products and services on favorable terms, which in turn could lead to price cuts, reduced gross margins, or loss of market share. These factors could seriously harm Beacon’s business.

Liability . Beacon’s business involves providing customers with mission-critical communications products and services on a 24/7 basis. Failure by Beacon to maintain delivery of these services could place Beacon at risk of litigation and judgments for consequential and punitive damages.

Expenses . Beacon plans to grow the businesses it acquires, which will involve incurring increased costs. Beacon will, as a result of such expansion, incur significant expenses arising from multiple necessary activities including attending marketing trade shows and conferences, hiring full-time professional sales and marketing management, consultants, attorneys, and expanding day-to-day operations. There can be no assurance that the incurrence of these costs will have the desired result of increasing revenue to the degree needed to achieve and maintain profitability.

Beacon depends on its key employees.

Beacon is highly dependent on certain officers and employees. The loss of any of their services or Beacon’s inability to attract and retain other qualified employees or consultants would have an adverse impact on Beacon’s business and its ability to achieve its objectives. Beacon currently intends to attempt to enter into employment and non-compete agreements with all key personnel. These agreements however will permit the employee to resign without cause at any time. There can be no assurance that Beacon will be able to retain existing employees or that it will be able to find, attract and retain other skilled personnel on acceptable terms.

Beacon has no patent protection for its products and services.

None of Beacon’s products or services is proprietary to Beacon and, as a result, Beacon enjoys no patent protection. As a result, Beacon has a limited ability to protect what it does against infringement by others, including competitors who are larger and better capitalized than Beacon.

The U.S. and the international economic situation creates uncertainty for Beacon.

The current indicators suggest that there is a slowdown in both the United States and most international economies. The economic situation may therefore have a material adverse effect on Beacon. Those adverse effects could cause Beacon to fail to meet, or face delays in meeting, its marketing and sales objectives. Any such failures or delays will create additional financial uncertainties and difficulties for Beacon.

Changes in regulations, the laws or court rulings could adversely affect Beacon.

Our telecommunications and IT products and services are highly regulated and subject to governmental actions at myriad levels. Changes to laws affecting the telecommunications industry or the economic climate for telecommunications businesses could have a material adverse effect on Beacon’s ability to conduct business.

Beacon’s quarterly operating results may fluctuate significantly and will be difficult to predict.

Our results of operations will fluctuate significantly from quarter to quarter as a result of a number of factors, including our product development timeline and the rate at which customers accept our products. Accordingly, our future operating results are likely to be subject to variability from quarter to quarter and could be adversely affected in any particular quarter. It is possible that our operating results will be below the expectations of investors. As indicated above, Beacon has incurred losses since its inception.

Past activities of Suncrest Global Energy Corp. and its affiliates may lead to future liability for New Beacon.

Before the Share Exchange, Suncrest Global Energy Corp. engaged in businesses unrelated to that of Beacon’s new operations. Any liabilities relating to such prior business may have a material adverse effect on New Beacon.

Beacon’s inability to register the shares of Common Stock underlying the Preferred Stock and the Exchanged Investor Warrants issued in the Private Placement could cause us to incur financial penalties

Beacon is required to use commercially reasonable efforts to register the shares of New Beacon Common Stock that will underlie the New Beacon Preferred Stock and the Exchanged Investor Warrants for public resale. If New Beacon fails to take specified actions by June 30, 2008, New Beacon may be required to pay a monthly penalty of 1% of the amount raised in the Private Placement to the The Placement Agent Investment Group until such failure is cured. These penalties could have an adverse effect on Beacon’s financial results, cash flows, and ability to fund operations.

Risks Relating to Ownership of New Beacon Common Stock

No Assurances of a Public Market; Restrictions on Resale.

Although New Beacon Common Stock is eligible for quotation on the NASD Bulletin Board, there is not and has never been a trading market for the New Beacon Common Stock. There can be no assurances that any trading market will ever develop in the New Beacon Common Stock at any time in the future. Investors must be prepared to bear the economic risk of holding the securities for an indefinite period of time.

Significant number of outstanding convertible notes, options and warrants could interfere with Beacon’s ability to raise capital.

Upon the consummation of the Share Exchange, New Beacon will have promissory notes convertible into an aggregate of 1,166,666 shares of New Beacon Common Stock and outstanding options and warrants to purchase, in the aggregate, 4,066,414 shares of New Beacon Common Stock at exercise prices of $1.00 per share. To the extent that outstanding options or warrants are exercised, dilution to the percentage ownership of Beacon’s shareholders will occur. In addition, the terms on which Beacon will be able to obtain additional equity capital may be adversely affected if the holders of outstanding options and warrants exercise them at a time when Beacon is able to obtain additional capital on terms more favorable to Beacon than those provided in the outstanding options and warrants.

Beacon’s investors have the right to have their shares registered for resale, which could depress the market price of New Beacon common stock.

Beacon is required to use commercially reasonable efforts to register the shares of New Beacon Common Stock that will underlie the New Beacon Preferred Stock and the Warrants for public resale. Sales of substantial amounts of New Beacon Common Stock in the public market, or the perception that these sales may occur, could adversely affect the prevailing market price of New Beacon Common Stock, and its ability to raise capital through a public offering of its equity securities.

The price of New Beacon Common Stock may fluctuate significantly.

Stock of public companies can experience extreme price and volume fluctuations. These fluctuations often have been unrelated or out of proportion to the operating performance of such companies. Beacon expects its stock price to be similarly volatile. These broad market fluctuations may continue and could harm Beacon’s stock price. Any negative change in the public’s perception of the prospects of Beacon or companies in Beacon’s industry could also depress Beacon’s stock price, regardless of Beacon’s actual results. Factors affecting the trading price of Beacon’s common stock may include:

variations in operating results;

announcements of technological innovations, new products or product enhancements, strategic alliances or significant agreements by Beacon or by competitors;

recruitment or departure of key personnel;

litigation, legislation, regulation or technological developments that adversely affect Beacon’s business; and

market conditions in Beacon’s industry, the industries of their customers and the economy as a whole.

Further, the stock market in general, and securities of microcap companies in particular, can experience extreme price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of the New Beacon Common Stock, which could cause a decline in the value of New Beacon Common Stock. You should also be aware that price volatility might be worse if the trading volume of the New Beacon Common Stock is low.

Although Suncrest Common Stock is currently quoted on the Over-The-Counter Bulletin Board (“ OTC.BB ”), trading may be extremely sporadic. There can be no assurance that a more active market for New Beacon common stock will develop.

The SEC may limit the number of shares of New Beacon Common Stock that may be registered for resale at any one time.

The Federal securities laws distinguish between a primary offering made by an issuer and a secondary offering made by an issuer on behalf of a selling shareholder. Recently, the SEC has made public statements indicating the SEC’s Division of Corporation Finance will question the ability of issuers to register shares for resale in a secondary offering where the number of shares offered exceed an estimated one-third of the total number of shares held by non-affiliates prior to the underlying private transaction. Although this position is not written or settled law, it is possible the SEC staff will view any resale offering by investors as an offering by Beacon and deem it a primary offering if the number of shares Beacon seeks to register exceeds the estimated one-third threshold. Even if the number of shares Beacon seeks to register is below the estimated one-third threshold, the SEC staff may still take the position that the offering is a primary offering rather than a secondary offering. In that event, Beacon may seek to register only a portion of its Common Stock at any one time and will only be able to register additional Common Stock after the passage of time and the sale of substantially all of the Registrable Securities subject to the previous registration statement.

New Beacon Common Stock may be subject to Penny Stock Rules, which could affect trading.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain rules adopted by the SEC. Penny stocks generally are equity securities with a price of less than $5.00, subject to exceptions. The rules require that a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in connection with the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the rules generally require that prior to a transaction in a penny stock the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the liquidity of penny stocks. If the New Beacon Common Stock becomes subject to the penny stock rules, holders of New Beacon Common Stock or other Beacon securities may find it more difficult to sell their securities.

We cannot assure you what the market price of New Beacon Common Stock will be.

Before the Share Exchange there was no public trading market for New Beacon Common Stock. We cannot predict the prices at which New Beacon Common Stock will trade. The price per share implied in the Share Exchange transaction was determined through negotiations with Suncrest Global Energy Corp. and The Placement Agent and it may not bear any relationship to the market price at which New Beacon Common Stock will trade after the Share

Exchange or to any other established criteria of its value. It is possible that in some future period New Beacon’s operating results may be below the expectations of public market analysts and investors and, as a result of these and other factors, the price of New Beacon Common Stock may fall.

New Beacon’s operation as a public company subjects it to extensive corporate governance and disclosure regulations that will result in additional operating expenses.

As a public company, New Beacon will incur significant legal, accounting and other expenses. New Beacon will incur costs associated with its public company reporting requirement and certain requirements under the Sarbanes-Oxley Act of 2002. Like many smaller public companies, New Beacon faces a significant impact from required compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Section 404 requires management of public companies to evaluate the effectiveness of internal control over financial reporting and the independent auditors to attest to the effectiveness of such internal controls and the evaluation performed by management. The SEC has adopted rules implementing Section 404 for public companies as well as disclosure requirements. The Public Company Accounting Oversight Board, or PCAOB, has adopted documentation and attestation standards that the independent auditors must follow in conducting its attestation under Section 404. New Beacon is currently preparing for compliance with Section 404; however, there can be no assurance that it will be able to effectively meet all of the requirements of Section 404 as currently known to us in the currently mandated timeframe. Any failure to implement effectively new or improved internal controls, or to resolve difficulties encountered in their implementation, could harm New Beacon’s operating results, cause it to fail to meet reporting obligations or result in management being required to give a qualified assessment of its internal control over financial reporting or its independent auditors providing an adverse opinion regarding management’s assessment. Any such result could cause investors to lose confidence in New Beacon’s reported financial information, which could have a material adverse effect on its stock price.

We also expect these rules and regulations may make it more difficult and more expensive for New Beacon to obtain director and officer liability insurance and New Beacon may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for New Beacon to attract and retain qualified individuals to serve on its Board of Directors or as executive officers. We cannot predict or estimate the amount of additional costs that we may incur or the timing of such costs.

If New Beacon fails to maintain the adequacy of our internal control, our ability to provide accurate financial statements and comply with the requirements of the Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price to decrease substantially.

Because Beacon operated as a private company without public reporting obligations before the Share Exchange, Beacon had limited personnel and resources to apply to the development of the external reporting and compliance obligations that would be required of a public company. Beacon has taken and will continue to take measures to address and improve its financial reporting and compliance capabilities and it is in the process of instituting changes to satisfy its obligations in connection with joining a public company, when and as such requirements become applicable to it. Prior to taking these measures, Beacon did not believe it had the resources and capabilities to do so. Beacon plans to obtain additional financial and accounting resources to support and enhance its ability to meet the requirements of being a public company. Beacon will need to continue to improve its financial and managerial controls, reporting systems and procedures, and documentation thereof. If Beacon’s financial and managerial controls, reporting systems or procedures fail, it may not be able to provide accurate financial statements on a timely basis or comply with the Sarbanes-Oxley Act of 2002 as it applies to us. Any failure of Beacon’s internal controls or its ability to provide accurate financial statements could cause the trading price of New Beacon common stock to decrease substantially.

PLAN OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition of Beacon for the fiscal year ended September 30, 2007 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Form 8-K. References in this Management’s Discussion and Analysis or Plan of Operations to “ us ,” “ we ,” “ our ,” and similar terms refers to Beacon. This discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as plans,

objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,””may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements.

Overview

All references to Beacon Enterprise Solutions Group, Inc., the “Company,” “Beacon,” “we,” “us,” or “our,” refer to the consolidated businesses. Beacon was recently formed with the long-term strategic goal of acquiring and consolidating regional telecommunications businesses and service platforms into an integrated, one-stop-shop, national provider of voice, data and VOIP communications services to the MBE Market.

We believe that the MBE Market is currently impaired by the complexity and array of alternative voice and data telecommunications services and technologies that are currently available:

•

Which bandwidth solution is optimal: DSL, cable, wireless?

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Which hardware solution is optimal: the choice is endless?

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Which software solution is optimal: the choice is endless?

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How should the system be integrated?

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What is the best way to maintain the system?

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Is this an affordable system to own, operate and maintain?

Our business strategy is to acquire companies that will allow us to serve the MBE Market customer on an integrated, turn-key basis from system design, procurement and installation through all aspects of providing network service and designing and hosting network applications.

The Beacon Business Premise

For all intents and purposes, the “ Tech Wreck ” of 2000-2002 did not result in the abatement of change, evolution and invention in the telecommunications arena. To the contrary, today, just a few years following the Tech Wreck, we believe that the MBE Market is faced with an even more imposing array of choices relative to satisfying its needs for a 24/7 communications solution that is reliable, functional and affordable.

We believe this problem is made more complex by the fact that entities involved in the MBE Market cannot typically afford an in-house IT staff that is well versed in evaluating and choosing among the wide array of network systems, software and service provider options that are available today. As such, we believe the decision-making executives for a vast number of MBE Market companies faced with this problem are forced to turn to a highly fragmented array of vendors, each typically providing only a portion of the solution.

It is in this business context that we believe we have an opportunity to build through acquisitions a provider to the MBE Market customer with a one-stop-shop, “ converged ” voice and data service platform that is convenient, technically proficient and affordable for the customer.

By managing organic growth and a multi-phased acquisition program, we believe that we can create an integrated telecommunications company able to provide the MBE Market customers it intends to serve with quality service on an affordable basis. Operating in this way, we believe that we can access, manage and deliver complete communications solutions utilizing service and technology providers to the MBE Market customer. We intend to create these solutions via acquisitions of companies providing network service/bandwidth capabilities, phone system hardware solutions, data network server, storage and security solutions, and Internet-based hosted applications software.

Acquisition Strategy

On December 20, 2007, we executed our Phase I acquisition strategy when we simultaneously acquired four companies that serve more than 4,000 MBE Market customers doing business predominately in Ohio, Kentucky and Indiana. ADSnetcurve provides information technology services, CETCON provides network design and engineering services, and BHS and Strategic Communications provide voice and data telecommunications services in the Indiana, Kentucky and Ohio regions.

Our operating plan over the next 12 months includes combining the operations of the four companies into a single integrated organization and developing the internal infrastructure to scale the business. We believe we have sufficient capital to satisfy our cash requirements for the next 12 months including investment in an integrated enterprise resource planning system to facilitate the future growth plans of the business and satisfy regulatory requirements. By integrating the remaining existing information technology infrastructure and fixed assets of the constituent businesses, we believe we will be able to avoid significant additional capital expenditures during the next 12 months. We do not anticipate our existing headcount will change dramatically although responsibilities will change in order to facilitate execution of our operating plan.

Consistent with our operating plan, we will continue to pursue our phase II acquisition strategy, financed by additional debt or equity financings, by exploring acquisition targets to build around our three state operating hub to grow Beacon into a large regional telecommunications provider with a strong Southeast/Midwest concentration and focus.

2007 Bridge Facility

In July 2007, Beacon entered into the First Bridge Facility, completing the sale of $500 thousand aggregate principal amount of its 8% Convertible Promissory Notes to Sherman Henderson and Robert Clarkson, two founding directors of Beacon, through their wholly-owned limited liability companies. On November 15, 2007, Beacon entered into the Second Bridge Facility, in the aggregate amount of $200 thousand, with John D. Rhodes and another investor. The promissory notes issued in the 2007 Bridge Facility are collectively the “ Bridge Notes .”

Due to the successful completion of the Private Placement and the Phase I Acquisitions, the Bridge Notes were exchanged for the Exchanged Bridge Notes, which will mature on December 20, 2009, the date two years from the closing of the acquisitions; provided , however , each holder of a Exchanged Bridge Note (i) may convert his Exchanged Bridge Notes into shares of New Beacon Common Stock at a conversion rate of one (1) share of New Beacon common stock for each $.60 of principal so converted, and (ii) received Exchanged Bridge Warrants, which are five (5) year warrants to purchase shares of New Beacon common stock at an exercise price equal to $1.00. Of these Exchanged Bridge Warrants, the rights to purchase 875,000 shares of New Beacon Common Stock were immediately vested and exercisable, and the remaining warrants to purchase an aggregate of 336,000 will vest monthly for each month that the principal under the Exchanged Bridge Notes remains outstanding until December 20, 2009, the second anniversary of the Private Placement.

We used the proceeds from the Bridge Notes to pay the costs associated with the execution of our plans to date.

See the discussion of “2007 Bridge Facility” elsewhere in this Item 2.01, for further details.

Private Placement

We executed the Private Placement to facilitate the Phase I Acquisitions. The following table summarizes the net proceeds from the Private Placement:


Gross Offering Proceeds	$ 2,433,900
Share Exchange Cash Consideration	(305,000	)

Net Proceeds	$ 2,128,900

The net proceeds received were used as follows:


Phase I Acquisition Consideration		$1,650,500
General Working Capital Purposes		478,400

Net Proceeds		$2,128,900

Summary of Share Exchange

See “Share Exchange” elsewhere in this Item 2.01 for a summary of the Share Exchange.

For the Period from June 6, 2007 (the date of inception) to September 30, 2007

From the inception of the business on June 6, 2007 to September 30, 2007, the sole activities of Beacon were to execute our Phase I Acquisitions, our Private Placement and execute the Share Exchange. Through September 30, 2007, we generated no revenues and relied on the 2007 Bridge Facility to support our cash requirements.

During the period, we incurred compensation related expenses of approximately $79 thousand and other administrative expenses of approximately $52 thousand. Interest expense of approximately $2 thousand was incurred in connection with the 2007 Bridge Facility.

Based on our limited operating experience and lack of revenue to offset our expenses, we do not currently have evidence to support the use of our losses to offset any future income. We therefore have not recorded income tax expense nor the associated deferred tax asset related thereto.

Liquidity

For the period from June 6, 2007 to September 30, 2007, we used cash in operations of approximately $106 thousand primarily the result of approximately $133 thousand of cash used related to our net loss and approximately $22 thousand increase in cash used to fund certain expenses partially offset by approximately $45 thousand of cash provided by an increase in accounts payable.

Cash used in investing activities in the amount of approximately $111 thousand related to prepaid acquisition costs.

Cash provided by financing activities of approximately $278 thousand was primarily the result of a drawdown of $278 thousand on our 2007 Bridge Facility and the receipt of subscriptions for Beacon Common Shares.

Off Balance Sheet Arrangements

At September 30, 2007, we were a party to an operating lease for office space for which we have committed to pay approximately $7 thousand for the year ended September 30, 2008.

Critical Accounting Estimates and Judgments

Beacon’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“ GAAP ”). The preparation of Beacon’s financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related

disclosures. We base Beacon’s estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Due to the limited activity of the development stage company prior to the Phase I Acquisitions and Share Exchange, there have been no significant estimates and judgments required to date. However, due to the nature of our business, subsequent to the Phase I Acquisitions and Share Exchange, the following significant accounting policies are believed to be the most critical to fully understanding and evaluating the future results and financial position of our business including revenue recognition, inventory valuations for slow moving items, accounting for business combinations, amortization of definite lived intangible assets, impairment of goodwill, and the recovery of deferred income tax assets.

We recognize sales and associated cost of sales when delivery has occurred and collectability is probable. We will use the allowance for doubtful accounts method of valuing doubtful accounts receivable which is based on historical experience, coupled with a review of the current status of existing receivables.

We will determine Beacon’s inventory value at the lower of cost (first-in, first-out method) or market value. In the case of slow moving items, we may write down or calculate a reserve to reflect a reduced marketability for the item. The actual percentage reserved will depend on the total quantity on hand, its sales history, and expected near term sales prospects. When we discontinue sales of a product, we will write down the value of inventory to an amount equal to its estimated net realizable value less all applicable disposition costs.

We will account for the Phase I Acquisitions and Share Exchange in accordance with Statement of Financial Accounting Standards No. 141(R) “Business Combinations,” (SFAS 141R) under the purchase method of accounting whereby a preliminary valuation of the assets and liabilities of the acquisitions will be recorded in the December 31, 2007 financial statements based on an allocation of the purchase price. Such valuations will be adjusted based on final valuations with the final adjustments also affecting the carrying value of goodwill.

Beacon’s intangible assets will consist principally of customer lists, non-compete agreements and goodwill. We will amortize definite lived intangible assets over their estimated period of benefit, ranging from one to fifteen years upon being placed in full production. In accordance with Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets,” (SFAS 142), we do not amortize goodwill and certain intangible assets with indefinite useful lives. Instead, SFAS 142 requires that we review goodwill and intangible assets deemed to have indefinite useful lives for impairment on at least an annual basis. We perform our annual impairment review during the fourth quarter of each year or whenever events or changes in circumstances indicate that such assets might be impaired.

As part of the process of preparing Beacon’s consolidated financial statements, we must estimate Beacon’s actual current tax liabilities together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within the consolidated balance sheet. We must assess the likelihood that the deferred tax assets will be recovered from future taxable income on a more likely than not basis and, to the extent we believe that recovery is not likely, a valuation allowance must be established. To the extent we establish a valuation allowance or increase or decrease this allowance in a period, the impact will be included in the tax provision in the statement of operations.

MANAGEMENT

Upon the consummation of the Share Exchange with respect to the Beacon Common Shares on December 20, 2007, April L. Marino resigned as a director and Bruce Widener was appointed as a director. After the consummation of the Share Exchange with respect to the Beacon Preferred Shares, John Peters will resign as a director, the size of the Board of Directors will be increased to four, and three additional directors (Robert H. Clarkson, J. Sherman Henderson and John D. Rhodes, III) will be appointed to the board of directors by a resolution by the existing members of the Board of Directors.

Effective upon the consummation of the Share Exchange with respect to the Beacon Common Shares on December 20, 2007, Mr. Peters resigned his position as President and Ms. Marino resigned as Secretary/Treasurer. Immediately following the resignation of Mr. Peters, Mr. Widener was appointed Chairman and Chief Executive Officer, Mr. Richard C. Mills as President, Robert Mohr as Chief Accounting Officer and Kenneth E. Kerr as Chief Operating Officer.

Directors and Executive Officers

Our executive officers and directors and their respective ages, positions, term of office and biographical information are set forth below. Our bylaws require two directors to serve for a term of one year or until they are replaced by a qualified director. Our executive officers are chosen by our board of directors and serve at its discretion. There are no existing family relationships between or among any of our executive officers or directors.

Name	Age	Position Held	Director/Officer Since
John W. Peters	55	Director	June 9, 2003

Bruce Widener	46	Director, Chairman of the Board and Chief Executive Officer	December 20, 2007

Richard C. Mills	52	President	December 20, 2007

Robert Mohr	42	Chief Accounting Officer	December 20, 2007

Kenneth Kerr	44	Chief Operating Officer	December 20, 2007

John W. Peters, Director. Mr. Peters has been involved with Coyote Oil since its inception in 1996 and has served as President of that company since June 15, 2001. Since July 1999 Mr. Peters has been the manager of Development Specialties, Inc. a property development and management company. He is a director of Bingham Canyon Corporation, Cancer Capital Corp. and Skinovation Pharmaceutical Incorporated, reporting companies. Mr. Peters studied business administration at Long Beach Community College and California Polytechnic State University in San Luis Obispo, California.

Bruce Widener, Chief Executive Officer, Director and Chairman. Mr. Widener possesses over 19 years of industry experience. Prior to developing and forming Beacon, Mr. Widener served as Chief Operating Officer of US Wireless Online, a provider of wireless internet access and related applications during 2006. From 2004 to 2006 Mr. Widener served as Senior Vice President of Corporate Development of UniDial Communications / Lightyear Network Solutions. Mr. Widener was an independent contractor with PTEK in 2002 and became Senior Vice President of Indirect Channel Sales in 2003 through 2004.

Rick Mills, President. Mr. Mills possesses over 26 years of industry experience. Mr. Mills served as President of Strategic Communications, LLC since 2005 until its acquisition by Beacon. Mr. Mills served as Managing Partner

of RFK Communications, LLC from 2003 through 2004. Mr. Mills was the Chief Executive Officer of Sarcom, Inc. from 2000 through 2002.

Robert Mohr, Chief Accounting Officer and Senior Vice President of Finance. Mr. Mohr most recently served as Director of Financial Reporting of Triple Crown Media, Inc. (NASDAQ: TCMI), in charge of SEC compliance, financial reporting and analysis from 2006 to November 2007 when he joined Beacon. Mr. Mohr was Chief Financial Officer of Culinary Standards Corp., a food manufacturer, from 2002 through 2005.

Kenneth E. Kerr, RCDD, Chief Operating Officer. Mr. Kerr has over 25 years of industry experience. Mr. Kerr co-founded and has served as President of CETCON since 1996. Mr. Kerr is a BICSI certified RCDD and holds a BSEE from The Ohio State University.

Directors of Beacon Enterprise Solutions Group, Inc.

Set forth below is information regarding the current directors of Beacon Enterprise Solutions Group, Inc. Currently it is expected that these persons will be appointed to the Board of Directors of New Beacon after the resignation of Mr. Peters becomes effective.

Name	Age	Title
Bruce Widener	46	Chief Executive Officer and Chairman of the Board
Robert H. Clarkson	66	Director
J. Sherman Henderson III	65	Director
John D. Rhodes III	53	Director

J. Sherman “Sherm” Henderson III, Director. Mr. Henderson has more than 35 years of business experience, including company ownership, sales, marketing and management. He has served as president and CEO of Lightyear Network Solutions, LLC since its inception in 2003. Lightyear Network Solutions, LLC is the successor to Lightyear Communications, Inc. following its reorganization in April 2004 under Chapter 11 of the U.S. Bankruptcy Code. Mr. Henderson served as President and CEO of Lightyear Communications, Inc. since its formation in 1993. In 2004, he was voted chairman of COMPTEL, the leading communications trade association, made up of more than 300 member companies. Mr. Henderson is a graduate of Florida State University, with a B.A. degree in Business Administration.

Robert H. “Bobby” Clarkson, Director. Mr. Clarkson established Robert H. Clarkson Insurance Agency, LLC and Robert H. Clarkson Financial Services Inc. in 1964. Since that time, the agency has continued to grow and is licensed to conduct business in all 50 states. Working with clients such as the Independent Pilot’s Association and McDonald’s, the agency serves national and international corporations.

John D. Rhodes, III, M.D., Director. Dr. Rhodes practiced as a physician and has been Board Certified in Internal Medicine and Cardiovascular Diseases serving as Chief Fellow in Cardiology at the University of Louisville School of Medicine from 1984-1985 and was elected a Fellow of the American College of Cardiology. Dr. Rhodes retired from his private practice in 2005. In his retirement, Dr. Rhodes has been an active investor in the telecom, restaurant and real estate industries. Dr. Rhodes was a founding investor in Texas Roadhouse and served as a member of its advisory board until its initial public offering in 2004.

Board Committees

As of this date, the Board of Directors has not appointed an audit committee, compensation committee or nominating/corporate governance committee. We are not currently required to have such committees. Accordingly, we do not have an “audit committee financial expert” as such term is defined in the rules promulgated under the Securities Act and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”). The functions ordinarily handled by these committees are currently handled by our entire board of directors. Our Board of Directors intends however to review our governance structure and institute board committees as necessary and advisable in the future, to facilitate the management of our business. We anticipate creating audit, compensation and nominating/corporate governance committees after the consummation of the Share Exchange.

No Code of Ethics

A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote:

•

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

•

Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the SEC and in other public communications made by an issuer;

•

Compliance with applicable governmental laws, rules and regulations;

•

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

•

Accountability for adherence to the code.

Suncrest Global Energy Corp. had not adopted a code of ethics that applies to the Chief Executive Officer because it had no meaningful operations prior to the closing of the Share Exchange. However, New Beacon plans to adopt a code of ethics after the consummation of the Share Exchange with respect to the Beacon Preferred Shares.

Conflicts of Interest

Certain conflicts of interest may exist from time to time between us and certain officers and directors due to the fact that some of them may have other business interests to which they devote their attention. Some of our officers and directors may continue to do so notwithstanding the fact that management time should be devoted to our business. Suncrest Global Energy Corp. has not established policies or procedures for the resolution of current or potential conflicts of interest between us, our officers and directors or affiliated entities. There can be no assurance that our management will resolve all conflicts of interest in our favor, and conflicts of interest may arise that can be resolved only through the exercise by management of their best judgment as may be consistent with their fiduciary duties.

Board Meetings and Committees

Suncrest’s Board of Directors held six meetings during the fiscal year ended September 30, 2007.

Directors may be paid their expenses, if any, of attendance at such meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director, although no such compensation package has yet been adopted. No such payment shall preclude any director from serving Beacon in any other capacity and receiving compensation therefore except as otherwise provided under applicable law. No compensation was paid to the directors of Beacon during the past five years.

The Board of Directors may designate from among its members one or more committees. No such committees are currently appointed or in place. Beacon does not currently have an audit committee, compensation committee or nominating/corporate governance committee, but it intends to appoint such committees after the consummation of the Share Exchange.

The Board of Directors neither has a nominating committee for persons to be proposed as directors for election to the Board of Directors nor a formal method to receive the names of nominees from stockholders. There are no restrictions on stockholder nominations under the articles of incorporation or by-laws. The only restrictions are those applicable generally under Nevada law and the federal proxy rules. Currently, the entire Board of Directors decides on nominees, on the recommendation of one or more members of the Board of Directors. None of the members of the Board of Directors are “independent.” The Board of Directors will consider suggestions from

individual stockholders, subject to evaluation of the person’s merits. Stockholders may communicate nominee suggestions directly to any of the Board members, accompanied by biographical details and a statement of support for the nominees. The suggested nominee must also provide a statement of consent prior to being considered for nomination. Although there are no formal criteria for nominees, our Board of Directors believes that persons should be actively engaged in business endeavors, have a financial background, and be familiar with acquisition strategies and the information technology industry.

The Board of Directors has not adopted a formal methodology for communications from stockholders but plans to adopt such methodology after the closing of the Share Exchange.

We do not have a policy regarding the attendance of board members at the annual meeting of stockholders, but we plan to adopt a policy after the closing of the Share Exchange.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our Board of Directors and the Board of Directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

EXECUTIVE COMPENSATION

Summary Compensation

Executive Officer Compensation

John W. Peters, who served as principal executive officer until December 20, 2007 did not receive any cash or non-cash compensation during the past fiscal year, nor did he have any outstanding equity awards at year end. The current executive officers have entered into employment agreements with Beacon Enterprise Solutions Group, Inc., our wholly-owned subsidiary, the terms of which are outlined below. Except as otherwise set forth in those employment agreements, the compensation of our executive officers will be determined at the discretion of the Board of Directors of New Beacon.

Retirement or Change of Control Arrangements

Other than the 401(k) plan described below, we do not offer retirement benefit plans to our executive officers, although we may do so in the future. Other than the severance provisions of the employment agreements with executive officers set forth described below, we have not entered into any contract, agreement, plan or arrangement, written or unwritten, that provides for payments to a named executive officer at or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of Suncrest or a change in the named executive officer’s responsibilities following a change in control.

Compensation of Directors

We do not have any standard arrangement for compensation of our directors for any services provided as director, including services for committee participation or for special assignments.

Employment Agreements

Beacon has entered into employment agreement with each of Bruce Widener, Richard C. Mills, Robert Mohr and Kenneth E. Kerr, each effective as of December 20, 2007. Each executive officer has agreed not to compete with us within the United States during the term of his employment and for a period of one year following his termination of employment, nor to solicit our employees for a period of two years following the termination of his employment.

Pursuant to the terms of Mr. Widener’s Employment Agreement, Mr. Widener will serve as the Chief Executive Officer and will be entitled to receive, among other things: (1) an annual base salary of $180,000, and (2) such annual performance bonuses as may be approved by the Compensation Committee of the Board of Directors.

Pursuant to the terms of Mr. Mills’s Employment Agreement, Mr. Mills will serve as the President and will be entitled to receive, among other things: (1) an annual base salary of $150,000, and (2) such annual performance bonuses as may be approved by the Compensation Committee of the Board of Directors.

Pursuant to the terms of Mr. Mohr’s Employment Agreement, Mr. Mohr will serve as the Chief Accounting Officer and will be entitled to receive, among other things: (1) an annual base salary of $150,000, and (2) such annual performance bonuses as may be approved by the Compensation Committee of the Board of Directors.

Pursuant to the terms of Mr. Kerr’s Employment Agreement, Mr. Kerr will serve as the Chief Operating Officer and will be entitled to receive, among other things: (1) an annual base salary of $150,000, and (2) such annual performance bonuses as may be approved by the Compensation Committee of the Board of Directors.

If any of Mr. Widener, Mr. Mills, Mr. Mohr or Mr. Kerr is terminated for reasons other than for “cause,”then he will be entitled severance equal to the greater of (i) three months’ salary, or (ii) the amount of salary to be paid from the date of termination until December 20, 2008.

401(k) Plan

We will have a 401(k) Savings Plan qualified under Section 401(k) of the Internal Revenue Code, as amended, which will be available to all our employees who are at least 21 years of age. The terms and conditions of the plan are currently in the planning stages and have not been finalized.

Named executive officers will be eligible to participate in the plan, once established.

Other Compensation

We provide our named executive officers with medical, dental and vision insurance coverage that are consistent with those provided to our other employees.

Beacon Enterprise Solutions Group, Inc.

The following Summary Compensation Table indicates the cash and non-cash compensation earned during the fiscal year ended September 30, 2007 from Beacon Enterprise Solutions Group, Inc. or any of the Phase I Acquisitions by Bruce Widener, Chief Executive Officer, Robert Mohr, Chief Accounting Officer, Richard C. Mills, President, and Kenneth Kerr, Chief Operating Officer.

The following table sets forth a summary of the compensation of our Chairman and Chief Executive Officer and the other named executive officers for the nine months ended September 30, 2007.

Summary Compensation Table

Name
and
Principal
Position

Year

Salary ($)

Bonus ($)

Stock
Awards ($)

Option
Awards ($)

Non-
Equity
Incentive
Plan
Compen-
sation ($)

Change in
Pension
Value and
Nonquali-
fied
Deferred
Compen-
sation
Earnings
($)

All
Other
Compen-
sation
($)

Total
($)

(A)

(B)

(C)

(D)

(E)

(F)

(G)

(H)

(I)

(J)

Bruce Widener

2007

33,750

(1)

2,580

(2)

36,330

Chariman of the

Board of Directors and

Chief Executive Officer

Richard C. Mills

2007

90,000

(3)

90,000

President

Robert Mohr

2007

(4)

Chief Accounting Officer

and Senior Vice

President

Kenneth Kerr

2007

90,000

(5)

41,525

(6)

131,525

Chief Operating

Officer

(1)

Amount agreed upon with Founders.

(2)

Amount paid for medical, dental and vision insurance.

(3)

Amount paid by Strategic Communications, Inc. to Kathy Mills, Mr. Mills spouse on behalf of Mr. Mills.

(4)

Mr. Mohr was not employed by the company prior to September 30, 2007.

(5)

Amounts paid by CETCON, Inc.

(6)

Amounts paid by CETCON, Inc. include $32,341 personal use of company auto and $9,184 of medical payments.

OUTSTANDING EQUITY AWARDS

Suncrest Global Energy Corp. did not make any equity awards during the fiscal year ended September 30, 2007. Beacon Enterprise Solutions Group, Inc., prior to the Share Exchange, issued 782,250 Beacon Common Shares to Richard C. Mills, subject to vesting over a period of three years, which vesting shall commence on January 1, 2008 and shall continue so long as Mr. Mills remains an employee of Beacon.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information regarding beneficial ownership of the registrant as of December 20, 2007, after giving effect to the consummation of the Share Exchange with respect to the shares of Suncrest Common Stock by the following groups: (i) each stockholder known by us to be the beneficial owner of more than 5% of the outstanding shares of our common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and named executive officers as a group. Immediately prior to the Share Exchange, none of our directors and executive officers was the beneficial owner of any capital stock of Suncrest.

The table with respect to the Suncrest Common Stock is computed on the basis of the amount of outstanding shares of Suncrest Common Stock as of the date hereof, plus any securities that are convertible into or exercisable for Suncrest Common Stock within 60 days of the date hereof pursuant to options, warrants, conversion privileges or other rights. The Share Exchange has not yet been consummated with respect to the Beacon Preferred Shares and Suncrest Preferred Stock. To more accurately reflect the percentages of beneficial ownership, however, the 3,245,200 outstanding Beacon Preferred Shares are treated as if they had been converted into Beacon Common

Shares and exchanged for Suncrest Common Stock at the consummation of the Share Exchange with respect to the Beacon Common Shares and the Suncrest Common Stock.

Unless otherwise indicated in the footnotes to this table, based on information furnished by such stockholders, each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. The address of each of the stockholders named in this table is the same as that of Beacon.

Name of Beneficial Owner	Class	Shares of New Beacon held immediately after the Share Exchange	Percent Ownership (%)

Bruce Widener	Common	2,580,000	13.7%
Sherman Henderson (1)	Common	1,759,167	9.4%
Robert Clarkson (2)	Common	979,166	5.3%
John D. Rhodes, III (3)	Common	591,666	3.2%
Richard C. Mills (4)	Common	1,577,250	9.9%
Kenneth E. Kerr (5)	Common	471,429	2.4%
Robert Mohr	Common	-0-	0%
CETCON, Incorporated	Common	900,000	4.8%
Directors and Named Executive	Common	7,958,678	43.9%
Officers (as a group)

(1) Includes 30,000 shares held by LANJK, LLC (a limited liability company wholly owned by Mr. Henderson) as well as the 416,666 shares into which the Exchanged Bridge Note held by SHEND LLC (a limited liability company wholly owned by Mr. Henderson) is convertible, and the 322,500 shares for which Exchanged Bridge Warrants held by SHEND LLC are exercisable within 60 days of the date hereof.

(2) Includes the 416,666 shares into which the Exchanged Bridge Note held by ROBT LLC (a limited liability company wholly owned by Mr. Clarkson) is convertible, and the 322,500 shares for which the Exchanged Bridge Warrants held by ROBT LLC are exercisable within 60 days of the date hereof.

(3) Includes the 166,666 shares into which the Exchange Bridge Note held by Dr. Rhodes is convertible, and the 129,000 shares for which the Exchanged Bridge Warrants held by Dr. Rhodes are exercisable within 60 days of the date hereof.

(4) 782,250 of the shares of New Beacon Common Stock are subject to a three-year vesting provision, where such shares will vest in three equal installments on December 20, 2008, 2009 and 2010. In addition, Mr. Mills and his wife are the beneficial owners of 795,000 shares of New Beacon Common Stock, of which 200,000 have been placed in escrow under the terms of the asset purchase agreement between Beacon and Strategic.

(5) Mr. Kerr, as the 50% stockholder of CETCON, is the beneficial owner of 450,000 shares of New Beacon Common Stock, of which 225,000 have been placed in escrow under the terms of the asset purchase agreement between Beacon and CETCON.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SUNCREST GLOBAL ENERGY CORP.

There were no related party transactions, as defined by Item 404 of Regulation S-B, between Suncrest Global Energy Corp. and any of its officers, directors or holders of 5% or more of Suncrest Global Energy Corp. capital stock.

BEACON ENTERPRISE SOLUTIONS GROUP, INC.

Bridge Financing

John D. Rhodes, III and affiliated entities of Sherman Henderson and Robert Clarkson, all of whom are directors and/or 5% shareholders of Beacon, hold Exchanged Bridge Notes in the aggregate principal amount of $600,000.

Consulting Agreement

DESCRIPTION OF SECURITIES

Suncrest Global Energy Corp. is currently authorized under its Articles of Incorporation to issue 70,000,000 shares of Suncrest Global Energy Corp. common stock, par value $0.001 per share, and 5,000,000 shares of Suncrest Global Energy Corp. preferred stock (“ Existing Suncrest Preferred Stock ”), par value $0.01 per share.

As of immediately prior to the Share Exchange, there were 1,273,121 shares of Suncrest Common Stock issued and outstanding and no shares of Suncrest Preferred Stock issued and outstanding.

The Articles of Incorporation will be amended to retire all existing shares of Existing Suncrest Preferred Stock and to authorize a new series of preferred stock, which will have the rights, privileges and preferences described in “Preferred Stock,” below. This preferred stock is referred to as “ Suncrest Preferred Stock ” throughout this Form 8-K.

The following descriptions of Suncrest Global Energy Corp. capital stock are only summaries and do not purport to be complete and are subject to and qualified by the Articles of Incorporation, as amended and restated, its Bylaws, and by the provisions of applicable corporate laws of the State of Nevada. The descriptions of the Suncrest Global Energy Corp. common stock and Suncrest Global Energy Corp. preferred stock, as well as the Suncrest

Global Energy Corp. Warrants, reflect changes to our capital structure that occurred immediately prior to or upon the closing of the Share Exchange and the Private Placement:

Common Stock

Holders of Suncrest Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders. Suncrest Global Energy Corp. may pay dividends at such time and to the extent declared by the Board of Directors in accordance with Nevada corporate law. Suncrest Common Stock has no preemptive or other subscription rights, and there are no conversion rights or redemption or sinking fund provisions with respect to such shares. All outstanding shares of Suncrest Common Stock are fully paid and non-assessable. To the extent that additional shares of Suncrest Common Stock may be issued in the future, the relative interests of the then existing stockholders may be diluted.

Existing Suncrest Preferred Stock

Each share of preferred stock shall have the preference to exchange for ten (10) shares of Suncrest Common Stock and is entitled to ten (10) votes per share of Existing Suncrest Preferred Stock. The Board of Directors is authorized to determine and alter the rights, preferences, privileges, and restrictions granted to or may issue shares of Existing Suncrest Preferred Stock for such consideration as they may determine, from time to time, and the holder of such shares shall not be liable for any further payment thereof.

New Beacon intends to eliminate all authorized Existing Suncrest Preferred Stock upon the amendment of the Articles of Incorporation.

New Beacon Preferred Stock

After the amendment of the Articles of Incorporation to authorize 4,500 shares of New Beacon Preferred Stock, each share of the New Beacon Preferred Stock will have the following rights, preferences and privileges, including: (i) a stated value per share of $1,000 (the “ Stated Value ”); (ii) dividends of 10% on the Stated Value payable in cash annually or as a stock dividend in additional shares of New Beacon Preferred Stock; (iii) optional conversion into 1,333.33 shares of New Beacon Common Stock and mandatory conversion upon the occurrence of conditions relating to a secondary public offering or trading volume; (iv) antidilution provisions, including full ratchet antidilution protection for certain unauthorized offerings; (v) a liquidation preference equal to the sum of 125% of the Stated Value and all accrued but unpaid dividends; (vi) upon a change of control transaction, a premium equal to the liquidation preference in addition to the amounts payable on the common shares into which the shares of New Beacon Preferred Stock are convertible; and (vii) certain negative covenants regarding the declaration of dividends, the issuance of additional preferred stock and the issuance of debt.

Warrants

On December 20, 2007, the Bridge Warrants to purchase 1,111,000 Beacon Common Shares issued in connection with the 2007 Bridge Facility were exchanged for the Exchanged Bridge Warrants to purchase 1,111,000 shares of New Beacon Common Stock. Of the Exchanged Bridge Warrants, the rights to purchase 875,000 Beacon Common Shares were immediately vested and exercisable. The remaining 336,000 warrants will collectively vest at a rate of 14,000 shares per month for each month that the principal under the Exchanged Bridge Notes remains outstanding until the maturity date of December 20, 2009, the second anniversary of the Private Placement. Upon full conversion of the Exchanged Bridge Notes into shares of New Beacon Common Stock or upon the maturity date of December 20, 2009, all remaining unvested rights to purchase shares of New Beacon Common Stock under the Exchanged Bridge Warrants will automatically vest and become exercisable. If prepayment of the advances prior to the maturity date of December 20, 2009 is required, all remaining unvested rights to purchase shares of New Beacon Common Stock under the Exchanged Bridge Warrants will be forfeited and canceled. The Exchanged Bridge Warrants have an exercise price of $1.00 per share and expire on June 30, 2012.

The Investor Warrants were exchanged for the Exchanged Investor Warrants, which in the aggregate have the right to purchase 250,000 shares of New Beacon Common Stock. Each Exchanged Investor Warrant has a five year exercise period and an exercise price of $1.00 per share of New Beacon Common Stock, payable in cash on the

exercise date. The exercise price is subject to adjustment upon certain occurrences specified in the Exchanged Investor Warrants.

The The Placement Agent Warrant was exchanged for the Exchanged The Placement Agent Warrant, and the The Placement Agent Affiliate Warrants were exchanged for the Exchanged The Placement Agent Affiliate Warrants. The Exchanged The Placement Agent Warrant has the right to purchase 1,040,000 shares of New Beacon Common Stock at an exercise price of $1.00 per share of New Beacon Common Stock over a five year exercise period. The Exchanged The Placement Agent Affiliate Warrants have the right in the aggregate to purchase 600,000 shares of New Beacon Common Stock at an exercise price of $1.00 per share of New Beacon Common Stock over a five year exercise period.

Convertible Notes

On December 20, 2007, the convertible promissory notes issued in the bridge financing facilities were exchanged for convertible promissory notes and warrants to purchase shares of Suncrest Common Stock, with terms identical to those issued in the bridge financing facilities.

Consequently, New Beacon has convertible promissory notes outstanding in the aggregate principal amount of $700,000, which bear interest at the prime rate and mature on December 20, 2009. These convertible promissory notes are convertible into a total of up to 1,166,664 shares of Suncrest Common Stock, at a deemed conversion price of $0.60 per share of New Beacon Preferred Stock.

Registration Rights

Pursuant to the Registration Rights Agreement, New Beacon will be required after the Share Exchange to register their “registrable securities” with the SEC so those securities can be publicly sold. These registration rights are discussed more fully in “Registration Rights Agreement,” above.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Suncrest Global Energy Corp.’s common stock is traded on the OTC.BB under the symbol “ SGEG.OB ”. Following the Share Exchange, the combined company is expected to be traded on the OTC.BB.

Transfer Agent and Registrar

Standard Registrar & Transfer Company is the transfer agent and registrar of Suncrest Global Energy Corp.’s common stock.

Dividend Policy

Suncrest Global Energy Corp. has not paid any cash dividends on its common stock to date. New Beacon does not anticipate declaring or paying any dividends in the foreseeable future. New Beacon anticipates that for the foreseeable future New Beacon will follow a policy of retaining earnings, if any, in order to finance the expansion and development of its business. Payment of dividends shall be within the discretion of New Beacon’s board of directors and will depend upon earnings, capital requirements, and operating and financial condition, among other factors.

RECENT SALES OF UNREGISTERED SECURITIES

Reference is made to Item 3.02 of this Current Report on Form 8-K for a description of recent sales of unregistered securities, which is hereby incorporated by reference.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 78.7502 of the Nevada General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit indemnification for liabilities, including reimbursement for expenses incurred, arising under the Securities Act. This indemnification may, however, be unenforceable as against public policy.

As permitted by Nevada law, our Amended and Restated Articles of Incorporation include a provision that eliminates the personal liability of its directors for monetary damages for breach of fiduciary duty as a director, except for liability:

•

for any breach of the director’s duty of loyalty to us or our stockholders;

•

for acts or omissions not in good faith or that involve intentional misconduct, fraud or a knowing violation of law;

•

under Section 78.300 of the Nevada law regarding unlawful dividends and stock purchases; or

•

for any transaction from which the director derived an improper personal benefit.

As permitted by Nevada law, our Amended and Restated Articles of Incorporation and our bylaws provide that:

•

we are required to indemnify our directors and officers to the fullest extent permitted by Nevada law, so long as such person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of our company, and with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful;

•

we are permitted to indemnify our other employees to the extent that we indemnify our officers and directors, unless otherwise required by law, our articles of incorporation, our bylaws or other agreements;

•

we are required to advance expenses to our directors and officers incurred in connection with a legal proceeding to the fullest extent permitted by Nevada law, subject to very limited exceptions; and

•

the rights conferred in our bylaws are not exclusive.

We intend to enter into indemnification agreements with each of our current directors and executive officers to give such directors and executive officers additional contractual assurances regarding the scope of the indemnification set forth in our Amended and Restated Articles of Incorporation and our bylaws and to provide additional procedural protections. Currently, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification. Our Board of Directors has authorized management to negotiate and obtain directors’ and officers’ liability insurance.

The indemnification provisions described above will provide coverage for claims arising under the Securities Act and the Exchange Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to our Amended and Restated Articles of Incorporation, Bylaws, the Nevada General Corporation Law, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Item 2.03 Creation of a Direct Financial Obligation.

On December 20, pursuant to the Share Exchange, New Beacon assumed the obligations of Beacon under the Bridge Notes, and issued the Exchanged Bridge Notes and the Exchanged Bridge Warrants to the holders of the Bridge Notes and Bridge Warrants. The terms of the Exchanged Bridge Notes and the Exchanged Bridge Warrants are substantially equivalent to those of the Bridge Notes and the Bridge Warrants, respectively. See Item 2.01, “Bridge Financing,” above.

The Exchanged Bridge Notes bear interest at the prime rate and mature on December 20, 2009. The holders of the Exchanged Bridge Notes can also require prepayment of the advances in cash at any time. The Exchanged

Bridge Notes are convertible into a total of up to 1,166,664 shares of New Beacon Common Stock, at a deemed conversion price of $0.60 per share of New Beacon Common Stock.

On December 20, as part of the consideration given for the Phase I Acquisitions, Beacon issued secured promissory notes in the aggregate amount of $1,462,500. The terms of these notes, comprised of the RFK Note, the CETCON Note, and the ADS Note, are described in Item 2.01, “Phase I Acquisitions,” above.

On December 20, upon the consummation of the merger of BHS with and into an acquisition subsidiary of Beacon, Beacon issued the BHS Earnout Note, which evidences contingent obligations in the maximum amount of $480,374, and the BHS Rent Notes, in the aggregate amount of $173,000, to the shareholders of BHS, as described in Item 2.01, “Phase I Acquisitions,” above.

On December 20, upon the consummation of the purchase of the assets of Strategic, Beacon acquired assets subject to an approximate aggregate amount of $342,000 in Federal, state and local tax liens. Currently, the Strategic Note, in the principal amount of $342,000, is held in escrow pending resolution of the ongoing dispute between Strategic and the Federal, state and local taxing authorities.

In addition, Beacon has certain ongoing obligations with respect to indemnification and other matters, as set forth in the ADS Purchase Agreement, the BHS Agreement, the CETCON Purchase Agreement, the Strategic Purchase Agreement and the RFK Purchase Agreement.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Exchange Agreement, on December 20, 2007, Suncrest Global Energy Corp. issued 9,194,900 shares of Suncrest Common Stock to holders of Beacon Common Shares in exchange for all such Beacon Common Shares. At this time, Suncrest Global Energy Corp. issued warrants for the purchase of 4,066,414 shares of Suncrest Common Stock and promissory notes convertible into 4,066,414 shares of Suncrest Common Stock in exchange for the outstanding warrants for the purchase of Beacon Common Shares and promissory notes convertible into Beacon Common Shares, respectively. The warrants for the purchase of Suncrest Common Stock and the promissory notes convertible into Suncrest Common Stock are described in Item 2.01, above. Suncrest Global Energy Corp. is obligated to issue 4,000 shares of Suncrest Preferred Stock to holders of Beacon Preferred Shares in exchange for all such Beacon Preferred Shares. The Beacon Common Shares and Beacon Preferred Shares are not registered under the Securities Act.

The issuance of Suncrest Common Stock and Suncrest Preferred Stock in exchange for the Beacon Common Shares and Beacon Preferred Shares is exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(2) thereof and Rule 506 of Regulation D promulgated thereunder. Suncrest Global Energy Corp. made this determination based on the representations of Beacon and the Beacon shareholders that less than thirty-five (35) of the Beacon shareholders were not “accredited investors” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, and that such persons were acquiring the Suncrest Common Stock and Suncrest Preferred Stock for investment purposes for their own respective accounts and not as nominees or agents, and with a view to resale or distribution thereof, and that said persons understood that the shares of Suncrest Common Stock and Suncrest Preferred Stock may not be offered or sold in the United States unless they are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No registration statement covering these securities has been filed with the Securities and Exchange Commission (the “SEC”) or with any state securities commission in respect of the Share Exchange.

Item 4.01 Changes in Registrant’s Certifying Accountant.

On December 20, 2007, Suncrest Global Energy Corp. dismissed Chisholm, Bierwolf & Nilson LLP as the independent registered public accounting firm. Chisholm, Bierwolf & Nilson LLP had been previously engaged as the principal accountant to audit the financial statements of Suncrest Global Energy Corp.

Suncrest Global Energy Corp. has engaged Marcum & Kliegman LLP as its new independent registered public accounting firm, effective as of December 20, 2007, to audit the financial statements for the fiscal year ended September 30, 2007, and to perform procedures related to the financial statements included in the current reports on Form 8-K and quarterly reports on Form 10-QSB.

The decision to dismiss Chisholm, Bierwolf & Nilson LLP and engage Marcum & Kliegman LLP was approved by the Board of Directors after the consummation of the Share Exchange with respect to the Beacon Common Shares on December 20, 2007.

During the two most recent fiscal years and the subsequent interim period through December 20, 2007, the date of dismissal, there were no disagreements with, or adverse opinions or disclaimers of opinions from, Chisholm, Bierwolf & Nilson LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of Chisholm, Bierwolf &Nilson LLP, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its reports. There were no items described in Item 304(a)(1)(iv)(B) of Regulation S-B to disclose during the two most recent fiscal years and the subsequent interim period through December 20, 2007, the date of dismissal.

New Beacon has made the contents of this Form 8-K available to Chisholm, Bierwolf & Nilson LLP and requested it to furnish a letter to the SEC as to whether Chisholm, Bierwolf & Nilson LLP agrees or disagrees with, or wishes to clarify the expression of its views set forth herein. A copy of Chisholm, Bierwolf & Nilson LLP’s letter to the SEC is included as Exhibit 16.1 to this Form 8-K.

Other than in connection with the engagement of Marcum & Kliegman LLP by Suncrest Global Energy Corp., during its most recent fiscal year and the subsequent interim period prior to December 20, 2007, Suncrest Global Energy Corp. did not consult Marcum & Kliegman LLP regarding either: (i) the application of accounting principles to a specified transaction, completed or proposed, or the type of audit opinion that might be rendered on its financial statements, or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-B or the related instructions thereto or a “reportable event” as described in Item 304(a)(1)(v) of Regulation S-B.

Item 5.01 Changes in Control of Registrant.

The consummation of the Share Exchange with respect to the Beacon Common Shares under the Exchange Agreement, as amended, which resulted in the change of control of the registrant, occurred on December 20, 2007. A copy of the Exchange Agreement is included as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.

On December 20, 2007 pursuant to the Exchange Agreement, Suncrest Global Energy Corp. issued 9,194,900 shares of Suncrest Common Stock, convertible promissory notes convertible into 1,166,666 shares of Suncrest Common Stock and warrants exercisable for 4,066,414 shares of Suncrest Common Stock, representing 91.9% of the Suncrest Common Stock on a fully-diluted, as converted basis to the Beacon stockholders, in exchange for the transfer of 100% of the Beacon Common Shares and securities convertible into or exercisable for Beacon Common Shares.

Upon the consummation of the Share Exchange with respect to the Beacon Preferred Shares under the Exchange Agreement, Suncrest Global Energy Corp. will issue 2,433.9 shares of Suncrest Preferred Stock convertible into 3,245,200 shares of Suncrest Common Stock in exchange for the transfer of 100% of the Beacon Preferred Shares. Accordingly, the shares of Suncrest Common Stock issued to holders of Beacon Common Shares and Beacon Preferred Shares will represent 93.3% of the Suncrest Common Stock on a fully-diluted, as converted basis upon the completion of the Share Exchange. Reference is made to the disclosures set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.

On December 20, 2007, as explained more fully in Item 2.01 above under the section titled “Management”and in Item 5.02 of this Current Report on Form 8-K, Mr. John Peters resigned as Chairman of the Board and President, and Ms. April Marino resigned as a member of Suncrest Global Energy Corp.’s Board of Directors and as

Secretary and Treasurer. Copies of the letters of resignation of each of Mr. Peters and Ms. Marino are attached as Exhibits 17.1 and 17.2.

On December 20, 2007, as explained more fully in Item 2.01 and Item 5.02, the Board of Directors appointed Mr. Bruce Widener to serve as a member of the Board of Directors. Mr. Peters has agreed to resign from the Board of Directors ten (10) days after the effective time of the filing and dissemination of the Schedule 14f-1.

As explained more fully in Item 2.01 and Item 5.02, the Board of Directors appointed Bruce Widener to serve as Chief Executive Officer and other persons to serve as executive officers.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Reference is made to the disclosures set forth under Items 2.01 and 5.01 of the this Current Report on Form 8-K, which disclosures regarding the resignation and appointment of the directors and officers described below in connection with the Share Exchange are incorporated herein by reference.

(a) Resignation of Directors

Effective December 20, 2007, Ms. April Marino resigned as a director of Suncrest Global Energy Corp. Mr. John Peters resigned as the Chairman of the Board of Directors but retained his membership on the Board of Directors. Mr. Peters has provided notice of his resignation, effective as of the date that is ten (10) days after the filing and dissemination of the Schedule 14f-1 on December 20, 2007.

(b) Resignation of Officers

Effective December 20, 2007, Mr. John Peters resigned as Chief Executive Officer and President of Suncrest Global Energy Corp., and Ms. April Marino resigned as Secretary/Treasurer of Suncrest Global Energy Corp.

(c) Appointment of Executive Officers

Effective December 20, 2007, the directors described below in Item 5.02(d) appointed the following persons as our executive officers, with the respective titles as set forth opposite his name below:

Name	Age	Title
Bruce Widener	46	Chief Executive Officer
Richard C. Mills	52	President
Robert Mohr	42	Chief Accounting Officer and Senior Vice President of Finance
Kenneth E. Kerr	44	Chief Operating Officer

The business background descriptions of the newly appointed officers are described in Item 2.01 of this Current Report on Form 8-K. There are no family relationships among the newly appointed officers.

Richard C. Mills and his wife S. Kathy Mills owned 100% of the membership interests of Strategic Communications, LLC and RFK Communications, LLC, which were acquired by Beacon as set forth in Item 2.01, above. Beacon and Strategic Communications, LLC have entered into a Marketing Agreement, under the terms of which Beacon is required to pay commissions to Strategic for (i) sales of Beacon products or services originated by Strategic Communications, LLC; or (ii) sales of Beacon products or services for which Strategic Communications, LLC acts as a sales intermediary. Beacon does not believe that this Marketing Agreement will be material to the operations of the Company.

Kenneth E. Kerr owns 52.3% of CETCON Incorporated, which was acquired by Beacon as set forth in Item 2.01, above.

The employment agreements of our executive officers are summarized in Item 2.01, above.

(d) Appointment of Directors

Effective December 20, 2007, after the resignation of Ms. Marino, the Board of Directors appointed Bruce Widener to fill the vacancy of the Board of Directors and as the Chairman of the Board of Directors.

The size of the Board of Directors will be increased to four on or after the tenth (10th) day after the filing and dissemination of Schedule 14f-1. After the effective time of the resignation of Mr. Peters, three additional directors shall be appointed to the Board of Directors, as set forth in Item 2.01, Management, above.

The business background description of Mr. Widener is described in Item 2.01 of this Current Report on Form 8-K. Except as set forth with respect to the bridge financing, above, there are no related party transactions between us and any of the directors.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On December 20, 2007, the Board of Directors voted to change the fiscal year end to September 30. The report covering the transition period will be filed on Form 10-QSB.

Item 5.06 Change in Shell Company Status.

As explained more fully in Item 2.01 above, Suncrest Global Energy Corp. was a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act), immediately before the closing of the Share Exchange. As a result of the Share Exchange, Suncrest Global Energy Corp. took on the business of Beacon, with Beacon’s extensive operations. Consequently, Suncrest Global Energy Corp. believes that the Share Exchange has caused it to cease to be a shell company. For information about the Share Exchange, please see the information set forth above under Item 2.01 of this Current Report on Form 8-K, which information is incorporated herein by reference.

Item 9.01 Financial Statement and Exhibits.

(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

The audited historical financial statements are filed as Exhibits 99.2 to 99.6 to this Current Report on Form 8-K and are incorporated herein by reference.

(i) Independent Auditors’ Report and financial statements of Beacon Enterprise Solutions Group, Inc., as of September 30, 2007.

(ii) Independent Auditors’ Report and financial statements of Advance Data Systems, Inc. (d/b/a ADSnetcurve) as of September 30, 2007.

(iii) Independent Auditors’ Report and financial statements of Bell-Haun Systems, Inc. as of September 30, 2007.

(iv) Independent Auditors’ Report and financial statements of CETCON, Incorporated as of September 30, 2007.

(v) Independent Auditors’ Report and financial statements of Strategic Communications, LLC as of September 30, 2007.

(b) PRO FORMA FINANCIAL INFORMATION.

The following pro forma financial information is filed as Exhibit 99.7 to this Current Report on Form 8-K and is incorporated herein by reference:

(i)

The Unaudited Condensed Financial Statements of Beacon Enterprise Solutions Group, Inc., combined on an unaudited pro forma basis with those of the Phase I Acquisitions, as of September 30, 2007.

(d)

EXHIBITS

EXHIBIT INDEX

Exhibit Number	Description
2.1	Securities Exchange Agreement dated December 20, 2007 by and among Suncrest Global Energy Corp.
	(“Suncrest”), Beacon Enterprise Solutions Group, Inc. (“Beacon”), and Beacon shareholders.
4.1	Form of Exchanged Bridge Notes and Exchanged Bridge Warrants
4.2
10.1	Form of Exchanged Bridge Notes and Exchanged Bridge Warrants. See 4.1.
10.2	Form of Exchanged Investor Warrants.
10.3	Form of Exchanged The Placement Agent Warrant.
10.4	Form of The Placement Agent Affiliate Warrant.
10.5	Asset Purchase Agreement, dated October 15, 2007, by and between Beacon and Advance Data Systems, Inc. (“ADSnetcurve”).
10.6	Secured Promissory Note, dated December 20, 2007, issued by Beacon to ADSnetcurve.
10.7	Asset Purchase Agreement, dated October 15, 2007, by and between Beacon and CETCON, Incorporated (“CETCON”).
10.8	Secured Promissory Note, dated December 20, 2007, issued by Beacon to CETCON.
10.9	Asset Purchase Agreement, dated October 15, 2007, by and between Beacon and Strategic Communications, LLC (“Strategic”).
10.10	Promissory Note, dated December 20, 2007, issued by Beacon to Strategic.
10.11	Asset Purchase Agreement, dated October 15, 2007, by and between Beacon and RFK Communications, LLC (“RFK”).
10.12	Secured Promissory Note, dated December 20, 2007, issued by Beacon to RFK.
10.13	Agreement and Plan of Merger, dated October 15, 2007, by and among Beacon, BH Acquisition Sub, Inc., Bell Haun Systems, Inc. (“BHS”) and BHS shareholders.
10.14	Promissory Note, dated December 20, 2007, issued by Beacon to the BHS shareholders.
10.15	Promissory Notes, dated December 20, 2007, issued by Beacon to Thomas O. Bell and Michael T. Haun.
10.16	Registration Rights Agreement, dated December 20, 2007, between Beacon, The Placement Agent and certain investors (the “The Placement Agent Investor Group”).
16.1	Letter of Chisholm, Bierwolf & Nilson LLP.
17.1	Letter of John W. Peters.
17.2	Letter of April Marino.
21.1	List of Subsidiaries of the Registrant.
99.1	Press Release of Beacon and Suncrest.
99.2	Audited Financial Statements of Beacon Enterprise Solutions Group, Inc., as of September 30, 2007.
99.3	Audited Financial Statements of Advance Data Systems, Inc. as of September 30, 2007.
99.4	Audited Financial Statements of Bell-Haun Systems, Inc., as of September 30, 2007.
99.5	Audited Financial Statements of CETCON, Incorporated, as of September 30, 2007.
99.6	Audited Financial Statements of Strategic Communications, LLC, as of September 30, 2007.
99.7	Pro Forma Consolidated Financial Statements of Beacon and Phase I Acquisitions, as of September 30, 2007
99.8	Amended and Restated Articles of Incorporation of Beacon Enterprise Solutions Group, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

	SUNCREST GLOBAL ENERGY CORP.

Date: December 20, 2007	By:	/s/ Bruce Widener Bruce Widener, Chief Executive Officer

EXHIBIT 2.1

SECURITIES EXCHANGE AGREEMENT

BY AND AMONG

SUNCREST GLOBAL ENERGY CORP.

BEACON ENTERPRISE SOLUTIONS GROUP, INC.

AND

THE BEACON HOLDERS

DATED AS OF DECEMBER 20, 2007

SECURITIES EXCHANGE AGREEMENT

This SECURITIES EXCHANGE AGREEMENT (this "Agreement") is made and entered into as of December 20, 2007, by and among SUNCREST GLOBAL ENERGY CORP., a Nevada corporation (the "Company"), BEACON ENTERPRISE SOLUTIONS GROUP, INC., an Indiana corporation ("Beacon"), and the persons listed on Annex A hereto (the "Beacon Holders").

RECITALS

A. Immediately prior to the Initial Closing (as defined below), the Beacon Holders will collectively own (i) 9,194,900 shares of common stock, no par value, of Beacon (the "Beacon Common Stock"), (ii) [2,500] shares of Series A Convertible Preferred Stock, no par value, of Beacon, collectively convertible into an aggregate of [3,333,333] shares of Beacon Common Stock (the "Beacon Preferred Stock"), out of [4,000] shares of Beacon Preferred Stock (collectively convertible into an aggregate of 5,333,333 shares of Beacon Common Stock) that may be issued in the Equity Financing, (iii) $700,000 aggregate principal amount of Beacon convertible promissory notes (the "Beacon Notes"), convertible into up to 1,166,664 shares of Beacon Common Stock, and (iv) warrants to purchase up to
[5,517,667] shares of Beacon Common Stock at a price of $1.00 per share (the "Beacon Warrants");

B. The number and/or amount of Beacon Common Stock, Beacon Preferred Stock, Beacon Notes and Beacon Warrants (collectively, the "Beacon Securities") held by the Beacon Holders shall be set forth on Annex A hereto and shall constitute all of the issued and outstanding securities of Beacon, as of the date hereof and the Initial Closing;

C. The Beacon Holders desire to (i) exchange their respective Beacon Common Stock, Beacon Notes and Beacon Warrants for Company Common Stock (as defined below), respectively, at the Initial Closing (the "Exchange"), and (ii) Beacon Preferred Stock for Company Preferred Stock (as defined below) following the Company's adoption and filing with the Secretary of State of Nevada, of the Restated Articles (as defined below), which will occur subsequent to the Exchange (the "Preferred Exchange," and, together with the Exchange, collectively, the "Securities Exchange");

D. The Company's current shareholders will have as of the Initial Closing and prior to the Exchange, 1,273,121 shares of common stock, par value $0.01 per share (the "Company Common Stock") issued and outstanding and no other securities issued and outstanding;

E. The Board of Directors of the Company and the Board of Directors of Beacon have determined that the Securities Exchange is fair to, and in the best interests of, their respective corporations and their respective shareholders;

F. Following the Securities Exchange, (I) the Company will have issued and outstanding (i) 10,468,021 shares of Company Common Stock (of which (a) 1,273,121 shares will be owned by persons who are the current shareholders of the Company immediately prior to the Exchange; and (b) 9,194,900 shares will be owned by former holders of Beacon Common Stock who will exchange such shares for Company Common Stock in the Exchange; (2) 1,666,664 shares will be reserved for issuance upon conversion of the Company Notes issued to

the holders of Beacon Notes in exchange for their Beacon Notes in the Exchange,
(3) 5,333,333 shares reserved for issuance upon conversion of the Company Preferred Stock issued to the Beacon Holders in exchange for their Beacon Preferred Stock in the Preferred Exchange; and (4) up to 5,171,667 shares issuable upon exercise of Company Warrants, at a price of $1.00 per common share, issued to Beacon Holders in exchange for their Beacon Warrants in the Exchange; (II) the officers and directors of the Company shall have resigned and new Company officers and directors shall have been appointed or elected; (III) Beacon shall be a wholly-owned subsidiary of the Company and shall have completed the Four Beacon Acquisitions (as defined below); and (IV) the Company shall have changed its name to "Beacon Enterprise Solutions Group, Inc."

G. The parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

THE SECURITIES EXCHANGE

1.1 Exchange of Beacon Securities. Subject to and upon the terms and conditions of this Agreement, the Company agrees to issue to each Beacon Holder
(a) at the applicable Closing, in exchange for each (i) share of Beacon Common Stock held by such Beacon Holder, one (1) share of Company Common Stock, (ii) Beacon Note, a convertible promissory note of the Company in the same principal amount and accrued interest and with equivalent provisions to the Beacon Note being exchanged by the Beacon Holder (a "Company Note"), and (iii) Beacon Warrant, a warrant to purchase the equivalent number of shares of Company Common Stock as the Beacon Warrant being exchanged by such Beacon Holder (a "Company Warrant"), and (b) In the Preferred Exchange, immediately following the filing of the First Amended and Restated Articles of Incorporation of the Company attached hereto as Annex B (the "Restated Articles"), for each share of Beacon Preferred Stock held by such Beacon Holder, one (1) share of Series A Convertible Preferred Stock of the Company, having the designations, terms, rights and limitations as set forth in the Restated Articles (the "Company Preferred Stock"). The Securities Exchange, and the other transactions contemplated by this Agreement, are hereinafter sometimes referred to as the "Transactions."

1.2 Closings. Unless this Agreement shall have been terminated pursuant to
Section 8.1, the closing of the Exchange (each a "Closing") shall take place at the offices of the Company at a time and date to be specified by the parties. The initial Closing (the "Initial Closing") shall be no later than the second business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree (the "Initial Closing Date").

-2-

1.3 Exchange Requirements.

(a) Restrictions on Beacon Securities. If any Beacon Securities outstanding immediately prior to the Initial Closing are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with Beacon, then the Company Securities issued in exchange for such Beacon Securities will also be unvested or subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such Company Securities may accordingly be marked with appropriate legends and notices to the Company's transfer of such restrictions also. The Company shall take all action that may be necessary to ensure that, from and after the Initial Closing, the Company is entitled to exercise any such repurchase option or other right set forth in any such restricted securities agreement or other agreement.

(b) Transfers of Ownership. If certificates representing any Company Securities issued in the Securities Exchange are to be issued in a name other than that in which the certificates representing the Beacon Securities surrendered in exchange therefore are registered, it will be a condition of the issuance thereof that the certificates representing the Beacon Securities so surrendered will be properly endorsed and otherwise in proper form for transfer and that the persons requesting such exchange will have paid to the Company or any agent designated by it any transfer or other taxes required by reason of the issuance of certificates representing Company Securities in any name other than that of the registered holder of the certificates surrendered, or established to the satisfaction of the Company or any agent designated by it that such tax has been paid or is not payable.

(c) Limited Power of Attorney. Each Beacon Holder hereby expressly and irrevocably grants to the Chief Executive Officer of Beacon a limited special power of attorney constituting and appointing such officer as the attorney-in-fact for such Beacon Holder, with power and authority to act in his name and on his behalf, enter into and execute such documents, instruments and agreements, endorse for transfer any and all certificates or documents evidencing Beacon Securities, and to take such other reasonable actions as may be necessary to accomplish the Exchange and the Preferred Exchange, all in the name of and on behalf of each such Beacon Holder. Such limited power of attorney shall expire on February 29, 2008.

1.4 Procedure for the Securities Exchange.

(a) Standard Registrar and Transfer, the Company's transfer agent and registrar, shall be designated by the parties hereto to act as the exchange agent (the "Exchange Agent") in the Share Exchange.

(b) Prior to the Initial Closing Date, the Company shall make available to the Exchange Agent the shares of Company Common Stock, Company Notes and Company Warrants to be issued in the Exchange in exchange for the corresponding Beacon Securities, in accordance with the terms of this Agreement and as provided in Schedule 1.4(b) hereto.

(c) Immediately following the filing of the Restated Articles with the Secretary of State of Nevada, the Company shall make available to the Exchange Agent the Company Preferred Stock to be issued in the Preferred Exchange in exchange for the

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corresponding Beacon Preferred Stock in accordance with the terms of this Agreement and as provided in Schedule 1.4(c) hereto.

(d) Upon surrender to the Exchange Agent of the certificate or documents evidencing Beacon Securities, along with such other documents as the Exchange Agent may reasonably request in connection with the Exchange and the Preferred Exchange, the Exchange Agent shall deliver the appropriate Company Common Stock, Company Preferred Stock, Company Notes and Company Warrants (collectively, the "Company Securities") to such Beacon Holder in accordance with Section 1.1 hereof.

1.5 Tax Consequences. It is intended by the parties hereto that the Exchange shall constitute a reorganization within the meaning of Section 368 of the Code. The parties hereto adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

1.6 Investment Representation. All Company Securities issued in accordance with the terms hereof shall, when issued, be restricted securities and may not be sold, transferred or otherwise disposed of by the holders thereof without registration under the Securities Act of 1933, as amended (the "Securities Act") or an available exemption from registration under the Securities Act. The certificates or other documents representing the Company Securities issued in accordance with the terms hereof will contain the appropriate restrictive legends.

By execution of this Agreement, each of the Beacon Holders expressly represents and warrants to the Company and Beacon that he, she or it is an "accredited investor" (as defined under the Securities Act), except that up to 35 Beacon Holders may be permitted to not make such representation, and that:

(a) Each holder has and shall transfer, good and marketable title to the Beacon Securities owned by such holder, free and clear of all liens, claims, charges, encumbrances, pledges, mortgages, security interests, options, rights to acquire, proxies, voting trusts or similar agreements, restrictions on transfer or adverse claims of any nature whatsoever (the "Liens").

(b) Each holder is acquiring the Company Securities for investment for holder's own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and such holders have no present intention of selling, granting any participation in, or otherwise distributing the same. Each holder further represents that he does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Company Securities.

(c) Each holder understands that Company Securities are not registered under the Securities Act, that the issuance of Company Securities is intended to be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof or such other available exemptions under the Securities Act, and that the Company's reliance on such exemption is predicated on the holder's representations set forth herein. Each holder represents and warrants that: (i) he can bear the economic risk of his respective investments, and (ii) he possesses such

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knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the investment in Company Securities.

(d) Holders acknowledge that neither the Securities and Exchange Commission (the "SEC"), nor the securities regulatory body of any state has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

(e) Holders acknowledge that they have carefully reviewed such information as each of them deemed necessary to evaluate an investment in Company Securities. To the full satisfaction of each holder, he has been furnished all materials that he has requested relating to Company and the issuance of Company Securities hereunder, and each holder has been afforded the opportunity to ask questions of Company's representatives to obtain any information necessary to verify the accuracy of any representations or information made or given to the holders. Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of the Company set forth in this Agreement, on which each of the holders has relied in making an exchange of his Company Securities.

(f) Each of the Beacon Holders understands that Company Securities may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an available exemption therefrom, and that in the absence of an effective registration statement covering Company Securities or any available exemption from registration under the Securities Act, the Company Securities may have to be held indefinitely.

(g) The representations, warranties and agreements of each holder contained in this Agreement shall survive the closing of the Transactions.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
OF BEACON

Beacon hereby represents and warrants to, and covenants with, the Company, as follows:

2.1 Organization and Qualification.

(a) Beacon is a corporation duly incorporated or organized, validly existing and in good standing under the laws of the State of Indiana and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Beacon to be conducted. Beacon is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (the "Approvals") necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Beacon to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Beacon. Complete and correct copies of the articles of incorporation or organization and by-laws (or other comparable governing instruments with different names) (collectively referred to herein as "Charter Documents") of Beacon, as amended and currently in effect, have been heretofore

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delivered to the Company. Beacon is not in violation of any of the provisions of its Charter Documents.

(b) Beacon is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Beacon.

(c) The minute books of Beacon contain true, complete and accurate records of all meetings and consents in lieu of meetings of its Board of Directors (and any committees thereof), similar governing bodies and stockholders ("Corporate Records"), since the time of Beacon's organization. Copies of such Corporate Records of Beacon have been heretofore delivered to the Company.

(d) The stock transfer and ownership records of Beacon contain true, complete and accurate records of the stock ownership as of the date of such records and the transfers involving the capital stock of Beacon since the time of Beacon's organization. Copies of such stock records of Beacon have been heretofore delivered to the Company.

2.2 Subsidiaries. Beacon has a wholly-owned subsidiary, BH Acquisition Sub, Inc., a Nevada corporation, which has no operating assets or liabilities.

2.3 Capitalization.

(a) As of the Initial Closing Date, the authorized capital stock of Beacon shall consist of 25,000,000 shares of Beacon Common Stock and 4,500 shares of Beacon Preferred Stock. As of November 7, 2007 (i) 5,969,900 shares of Beacon Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) 3,225,000 shares of Beacon Common Stock were reserved for issuance upon the completion of Beacon's four (4) pending acquisitions (the "Four Beacon Acquisitions"), (iii) 1,166,664 shares of Beacon Common Stock were reserved for issuance upon the conversion of outstanding Beacon Notes in the aggregate principal amount of $700,000 (the "Beacon Conversion Shares"); and (iv) 5,333,333 shares of Beacon Common Stock have been reserved for issuance by Beacon upon the conversion of the 4,000 shares of Beacon Preferred Stock to be sold in the Equity Financing ("Preferred Conversion Shares"). In addition, as of the Initial Closing Date, there will be Beacon Warrants with a duration of five years to purchase an aggregate of up to 5,517,667 shares of Beacon Common Stock at a price of $1.00 per share. All shares of Beacon Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. Except as described in Schedule 2.3 hereto, there are no commitments or agreements of any character to which Beacon is bound obligating Beacon to accelerate the vesting of any Beacon Stock Option as a result of the Transactions. All outstanding securities of Beacon have been issued and granted in compliance with (i) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (ii) all requirements set forth in any applicable Contracts (as defined below). Beacon has heretofore delivered to the Company

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true, complete and accurate copies of Beacon Warrants and Beacon Notes, including any and all documents and agreements relating thereto.

(b) Except as set forth in Schedule 2.3 hereto, there are no equity securities or similar ownership interests of any class of any equity security of Beacon, or any securities exchangeable or convertible into or exercisable for such equity securities or similar ownership interests, issued, reserved for issuance or outstanding. Except as set forth in Schedule 2.3 hereof there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which Beacon is a party or by which it is bound obligating Beacon to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock or similar ownership interests of Beacon or obligating Beacon to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.

(c) Except as contemplated by this Agreement and except as set forth in Schedule 2.3 hereto, there are no registration rights, and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which Beacon is a party or by which Beacon is bound with respect to any equity security of any class of Beacon.

2.4 Authority Relative to this Agreement. Beacon has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and, to consummate the transactions contemplated hereby (including the Transactions). The execution and delivery of this Agreement and the consummation by Beacon of the transactions contemplated hereby (including the Transactions) have been duly and validly authorized by all necessary corporate action on the part of Beacon (including the approval by its Board of Directors), and no other corporate proceedings on the part of Beacon are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, other than the approval of this Agreement and the Transactions by the holders of a majority of the outstanding shares of Beacon Common Stock. This Agreement has been duly and validly executed and delivered by Beacon and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of Beacon, enforceable against Beacon in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity and public policy.

2.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by Beacon does not, and the performance of this Agreement by Beacon shall not, (i) conflict with or violate Beacon's Charter Documents, (ii) subject to obtaining the adoption of this Agreement and the Transactions by the stockholders of Beacon, conflict with or violate any Legal Requirements (as defined below), or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair Beacon's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the

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properties or assets of Beacon pursuant to, any Contracts, except, with respect to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Beacon.

(b) The execution and delivery of this Agreement by Beacon does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any court, administrative agency, commission, governmental or regulatory authority, domestic or foreign (a "Governmental Entity"), except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, state securities laws (the "Blue Sky Laws"), and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which Beacon is qualified to do business, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Beacon or, after the Initial Closing, the Company, or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

2.6 Compliance. To the knowledge of Beacon, it has complied with and is not in violation of any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Beacon. To Beacon's knowledge, the businesses and activities of Beacon have not been and are not being conducted in violation of any Legal Requirements. Beacon is not in default or violation of any term, condition or provision of any applicable Charter Documents or Contracts. Except as set forth on Schedule 2.6, to Beacon's knowledge no written notice of non-compliance with any Legal Requirements has been received by Beacon (and Beacon has no knowledge of any such notice delivered to any other Person). Except as set forth on Schedule 2.6, Beacon is not in violation of any term of any contract or covenant relating to employment, patents, proprietary information disclosure, non-competition or non-solicitation.

2.7 Financial Statements.

(a) Beacon has provided to the Company a correct and complete copy of the audited financial statements (including, in each case, any related notes thereto) of Beacon for the fiscal years ended December 31, 2005 and 2006, prepared in accordance with the published rules and regulations of any applicable Governmental Entity and with generally accepted accounting principles of the United States ("U.S. GAAP") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), were audited in accordance with the auditing standards of the Public Company Accounting Oversight Board ("PCAOB") by an independent accountant registered with PCAOB, and each fairly presents in all material respects the financial position of Beacon at the respective dates thereof and the results of its operations and cash flows for the periods indicated, and each does not 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 therein, in light of the circumstances under which they were made, not misleading.

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(b) Beacon has provided to the Company a correct and complete copy of the unaudited financial statements (including, in each case, any related notes thereto) of Beacon for the nine-month period ending September 30, 2007, which complied as to form in all material respects with, and were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the period involved (except as may be indicated in the notes thereto), and were reviewed by an independent accountant registered with PCAOB, and such statements fairly present in all material respects the financial position of each at the dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on Beacon.

(c) The books of account and other financial records of Beacon have been maintained in accordance with good business practice.

2.8 No Undisclosed Liabilities. Except as set forth in Schedule 2.8 hereto, Beacon has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to the financial statements prepared in accordance with U.S. GAAP which are, individually or in the aggregate, material to the business, results of operations or financial condition of Beacon, except: (i) liabilities provided for in or otherwise disclosed in the interim balance sheets of Beacon as of September 30, 2007 prepared in accordance with U.S. GAAP, which have been delivered to the Company, and (ii) such liabilities arising in the ordinary course of Beacon's business since September 30, 2007, none of which would have a Material Adverse Effect on Beacon.

2.9 Absence of Certain Changes or Events. Except as set forth in Schedule 2.9 hereto or in the interim balance sheets of Beacon as of September 30, 2007
(including the notes thereto), since September 30, 2007, there has not been: (i) any Material Adverse Effect on Beacon, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of Beacon's stock, or any purchase, redemption or other acquisition by Beacon of any of Beacon's capital stock or any other securities of Beacon or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of Beacon's capital stock, or any amendment or modification of the terms of any options, warrants or convertible securities of Beacon, (iv) any granting by Beacon of any increase in compensation or fringe benefits, except for normal increases of cash compensation in the ordinary course of business consistent with past practice, or any payment by Beacon of any bonus, except for bonuses made in the ordinary course of business consistent with past practice, or any granting by Beacon of any increase in severance or termination pay or any entry by Beacon into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving Beacon of the nature contemplated hereby, (v) entry by Beacon into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property (as defined in
Section 2.18 hereof) other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement filed or required to be filed by Beacon with respect to any Governmental Entity, (vi) any material change by Beacon in its accounting methods, principles or practices, (vii) any change in the auditors of Beacon,
(vii) any issuance of capital stock, options or warrants of Beacon, or (viii) any

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revaluation by Beacon of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of Beacon other than in the ordinary course of business.

2.10 Litigation. Except as disclosed in Schedule 2.10 hereto, there are no claims, suits, actions or proceedings pending, or to the knowledge of Beacon, threatened against Beacon, before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the Transactions or which could reasonably be expected, either singularly or in the aggregate with all such claims, actions or proceedings, to have a Material Adverse Effect on Beacon or have a Material Adverse Effect on the ability of the parties hereto to consummate the Transactions.

2.11 Employee Benefit Plans.

(a) Except as disclosed on Schedule 2.11, all employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document) covering any active or former employee, director or consultant of Beacon, or any trade or business (whether or not incorporated) which is under common control with Beacon, with respect to which Beacon has liability (collectively, the "Plans") has been maintained and administered in all material respects in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Plans, and all liabilities with respect to the Plans have been properly reflected in the financial statements of Beacon. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or to the knowledge of Beacon is threatened, against or with respect to any such Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of Beacon, threatened by any governmental agency with respect to any Plans. Except as disclosed on Schedule 2.11, all contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued. Except as disclosed on Schedule 2.11, Beacon does not have any plan or commitment to establish any new Plan, to modify any Plan (except to the extent required by law or to conform any such Plan to the requirements of any applicable law, in each case as previously disclosed to Beacon in writing, or as required by this Agreement), or to enter into any new Plan. Each Plan can be amended, terminated or otherwise discontinued after the Initial Closing in accordance with its terms, without liability to Beacon (other than ordinary administration expenses and expenses for benefits accrued but not yet paid).

(b) Except as disclosed on Schedule 2.11 hereto or set forth herein in Section 2.9, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any Stockholder, director or employee of Beacon under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

2.12 Labor Matters. Except as disclosed in Schedule 2.12 hereto, Beacon is not a party to any collective bargaining agreement or other labor union contract applicable to persons

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employed by Beacon nor does Beacon know of any activities or proceedings of any labor union to organize any such employees.

2.13 Restrictions on Business Activities. Except as disclosed on Schedule 2.13 hereto, to Beacon's knowledge there is no agreement, commitment, judgment, injunction, order or decree binding upon Beacon or to which Beacon is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Beacon, any acquisition of property by Beacon or the conduct of business by Beacon as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on Beacon.

2.14 Title to Property.

(a) Beacon does not own or lease real property (the "Real Property"). There are no options or other contracts under which Beacon has a right to acquire any interest in real property.

(b) All leases of real property held by Beacon and all personal property and other property and assets of Beacon (other than Real Property) owned, used or held for use in connection with the business of Beacon (the "Personal Property") are shown or reflected on the interim balance sheets of Beacon prepared in accordance with U.S. GAAP. Beacon owns and has good and marketable title to the Personal Property, and all such assets and properties are in each case held free and clear of all Liens, except for Liens disclosed in the financial statements of Beacon prepared in accordance with U.S. GAAP or in Schedule 2.14 hereto, none of which Liens has or will have, individually or in the aggregate, a Material Adverse Effect on such property or on the present or contemplated use of such property in the businesses of Beacon.

(c) All leases pursuant to which Beacon leases from others material Real Property or Personal Property are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default of Beacon or, to Beacon's knowledge, any other party (or any event which with notice or lapse of time, or both, would constitute a material default), except where the lack of such validity and effectiveness or the existence of such default or event of default could not reasonably be expected to have a Material Adverse Effect on Beacon.

2.15 Taxes.

(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or "Taxes" refers to any and all federal, state, local and foreign taxes, including, without limitation, gross receipts, income, profits, sales, use, occupation, value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, assessments, governmental charges and duties together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

(b) Tax Returns and Audits.

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(i) Beacon has timely filed all federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (the "Returns") required to be filed by Beacon with any Tax authority prior to the date hereof, except such Returns which are not material to Beacon. All such Returns are true, correct and complete in all material respects. Beacon has paid all Taxes shown to be due on such Returns.

(ii) All Taxes that Beacon is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

(iii) Beacon has not been delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, proposed or assessed against Beacon, nor has Beacon executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

(iv) No audit or other examination of any Return of Beacon by any Tax authority is presently in progress, nor has Beacon been notified of any request for such an audit or other examination.

(v) No adjustment relating to any Returns filed by Beacon has been proposed in writing, formally or informally, by any Tax authority to Beacon or any representative thereof.

(vi) Beacon has no liability for any material unpaid Taxes which have not been accrued for or reserved on Beacon's balance sheets included in the audited financial statements for the most recent fiscal year ended, whether asserted or unasserted, contingent or otherwise, which is material to Beacon, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of Beacon in the ordinary course of business, none of which is material to the business, results of operations or financial condition of Beacon.

(vii) Beacon has not taken any action and does not know of any fact, agreement, plan or other circumstance that is reasonably likely to prevent the Transactions from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

2.16 Environmental Matters.

(a) Except as disclosed in Schedule 2.16 hereto and except for such matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect to Beacon's knowledge: (i) Beacon has complied with all applicable Environmental Laws; (ii) the properties currently owned or operated by Beacon (including soils, groundwater, surface water, buildings or other structures) are not contaminated with any Hazardous Substances; (iii) the properties formerly owned or operated by Beacon were not contaminated with Hazardous

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Substances during the period of ownership or operation by Beacon; (iv) Beacon is not subject to liability for any Hazardous Substance disposal or contamination on any third party property; (v) Beacon has not been associated with any release or threat of release of any Hazardous Substance; (vi) Beacon has not received any notice, demand, letter, claim or request for information alleging that Beacon may be in violation of or liable under any Environmental Law; and (vii) Beacon is not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

(b) As used in this Agreement, the term "Environmental Law" means any federal, state, local or foreign law, regulation, order, decree, permit, authorization, opinion, common law or agency requirement relating to: (A) the protection, investigation or restoration of the environment, health and safety, or natural resources; (B) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination or any injury or threat of injury to persons or property.

(c) As used in this Agreement, the term "Hazardous Substance" means any substance that is: (i) listed, classified or regulated pursuant to any Environmental Law; (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; or (iii) any other substance which is the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law.

2.17 Brokers; Third Party Expenses. Except as disclosed on Schedule 2.17, and defined in Section 5.9, and except as payable under the Placement Agreement (as defined herein), (i) Beacon has not incurred, nor will it incur, directly or indirectly, any liability for brokerage, finders' fees, agent's commissions or any similar charges in connection with this Agreement or any transactions contemplated hereby; and (ii) no shares of common stock, options, warrants or other securities of Beacon are payable to any third party by Beacon as a result of the Transactions.

2.18 Intellectual Property. For the purposes of this Agreement, the following terms have the following definitions:

"Intellectual Property" shall mean any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefore and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof ("Patents"); (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) domain names, uniform resource locators ("URLs") and other names and locators associated with the Internet ("Domain Names"); (v) industrial designs and any registrations and applications therefor; (vi) trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor (collectively, "Trademarks");
(vii) all databases and data collections and all rights

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therein; (viii) all moral and economic rights of authors and inventors, however denominated, and (ix) any similar or equivalent rights to any of the foregoing (as applicable).

"Beacon Intellectual Property" shall mean any Intellectual Property that is owned by, or exclusively licensed to, Beacon.

"Registered Intellectual Property" means all Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any private, state, government or other legal authority.

"Beacon Registered Intellectual Property" means all of the Registered Intellectual Property owned by, or filed in the name of, Beacon.

"Beacon Products" means all current versions of products or service offerings of Beacon.

(a) Except as disclosed on Schedule 2.18, to Beacon's knowledge, Beacon Intellectual Property and Beacon Products are not subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by Beacon, or which may affect the validity, use or enforceability of such Beacon Intellectual Property or Beacon Products, which in any such case could reasonably be expected to have a Material Adverse Effect on Beacon.

(b) Except as disclosed on Schedule 2.18 hereto, Beacon owns and has good and exclusive title to each material item of Beacon Intellectual Property owned by it free and clear of any Liens (excluding non-exclusive licenses and related restrictions granted in the ordinary course); and Beacon is the exclusive owner of all material Beacon Registered Intellectual Property used in connection with the operation or conduct of the business of Beacon including the sale of any products or the provision of any services by Beacon.

(c) Except as disclosed on Schedule 2.18, the operation of the business of Beacon as such business currently is conducted, including (i) the design, development, manufacture, distribution, reproduction, marketing or sale of the products or services of Beacon (including Beacon Products) and (ii) Beacon's use of any product, device or process, to Beacon's knowledge and except as could not reasonably be expected to have a Material Adverse Effect, has not and does not and will not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction.

2.19 Agreements, Contracts and Commitments. (a) Schedule 2.19 hereto sets forth a complete and accurate list of all Material Contracts (as hereinafter defined), specifying the parties thereto. For purposes of this Agreement, (i) the term "Contracts" shall mean all contracts, agreements, leases, mortgages, indentures, note, bond, liens, license, permit, franchise, purchase orders, sales orders, arbitration awards, judgments, decrees, orders, documents, instruments, understandings and commitments, or other instrument or obligation (including without limitation outstanding offers or proposals) of any kind, whether written or oral, to which Beacon is a party or by or to which any of the properties or assets of Beacon may be bound, subject or affected (including without limitation notes or other instruments payable to Beacon)

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and (ii) the term "Material Contracts" shall mean (x) each Contract (I) providing for payments (past, present or future) to Beacon in excess of $50,000 in the aggregate or (II) under which or in respect of which Beacon presently has any liability or obligation of any nature whatsoever (absolute, contingent or otherwise) in excess of $50,000, (y) each Contract which otherwise is or may be material to the businesses, operations, assets, condition (financial or otherwise) or prospects of Beacon and (z) without limitation of subclause (x) or subclause (y), each of the following Contracts:

(i) any mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by or from Beacon, or any officer, director or 5% or more stockholder (the "Insider") of Beacon;

(ii) any guaranty, direct or indirect, by Beacon or any Insider of Beacon of any obligation for borrowings, or otherwise, excluding endorsements made for collection in the ordinary course of business;

(iii) any Contract made other than in the ordinary course of business or (x) providing for the grant to any preferential rights to purchase or lease any asset of Beacon or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution of, any product or service of Beacon;

(iv) any obligation to register any shares of the capital stock or other securities of Beacon with any Governmental Entity;

(v) any obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons;

(vi) any collective bargaining agreement with any labor union;

(vii) any lease or similar arrangement for the use by Beacon of personal property;

(viii) any Contract granting or purporting to grant, or otherwise in any way relating to, any mineral rights or any other interest (including, without limitation, a leasehold interest) in real property; and

(ix) any Contract to which any Insider of Beacon is a party.

(b) Except as set forth on Schedule 2.19, each Contract was entered into at arms' length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all Material Contracts (or written summaries in the case of oral Material Contracts) and of all outstanding offers or proposals of Beacon has have been heretofore delivered to the Company.

(c) Except as set forth in Schedule 2.19, neither Beacon nor to the best of Beacon's knowledge any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Contract, and no party to any Contract has given any written notice of any claim of any such

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breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Beacon. Each agreement, contract or commitment to which Beacon are a party or by which they are bound that has not expired by its terms is in full force and effect, except where such failure to be in full force and effect is not reasonably likely to have a Material Adverse Effect on Beacon.

2.20 Insurance. Schedule 2.20 sets forth Beacon's insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors (collectively, the "Insurance Policies") of Beacon which Beacon reasonably believes are adequate in amount and scope for the Business in which they are engaged.

2.21 Governmental Actions/Filings. Beacon has been granted and holds, and has made, all Governmental Actions/Filings necessary to the conduct by Beacon of its businesses (as presently conducted and as presently proposed to be conducted) or used or held for use by Beacon, all of which are listed in Schedule 2.21 hereto, and true, complete and correct copies of which have heretofore been delivered to the Company. Each such Governmental Action/Filing is in full force and effect and, expect as disclosed in Schedule 2.21 hereto, will not expire prior to December 31, 2007, and Beacon is in compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings. Except as set forth in Schedule 2.21, to Beacon's knowledge no Governmental Action/Filing is necessary to be obtained, secured or made by Beacon to enable it to continue to conduct its businesses and operations and use its properties after the Initial Closing in a manner which is consistent with current practice.

For purposes of this Agreement, the term "Governmental Action/Filing" shall mean any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal, foreign or other governmental, administrative or judicial body, agency or authority.

2.22 Interested Party Transactions. Except as set forth in the Schedule 2.22 hereto, no employee, officer, director or stockholder of Beacon or a member of his or her immediate family is indebted to Beacon, nor is Beacon indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of Beacon, and (iii) for other employee benefits made generally available to all employees. Except as set forth in Schedule 2.22, to Beacon's knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom Beacon is affiliated or with whom Beacon has a contractual relationship, or any Person that competes with Beacon, except that each employee, stockholder, officer or director of Beacon and members of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with Beacon. Except as set forth in Schedule 2.22, to the knowledge of Beacon, no officer, director or stockholder or any member of their immediate families is, directly or indirectly, interested in any material contract with Beacon (other than such contracts as relate to any such individual ownership of capital stock or other securities of Beacon).

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2.23 Board Approval. The board of directors of Beacon or similar governing body (including any required committee or subgroup of thereof) has, as of the date of this Agreement, unanimously approved, subject to the approval of stockholders, this Agreement and the transactions contemplated hereby, and resolved to seek the stockholders approval and adoption of this Agreement and approval of the Transactions.

2.24 Representations and Warranties Complete. The representations and warranties of Beacon included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and covenants with, Beacon, as follows:

3.1 Organization and Qualification.

(a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by the Company to be conducted. The Company is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by the Company to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company. Complete and correct copies of the Charter Documents of the Company, as amended and currently in effect, have been heretofore delivered to Beacon. The Company is not in violation of any of the provisions of the Company's Charter Documents.

(b) The Company is duly qualified to do business as a foreign corporation and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company.

(c) The minute books of the Company contain true, complete and accurate Corporate Records, since the time of the Company's organization. Copies of such Corporate Records of the Company have been heretofore delivered to Beacon.

(d) The stock transfer and ownership records of the Company contain true, complete and accurate records of the stock ownership as of the date of such records and the transfers involving the capital stock of the Company since the time of the Company's

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organization. Copies of such Stock Records of the Company have been heretofore delivered to Beacon.

3.2 Subsidiaries. The Company has no Subsidiaries.

3.3 Capitalization.

(a) The authorized capital stock of the Company shall consist of 70,000,000 shares of Company Common Stock and 5,000,000 shares of Company Preferred Stock. At the close of business on the Initial Closing Date, (i) 1,273,121 shares of the Company Common Stock will be issued and outstanding, all of which are validly issued, fully paid and nonassessable (ii) no shares of the Company Preferred Stock will be issued and outstanding; (iii) no shares of the Company Common Stock will be reserved for issuance upon the exercise of outstanding options to purchase Company Common Stock granted to certain employees of Company or other parties (the "Company Stock Options"); (iv) no shares of the Company Common Stock will be reserved for issuance upon the exercise of outstanding warrants to purchase the Company Common Stock; and (v) no shares of the Company Common Stock will be reserved for issuance upon the conversion of any outstanding convertible notes, debentures or securities. All shares of Company Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of the Company Common Stock have been issued and granted in compliance with (i) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (ii) all requirements set forth in any applicable Contracts.

(b) There are no equity securities, partnership interests or similar ownership interests of any class of any equity security of the Company, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding. There are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity (or other) security, call, right, commitment or agreement.

(c) There are no registration rights, rights of first refusal, anti-dilution rights and/or similar rights and there is no voting trust, proxy, rights plan, anti-takeover plan or other agreement or understanding to which the Company is a party or by which it is bound with respect to any equity security of any class of the Company.

3.4 Authority Relative to this Agreement. The Company has full corporate power and authority to: (i) execute, deliver and perform this Agreement, and each ancillary document which the Company has executed or delivered or is to execute or deliver pursuant to this Agreement, and (ii) carry out the Company's obligations hereunder and thereunder and, to

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consummate the transactions contemplated hereby (including the Transactions). The execution and delivery of this Agreement and the consummation by the Company of the transactions contemplated hereby (including the Transactions) have been duly and validly authorized by all necessary corporate action on the part of the Company (including the approval by its Board of Directors), and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, other than the approval of this Agreement and the Transactions by a majority of the Company's stockholders. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity and public policy.

3.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company shall not: (i) conflict with or violate the Company's Charter Documents, (ii) conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the Company's rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Company pursuant to, any Contracts, except, with respect to clauses (ii) or
(iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Company.

(b) The execution and delivery of this Agreement by the Company does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which Company is qualified to do business, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

3.6 Compliance. To the Company's knowledge, the Company has complied with, is not in violation of, any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on the Company. To the Company's knowledge, the businesses and activities of the Company have not been and are not being conducted in violation of any Legal Requirements. the Company is not in default or violation of any term, condition or provision of its Charter Documents. To the Company's knowledge, no written notice of non-compliance with any Legal Requirements has been received by the Company.

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3.7 SEC Filings; Financial Statements; Bulletin Board.

(a) The Company has made available to Beacon a correct and complete copy of each report, registration statement and definitive proxy statement filed by the Company with the SEC for the 36 months prior to the date of this Agreement (the "Company SEC Reports"), which, to the Company's knowledge, are all the forms, reports and documents required to be filed by the Company with the SEC for the 36 months prior to the date of this Agreement. As of their respective dates, to the Company's knowledge, the Company SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such the Company SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superceded) 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 therein, in light of the circumstances under which they were made, not misleading. Except to the extent set forth in the preceding sentence, the Company makes no representation or warranty whatsoever concerning the Company SEC Reports as of any time other than the time they were filed.

(b) To the Company's knowledge, each set of financial statements (including, in each case, any related notes thereto) contained in the Company SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, was prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-QSB of the Exchange Act) and each fairly presents in all material respects the financial position of the Company at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on the Company taken as a whole.

(c) The Company has previously furnished to Beacon a complete and correct copy of any amendments or modifications, which have not yet been filed with the SEC but which are required to be filed, to agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act or the Exchange Act.

(d) The Company Stock is currently subject to quotation on the FINRA Over-the-Counter Bulletin Board ("OTC BB") and has received no notice that such quotation will be discontinued.

3.8 No Undisclosed Liabilities. The Company has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to the financial statements prepared in accordance with U.S. GAAP which are, individually or in the aggregate, material to the business, results of operations or financial condition of the Company, except (i) liabilities provided for in or otherwise disclosed in the Company SEC Reports filed prior to the date hereof, (ii) liabilities incurred since September 30, 2007 in the

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ordinary course of business, none of which would have a Material Adverse Effect on the Company, and (iii) those liabilities and obligations specifically set forth in Section 5.8.

3.9 Absence of Certain Changes or Events. Except as set forth in the Company SEC Reports filed prior to the date of this Agreement, and except as contemplated by this Agreement, since December 31, 2006, there has not been: (i) any Material Adverse Effect on the Company, (ii) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company's capital stock, or any purchase, redemption or other acquisition by the Company of any of the Company's capital stock or any other securities of the Company or any options, warrants, calls or rights to acquire any such shares or other securities, (iii) any split, combination or reclassification of any of the Company's capital stock, (iv) any granting by the Company of any increase in compensation or fringe benefits, except for normal increases of cash compensation in the ordinary course of business consistent with past practice, or any payment by the Company of any bonus, except for bonuses made in the ordinary course of business consistent with past practice, or any granting by the Company of any increase in severance or termination pay or any entry by the Company into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby, (v) entry by the Company into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to any licensing agreement filed or required to be filed by the Company with respect to any Governmental Entity, (vi) any material change by the Company in its accounting methods, principles or practices, except as required by concurrent changes in U.S. GAAP, (vii) any change in the auditors of the Company, (vii) any issuance of capital stock of the Company, or (viii) any revaluation by the Company of any of their respective assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of the Company other than in the ordinary course of business.

3.10 Litigation. Except as set forth in the Company SEC Reports, there are no claims, suits, actions or proceedings pending or, to the Company's knowledge, threatened against the Company, before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the transactions contemplated by this Agreement or which could reasonably be expected, either singularly or in the aggregate with all such claims, actions or proceedings, to have a Material Adverse Effect on the Company or have a Material Adverse Effect on the ability of the parties hereto to consummate the Transactions.

3.11 Employee Benefit Plans. The Company does not maintain, and has no liability under, any Plan, and neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any stockholder, director or employee of the Company, or (ii) result in the acceleration of the time of payment or vesting of any such benefits.

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3.12 Labor Matters. The Company is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company, nor does the Company know of any activities or proceedings of any labor union to organize any such employees.

3.13 Restrictions on Business Activities. To the Company's knowledge, there is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or to which the Company is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company, any acquisition of property by the Company or the conduct of business by the Company as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have, a Material Adverse Effect on the Company.

3.14 Title to Property. The Company does not own or lease any Real Property or Personal Property. There are no options or other contracts under which the Company has a right or obligation to acquire or lease any interest in Real Property.

3.15 Taxes. To the Company's knowledge:

(a) The Company has timely filed all Returns required to be filed by the Company with any Tax authority prior to the date hereof, except such Returns which are not material to the Company. All such Returns are true, correct and complete in all material respects. The Company has paid all Taxes shown to be due on such Returns.

(b) The Company has no liability for any material unpaid Taxes and has net operating loss carry forwards available to offset future taxable income.

(c) The Company has not taken any action and does not know of any fact, agreement, plan or other circumstance that is reasonably likely to prevent the Transactions from qualifying as a reorganization within the meaning of
Section 368(a) of the Code.

3.16 Environmental Matters. To the Company's knowledge it has complied with all applicable Environmental Laws. The Company does not own and has not owned any real properties subject to Environmental Laws and has not conducted operations subject to Environmental Laws.

3.17 Brokers. Except for the obligations for the Closing Payment (as defined in Section 5.9), the Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders' fees or agent's commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby.

3.18 Intellectual Property. The Company does not own, license or otherwise have any right, title or interest in any Intellectual Property or Registered Intellectual Property.

3.19 Agreements, Contracts and Commitments.

(a) Except for the Closing Payment, the agreements with Transfer Agent, and as set forth in the Company SEC Reports, to the Company's knowledge, there are no contracts,

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agreements, leases, mortgages, indentures, note, bond, liens, license, permit, franchise, purchase orders, sales orders, arbitration awards, judgments, decrees, orders, documents, instruments, understandings and commitments, or other instrument or obligation (including without limitation outstanding offers or proposals) of any kind, whether written or oral, to which the Company is a party or by or to which any of the properties or assets of the Company may be bound, subject or affected, which either (a) creates or imposes a liability greater than $5,000, or (b) may not be cancelled by the Company on less than 30 days' or less prior notice (the "Company Contracts").

(b) Each Company Contract was entered into at arms' length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all the Company Contracts (or written summaries in the case of oral the Company Contracts) and of all outstanding offers or proposals of the Company have been heretofore delivered to Beacon.

(c) Neither the Company nor, to the knowledge of the Company, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Company Contract, and no party to any Company Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on the Company. Each agreement, contract or commitment to which the Company is a party or by which it is bound that has not expired by its terms is in full force and effect, except where such failure to be in full force and effect is not reasonably likely to have a Material Adverse Effect on the Company.

3.20 Insurance. The Company does not maintain any Insurance Policies.

3.21 Governmental Actions/Filings. The Company has been granted and holds, and has made, all Governmental Actions/Filings necessary to the conduct by the Company of its businesses (as presently conducted) or used or held for use by the Company, and true, complete and correct copies of which have heretofore been delivered to Beacon. Each such Governmental Action/Filing is in full force and effect and the Company is in compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or the ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings. To the Company's knowledge, no Governmental Action/Filing is necessary to be obtained, secured or made by the Company to enable it to continue to conduct its businesses and operations and use its properties after the Initial Closing in a manner which is consistent with current practice.

3.22 Interested Party Transactions. Except as set forth in the Company's SEC Reports, no employee, officer, director or stockholder of the Company or a member of his or her immediate family is indebted to the Company, nor is the Company indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, and
(iii) for other employee benefits made generally available to all employees.

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Except as set forth in the Company's SEC Reports, to the Company's knowledge, none of such individuals has any direct or indirect ownership interest in any Person with whom the Company is affiliated or with whom the Company has a material contractual relationship, or any Person that competes with the Company, except that each employee, stockholder, officer or director of the Company and members of their respective immediate families may own less than 5% of the outstanding stock in publicly traded companies that may compete with the Company. To the Company's knowledge, no officer, director or stockholder or any member of their immediate families is, directly or indirectly, interested in any material contract with the Company (other than such contracts as relate to any such individual ownership of capital stock or other securities of the Company).

3.23 Indebtedness; Company Assets. Except as set forth in the Company's SEC Reports, the Company has no indebtedness for borrowed money. Any indebtedness for borrowed money shall be paid in full or otherwise satisfied prior to or at the Initial Closing. Immediately prior to the Initial Closing, the Company will have no assets.

3.24 Exchange Act Reporting. The Company is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the shares of the Company's common stock have been duly and properly registered under Section 12(g) of the Exchange Act, and the Company is in compliance with all of the requirements under, and imposed by, Section 12(g) of the Exchange Act, except where a failure to so comply is not reasonably likely to have a Material Adverse Effect on the Company.

3.25 Board Approval. The Board of Directors of the Company (including any required committee or subgroup of the Board of Directors of the Company) has, as of the date of this Agreement, unanimously (i) declared the advisability of the Transactions and approved this Agreement and the transactions contemplated hereby, and (ii) determined that the Transactions are in the best interests of the stockholders of the Company.

3.26 Representations and Warranties Complete. The representations and warranties of the Company included in this Agreement and any list, statement, document or information set forth in, or attached to, any Schedule provided pursuant to this Agreement or delivered hereunder, are true and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading, under the circumstance under which they were made.

ARTICLE IV

CONDUCT PRIOR TO THE INITIAL CLOSING

4.1 Conduct of Business by Company and Beacon. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Initial Closing, each of the Company and Beacon shall, except to the extent that the other party shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where

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noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement, without the prior written consent of the other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Initial Closing, each of the Company and Beacon shall not do any of the following:

(a) Except as disclosed on Schedule 4.1(a), waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;

(b) Grant any severance or termination pay to any officer or employee except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof and as previously or concurrently disclosed in writing or made available to the other party, or adopt any new severance plan, or amend or modify or alter in any manner any severance plan, agreement or arrangement existing on the date hereof;

(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company or Beacon, as applicable, or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business consistent with past practices provided that in no event shall the Company or Beacon license on an exclusive basis or sell any Intellectual Property of the Company, or Beacon as applicable;

(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock, or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock, or amend or modify the terms of any options, warrants or convertible securities;

(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company and Beacon, as applicable, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;

(f) Except for the Equity Financing, issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities;

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(g) Amend its Charter Documents;

(h) Except as contemplated by Schedule 6.1(f) hereto, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Beacon or the Company as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party's ability to compete or to offer or sell any products or services;

(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except sales of inventory in the ordinary course of business consistent with past practice and, except for the sale, lease or disposition (other than through licensing) of property or assets which are not material, individually or in the aggregate, to the business of such party;

(j) Incur any indebtedness for borrowed money in excess of $10,000 in the aggregate or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Beacon or the Company, as applicable, enter into any "keep well" or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing;

(k) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable "at will"), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, except in the ordinary course of business consistent with past practices;

(l) Except as disclosed in Schedule 4.1(1) hereto, (i) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practices or in accordance with their terms, or liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of Beacon or of the Company included in the Company SEC Reports, as applicable, or incurred since the date of such financial statements, or (ii) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which Beacon is a party or of which Beacon is a beneficiary, as applicable;

(m) Except in the ordinary course of business consistent with past practices, modify, amend or terminate any Contract of the Company, or Beacon, as applicable, or other

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material contract or material agreement to which the Company, or Beacon is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;

(n) Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;

(o) Except as set forth in Schedule 4.1(o) hereto or in the ordinary course of business consistent with past practices, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $10,000 in any 12 month period;

(p) Engage in any action that could reasonably be expected to cause the Transactions to fail to qualify as a "reorganization" under Section 368(a) of the Code;

(q) Except as contemplated by Article V herein or as set forth in Schedule 4.1(q) hereto, settle any litigation;

(r) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;

(s) Form, establish or acquire any Subsidiary;

(t) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans; or

(u) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Sections 4.1 (a) through (t) above.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 Required Actions.

(a) At the time of Initial Closing and effective upon the Share Exchange, the Company's current board of directors and officers will resign, effective upon the designation of designees of Beacon as the Company's new board members and officers.

(b) Beacon shall prepare and deliver to the Company no later than at the Initial Closing, a current report on Form 8-K announcing the Initial Closing, which shall include all information required by such form, including without limitation the information required by Form 10-SB with respect to Beacon, the U.S. GAAP Financial Statements and the Company Pro Forma Financial Statements (as defined below) ("Transaction Form 8-K"), which shall be in a form reasonably acceptable to the Company. Prior to the Initial Closing, Beacon shall prepare a

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press release announcing the consummation of the Transactions hereunder (the "Press Release"). Following the Initial Closing, the Company shall file the Transaction Form 8-K with the SEC and distribute the Press Release.

(c) Prior to Initial Closing, Beacon shall deliver to the Company the audited financial statements of Beacon for the fiscal year ended December 31, 2005 and 2006, which financial statements shall comply in all material respects with the published rules and regulations of the SEC, shall be prepared in accordance with U.S. GAAP applied on a consistent basis throughout the period involved, were audited in accordance with the auditing standards of the PCAOB by an independent accountant registered with PCAOB (the "Accountant"), and such statements fairly present in all material respects the financial position of Beacon at the dates thereof and the results of its operations and cash flows for the periods indicated, and (ii) (collectively, the "U.S. GAAP Financial Statements"). As soon as practical following the date hereof, Beacon shall deliver to the Company the unaudited financial statements (including, in each case, any related notes thereto) of Beacon for the nine month period ended September 30, 2007, which financial statements shall comply in all material respects with the published rules and regulations of the SEC, shall be prepared in accordance with U.S. GAAP applied on a consistent basis throughout the period involved (except as may be indicated in the notes thereto), were reviewed by an independent accountant registered with PCAOB, and such statements fairly present in all material respects the financial position of each at the dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on Beacon ("Interim Financial Statements").

(d) The annual financial statements included in the U.S. GAAP Financial Statements and the Interim Financial Statements shall have been audited and reviewed, respectively, by the Accountant, and Beacon shall provide the Company with its permission, and shall cause the Accountant to provide its permission, to include such financial statements in any SEC filings by the Company or Beacon in a timely manner ("Permissions").

(e) As soon as practical following the date hereof, Beacon shall deliver to the Company pro forma consolidated financial statements for Beacon and the Company giving effect to the Transactions, for such periods as required by the SEC to be included in a Form 8-K or any other report or form required to be filed with the SEC at or after the Initial Closing with respect to the Transactions, all prepared in all material respects with the published rules and regulations of the SEC and in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (the "Pro Forma Financial Statements"). The Pro Forma Financial Statements shall have been reviewed by, the Accountant and shall be in a format acceptable for inclusion on the Transaction 8-K.

(f) As soon as practicable after the Initial Closing, the Company, with the assistance of Beacon, shall prepare an information statement pursuant to Rule 14(c) promulgated under Section 14A of the Exchange Act (together with any amendments or supplements thereto, the "Information Statement") in connection with the matters addressed in the Restated Articles as contemplated by Section 5.1(g) ("Stockholder Matters"). Beacon shall reasonably cooperate with the Company and provide such information available to it as may be necessary or required, in the reasonable determination of counsel to the Company and Beacon, for the Company to

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prepare the Information Statement including, without limitation, the delivery of the U.S. GAAP Financial Statements (as defined below). As soon as practicable after the Initial Closing, the Company shall obtain the written consent of such stockholders of the Company as necessary to approve the Stockholder Matters, such consent to be effective twenty (20) days following the filing of the definitive Information Statement with the SEC. Upon receipt of such written consent, the Company will file the Information Statement with the SEC and shall cause such Information Statement to become definitive and to be mailed to the holders of the Company's securities entitled to vote at a meeting of stockholders. In the event the Information Statement is reviewed by the SEC, the Company shall respond promptly to any comments of the SEC or its staff with respect to the Information Statement and use its reasonable best efforts to have the Information Statement cleared by the SEC as soon as practicable after its filing.

(g) Immediately following the effectiveness of the Information Statement, the Company will file the Restated Articles with the Nevada Secretary of State.

The Company and Beacon shall further cooperate with each other and use their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement and applicable laws to consummate the Transactions and the other transactions contemplated hereby as soon as practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and other filings and to obtain as soon as practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate the Transactions or any of the other transactions contemplated hereby. Subject to applicable laws relating to the exchange of information and the preservation of any applicable attorney-client privilege, work-product doctrine, self-audit privilege or other similar privilege, each of the Company and Beacon shall have the right to review and comment on in advance, and to the extent practicable each will consult the other on, all the information relating to such party, that appear in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Transactions and the other transactions contemplated hereby. In exercising the foregoing right, each of the Company and Beacon shall act reasonably and as promptly as practicable.

5.2 Required Information. In connection with the preparation of the Transaction Form 8-K, the Information Statement, and Press Release, and for such other reasonable purposes, the Company and Beacon each shall, upon request by the other, furnish the other with all information concerning themselves, their respective directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with the Transactions, or any other statement, filing, notice or application made by or on behalf of the Company and Beacon to any third party and/or any Governmental Entity in connection with the Transactions and the other transactions contemplated hereby. Each party warrants and represents to the other party that all such information shall be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

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5.3 Confidentiality; Access to Information.

(a) Any confidentiality agreement previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement. Each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement. Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party;
(ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of confidentiality; and (iv) disclosure required by law. In the event this Agreement is terminated as provided in Article VIII hereof, each party will return or cause to be returned to the other all documents and other material obtained from the other in connection with the Transactions contemplated hereby.

(b) Access to Information.

(i) The Company will afford Beacon and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of the Company during the period prior to the Initial Closing to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of the Company, as Beacon may reasonably request. No information or knowledge obtained by Beacon in any investigation pursuant to this
Section 5.3 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transactions.

(ii) Beacon will afford the Company and its financial advisors, underwriters, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Beacon during the period prior to the Initial Closing to obtain all information concerning the business, including the status of product development efforts, properties, results of operations and personnel of Beacon, as the Company may reasonably request. No information or knowledge obtained by the Company in any investigation pursuant to this Section 5.3 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transactions.

5.4 No Solicitation. Other than with respect to the Transactions, each of the Company and Beacon agrees that neither it nor any of its officers and directors shall, and that it shall direct and use its reasonable best efforts to cause its agents and other representatives (including any investment banker, attorney or accountant retained by it) not to, directly or indirectly, initiate, solicit, encourage or otherwise facilitate any inquiries or the making of any proposal or offer with respect to (i) a merger, reorganization, share exchange, consolidation or similar transaction involving it, (ii) any sale, lease, exchange, mortgage, pledge, transfer or purchase of all or substantially all of the assets or equity securities of, it and its Subsidiaries, taken as a whole, in a single transaction or series of related transactions, or (iii) any tender offer

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or exchange offer for 20% or more of the outstanding shares of Beacon Common Stock or the Company Common Stock (any such proposal or offer being hereinafter referred to as an "Acquisition Proposal"). Each of the Company and Beacon further agrees that neither such party nor any officers or director of such party shall, and that each such party shall direct and use its reasonable best efforts to cause its agents and representatives not to, directly or indirectly, engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal. Each of the Company and Beacon agrees that it will immediately cease and cause to be terminated any existing discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal. Each of the Company and Beacon agrees that it will take the necessary steps to promptly inform the individuals or entities referred to in the first sentence hereof of the obligations undertaken in this Section 5.4.

5.5 Public Disclosure. Except to the extent previously disclosed or to the extent the parties believe that they are required by applicable law or regulation to make disclosure, prior to the Initial Closing, no party shall issue any statement or communication to the public regarding the Transactions without the consent of the other party, which consent shall not be unreasonably withheld. To the extent a party hereto believes it is required by law or regulation to make disclosure regarding the Transactions, it shall, if possible, immediately notify the other party prior to such disclosure. Notwithstanding the foregoing, the parties hereto agree that the Company will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement and that the Company's stockholders may file any reports as required by the Exchange Act including, without limitation, any reports on Schedule 13D.

5.6 Reasonable Efforts; Notification.

(a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transactions and the other transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers, consents, approvals, orders and authorizations from Governmental Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the obtaining of all consents, approvals or waivers from third parties required as a result of the transactions contemplated in this Agreement, (iv) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (v) the execution or delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the foregoing, Beacon and its board of

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directors and the Company and its board of directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Transactions, this Agreement or any of the transactions contemplated by this Agreement, use its commercially reasonable efforts to enable the Transactions and the other transactions contemplated by this Agreement to be consummated as promptly as practicable on the terms contemplated by this Agreement. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be deemed to require Beacon or the Company to agree to any divestiture by itself or any of its affiliates of shares of capital stock or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and stock.

(b) The Company shall give prompt notice to Beacon upon becoming aware that any representation or warranty made by them contained in this Agreement has become untrue or inaccurate, or of any failure of the Company to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement, in each case, such that the conditions set forth in Article VI would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

(c) Beacon shall give prompt notice to the Company upon becoming aware that any representation or warranty made by it contained in this Agreement has become untrue or inaccurate, or of any failure of Beacon to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by it under this Agreement, in each case, such that the conditions set forth in Article VI would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

5.7 Treatment as a Reorganization. Neither Beacon nor the Company shall take any action prior to or following the Transactions that could reasonably be expected to cause the Share Exchange to fail to qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

5.8 Absence of Material Liabilities. Immediately prior to the Initial Closing, the Company shall have no liabilities or obligations requiring the payment of monies, other than obligations under or with respect to: (i) any agreement with the Transfer Agent, (ii) the Company Contracts disclosed under
Section 3.19 hereto, (iii) liabilities and obligations to be paid at or prior to the Initial Closing, and (iv) accounts payable, accrued expenses and other liabilities of the Company with respect to the period prior to the Initial Closing to be paid in full. Following the Initial Closing, Beacon shall pay and satisfy the Company's obligations under the agreement with the Transfer Agent, and the remaining Company Contracts.

5.9 Cash Payments at the Initial Closing. At the Initial Closing, Beacon will pay fees totaling $305,000 relating to the closing of this transaction, (such applicable sum being referred to herein, as the "Closing Payment").

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5.10 Business Records. At the Initial Closing, the Company shall cause to be delivered to the Company all records and documents relating to the Company, which the Company possesses, including, without limitation, books, records, government or regulatory filings and correspondence (including state blue sky and Federal securities filings and FINRA or SEC comment letters and related correspondence), Returns, Charter Documents, consent decrees, orders, and correspondence, director and stockholder minutes and resolutions, stock ownership records, financial information and records, and other documents used in or associated with the Company (the "Business Records").

5.11 Delivery of Stock Records. Within 5 days after the date of this Agreement, the Company shall deliver to Beacon a certified complete and current listing of the holders of all Company Common Stock from the Company's transfer agent.

ARTICLE VI

CONDITIONS TO THE TRANSACTION

6.1 Conditions to Obligations of Each Party to Effect the Transactions. The respective obligations of each party to this Agreement to effect the Transactions shall be subject to the satisfaction at or prior to the Initial Closing Date of the following conditions, unless waived by both the Company and Beacon:

(a) No Order. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions, substantially on the terms contemplated by this Agreement. All waiting periods, if any, under any foreign law in any jurisdiction in which the Company or Beacon has material operations relating to the transactions contemplated hereby will have expired or terminated early and all material foreign antitrust approvals required to be obtained prior to the Transactions in connection with the transactions contemplated hereby shall have been obtained.

(b) Information Statements. As soon as applicable after the date hereof, the surviving Company shall have filed the definitive Information Statement with the SEC, and the Company shall have mailed the definitive Information Statement to each of the Company's stockholders, and the Company shall have otherwise complied with all of the provisions under Rule 14c under the Exchange Act.

(c) Transaction 8-K. Transaction Form 8-K shall have been created by Beacon and filed by the Company's new officers and directors with the SEC at the Initial Closing, and the Press Release shall have been distributed.

(d) Blue Sky Laws. The issuance of Company Securities to be issued under this Agreement shall be exempt from, or have been qualified under, the Blue Sky Laws of each appropriate jurisdiction to the satisfaction of Beacon and its respective counsels.

(e) Equity Financing. Signed subscriptions shall have been received by Beacon to purchase shares of Beacon Preferred Stock (together with an attached five-year

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warrant to purchase one additional share of Beacon Common Stock for each share purchased in the Equity Financing) in a private placement offering exempt from registration under the Securities Act pursuant to Regulation D and Regulations promulgated thereunder, which subscriptions shall represent gross proceeds of not less than $4,000,000, with such gross proceeds having been fully funded into an escrow account established for the Equity Financing, the release of which to Beacon is conditioned only upon the Initial Closing of the Share Exchange. At or prior to the Initial Closing, Beacon's Board of Directors shall approve the Equity Financing, and the subscriptions received shall have been accepted by Beacon, subject only to the closing of the Share Exchange.

(f) Acquisitions. Beacon shall have consummated the Four Beacon Acquisitions, which shall have audited combined revenue of $10.2 million for the year ending December 31, 2006.

6.2 Additional Conditions to Obligations of Beacon. The obligations of Beacon to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Initial Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Beacon:

(a) Representations and Warranties. Each representation and warranty of the Company contained in this Agreement (i) shall have been true and correct as of the date of this Agreement and (ii) shall be true and correct on and as of the Initial Closing Date with the same force and effect as if made on the Initial Closing Date. Beacon shall have received a certificate with respect to the foregoing signed on behalf of the Company by an authorized officer of the Company ("Company Closing Certificate").

(b) Agreements and Covenants. The Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Initial Closing Date, except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of the Company) does not, or will not, constitute a Material Adverse Effect with respect to the Company, and Beacon shall have received the Company Closing Certificate to such effect.

(c) Consents. The Company shall have obtained all consents, waivers and approvals required in connection with the consummation of the transactions contemplated hereby, other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Company.

(d) Material Adverse Effect. No Material Adverse Effect with respect to the Company shall have occurred since the date of this Agreement.

(e) No Financial Obligations. Immediately prior to the Initial Closing, the Company shall have no material liabilities or obligations, other than as set forth in Section 5.10 hereof.

(f) SEC Compliance. Immediately prior to the Initial Closing, the Company shall be in compliance with the reporting requirements under the Exchange Act.

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(g) Business Records. The Company shall have delivered to Beacon the Business Records.

(h) Resignations. The Company shall have received the resignations of all of the officers and directors of the Company.

(i) Other Deliveries. At or prior to the Initial Closing, the Company shall have delivered to Beacon (i) copies of resolutions and actions taken by the Company's board of directors and stockholders in connection with the approval of this Agreement and the transactions contemplated hereunder, and
(ii) such other documents or certificates as shall reasonably be required by Beacon and its counsel in order to consummate the transactions contemplated hereunder.

6.3 Additional Conditions to the Obligations of the Company. The obligations of the Company to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Initial Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by the Company:

(a) Representations and Warranties. Each representation and warranty of Beacon contained in this Agreement (i) shall have been true and correct as of the date of this Agreement and (ii) shall be true and correct on and as of the Initial Closing Date with the same force and effect as if made on and as of the Initial Closing. The Company shall have received a certificate with respect to the foregoing signed on behalf of Beacon by an authorized officer of Beacon (the "Beacon Closing Certificate").

(b) Agreements and Covenants. Beacon shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by them at or prior to the Initial Closing Date except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of Beacon) does not, or will not, constitute a Material Adverse Effect on Beacon, and Beacon shall have received the Beacon Closing Certificate to such effect.

(c) Consents. Beacon shall have obtained all consents, waivers, permits and approvals required in connection with the consummation of the transactions contemplated hereby, other than consents, waivers and approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Beacon.

(d) Material Adverse Effect. No Material Adverse Effect with respect to Beacon shall have occurred since the date of this Agreement.

(e) Beacon Financial Statements. Beacon shall have delivered to the Company the U.S. GAAP Financial Statements, the Interim Financial Statements, the Pro Forma Financial Statements and the Permissions.

(f) Closing Payment. The Closing Payment shall have been disbursed as provided in Section 5.9.

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(g) Other Deliveries. At or prior to the Initial Closing, Beacon shall have delivered to the Company: (i) copies of resolutions and actions taken by Beacon's board of directors and stockholders (if required) in connection with the approval of this Agreement and the transactions contemplated hereunder, and
(ii) such other documents or certificates as shall reasonably be required by the Company and its counsel in order to consummate the transactions contemplated hereunder.

ARTICLE VII
SURVIVAL

Except as specifically set forth in Sections 1.6, 5.1(f), 5.7, 5.9, 5.10, 5.11, 8.3 and 9.1, and except where the performance of any covenant or agreement by Beacon following the Initial Closing is contemplated under this Agreement (collectively, the "Surviving Provisions"), all representations, warranties, agreements and covenants contained in or made pursuant to this Agreement by any party hereto or contained in any Schedule hereto shall not survive the Initial Closing, and no claims made by virtue of such representations, warranties, agreements and covenants shall be made or commenced by any party hereto from and after the Initial Closing.

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVER

8.1 Termination. This Agreement may be terminated at any time prior to the Initial Closing:

(a) by mutual written agreement of Beacon and the Company at any time;

(b) by either Beacon or the Company if the Transactions shall not have been consummated by December 31, 2007 (the "Expiration Date") for any reason; provided, however, that the right to terminate this Agreement under this
Section 8.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of this Agreement (c) by either Beacon or the Company if a Governmental Entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, ruling or other action is final and nonappealable;

(d) by the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of Beacon set forth in this Agreement, or if any representation or warranty of Beacon shall have become materially untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in Beacon's representations and warranties or breach by Beacon is curable by Beacon prior to the Initial Closing Date, then the Company may not terminate this Agreement under this Section 8.1(d) for thirty (30) days after delivery of written notice from the Company to Beacon of such breach, provided Beacon continues to exercise commercially reasonable efforts to cure such breach (it being understood that the Company may not terminate this Agreement pursuant to this

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Section 8.1(d) if the Company shall have materially breached this Agreement or if such breach by Beacon is cured during such thirty (30)-day period); and

(e) by Beacon, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become materially untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the Company's representations and warranties or breach by the Company is curable by the Company prior to the Initial Closing Date, then Beacon may not terminate this Agreement under this Section 8.1(e) for thirty (30) days after delivery of written notice from Beacon to the Company of such breach, provided the Company continues to exercise commercially reasonable efforts to cure such breach (it being understood that Beacon may not terminate this Agreement pursuant to this Section 8.1(e) if it shall have materially breached this Agreement or if such breach by the Company is cured during such thirty
(30)-day period).

8.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 8.1 above will be effective immediately upon (or, if the termination is pursuant to Section 8.1(d) or Section 8.1(e) and the provision therein is applicable, thirty (30) days after) the delivery of written notice of the terminating party to the other parties hereto. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect and the Transactions shall be abandoned, except for and subject to the following: (i) Section 8.2, Section 8.3 and Article X
(General Provisions) shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any intentional or willful breach of this Agreement.

8.3 Fees and Expenses. Except as otherwise provided herein, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Transactions are consummated. The parties further agree that, whether or not the Transactions are consummated, Beacon shall be responsible for any and costs and expenses incurred by it in connection with the preparation of the Transaction Form 8-K (including the U.S. GAAP Financial Statements and Pro Forma Financial Statements contained therein), and costs and expenses incurred by it in connection with the preparation of the Information Statement and the filing and mailing thereof.

8.4 Amendment. This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties hereto.

8.5 Extension; Waiver. At any time prior to the Initial Closing, any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.

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ARTICLE IX

POST-CLOSING COVENANTS

9.1 Post-Closing Covenants. During the period beginning upon the Initial Closing and ending on the second (2nd) anniversary of the Initial Closing, the Company agrees to satisfy, perform and comply with, the following agreements and covenants:

(a) Remain a Section 12(g) reporting company in compliance with and current in its reporting requirements under the Exchange Act.

(b) Within forty-five days following the Initial Closing, the Company's Board of Directors shall satisfy the independence, audit and compensation committee and other corporate governance requirements under the SOX Act, the rules and regulations promulgated by the SEC, and the requirements of either Nasdaq or AMEX as selected by the Company, whether or not Company's Common Stock is listed or quoted, or qualifies for listing or quotation, on Nasdaq or AMEX.

(c) Files within the statutory time limits any required filings or notifications with the SEC, NASDAQ and any other federal, state or regulatory agency including any agency or organization with jurisdiction over any exchange on which the Company's securities are listed or traded, and responds in a timely manner, and to the satisfaction of the SEC, to any review or inquiry by the SEC to the Transaction Form 8-K and the U.S. GAAP Financial Statements contained therein.

(d) In the event Beacon's certified public accountants resign or are terminated for any reason, promptly engage a new certified public accountant registered with PCAOB.

(e) Duly adopt audit and compensation committee charters and schedule regular meetings for the audit and compensation committee meetings are scheduled, with notice to all directors, and such committee meetings are properly held as scheduled.

(f) Duly adopt, cause its management to comply with, proper disclosure, insider trading and code of ethics policies as adopted by Beacon's board.

(g) Use its commercially reasonable efforts to obtain and maintain a quotation of its shares of Company Common Stock on the OTC BB, Nasdaq or AMEX, and cooperate with or assist any FINRA member firm in the filing of Form 211 under Rule 15c2-11 promulgated under the Exchange Act for the commencement or maintenance of quotation of Company Common Stock on the OTC BB, Nasdaq or AMEX.

(h) Take all actions necessary to consummate the Preferred Exchange.

(i) Take all actions necessary for holders of shares of Company Common Stock to sell such shares under Rule 144 promulgated under the Securities Act, including, delivery of requisite legal opinions by the Company's counsel at the Company's expense.

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9.2 Other Provisions. Notwithstanding anything contained herein to the contrary, the provisions of this Article IX shall survive (and not be affected in any respect by) the Initial Closing.

ARTICLE X

GENERAL PROVISIONS

10.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice):

(a) if to the Company, to:

Suncrest Global Energy Corp.

Attn: Mr. John W. Peters, President
3353 South Main, #584
Salt Lake City, Utah 84115

with a copy to:

Daniel W. Jackson, Esq.
2157 Lincoln Street
Salt Lake City, Utah 84106
801-596-8338 (telephone)

(b) if to Beacon, to:

Beacon Enterprise Solutions Group, Inc. Attn: Bruce Widener, Chief Executive Officer 9001 Shelbyville Road, Suite 101 Louisville, Kentucky 40202

with a copy to:

Frost Brown Todd LLC Attn: William G. Strench 400 W. Market Street, 32nd Floor Louisville, Kentucky 40202
502.589.5400 (telephone)
502.581.1087 (telecopy)

10.2 Interpretation.

(a) When a reference is made in this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement unless otherwise indicated. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement. Unless

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otherwise indicated the words "include," "includes" and "including" when used herein shall be deemed in each case to be followed by the words "without limitation." The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made herein to "the business of" an entity, such reference shall be deemed to include the business of all direct and indirect Subsidiaries of such entity. Reference to the Subsidiaries of an entity shall be deemed to include all direct and indirect Subsidiaries of such entity.

(b) For purposes of this Agreement, the term "Material Adverse Effect" when used in connection with an entity means any change, event, violation, inaccuracy, circumstance or effect, individually or when aggregated with other changes, events, violations, inaccuracies, circumstances or effects, that is materially adverse to the business, assets (including intangible assets), revenues, financial condition or results of operations of such entity (it being understood that neither of the following alone or in combination shall be deemed, in and of itself, to constitute a Material Adverse Effect: (a) changes attributable to the public announcement or pendency of the transactions contemplated hereby, (b) changes in general national or regional economic conditions, (c) changes affecting the industry generally in which Company or Beacon operates), or (d) any SEC rulemaking requiring enhanced disclosure of reverse merger transactions with a public shell.

(c) For purposes of this Agreement, the term "Legal Requirements" means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (as defined in Section 2.5(b)), and all requirements set forth in applicable Contracts (as defined in Section 2.19).

(d) For purposes of this Agreement, the term "Subsidiary" shall mean any Person in which the Company or Beacon or any subsidiary thereof directly or indirectly, owns beneficially securities or interests representing 50% or more of (x) the aggregate equity or profit interests, or (y) the combined voting power of voting interests ordinarily entitled to vote for management or otherwise.

(e) For purposes of this Agreement, the term "Person" shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

(f) For purposes of this Agreement, all monetary amounts set forth herein are referenced in United States dollars, unless otherwise noted.

10.3 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Signatures by facsimile or

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in electronic form shall be treated the same as if such signatures were original signatures of the parties.

10.4 Entire Agreement; Third Party Beneficiaries. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Schedules hereto (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood that the letter of intent between Beacon and the Company dated August 29, 2007 is hereby terminated in its entirety and shall be of no further force and effect; and (b) are not intended to confer upon any other person any rights or remedies hereunder (except as specifically provided in this Agreement).

10.5 Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

10.6 Other Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

10.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, USA, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

10.8 Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

10.9 Assignment. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the first sentence of this Section 10.9, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

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[The remainder of this page has been intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Exchange Agreement to be executed as of the date first written above.

SUNCREST GLOBAL ENERGY CORP.

By: /s/ John W. Peters
   ---------------------------------
    John W. Peters, President

BEACON ENTERPRISE SOLUTIONS
GROUP, INC.

By: /s/ Bruce Widener
   ---------------------------------------
    Bruce Widener, Chief Executive Officer

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Index of Exhibits and Schedules

ANNEX B

FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION

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Exhibits

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Schedules

Beacon Disclosure Schedules

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Schedules

Suncrest Disclosure Schedules

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Exhibit 10.1

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT.

BEACON ENTERPRISE SOLUTIONS GROUP INC.
CONVERTIBLE PROMISSORY NOTE

$______________ Louisville, Kentucky December __, 2007

Beacon Enterprise Solutions Group Inc., a Nevada corporation (the "Company"), the principal office of which is located at 124 North First Street, Louisville, Kentucky 40202 for value received, hereby promises to pay to the order of [HOLDER], whose address is [_______________], or his registered assigns (the "Holder"), the sum of [______________ ($________)], and any unpaid accrued interest hereon, as set forth below, on December 31, 2007 (the "Maturity Date"). This note (the "Note") is one of the Convertible Promissory Notes (the "2007 Notes") issued, under the terms of that certain Securities Exchange Agreement, dated December [20], 2007, in exchange for those Convertible Promissory Notes issued by the Company between June 1, 2007 and November 30, 2007.

The following is a statement of the rights of the Holder and the conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:

1. Interest and Payments. The Company shall pay interest at the Prime Rate of interest in effect from time to time as reported in the Wall Street Journal (the "Interest Rate") on the principal of this Note outstanding during the period beginning on the date hereof and ending on the Maturity Date. Accrued interest under this Note shall be compounded annually. Interest payable under this Note shall be computed on the basis of a year of 360 days and actual days elapsed occurring in the period for which payable. Interest shall be payable when the unpaid principal balance of the Note is paid.

Upon an Event of Default (as defined below), interest shall accrue at the Interest Rate plus three percent (3%) (the "Default Rate") on the balance of the outstanding principal amount and all accrued interest thereon until such balance is paid.

The Holder shall receive a payment of all accrued interest on the Note as of the date of such closing and thereafter shall receive monthly interest payments, which shall be due and payable on the 15th day of every month until the Maturity Date, at which time the entire outstanding principal amount and all accrued interest thereon shall be due and payable.

All payments made on this Note shall be applied, at the option of the Holder, first to late charges and collection costs, if any, then to accrued interest and then to principal. After the Maturity Date or upon an Event of Default, interest shall continue to accrue on this Note at the Default Rate set forth above and shall be payable on demand of the Holder.

Notwithstanding anything in this Note to the contrary, the interest rate charged hereon shall not exceed the maximum rate allowable by applicable law. If any stated interest rate herein exceeds the maximum allowable rate, then the interest rate shall be reduced to the maximum allowable rate, and any excess payment of interest made by the Company at any time shall be applied to the unpaid balance of any outstanding principal of this Note.

2. Events of Default. If any of the events specified in this Section 2 shall occur (herein individually referred to as an "Event of Default"), persons holding more than fifty percent (50%) of the then outstanding principal balance of the 2007 Notes (the "Majority Holders") may, so long as such condition exists, declare the entire outstanding principal and unpaid accrued interest on this Note and the other 2007 Notes immediately due and payable, by notice in writing to the Company.

(i) The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer consenting to or seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee or other similar official for the Company, or for any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action;

(ii) If, within sixty (60) days after the commencement of an action against the Company (and service of process in connection therewith on the Company) seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within sixty (60) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated, or

(iii) Failure by the Company to make any payment when due on this Note or any other material breach of this Note.

3. Conversion.

3.1 Voluntary Conversion. The Holder may, upon delivery of written notice to the Company, elect to convert the entire outstanding principal amount of the Note into Shares (as defined below), and demand payment of all accrued but unpaid interest thereon.

3.2 Conversion Procedure. Upon the election of the Holder to convert this Note pursuant to Section 3.1, the entire principal amount of this Note shall be converted into the

number of shares of Common Stock of the Company ("Shares") equal to (x) the outstanding principal amount of this Note as of the date of the election to convert, divided by (y) $0.60 (as adjusted proportionately from time to time upon any stock split, stock dividend, adjustment, combination or division affecting shares of Common Stock) and upon such other terms and conditions as applicable to the Shares with respect to any such transaction. All accrued but unpaid interest shall be paid to the holder at the time of conversion. Otherwise, all unpaid principal and unpaid accrued interest on the Note will be due and payable on the Maturity Date except to the extent the Holder has elected to convert its Note into Shares as provided herein.

3.3 Delivery of Evidence of Ownership. As promptly as practicable after the conversion of this Note, the Company at its expense will issue and deliver to the Holder a certificate or certificates and any other documents necessary to evidence ownership of the number of Shares issuable upon such conversion upon surrender of this Note, duly endorsed, at the principal office of the Company.

3.4 No Impairment. The Company will not, by amendment of its organizational documents or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against impairment.

3.5 Full Conversion. Upon conversion of the entire outstanding principal of this Note and payment of the accrued interest thereon, the Company shall be forever released from all its obligations and liabilities under this Note.

4. Assignment. The rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties. The Note shall not be transferred by the Holder, in whole or in part, unless a warrant exercisable for a ratable portion of the Warrant Shares ( in the Warrant held by the Holder), and on the same other terms as such Warrant, is also transferred.

5. Waiver and Amendment. The provisions of this Note may be amended, waived or modified upon the written consent of the Company and the Majority Holders, and all such amendments, waivers and modifications shall be binding on all holders of the 2007 Notes.

6. Prepayment. The Holder may require the Company to prepay the Note at any time after the later of the completion of an equity offering in which gross proceeds of $3.5 million are raised or January 31, 2008, and before the Maturity Date, and the Company shall pay the Holder the entire outstanding principal amount hereunder and all accrued interest thereon not more than thirty (30) days after the delivery of written notice to the Company of such demand for prepayment. Neither the principal amount of nor any accrued interest on the Note may be prepaid by the Company without the Holder's written consent to any such prepayment.

7. Treatment of Note. To the extent permitted by generally accepted accounting principles, the Company will treat, account and report the Note as debt and not equity for

accounting purposes and with respect to any returns filed with federal, state or local tax authorities.

8. Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), or (ii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses set forth herein. Any party hereto may by notice so given change its address for future notice hereunder.

9. Waivers. The Company hereby waives presentment, demand, protest and notice of dishonor and protest, and also waives all other exemptions; and agrees that extension or extensions of the time of payment of this Note or any installment or part thereof may be made before, at or after maturity by agreement by the Holder. The Company shall pay to the Holder, upon demand, all costs and expenses, including, without limitation, attorney's fees and legal expenses that may be incurred by the Holder in connection with the enforcement of this Note.

10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, excluding that body of law relating to conflict of laws.

11. Heading; References. All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

IN WITNESS WHEREOF, the Company has caused this Note to be issued this __th day of December, 2007.

BEACON ENTERPRISE SOLUTIONS GROUP INC.

By:
Bruce Widener, Chief Executive Officer

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE WARRANT UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS.

No. W-100__ Warrant to Purchase Shares

WARRANT TO PURCHASE SHARES
of
BEACON ENTERPRISE SOLUTIONS GROUP INC.

This certifies that, for value received, _____________, or its registered assigns ("Holder"), is entitled, subject to the terms set forth below, to purchase from Beacon Enterprise Solutions Group Inc., a Nevada corporation (the "Company"), the number of Warrant Shares (as defined below) as set forth in
Section 2 of this Warrant, upon surrender of this Warrant, at the principal office of the Company, with the Notice of Exercise attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States or otherwise as hereinafter provided, at the Exercise Price as set forth in
Section 2 below. The term "Warrant" as used herein shall include this Warrant, and any warrants delivered in substitution or exchange therefor as provided herein. This Warrant is issued in connection with the issuance of certain Convertible Promissory Notes of the Company.

1. Term of Warrant. Subject to the terms and conditions set forth herein, this Warrant shall only be exercisable on or after the date hereof and prior to December __, 2012.

2. Number of Shares; Exercise Price.

(a) The maximum number of shares of Common Stock of the Company that may be subscribed for under this Warrant (the "Warrant Shares") shall be ______, of which ______ shall initially be vested and exercisable and _____ shall initially be unvested and not exercisable. The exercise price per Warrant Share (the "Exercise Price") shall be $1.00.

(b) Until the Holder demands payment of the outstanding principal balance on that certain Convertible Promissory Note dated December __, 2007 (the "Note") pursuant to Section 6 of the Note, _____ of the unvested Warrant Shares (such number to be adjusted in accordance with the provisions of Section 7 hereof) shall vest and become exercisable on the 15th day of every month until the Maturity Date (as defined in the Note). Upon the full conversion of the Note into Shares (as defined in the Note) or upon the Maturity Date (as defined in the Note), all remaining unvested Warrant Shares hereunder shall vest and become exercisable. Upon any election by the Holder to demand prepayment of the Note before the Maturity Date, all remaining unvested Warrant Shares hereunder shall be forfeited and canceled.

3. Exercise of Warrant.

(a) Upon the election of the Holder, the purchase rights represented by this Warrant shall be exercisable with respect to all Warrant Shares vested under Section 2 by the Holder in whole or in part during the Exercise Period by the surrender of this Warrant and the Notice of Exercise in the form annexed hereto as Annex A duly completed and executed on behalf of the Holder, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), upon payment in cash or by check of the Exercise Price of the Warrant Shares to be purchased.

(b) This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the Warrant Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Warrant Shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate evidencing ownership of the number of Warrant Shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of Warrant Shares for which this Warrant may then be exercised.

4. No Fractional Shares or Scrip. No fractional Warrant Shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant. In lieu of any fractional Warrant Shares to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to $1.00 multiplied by such fraction.

5. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

6. Reservation of Shares. The Company covenants that, during the term this Warrant is exercisable, the Company will reserve from its authorized and unissued shares of Common Stock a sufficient number of shares of Common Stock to provide for the issuance of all Warrant Shares issuable upon the exercise of this Warrant and, from time to time, will take all steps necessary to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant. The Company further covenants that all Warrant Shares that may be issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price pursuant to Section 3(a) hereof, all as set forth herein, will be fully paid, nonassessable, free of preemptive rights (other than preemptive rights which have been waived) and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for Warrant Shares upon the exercise of this Warrant.

7. Adjustment of Exercise Price and Number of Shares. The Exercise Price and the number of Warrant Shares of the Corporation issuable pursuant to such exercise is subject to adjustment as follows:

(a) In the event that the Corporation shall at any time declare a stock dividend or stock split on the outstanding shares of Common Stock in shares of its Common Stock, then the Exercise Price and number of Warrant Shares shall be proportionately adjusted so that the holder of any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of shares which, if such Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive by virtue of such dividend.

(b) In the event that the Corporation shall at any time subdivide or combine the outstanding shares of the Common Stock, the Exercise Price, initial or adjusted, in effect immediately prior to such subdivision or combination shall forthwith be proportionately decreased in the case of subdivision or increased in the case of combination.

(c) In the event of any capital reorganization, sale of substantially all the assets of the Corporation, share exchange or any reclassification of the shares of Common Stock of the Corporation, or in event of any consolidation with or merger of the Corporation into or with another corporation, then as a part of such reorganization, sale, share exchange, reclassification, consolidation or merger, as the case may be, provision shall be made so that the registered owner of the Warrant evidenced hereby shall have the right thereafter to receive upon the exercise thereof the kind and amount of shares of stock or other securities or property which he would have been entitled to receive if immediately prior to such reorganization, sale, share exchange, reclassification, consolidation or merger, he had held the number of Warrant Shares which were then issuable upon the exercise of the Warrant evidenced hereby, so that the provisions set forth (including provisions with respect to adjustments of the Exercise Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other property thereafter deliverable upon the exercise of the Warrant.

(d) If the Corporation at any time makes any spin-off, split-off, or distribution of assets upon or with respect to its Common Stock, as a liquidating or partial liquidating dividend, spin-off, or by way of return of capital, or other than as dividend payable out of earnings or any surplus legally available for dividends under the laws of the State of Nevada, the holder of each Warrant then outstanding shall, upon the exercise of the Warrant, receive, in addition to the shares of Common Stock then issuable on exercise of the Warrant, the amount of such assets or other property (or, at the option of the Corporation, a sum equal to the value thereof at the time of the distributions) which would have been payable to such holder had he exercised the Warrant immediately prior to the record date for such distribution.

(e) Upon each adjustment to the Exercise Price, the Holder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such

adjustment. No fractional shares of Common Stock shall be issued upon the exercise of the Warrant. The Corporation shall round all fractional shares down to the next whole share.

(f) If any change in the outstanding Common Stock of the Company or any other event occurs as to which the other provisions of this Section 7 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder in accordance with such provisions, then the Board of Directors of the Company shall make an adjustment in the number and class of shares issuable under the Warrant, the Exercise Price or the application of such provisions, so as to protect such purchase rights as aforesaid. The adjustment shall be such as will give the Holder upon exercise for the same aggregate Exercise Price the total number, class and kind of shares, capital stock, securities and other property as it would have owned had the Warrant been exercised for Warrant Shares prior to the event and had it continued to hold such Warrant Shares until after the event requiring adjustment.

8. Rights as Stockholder. As a holder of this Warrant, the Holder shall not be entitled to vote or receive distributions or be deemed the holder of Warrant Shares or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of shares, reclassification of shares, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive distributions or subscription rights or otherwise until this Warrant shall have been exercised as provided herein.

9. Transfer of Warrant.

(a) Warrant Register. The Company will maintain a register (the "Warrant Register") containing the names and addresses of the Holder or Holders. Any Holder of this Warrant or any portion thereof may change its address as shown on the Warrant Register by written notice to the Company requesting such change. Any notice or written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register. Until this Warrant is transferred on the Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.

(b) Transferability and Nonnegotiability of Warrant. This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company). Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the "Act"), title to this Warrant may be transferred by endorsement (by the Holder executing the Assignment Form annexed hereto as Annex B) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

(c) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange, properly endorsed on the Assignment Form and subject to the provisions of this Warrant with respect to compliance with the Act and with the limitations on assignments and transfers contained in this Section 9, the Company at its expense shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of Warrant Shares issuable upon exercise hereof.

(d) Compliance with Securities Laws.

(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Act or any state securities laws. Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the Holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale and that the Holder is an "accredited investor" as defined in Section 501 of the regulations adopted under the Act and that the Warrant Shares so purchased may be issued without registration under the Act and under applicable state securities laws.

(ii) All Warrant Shares issued upon exercise hereof, if in certificated form, shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND APPLICABLE LAWS.

(e) The Warrant shall not be transferred by the Holder, in whole or in part, unless a convertible promissory note in a ratable principal amount (to that of the Note held by the Holder), and on the same other terms as such Note, is also transferred.

10. Amendments.

(a) This Warrant and any term hereof, may be changed, waived, discharged or terminated only by an instrument signed by the Holder and the Company.

(b) No waivers of, or exceptions to, any term, condition or provisions of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

11. Miscellaneous.

(a) This Warrant shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, without reference to the conflict of law principles thereof.

(b) This Warrant shall bind the Company, its successors and assigns, and shall benefit and bind the Holder, the Holder's successors and permitted assigns.

(c) The Section headings in this Warrant have been included solely for ease of reference and shall not be considered in the interpretation or construction of this Warrant. All references in this Warrant to "Sections" shall be construed as references to numbered Sections of this Warrant.

(d) Any notice or delivery required or permitted by this Warrant shall be deemed given or made for all purposes of this Warrant when (1) the notice is in writing, and (2) the notice or the delivery is delivered by hand or is mailed by registered mail, return receipt requested, addressed to the intended recipient at (A) in the Company's case, the Company's principal executive office, or (B) in the Holder's case, the Holder's address as set forth in the Company's records or at such other address as the Holder may designate by written notice to the Company.

[END OF TEXT]

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of December __, 2007.

12.

BEACON ENTERPRISE SOLUTIONS GROUP INC.,
a Nevada corporation

By:
Bruce Widener, Chief Executive Officer

Annex A

NOTICE OF EXERCISE

To: __________

(1)______The undersigned hereby (A) elects to purchase _____ shares of the Common Stock of Beacon Enterprise Solutions Group Inc., a Nevada corporation, pursuant to the provisions of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full.

(2)______In exercising this Warrant, the undersigned hereby confirms and acknowledges that the Shares to be issued upon exercise hereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment, and that the undersigned will not offer, sell or otherwise dispose of any such Shares except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws.

(Name)

(Date) (Signature)

Annex B

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares set forth below:

Name of Assignee Address

No. of Shares

The undersigned also represents that, by assignment hereof, the Assignee acknowledges that this Warrant and the shares to be issued upon exercise hereof are being acquired for investment and that the Assignee will not offer, sell or otherwise dispose of this Warrant or any shares to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

Date:

Signature of Holder

EXHIBIT 10.2

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

SUNCREST GLOBAL ENERGY CORP.

WARRANT TO PURCHASE

_______ SHARES

OF COMMON STOCK

(SUBJECT TO ADJUSTMENT)

(Void after December 20, 2012)

Investor Warrant No: December 20, 2007

This certifies that for value, [INVESTOR NAME], or registered assigns (the "Holder"), is entitled, subject to the terms set forth below, at any time from and after December 20, 2007 (the "Original Issuance Date") and before 5:00 p.m., Eastern Time, on December 20, 2012 (the "Expiration Date"), to purchase from Suncrest Global Energy Corp., a Nevada corporation (the "Company"), ____________________ (_______) shares (subject to adjustment as described herein), of common stock, par value $0.001 per share, of the Company (the "Common Stock"), upon surrender hereof, at the principal office of the Company referred to below, with a duly executed subscription form in the form attached hereto as Exhibit A and simultaneous payment therefor in lawful, immediately available money of the United States or otherwise as hereinafter provided, at an initial exercise price per share of $1.00 (the "Purchase Price"). The Purchase Price is subject to further adjustment as provided in Section 4 below. The term "Common Stock" shall include, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. The term "Warrant," as used herein, shall mean this Warrant and any other Warrants delivered in substitution or exchange therefor as provided herein.

This Warrant was issued in connection with a Securities Exchange Agreement ("Exchange Agreement") by and among the Company, Beacon Enterprise Solutions Group,

Inc., an Indiana corporation ("Beacon") and all holders of securities of Beacon, pursuant to which the Company acquired all of the outstanding securities of Beacon for securities of the Company (the "Acquisition"), including, but not limited, to this Warrant. In the Acquisition the Company also issued to holders of Beacon preferred stock, shares of the Company's Series A Convertible Preferred Stock (the "Company Preferred Stock").

1. Exercise. This Warrant may be exercised at any time or from time to time from and after the Original Issuance Date and before 5:00 p.m., Eastern Time, on December 20, 2012, on any business day, for the full number of shares of Common Stock called for hereby, by surrendering it at the principal office of the Company, at 124 N. First Street, Louisville, Kentucky 40202 (the "Principal Office"), with the subscription form duly executed, together with payment in an amount equal to (a) the number of shares of Common Stock called for on the face of this Warrant, multiplied (b) by the Purchase Price. Payment of the Purchase Price may be made by payment in immediately available funds. This Warrant may be exercised for less than the full number of shares of Common Stock at the time called for hereby, except that the number of shares receivable upon the exercise of this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be proportionately reduced. Upon a partial exercise of this Warrant in accordance with the terms hereof, this Warrant shall be surrendered, and a new Warrant of the same tenor and for the purchase of the number of such shares not purchased upon such exercise shall be issued by the Company to Holder without any charge therefor. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. Within two (2) business days after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Common Stock issuable upon such exercise, together with cash, in lieu of any fraction of a share, equal to such fraction of the then Fair Market Value on the date of exercise of one full share of Common Stock.

"Fair Market Value" shall mean, as of any date: (i) if shares of the Common Stock are listed on a national securities exchange, the average of the closing prices as reported for composite transactions during the ten (10) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the closing bid and asked prices on such exchange on such trading day; (ii) if shares of the Common Stock are not so listed but are traded on the NASDAQ Global Market ("NGM"), the average of the closing prices as reported on the NGM during the ten
(10) consecutive trading days preceding the trading day immediately prior to such date or, if no sale occurred on a trading day, then the mean between the highest bid and lowest asked prices as of the close of business on such trading day, as reported on the NGM; or if applicable, the Nasdaq Capital Market ("NCM"), (iii) if not then included for quotation on the NGM or the NCM, the average of the highest reported bid and lowest reported asked prices as reported by the OTC Bulletin Board of the National Quotation Bureau, as the case may be; or (iv) if the shares of the Common Stock are not then publicly traded, the fair market price of the Common Stock as determined in good faith by the independent members of the Board of Directors of the Company and the Holders of a majority of the then outstanding Warrants.

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2. Shares Fully Paid; Payment of Taxes. All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued, fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges (other than income taxes to the holder) that may be imposed in respect of the issue or delivery thereof.

3. Transfer and Exchange. (a) Neither this Warrant nor the Common Stock to be issued upon exercise hereof (the "Warrant Shares") have been registered under the Act or any state securities laws ("Blue Sky Laws"). This Warrant has been acquired for investment purposes and not with a view to distribution or resale and may not be pledged, hypothecated, sold, made subject to a security interest, or otherwise transferred without: (i) an effective registration statement for such Warrant under the Act and such applicable Blue Sky Laws; or (ii) an opinion of counsel reasonably satisfactory to the Company that registration is not required under the Act or under any applicable Blue Sky Laws.

(b) Upon compliance with applicable federal and state securities laws as set forth in Section 3(a), above, this Warrant and all rights hereunder are transferable, in whole or in part, on the books of the Company maintained for such purpose at its Principal Office by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with a completed and executed assignment form in the form attached hereto as Exhibit B, and payment of any necessary transfer tax or other governmental charge imposed upon such transfer. Upon any partial transfer, the Company will issue and deliver to the assignee a new Warrant with respect to the shares of Common Stock for which it is exercisable that have been transferred, and will deliver to the Holder a new Warrant or Warrants with respect to the shares of Common Stock not so transferred. A Warrant may be transferred only by the procedure set forth herein. No transfer shall be effective until such transfer is recorded on the books of the Company, provided that such transfer is recorded promptly by the Company, and until such transfer on such books, the Company shall treat the registered Holder hereof as the owner of the Warrant for all purposes.

(c) This Warrant is exchangeable at the Principal Office for two or more new Warrants, each in the form of this Warrant, to purchase the same aggregate number of shares of Common Stock, each new Warrant to represent the right to purchase such number of shares as the Holder shall designate at the time of such exchange, but which shall not exceed the total number of shares for which this Warrant may be from time to time exercisable.

(d) Transfer of the Warrant Shares issued upon the exercise of this Warrant shall be restricted in the same manner and to the same extent as the Warrant, and the certificates representing such Warrant Shares shall bear substantially the following legend, until such Warrant Shares have been registered under the Act or may be removed as otherwise permitted under the Act:

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APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER."

(e) The Holder and the Company agree to execute such other documents and instruments as counsel to the Company deems necessary to effect the compliance of the issuance of this Warrant and any Warrant Shares issued upon exercise hereof with applicable federal and state securities laws, including compliance with applicable exemptions from the registration requirements of such laws.

4. Anti-Dilution Provisions. The Purchase Price in effect at any time and the number and kind of securities issuable upon conversion of this Warrant shall be subject to adjustment from time to time upon the happening of certain events as follows:

A. Adjustment for Stock Splits and Combinations. If the Company at any time or from time to time on or after the date of Warrant issuance (the "Original Issuance Date") effects a subdivision of the outstanding Common Stock, the Purchase Price then in effect immediately before that subdivision shall be proportionately decreased, and conversely, if the Company at any time or from time to time on or after the Original Issuance Date combines the outstanding shares of Common Stock into a smaller number of shares, the Purchase Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this Section 4(A) shall become effective at the close of business on the date the subdivision or combination becomes effective.

B. Adjustment for Certain Dividends and Distributions. If the Company at any time or from time to time on or after the Original Issuance Date makes or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Purchase Price then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Purchase Price then in effect by a fraction (1) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date and (2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Purchase Price shall be adjusted pursuant to this Section 4(B) as of the time of actual payment of such dividends or distributions.

C. Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time on or after the Original Issuance Date makes, or fixes

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a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Company other than shares of Common Stock, then and in each such event provision shall be made so that the Holders of Warrants shall receive upon exercise thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Company which they would have received had their Warrants been exercised into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 4 with respect to the rights of the Holders of the Warrants.

D. Adjustment for Reclassification, Exchange and Substitution. In the event that at any time or from time to time on or after the Original Issuance Date, the Common Stock issuable upon the exercise of the Warrants is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section
4), then and in any such event each Holder of Warrants shall have the right thereafter to exercise such Warrant to receive the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change, by holders of the maximum number of shares of Common Stock for which such Warrants could have been exercised immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein.

E. Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or from time to time on or after the Original Issuance Date there is a capital reorganization of the Common Stock (other than a recapitalization, subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section 4) or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company's properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holders of the Warrants shall thereafter be entitled to receive upon exercise of the Warrants the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the Holders of the Warrants after the reorganization, merger, consolidation or sale to the end that the provisions of this Section 4 (including adjustment of the Purchase Price then in effect and the number of shares to be received upon exercise of the Warrants) shall be applicable after that event and be as nearly equivalent as may be practicable.

F. Sale of Shares Below Purchase Price:

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an Effective Price (as hereinafter defined) less than the then existing Purchase Price, then and in each such case the then existing Purchase Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price equal to the Effective Price for such Additional Shares of Common Stock.

(2) For the purpose of making any adjustment required under Section
4(F), the consideration received by the Company for any issue or sale of securities shall (I) to the extent it consists of cash be computed at the amount of cash received by the Company, (II) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the board of directors of the Company (the "Board"), (III) if Additional Shares of Common Stock, Convertible Securities (as hereinafter defined) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options, and (IV) be computed after reduction for all expenses payable by the Company in connection with such issue or sale.

(3) For the purpose of the adjustment required under Section 4(F), if the Company issues or sells any rights, warrants or options for the purchase of, or stock or other securities convertible into or exchangeable for, Additional Shares of Common Stock (such convertible or exchangeable stock or securities being hereinafter referred to as "Convertible Securities") and if the Effective Price of such Additional Shares of Common Stock is less than the Purchase Price then in effect, then in each case the Company shall be deemed to have issued at the time of the issuance of such rights, warrants, options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise, conversion or exchange thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, received by the Company for the issuance of such rights, warrants, options or Convertible Securities, plus, in the case of such rights, warrants or options, the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights, warrants or options, plus, in the case of Convertible Securities, the minimum amounts of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange thereof. No further adjustment of the Purchase Price, adjusted upon the issuance of such rights, warrants, options or Convertible Securities, shall be made as a result of the actual issuance of Additional Shares of Common Stock on the exercise of any such rights, warrants or options or the conversion or exchange of any such Convertible Securities. If any such rights or options or the conversion or exchange privilege represented by any such Convertible Securities shall expire without having been exercised, the Purchase Price adjusted upon the issuance of such rights, warrants, options or Convertible Securities shall be readjusted to the Purchase Price which would have been in effect had an adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights, warrants, or options or rights of conversion or exchange of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the

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consideration, if any, actually received by the Company for the granting of all such rights, warrants, or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted or exchanged, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion or exchange of such Convertible Securities.

(4) For the purpose of the adjustment required under Section 4(F), if the Company issues or sells, or is deemed by the express provisions of this
Section 4 to have issued or sold, any rights or options for the purchase of Convertible Securities and if the Effective Price of the Additional Shares of Common Stock underlying such Convertible Securities is less than the Purchase Price then in effect, then in each such case the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion or exchange of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional Shares of Common Stock an amount equal to the amount of consideration, if any, received by the Company for the issuance of such rights, warrants or options, plus the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights, warrants or options, plus the minimum amount of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange of such Convertible Securities. No further adjustment of the Purchase Price, adjusted upon the issuance of such rights, warrants or options, shall be made as a result of the actual issuance of the Convertible Securities upon the exercise of such rights, warrants or options or upon the actual issuance of Additional Shares of Common Stock upon the conversion or exchange of such Convertible Securities. The provisions of paragraph (3) above for the readjustment of the Purchase Price upon the expiration of rights, warrants or options or the rights of conversion or exchange of Convertible Securities shall apply mutatis mutandis to the rights, warrants options and Convertible Securities referred to in this paragraph (4).

(5) "Additional Shares of Common Stock" shall mean all shares of Common Stock issued by the Company on or after the Original Issuance Date, whether or not subsequently reacquired or retired by the Company, other than (I) the Warrant Shares, (II) the shares of Common Stock issuable upon conversion of the Company Preferred Stock, (III) shares of Common Stock issuable upon exercise of warrants, options and Convertible Securities outstanding as of the Original Issuance Date (provided that the terms of such warrants, options and Convertible Securities are not modified after the Original Issuance Date to adjust the exercise price), (IV) shares of Common Stock issued pursuant to any event for which adjustment is made to the Purchase Price under Section 4 hereof or to the exercise price under the anti-dilution provisions of any securities outstanding as of the Original Issuance Date (including the Company Preferred Stock), (V) Common Stock issuable upon the conversion of warrants issued to Laidlaw & Company (UK) Ltd. ("Laidlaw" or the "Placement Agent") in connection with the Offering, and (VI) up to 600,000 shares of Common Stock issuable to the Placement Agent and its designees pursuant to a warrant issued prior to the Offering (the "Affiliate Warrants"). The "Effective Price" of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 4F, into the aggregate consideration received, or deemed to have been received, by the Company for such issue under this Section 4F, for such Additional Shares of Common Stock.

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(6) Other than a reduction pursuant to its applicable anti-dilution provisions, any reduction in the conversion price of any Convertible Security, whether outstanding on the Original Issuance Date or thereafter, or the price of any option, warrant or right to purchase Common Stock or any Convertible Security (whether such option, warrant or right is outstanding on the Original Issuance Date or thereafter), to an Effective Price less than the current Purchase Price, shall be deemed to be an issuance of such Convertible Security and all such options, warrants or rights at such Effective Price, and the provisions of Sections 4(F)(3), (4) and (5) shall apply thereto mutatis mutandis.

(7) Any time an adjustment is made to the Purchase Price pursuant to
Section 4(F), a corresponding proportionate change shall be made to the number of shares of Common Stock issuable upon conversion of this Warrant.

G. No Adjustments in Certain Circumstances. No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one ($0.01) cent in such price; provided, however, that any adjustments which by reason of this Section 4(G) are not required to be made shall be carried forward and taken into account in any subsequent adjustment required to be made hereunder. All calculations under this
Section 4(G) shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.

5. Notices of Record Date. In case:

A. the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of the Warrants) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or

B. of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation, or

C. of any voluntary dissolution, liquidation or winding-up of the Company; then, and in each such case, the Company will mail or cause to be mailed to each holder of a Warrant at the time outstanding a notice specifying, as the case may be, (a) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (b) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up is expected to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, such notice shall be mailed at least ten
(10) days prior to the date therein specified.

6. Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise of reasonable discretion) of the ownership of and the loss, theft, destruction or

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mutilation of any Warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it (in the exercise of reasonable discretion), and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new Warrant of like tenor.

7. Reservation of Common Stock. The Company shall at all times reserve and keep available for issue upon the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants. All of the shares of Commons Stock issuable upon the exercise of the rights represented by this Warrant will, upon issuance and receipt of the Purchase Price therefor, be fully paid and nonassessable, and free from all preemptive rights, rights of first refusal or first offer, taxes, liens and charges of whatever nature, with respect to the issuance thereof.

8. Registration Rights Agreement. The Holder of this Warrant is entitled to have the Warrant Shares registered for resale under the Act, pursuant to and in accordance with the Registration Rights Agreement dated as of the date hereof by and between the Company and Laidlaw & Company (UK) Ltd. (the "Placement Agent"), all other holders of Warrants and the Company.

9. No Rights as Stockholder Conferred by Warrants. The Warrant shall not entitle the Holder hereof to any of the rights, either at law or in equity, of a stockholder of the Company. The Holder shall, upon the exercise thereof, not be entitled to any dividend that may have accrued or which may previously have been paid with respect to shares of stock issuable upon the exercise of the Warrant, except as may otherwise be provided in Section 4 hereof.

10. Notices. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class, registered or certified mail, postage prepaid, and/or a nationally recognized overnight courier service to the address furnished to the Company in writing by the Holder.

11. Change; Modifications; Waiver. No terms of this Warrant may be amended, waived or modified except by the express written consent of the Company and the holders of not less than 50.1% of the shares of Common Stock then issuable under outstanding Warrants issued in connection with the Financing.

12. Endorsement of Warrants. The Warrant when presented or surrendered for exchange, transfer or registration shall be accompanied (if so required by the Company) by an assignment in the form attached hereto as Exhibit B or such other written instrument of transfer, in form satisfactory to the Company, duly executed by the registered Holder or by his duly authorized attorney.

13. Agreement of Warrant Holders. The Holder, and to the extent that portions of this Warrant are assigned and there is more than one Holder of warrants exercisable for the Warrant Shares, every holder of a Warrant, by accepting the same, consents and agrees with the Company and with all other Warrant holders that: (a) the Warrants are transferable only as permitted by
Section 3 above; (b) the Warrants are transferable only on the registry books of the Company as herein provided; and (c) the Company may deem and treat the person in whose name the Warrant

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certificate is registered as the absolute owner thereof and of the Warrants evidenced thereby for all purposes whatsoever, and the Company shall not be affected by any notice to the contrary,

14. Payment of Taxes. The Company will pay all stamp, transfer and other similar taxes payable in connection with the original issuance of this Warrant and the shares of Common Stock issuable upon exercise thereof, provided, however, that the Company shall not be required to (i) pay any such tax which may be payable in respect of any transfer involving the transfer and delivery of this Warrant or the issuance or delivery of certificates for shares of Common Stock issuable upon exercise thereof in a name other than that of the registered Holder of this Warrant or (ii) issue or deliver any certificate for shares of Common Stock upon the exercise of this Warrant until any such tax required to be paid under clause (i) shall have been paid, all such tax being payable by the holder of this Warrant at the time of surrender.

15. Fractional Interest. The Company shall not be required to issue fractional shares of Common Stock on the exercise of this Warrant. If more than one Warrant shall be presented for exercise at the same time by the Holder, the number of full shares of Common Stock which shall be issuable upon such exercise shall be computed on the basis of the aggregate number of shares of Common Stock acquirable on exercise of the Warrants so presented. If any fraction of a share of Common Stock would, except for the provisions of this Section 15, be issuable on the exercise of any Warrant (or specified portion thereof), the Company shall pay an amount in cash calculated by it to be equal to the Purchase Price per share multiplied by such fraction computed to the nearest whole cent. The Holder by his acceptance of this Warrant expressly waives any and all rights to receive any fraction of a share of Common Stock or a stock certificate representing a fraction of a share of Common Stock.

16. Entire Agreement. This Warrant constitutes the full and entire understanding and agreement among the parties with regard to the subject matter hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants or agreements except as specifically set forth herein.

17. Successors and Assigns. All covenants and provisions of this Warrant by or for the benefit of the Company or the Holder of this Warrant shall bind and inure to the benefit of their respective successors, permitted assigns, heirs and personal representatives.

18. Termination. This Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date or upon such earlier date on which all of this Warrant has been exercised (the "Termination Date").

19. Headings. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

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jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of all of its reasonable legal fees and expenses.

Remainder of Page Intentionally Left Blank

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WARRANT SIGNATURE PAGE

Dated: December 20, 2007

SUNCREST GLOBAL ENERGY CORP.

By:

Name: Bruce Widener Title: Chief Executive Officer

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EXHIBIT A

SUBSCRIPTION FORM

(To be executed only upon exercise of Warrant)

The undersigned registered owner of this Warrant irrevocably exercises this Warrant and purchases _______ shares of the Common Stock of Suncrest Global Energy Corp. purchasable with this Warrant, and herewith makes payment therefor (either in cash or pursuant to the cashless exercise provisions set forth in
Section 1 of the Warrant), all at the price and on the terms and conditions specified in this Warrant.

Dated:

(Signature of Registered Owner)

(Street Address)

(City / State / Zip Code)

EXHIBIT B

FORM OF ASSIGNMENT

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant, with respect to the number of shares of Common Stock set forth below:

Name of Assignee Address Number of Shares

and does hereby irrevocably constitute and appoint __________________________ Attorney to make such transfer on the books of Suncrest Global Energy Corp., maintained for the purpose, with full power of substitution in the premises.

Dated:

(Signature)

(Witness)

The undersigned Assignee of the Warrant hereby makes to Suncrest Global Energy Corp., as of the date hereof, with respect to the Assignee, all of the representations and warranties made by the Holder, and the undersigned Assignee agrees to be bound by all the terms and conditions of the Warrant and the Registration Rights Agreement, dated as of ______ __, 2007, by and between Suncrest Global Energy Corp. and Laidlaw & Co. (UK) Ltd.

Dated:

(Signature)

EXHIBIT 10.3

SUNCREST GLOBAL ENERGY CORP.

WARRANT TO PURCHASE

_______ SHARES

OF COMMON STOCK

(SUBJECT TO ADJUSTMENT)

(Void after December 20, 2012)

Warrant No: 1 December 20, 2007

This certifies that for value, LAIDLAW & COMPANY (UK), LTD., or registered assigns (the "Holder"), is entitled, subject to the terms set forth below, at any time from and after December 20, 2007 (the "Original Issuance Date") and before 5:00 p.m., Eastern Time, on December 20, 2012 (the "Expiration Date"), to purchase from Suncrest Global Energy Corp., a Nevada corporation (the "Company"), ____________________ (_______) shares (subject to adjustment as described herein), of common stock, par value $0.001 per share, of the Company (the "Common Stock"), upon surrender hereof, at the principal office of the Company referred to below, with a duly executed subscription form in the form attached hereto as Exhibit A and simultaneous payment therefor in lawful, immediately available money of the United States or otherwise as hereinafter provided, at an initial exercise price per share of $1.00 (the "Purchase Price"). The Purchase Price is subject to further adjustment as provided in
Section 4 below. The term "Common Stock" shall include, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. The term "Warrant," as used herein, shall mean this Warrant and any other Warrants delivered in substitution or exchange therefor as provided herein.

This Warrant was issued in connection with a Securities Exchange Agreement ("Exchange Agreement") by and among the Company, Beacon Enterprise Solutions Group,

1. Exercise. This Warrant may be exercised at any time or from time to time from and after the Original Issuance Date and before 5:00 p.m., Eastern Time, on December 20, 2012, on any business day, for the full number of shares of Common Stock called for hereby, by surrendering it at the principal office of the Company, at 124 N. First Street, Louisville, Kentucky 40202 (the "Principal Office"), with the subscription form duly executed, together with payment in an amount equal to (a) the number of shares of Common Stock called for on the face of this Warrant, multiplied (b) by the Purchase Price. Payment of the Purchase Price may be made at Holder's choosing either: (1) by payment in immediately available funds; or (2) in lieu of any cash payment, if this Warrant is exercised on a date when a Registration Statement (as defined in the Registration Rights Agreement), covering the resale of the shares of Common Stock issuable upon exercise of this Warrant has not been declared effective by the Securities and Exchange Commission (the "Commission"), or is no longer in effect, in exchange for the number of shares of Common Stock equal to the product of (x) the number of shares to which the Warrants are being exercised multiplied by (y) a fraction, the numerator of which is the Purchase Price and the denominator of which is the Fair Market Value (as defined below). This Warrant may be exercised for less than the full number of shares of Common Stock at the time called for hereby, except that the number of shares receivable upon the exercise of this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be proportionately reduced. Upon a partial exercise of this Warrant in accordance with the terms hereof, this Warrant shall be surrendered, and a new Warrant of the same tenor and for the purchase of the number of such shares not purchased upon such exercise shall be issued by the Company to Holder without any charge therefor. A Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of such shares of record as of the close of business on such date. Within two (2) business days after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of full shares of Common Stock issuable upon such exercise, together with cash, in lieu of any fraction of a share, equal to such fraction of the then Fair Market Value on the date of exercise of one full share of Common Stock.

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("NCM"), (iii) if not then included for quotation on the NGM or the NCM, the average of the highest reported bid and lowest reported asked prices as reported by the OTC Bulletin Board of the National Quotation Bureau, as the case may be; or (iv) if the shares of the Common Stock are not then publicly traded, the fair market price of the Common Stock as determined in good faith by the independent members of the Board of Directors of the Company and the Holders of a majority of the then outstanding Warrants.

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"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER."

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the date fixed therefor, the Purchase Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Purchase Price shall be adjusted pursuant to this Section 4(B) as of the time of actual payment of such dividends or distributions.

C. Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time on or after the Original Issuance Date makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Company other than shares of Common Stock, then and in each such event provision shall be made so that the Holders of Warrants shall receive upon exercise thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Company which they would have received had their Warrants been exercised into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 4 with respect to the rights of the Holders of the Warrants.

F. Sale of Shares Below Purchase Price:

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(1) If at any time or from time to time following the Original Issuance Date, the Company issues or sells, or is deemed by the express provisions of this Section 4(F) to have issued or sold, Additional Shares of Common Stock (as hereinafter defined), other than as a dividend or other distribution on any class of stock and other than upon a subdivision or combination of shares of Common Stock, in either case as provided in Section 4(A) above, for an Effective Price (as hereinafter defined) less than the then existing Purchase Price, then and in each such case the then existing Purchase Price shall be reduced, as of the opening of business on the date of such issue or sale, to a price equal to the Effective Price for such Additional Shares of Common Stock.

(2) For the purpose of making any adjustment required under Section 4(F), the consideration received by the Company for any issue or sale of securities shall (I) to the extent it consists of cash be computed at the amount of cash received by the Company, (II) to the extent it consists of property other than cash, be computed at the fair value of that property as determined in good faith by the board of directors of the Company (the "Board"), (III) if Additional Shares of Common Stock, Convertible Securities (as hereinafter defined) or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration which covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options, and (IV) be computed after reduction for all expenses payable by the Company in connection with such issue or sale.

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Stock, if any, were issued or sold for the consideration actually received by the Company upon such exercise, plus the consideration, if any, actually received by the Company for the granting of all such rights, warrants, or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted or exchanged, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion or exchange of such Convertible Securities.

(4) For the purpose of the adjustment required under Section 4(F), if the Company issues or sells, or is deemed by the express provisions of this Section 4 to have issued or sold, any rights or options for the purchase of Convertible Securities and if the Effective Price of the Additional Shares of Common Stock underlying such Convertible Securities is less than the Purchase Price then in effect, then in each such case the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion or exchange of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional Shares of Common Stock an amount equal to the amount of consideration, if any, received by the Company for the issuance of such rights, warrants or options, plus the minimum amounts of consideration, if any, payable to the Company upon the exercise of such rights, warrants or options, plus the minimum amount of consideration, if any, payable to the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) upon the conversion or exchange of such Convertible Securities. No further adjustment of the Purchase Price, adjusted upon the issuance of such rights, warrants or options, shall be made as a result of the actual issuance of the Convertible Securities upon the exercise of such rights, warrants or options or upon the actual issuance of Additional Shares of Common Stock upon the conversion or exchange of such Convertible Securities. The provisions of paragraph (3) above for the readjustment of the Purchase Price upon the expiration of rights, warrants or options or the rights of conversion or exchange of Convertible Securities shall apply mutatis mutandis to the rights, warrants options and Convertible Securities referred to in this paragraph (4).

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The "Effective Price" of Additional Shares of Common Stock shall mean the quotient determined by dividing the total number of Additional Shares of Common Stock issued or sold, or deemed to have been issued or sold by the Company under this Section 4F, into the aggregate consideration received, or deemed to have been received, by the Company for such issue under this Section 4F, for such Additional Shares of Common Stock.

5. Notices of Record Date. In case:

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or securities at the time receivable upon the exercise of the Warrants) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, such notice shall be mailed at least ten
(10) days prior to the date therein specified.

6. Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise of reasonable discretion) of the ownership of and the loss, theft, destruction or mutilation of any Warrant and (in the case of loss, theft or destruction) of indemnity satisfactory to it (in the exercise of reasonable discretion), and (in the case of mutilation) upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof a new Warrant of like tenor.

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18. Termination. This Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date or upon such earlier date on which all of this Warrant has been exercised (the "Termination Date").

19. Headings. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

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20. Governing Law, Etc. This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement, shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of all of its reasonable legal fees and expenses.

Remainder of Page Intentionally Left Blank

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WARRANT SIGNATURE PAGE

Dated: December 20, 2007

SUNCREST GLOBAL ENERGY CORP.

By:

Name: Bruce Widener Title: Chief Executive Officer

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EXHIBIT A

SUBSCRIPTION FORM

(To be executed only upon exercise of Warrant)

Dated:

(Signature of Registered Owner)

(Street Address)

(City / State / Zip Code)

EXHIBIT B

FORM OF ASSIGNMENT

Name of Assignee Address Number of Shares

Dated:

(Signature)

(Witness)

The undersigned Assignee of the Warrant hereby makes to Suncrest Global Energy Corp., as of the date hereof, with respect to the Assignee, all of the representations and warranties made by the Holder, and the undersigned Assignee agrees to be bound by all the terms and conditions of the Warrant and the Registration Rights Agreement, dated as of _________, 2007, by and between Suncrest Global Energy Corp. and Laidlaw & Co. (UK) Ltd.

Dated:

(Signature)

EXHIBIT 10.4

SUNCREST GLOBAL ENERGY CORP.

WARRANT TO PURCHASE
_______ SHARES
OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)

(Void after December 20, 2012)

Warrant No: ___ December 20, 2007

This certifies that for value, [LAIDLAW AFFILIATE], or registered assigns (the "Holder"), is entitled, subject to the terms set forth below, at any time from and after December 20, 2007 (the "Original Issuance Date") and before 5:00
p.m., Eastern Time, on December 20, 2012 (the "Expiration Date"), to purchase from Suncrest Global Energy Corp., a Nevada corporation (the "Company"), ____________________ (_______) shares (subject to adjustment as described herein), of common stock, par value $0.001 per share, of the Company (the "Common Stock"), upon surrender hereof, at the principal office of the Company referred to below, with a duly executed subscription form in the form attached hereto as Exhibit A and simultaneous payment therefor in lawful, immediately available money of the United States or otherwise as hereinafter provided, at an initial exercise price per share of $1.00 (the "Purchase Price"). The Purchase Price is subject to further adjustment as provided in Section 4 below. The term "Common Stock" shall include, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. The term "Warrant," as used herein, shall mean this Warrant and any other Warrants delivered in substitution or exchange therefor as provided herein.

This Warrant was issued in connection with a Securities Exchange Agreement ("Exchange Agreement") by and among the Company, Beacon Enterprise Solutions Group,

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C. Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time on or after the Original Issuance Date makes, or fixes

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F. Sale of Shares Below Purchase Price:

-5-

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consideration received for issuing or selling the Convertible Securities actually converted or exchanged, plus the consideration, if any, actually received by the Company (other than by cancellation of liabilities or obligations evidenced by such Convertible Securities) on the conversion or exchange of such Convertible Securities.

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5. Notices of Record Date. In case:

6. Loss or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise of reasonable discretion) of the ownership of and the loss, theft, destruction or

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certificate is registered as the absolute owner thereof and of the Warrants evidenced thereby for all purposes whatsoever, and the Company shall not be affected by any notice to the contrary,

18. Termination. This Warrant shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date or upon such earlier date on which all of this Warrant has been exercised (the "Termination Date").

19. Headings. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof.

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Remainder of Page Intentionally Left Blank

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WARRANT SIGNATURE PAGE

Dated: December 20, 2007

SUNCREST GLOBAL ENERGY CORP.

By: ______________________________
Name: Bruce Widener
Title: Chief Executive Officer

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EXHIBIT A

SUBSCRIPTION FORM

(To be executed only upon exercise of Warrant)

Dated: _____________________

(Signature of Registered Owner)

(Street Address)

(City / State / Zip Code)

EXHIBIT B

FORM OF ASSIGNMENT

Name of Assignee Address Number of Shares

and does hereby irrevocably constitute and appoint __________________________ Attorney to make such transfer on the books of Suncrest Global Energy Corp. maintained for the purpose, with full power of substitution in the premises.

Dated: _____________________

(Signature)

(Witness)

The undersigned Assignee of the Warrant hereby makes to Suncrest Global Energy Corp. as of the date hereof, with respect to the Assignee, all of the representations and warranties made by the Holder, and the undersigned Assignee agrees to be bound by all the terms and conditions of the Warrant and the Registration Rights Agreement, dated as of ______ __, 2007, by and between Suncrest Global Energy Corp. and Laidlaw & Co. (UK) Ltd.

Dated: _____________________

(Signature)

EXHIBIT 10.5

ASSET PURCHASE AGREEMENT

dated October 15, 2007

by and among

BEACON ENTERPRISE SOLUTIONS GROUP, INC.,

and

ADVANCE DATA SYSTEMS, INC.
D/B/A
ADSNETCURVE

and

the Shareholders of Advance Data Systems, Inc.

TABLE OF CONTENTS

                                                                            Page

ARTICLE I             THE ASSET PURCHASE.......................................1
         1.1      Purchase and Sale of Assets..................................1
         1.2      Assumption of Liabilities....................................1
         1.3      Purchase Price...............................................1
         1.4      Escrow.......................................................2
         1.5      The Closing..................................................2
         1.6      Allocation...................................................3
         1.7      Further Assurances...........................................3

ARTICLE II            REPRESENTATIONS AND WARRANTIES OF THE SELLER.............4
         2.1      Organization, Qualification and Corporate Power..............4
         2.2      INTENTIONALLY DELETED
         2.3      Authorization of Transaction.................................4
         2.4      Noncontravention.............................................4
         2.5      Subsidiaries.................................................5
         2.6      Financial Statements.........................................5
         2.7      Absence of Certain Changes...................................5
         2.8      Undisclosed Liabilities......................................5
         2.9      Tax Matters..................................................5
         2.10     Ownership and Condition of Assets............................7
         2.11     Owned Real Property..........................................7
         2.12     Real Property Leases.........................................7
         2.13     Intellectual Property........................................8
         2.14     Contracts...................................................10
         2.15     Accounts Receivable.........................................11
         2.16     Insurance...................................................12
         2.17     Litigation..................................................12
         2.18     Warranties..................................................12
         2.19     Employees...................................................12
         2.20     Employee Benefits...........................................13
         2.21     Environmental Matters.......................................13
         2.22     Legal Compliance............................................13
         2.23     Customers and Suppliers.....................................13
         2.24     Permits.....................................................14
         2.25     Certain Business Relationships With Affiliates..............14
         2.26     Brokers' Fees...............................................14
         2.27     INTENTIONALLY DELETED
         2.28     Disclosure..................................................14
         2.29     INTENTIONALLY DELETED
         2.30     Government Contracts........................................14
         2.31     Securities Representations..................................15

ARTICLE III           REPRESENTATIONS AND WARRANTIES OF THE BUYER.............15


                                       (i)

         3.1      Organization and Corporate Power............................15
         3.2      Authorization of the Transaction............................16
         3.3      Noncontravention............................................16
         3.4      Capitalization..............................................16
         3.5      No Prior Activities.........................................17
         3.6      Litigation..................................................17

ARTICLE IV            PRE-CLOSING COVENANTS...................................17
         4.1      Closing Efforts.............................................17
         4.2      Governmental and Third-Party Notices and Consents...........17
         4.3      Exclusivity.................................................18
         4.4      Operation of Business.......................................18
         4.5      Access to Information.......................................20
         4.6      Notice of Breaches..........................................20
         4.7      FIRPTA Tax Certificate......................................20

ARTICLE V             CONDITIONS TO CLOSING...................................20
         5.1      Conditions to Obligations of the Buyer......................20
         5.2      Conditions to Obligations of the Seller.....................22

ARTICLE VI            POST-CLOSING COVENANTS..................................23
         6.1      Proprietary Information.....................................23
         6.2      Solicitation and Hiring.....................................23
         6.3      Non-Competition.............................................24
         6.4      Tax Matters.................................................24
         6.5      Sharing of Data.............................................25
         6.6      Use of Name.................................................26
         6.7      Cooperation in Litigation...................................26
         6.8      Collection of Accounts Receivable...........................26
         6.9      Employees...................................................26
         6.10     Maintenance of Corporate Existence;
                    Distribution of Shares....................................27

ARTICLE VII           INDEMNIFICATION.........................................27
         7.1      Indemnification by the Seller...............................27
         7.2      Indemnification by the Buyer................................27
         7.3      Indemnification Claims......................................28
         7.4      Survival of Representations and Warranties..................29
         7.5      Treatment of Indemnity Payments.............................29
         7.6      Limitations.................................................29

ARTICLE VIII          TERMINATION.............................................30
         8.1      Termination of Agreement....................................30
         8.2      Effect of Termination.......................................31

ARTICLE IX            DEFINITIONS.............................................31

ARTICLE X             MISCELLANEOUS...........................................42


                                      (ii)

         10.1     Press Releases and Announcements............................42
         10.2     No Third Party Beneficiaries................................43
         10.3     Entire Agreement............................................43
         10.4     Succession and Assignment...................................43
         10.5     Counterparts and Facsimile Signature........................43
         10.6     Headings....................................................43
         10.7     Notices.....................................................43
         10.8     Governing Law...............................................44
         10.9     Amendments and Waivers......................................44
         10.10    Severability................................................44
         10.11    Expenses....................................................45
         10.12    Submission to Jurisdiction..................................45
         10.13    Specific Performance........................................45
         10.14    Construction................................................45

Exhibits
Exhibit A - Secured Promissory Note
Exhibit B - Security Agreement
Exhibit C - Bill of Sale
Exhibit D - Instrument of Assumption
Exhibit E - Opinion of Seller's Counsel
Exhibit F - Escrow Agreement
Exhibit G - Opinion of Buyer's Counsel

Schedules
Schedule 1.1(b) -Specified Excluded Assets
Schedule 1.6 -Allocation of Purchase Price
Schedule 2.8 - Assumed Accounts Payable
Schedule 6.9 -Employees To Be Offered Employment By Buyer
Disclosure Schedules

(iii)

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is entered into as of October 15, 2007 by and among BEACON ENTERPRISE SOLUTIONS GROUP, INC., an Indiana corporation (the "Buyer"), ADVANCE DATA SYSTEMS INC. d/b/a ADSnetcurve, a Kentucky corporation (the "Seller"), and the shareholders of Seller (each a "Shareholder" and collectively, the "Shareholders").

This Agreement contemplates a transaction in which the Buyer will purchase substantially all of the assets and assume certain of the liabilities of the Seller.

Contemporaneously with the execution and delivery of this Agreement, certain employees of the Seller have entered into employment agreements with the Buyer, to become effective upon the Closing (the "Employment Agreements").

Capitalized terms used in this Agreement shall have the meanings ascribed to them in Article IX.

In consideration of the representations, warranties and covenants herein contained, the Parties agree as follows.

ARTICLE I

THE ASSET PURCHASE

1.1 Purchase and Sale of Assets.

(a) Upon and subject to the terms and conditions of this Agreement, the Buyer shall purchase from the Seller, and the Seller shall sell, transfer, convey, assign and deliver to the Buyer, at the Closing, for the consideration specified below in this Article I, all right, title and interest in, to and under the Acquired Assets.

(b) Notwithstanding the provisions of Section 1.1(a), the Acquired Assets shall not include the Excluded Assets.

1.2 Assumption of Liabilities.

(a) Upon and subject to the terms and conditions of this Agreement, the Buyer shall assume and become responsible for, from and after the Closing, the Assumed Liabilities.

(b) Notwithstanding the terms of Section 1.2(a) or any other provision of this Agreement to the contrary, the Buyer shall not assume or become responsible for, and the Seller shall remain liable for, the Retained Liabilities.

1.3 Purchase Price. The aggregate Purchase Price to be paid by the Buyer for the Acquired Assets will equal One Million Six Hundred Thousand Dollars ($1,600,000) (the "Purchase Price"). The Purchase Price will be divided as follows: (a) $600,000.00, subject to the purchase price adjustment set forth in
Section 1.4 (the "Cash Consideration"), (b) 700,000 shares

(the "Shares") of Buyer Common Stock issued pro-rata to the Shareholders pursuant to Seller's instructions, and (c) the Secured Promissory Note.

1.4 Purchase Price Adjustment. Prior to the Closing, Seller shall deliver to Buyer the Net Working Capital Balance Certificate. To the extent the Net Working Capital Balance Certificate shows that there exists any Excess Net Working Capital, such Excess Net Working Capital shall be paid by Buyer into the Escrow Account (up to and including the amount of $200,000 with any remaining additional balance, if any, to be paid into the Escrow Account as accounts receivable are realized). Within twenty (20) days after the Closing, Buyer shall present to Seller proposed adjustments, if any, to the Closing Net Working Capital reflected on the Net Working Capital Balance Certificate. Buyer and Seller shall have ten (10) days to resolve any disagreements over such proposed adjustments. If Buyer and Seller are unable to agree on such adjustments, Buyer and Seller shall jointly select an independent certified public accountant (the "Independent Accountant") who will promptly review this Agreement and the disputed items or amounts for the purpose of calculating the final Closing Net Working Capital. In making such calculation, the Independent Accountant shall consider only those items or amounts on the Net Working Capital Balance Certificate that have been adjusted by Buyer. Such Independent Accountant shall, as promptly as practicable but in any event within ten (10) days, deliver to Buyer and Seller a report setting forth such calculation. Such report shall be final and binding upon Buyer and Seller. The cost of such review and report shall be borne by Buyer and Seller equally, and the Seller shall not distribute any portion of the Cash Consideration until a final determination of the Closing Net Working Capital has been made and agreed upon by the Buyer and the Seller. To the extent the final Closing Net Working Capital (after adjustments) exceeds $105,000.00, the amount of any such excess, including any amounts held in the Escrow Account and any interest thereon, shall be added to the Cash Consideration and paid by Buyer to Seller within five (5) days of the determination of the final Closing Net Working Capital (after adjustments whether by agreement of the parties or by the Independent Accountant). To the extent the final Closing Net Working Capital (after adjustments) is below $105,000.00, the Seller shall remit to the Buyer the amount of the Net Working Capital Difference from the Cash Consideration.

1.5 The Closing.

(a) The Closing shall take place at the offices of Frost Brown Todd LLC in Louisville, Kentucky commencing at 9:00 a.m. local time on the Closing Date, or at such other place as the parties may mutually agree. All transactions at the Closing shall be deemed to take place simultaneously, and no transaction shall be deemed to have been completed and no documents or certificates shall be deemed to have been delivered until all other transactions are completed and all other documents and certificates are delivered.

(b) At the Closing:

(i) the Seller shall deliver to the Buyer the various certificates, instruments and documents referred to in Section 5.1;

(ii) the Buyer shall deliver to the Seller the various certificates, instruments and documents referred to in Section 5.2;

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(iii) the Buyer shall execute and deliver to the Seller the Secured Promissory Note in substantially the form attached hereto as Exhibit A;

(iv) the Buyer and the Seller shall execute and deliver to each other the Security Agreement in substantially the form attached hereto as Exhibit B;

(v) the Seller shall execute and deliver to the Buyer a bill of sale in substantially the form attached hereto as Exhibit C and such other instruments of conveyance as the Buyer may reasonably request in order to effect the sale, transfer, conveyance and assignment to the Buyer of valid ownership of the Acquired Assets;

(vi) the Buyer shall execute and deliver to the Seller an instrument of assumption in substantially the form attached hereto as Exhibit D and such other instruments as the Seller may reasonably request in order to effect the assumption by the Buyer of the Assumed Liabilities;

(vii) the Buyer shall pay to the Seller, payable by wire transfer, bank draft, or other delivery of immediately available U.S. funds to an account designated by the Seller, the Cash Consideration;

(viii) the Buyer shall deliver the Shares to Seller;

(ix) the Buyer, the Seller and the Escrow Agent shall execute and deliver the Escrow Agreement in substantially the form attached hereto as Exhibit E and the Buyer shall deposit the Excess Net Working Capital, if any, with the Escrow Agent in accordance with Section 1.4;

(x) the Seller shall deliver to the Buyer, or otherwise put the Buyer in possession and control of, all of the Acquired Assets of a tangible nature; and

(xi) the Buyer and the Seller shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above.

1.6 Allocation. The Buyer and the Seller agree to allocate the Purchase Price (and all other capitalizable costs) among the Acquired Assets and the non-solicitation and non-competition covenants set forth in Sections 6.2 and 6.3 for all purposes (including financial accounting and tax purposes) in accordance with the allocation schedule attached hereto as Schedule 1.6. Seller and Buyer agree to use the allocations determined pursuant to this Section 1.6 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Code, and the Treasury regulations promulgated thereunder. Buyer and Seller shall prepare and submit to the other for review their IRS Forms 8594 within ninety (90) days after Closing. Each party shall have thirty (30) days to complete its review.

1.7 Further Assurances. At any time and from time to time after the Closing, at the request of the Buyer and without further consideration, the Seller shall execute and deliver such other instruments of sale, transfer, conveyance and assignment and take such actions as the Buyer may reasonably request to more effectively transfer, convey and assign to the Buyer, and

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to confirm the Buyer's rights to, title in and ownership of, the Acquired Assets and to place the Buyer in actual possession and operating control thereof.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer that, except as set forth in the Disclosure Schedules, the statements contained in this Article II are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing (after giving effect to any supplement(s) of the Disclosure Schedules pursuant to Section 4.6 or otherwise), except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedules shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article II. Disclosures in any section or subsection of the Disclosure Schedules shall be deemed to be disclosed and incorporated by reference in any such other section or subsection of the Disclosure Schedules as though fully set forth in such section or subsection.

2.1 Organization, Qualification and Corporate Power. The Seller is a corporation validly existing and in good standing under the laws of the State of Kentucky. The Seller is duly qualified to conduct business and is in good standing under the laws of each jurisdiction listed in Section 2.1 of the Disclosure Schedules, which jurisdictions constitute the only jurisdictions in which the Seller's business or the ownership or leasing of its properties requires such qualification. The Seller has all requisite power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it.

2.2 INTENTIONALLY OMITTED.

2.3 Authorization of Transaction.

(a) The Seller has all requisite power and authority to execute and deliver this Agreement and the Ancillary Agreements, and to perform its obligations hereunder and thereunder. The performance by the Seller of this Agreement and the Ancillary Agreements and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary actions on the part of the Seller.

(b) This Agreement has been duly and validly executed and delivered by the Seller and constitutes, and each of the Ancillary Agreements, upon its execution and delivery by the Seller, will constitute, a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, arrangement or other similar laws from time to time in effect and except as to the remedy of specific performance which may not be available under the laws of various jurisdictions.

2.4 Noncontravention. Except as listed in Section 2.4 of the Disclosure Schedules, neither the execution and delivery by the Seller of this Agreement or the Ancillary Agreements, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will (a)

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conflict with or violate any provision of the Articles of Incorporation or Bylaws of the Seller, (b) require on the part of the Seller any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Seller is a party or by which the Seller is bound or to which any of its assets is subject, (d) result in the imposition of any Security Interest upon any asset or assets of the Seller or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Seller or any of its properties or assets, except for, in the case of Sections 2.4(b)-(e), any such conflict, breach, default, acceleration, or right to terminate, modify or cancel, or failure to notify or obtain consent or waiver that would not have a Seller Material Adverse Effect.

2.5 Subsidiaries. Except as set forth in Section 2.5 of the Disclosure Schedules, (a) the Seller has no Subsidiaries; and (b) the Seller does not control directly or indirectly or have any direct or indirect equity participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association or entity.

2.6 Financial Statements. The Seller has provided or made available to the Buyer the Financial Statements. The Financial Statements (i) were prepared on a consistent basis throughout the periods covered thereby (except as may be indicated in the notes to such financial statements) and, in the case of the balance sheet and statement of income, changes in shareholder's equity and cash flows of the Seller as of the end of and for the year ended December 31, 2006, in accordance with GAAP, and (ii) fairly present the financial position of the Seller as of the dates thereof and the results of its operations and cash flows for the periods indicated, consistent with the books and records of the Seller, except that the unaudited interim financial statements are subject to normal and recurring year-end adjustments and do not include footnotes.

2.7 Absence of Certain Changes. Except as set forth in Section 2.7 of the Disclosure Schedules, since the Most Recent Balance Sheet Date, (a) there has, to Seller's Knowledge, occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Seller Material Adverse Effect, and (b) the Seller has not taken any of the actions set forth in paragraphs (a) through (n) of Section 4.4.

2.8 Undisclosed Liabilities. Except as set forth in Section 2.8 of the Disclosure Schedules, the Seller has no Knowledge of any liability (whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet,
(b) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet and which are not material, and (c) liabilities which have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business.

2.9 Tax Matters. Except as set forth on Section 2.9 of the Disclosure Schedules, for all taxable periods from and after calendar year 2004:

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(a) The Seller has properly filed on a timely basis all material Tax Returns that it is and was required to file, and, to Seller's Knowledge, all such material Tax Returns were true, correct and complete in all material respects. The Seller has properly paid on a timely basis all material Taxes that were due and payable. All material Taxes that the Seller is or was required by law to withhold or collect have been withheld or collected and, to the extent required, have been properly paid on a timely basis to the appropriate Governmental Entity. The Seller has complied with all information reporting and back-up withholding requirements in all material respects, including maintenance of the required records with respect thereto, in connection with amounts paid to any employee, independent contractor, creditor or other third party.

(b) The unpaid Taxes of the Seller for periods through the date of the Most Recent Balance Sheet Date do not materially exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Most Recent Balance Sheet. All Taxes attributable to the period from and after the Most Recent Balance Sheet Date and continuing through the Closing Date are, or will be, attributable to the conduct by the Seller of its operations in the Ordinary Course of Business.

(c) No examination or audit of any Tax Return of the Seller by any Governmental Entity is currently in progress or, to the Knowledge of the Seller, threatened or contemplated. Section 2.9(c) of the Disclosure Schedules sets forth each jurisdiction (other than United States federal) in which the Seller files, or is required to file or has been required to file a material Tax Return. The Seller has not been informed by any jurisdiction that the jurisdiction believes that the Seller was required to file any Tax Return that was not filed.

(d) The Seller is, and has been since its inception, treated as a "corporation" for federal income tax purposes and has been treated in a similar manner for purposes of the income Tax laws of all states in which it has been subject to taxation.

(e) The Seller has delivered or made available to the Buyer (i) complete and correct copies of all Tax Returns of the Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of assessment, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations has not yet expired.

(f) The Seller has not (i) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, or (iii) executed or filed any power of attorney relating to Taxes with any Governmental Entity.

(g) The Seller is not a party to any ongoing litigation regarding Taxes.

(h) There are no Security Interests with respect to Taxes upon any of the Acquired Assets, other than with respect to Taxes not yet due and payable. To the Seller's

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Knowledge, there is no basis for the assertion of any claim relating or attributable to Taxes, which, if adversely determined, would result in any Security Interest on the Acquired Assets, or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

(i) None of the Acquired Assets (i) is property that is required to be treated as being owned by any other person pursuant to the provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, or (ii) is "tax exempt use property" within the meaning of Section 168(h) of the Code.

(j) The Seller is not bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(k) The Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.

2.10 Ownership and Condition of Assets. Except as set forth on Section 2.10 of the Disclosure Schedules,

(a) The Seller is the true and lawful owner, and has good title to, all of the Acquired Assets, free and clear of all Security Interests. Upon execution and delivery by the Seller to the Buyer of the Bill of Sale the Buyer will become the true and lawful owner of, and will receive good title to, the Acquired Assets, free and clear of all Security Interests, except for Security Interests created by Buyer.

(b) The Acquired Assets are sold and purchased pursuant to this Agreement AS IS, WHERE IS.

2.11 Owned Real Property. The Seller does not own any real property.

2.12 Real Property Leases. Section 2.12 of the Disclosure Schedules lists all Leases to which Seller is currently a party, and lists the term of each such Lease, any extension and expansion options, and the rent payable thereunder. The Seller has delivered or made available to the Buyer complete and accurate copies of such Leases. With respect to each Lease and except as set forth in Section 2.12 of the Disclosure Schedules:

(a) such Lease is legal, valid, binding, enforceable and in full force and effect as to the Seller, and, to Seller's Knowledge, as to the other party (or parties) to such Lease;

(b) neither the Seller nor, to Seller's Knowledge, any other party, is in breach or violation of, or default under, any such Lease, and, to Seller's Knowledge, no event has occurred, is pending or is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a material breach or default by the Seller or any other party under such Lease;

(c) the Seller is not a party to any dispute as to such Lease, and to Seller's Knowledge, no other person is a party to such dispute relating to or affecting the Lease; and

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(d) the Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold, except pursuant to this Agreement.

2.13 Intellectual Property. Except as set forth on Section 2.13 of the Disclosure Schedules,

(a) Seller Registrations. There are no Seller Registrations.

(b) Prosecution Matters. Seller has no Patent Rights.

(c) Ownership. The Seller is the sole and exclusive owner of all Seller Owned Intellectual Property, free and clear of any Security Interests and all joint owners of the Seller Owned Intellectual Property are listed in Section 2.13(c) of the Disclosure Schedules.

(d) Protection Measures. The Seller has taken reasonable measures to protect the proprietary nature of each item of Seller Owned Intellectual Property, and to maintain in confidence all trade secrets and confidential information comprising a part thereof. To Seller's Knowledge, no complaint relating to an improper use or disclosure of, or a breach in the security of, any such information has been made or threatened against the Seller. To Seller's Knowledge, there has been no: (i) unauthorized disclosure of any third party proprietary or confidential information in the possession, custody or control of the Seller or (ii) breach of the Seller's security procedures wherein confidential information has been disclosed to a third person.

(e) Infringement by Seller. To Seller's Knowledge, none of the Customer Offerings, or the Exploitation thereof by the Seller or any other activity of the Seller, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party. To Seller's Knowledge, none of the Internal Systems, or the Seller's past, current or currently contemplated Exploitation thereof, or any other activity undertaken by them in connection with the Business, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party. The Seller has not received any complaint, claim or notice, or, To Seller's Knowledge, threat of any of the foregoing (including any notification that a license under any patent is or may be required), alleging any such infringement, violation or misappropriation and any request or demand for indemnification or defense received by the Seller from any reseller, distributor, customer, user or any other third party; and the Seller has not received any legal opinions, studies, market surveys and analyses relating to any alleged or potential infringement, violation or misappropriation.

(f) Infringement of Rights. To Seller's Knowledge, no person (including, without limitation, any current or former employee or consultant of Seller) is infringing, violating or misappropriating any of the Seller Owned Intellectual Property or any Seller Licensed Intellectual Property.

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Intellectual Property rights with respect to any Customer Offerings or any third party Intellectual Property rights. The Seller is not a member of or party to any patent pool, industry standards body, trade association or other organization pursuant to the rules of which it is obligated to license any existing or future Intellectual Property to any person.

(h) Inbound IP Agreements. Section 2.13(h) of the Disclosure Schedules identifies (i) each item of Seller Licensed Intellectual Property and
(ii) the license or agreement pursuant to which the Seller Exploits it (excluding currently-available, off the shelf software programs that are part of the Internal Systems and are licensed by the Seller pursuant to "shrink wrap" licenses, the total fees associated with which are less than $2,500). Except as set forth on section 2.13(h) of the Disclosure Schedules, no third party inventions, methods, services, materials, processes or Software are included in or required to Exploit the Customer Offerings or Internal Systems in the manner so done currently by Seller.

(i) Source Code. The Seller has not licensed, distributed or disclosed, and knows of no distribution or disclosure by others (including its employees and contractors) of, the Seller Source Code to any person (other than Persons who need access thereto in connection with Seller's Business), and the Seller has taken reasonable security measures to prevent disclosure of such Seller Source Code. To Seller's Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, nor will the consummation of the transactions contemplated hereby, result in the disclosure or release of such Seller Source Code by the Seller, or escrow agent(s) or any other person to any third party (other than Persons who need access thereto in connection with Seller's Business).

(j) Authorship. All of the Software and Documentation comprising, incorporated in or bundled with the Customer Offerings or Internal Systems and all right, title and interest in such copyrightable materials is owned by the Seller.

(k) Open Source Code. Section 2.13(k) of the Disclosure Schedules lists all Open Source Materials that the Seller has either incorporated into the Customer Offering or Internal Systems, and/or those Customer Offerings and/or Internal Systems (or portions thereof) that are derivative works of Open Source Materials. Except as identified in Section 2.13(k) of the Disclosure Schedules, the Seller has not (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Customer Offerings; or (ii) used Open Source Materials that create obligations for the Seller with respect to the Customer Offerings or grant to any third party, any rights or immunities under Intellectual Property rights (including, but not limited to, using any Open Source Materials that require, as a condition of Exploitation of such Open Source Materials, that other Software incorporated into, derived from or distributed with such Open Source Materials be (x) disclosed or distributed in source code form, (y) licensed for the purpose of making derivative works, or
(z) redistributable at no charge or minimal charge). Seller has no distributed Open Source Materials in conjunction with any other software developed or distributed by the Seller.

(l) Support and Funding. The Seller has neither sought, applied for nor received any support, funding, resources or assistance from any federal, state, local or foreign governmental or quasi-governmental agency or funding source in connection with the

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Exploitation of the Customer Offerings, the Internal Systems or any facilities or equipment used in connection therewith.

(m) Certifications. Section 2.13(m) of the Disclosure Schedule identifies all channel partner certifications, accreditations or similar qualifications with third party technology providers held by the Seller or its employees.

(n) Disclaimer of Warranty. EXCEPT AS OTHERWISE PROVIDED IN THIS
SECTION 2.13, SELLER IS MAKING NO, AND HEREBY EXPRESSLY DISCLAIMS ANY AND ALL, REPRESENTATIONS OR WARRANTIES (WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE SOFTWARE, THE SELLER SOURCE CODE, THE CUSTOMER OFFERINGS, THE DOCUMENTATION, THE INTERNAL SYSTEMS OR ANY PART OF ANY OF THE FOREGOING, INCLUDING, BUT NOT LIMITED TO, REPRESENTATIONS AND WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SELLER HEREBY EXPRESSLY DISCLAIMS ANY LIABILITY TO BUYER FOR ANY REASON WITH RESPECT TO THE SOFTWARE, THE SELLER SOURCE CODE, THE CUSTOMER OFFERINGS, THE DOCUMENTATION, THE INTERNAL SYSTEMS OR ANY PART OF ANY OF THE FOREGOING, INCLUDING, BUT NOT LIMITED TO, LIABILITY FOR LOSS OF INCOME, LOSS OF PROFITS, LOSS OF OR INACCURACY OF DATA, OR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES. THIS SECTION 2.13(n) SHALL SURVIVE THE CLOSING.

2.14 Contracts.

(a) Section 2.14 of the Disclosure Schedules lists the following agreements (written or oral) to which the Seller is a party as of the date of this Agreement (other than this Agreement and the Ancillary Agreements):

(i) any agreement (or group of related agreements) for the lease of personal property from or to third parties providing for lease payments in excess of $5,000 per annum or having a remaining term longer than three months;

(ii) any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, (B) which involves more than the sum of $5,000 per annum, or (C) in which the Seller has granted manufacturing rights, "most favored nation" pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;

(iv) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) involving more than $5,000 or under

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which it has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible;

(v) any agreement for the disposition of any significant portion of the assets or business of the Seller (other than sales of products in the Ordinary Course of Business) or any agreement for the acquisition of the assets or business of any other entity (other than purchases of inventory or components in the Ordinary Course of Business);

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer, manager or Shareholder or an Affiliate thereof;

(ix) any agreement which contains any provisions requiring the Seller to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the Ordinary Course of Business);

(x) any agreement, not entered into in the Ordinary Course of Business, that could reasonably be expected to have the effect of prohibiting or impairing the conduct of the business of the Seller as currently conducted;

(xi) any agreement under which the Seller is restricted from selling, licensing or otherwise distributing any of its technology or products, or providing services to, customers or potential customers or any class of customers, in any geographic area, during any period of time or any segment of the market or line of business;

(xii) any agreement which would entitle any third party to receive a license or any other right to intellectual property of the Buyer or any of the Buyer's Affiliates following the Closing; and

(xiii) any other agreement (or group of related agreements) either involving more than $10,000 per annum or not entered into in the Ordinary Course of Business.

(b) The Seller has delivered or made available to the Buyer a complete and accurate copy of each agreement listed in Section 2.13 or Section 2.14 of the Disclosure Schedules. With respect to each agreement so listed and except as disclosed in Section 2.14 of the Disclosure Schedules: (i) the agreement is legal, valid, binding and enforceable and in full force and effect;
(ii) neither the Seller nor, to Seller's Knowledge, any other party, is in breach or violation of, or default under, any such agreement, and, to Seller's Knowledge, no event has occurred, is pending or threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Seller or, to Seller's Knowledge, any other party under such agreement.

2.15 Accounts Receivable. All accounts receivable of the Seller reflected on the Most Recent Balance Sheet (other than those paid since such date) are valid receivables and are current and, to Seller's Knowledge, collectible (within 90 days after the date on which it first

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became due and payable), net of the applicable reserve for bad debts on the Most Recent Balance Sheet. A complete and accurate list of the accounts receivable reflected on the Most Recent Balance Sheet, showing the aging thereof, is included in Section 2.15 of the Disclosure Schedules. All accounts receivable of the Seller that have arisen since the Most Recent Balance Sheet Date are valid receivables and are current and, to Seller's Knowledge, collectible (within 90 days after the date on which it first became due and payable), net of a reserve for bad debts in an amount consistent with Seller's past practice. The Seller has not received any written notice from an account debtor stating that any account receivable in an amount in excess of $5,000 is subject to any contest, claim or setoff by such account debtor.

2.16 Insurance. Section 2.16 of the Disclosure Schedules lists each insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, business interruption, environmental, product liability, errors and omissions, professional liability, and automobile insurance policies)(collectively, the "Insurance Policies") to which the Seller is a party, all of which are in full force and effect. Except as set forth on
Section 2.16 of the Disclosure Schedules, the Seller has no Knowledge of any threatened termination of, or premium increase with respect to, any such Insurance Policy, nor any Knowledge of any material claim pending under any such Insurance Policy as to which coverage has been questioned, denied or disputed by the underwriter of such Insurance Policy.

2.17 Litigation. Except as set forth in Section 2.17 of the Disclosure Schedules, there is no Legal Proceeding which is pending or has been threatened in writing against the Seller. There are no judgments, orders or decrees outstanding against the Seller.

2.18 Warranties. Except as set forth in Section 2.17 of the Disclosure Schedules, no service or product delivered, made, sold, leased or licensed by the Seller is subject to any guaranty, warranty, right of return, right of credit or other indemnity.

2.19 Employees.

(a) Section 2.19 of the Disclosure Schedules contains a list of all employees of the Seller, their respective positions with Seller and their annual salaries. Except as set forth on Section 2.19 of the Disclosure Schedules, each current employee of the Seller and each past employee of the Seller has entered into a confidentiality agreement with the Seller, a copy or form of which has been provided or made available to the Buyer. Section 2.19 of the Disclosure Schedules contains a list of all employees of the Seller who are a party to a non-competition agreement with the Seller; copies of such agreements have been provided or made available to the Buyer. Section 2.19 of the Disclosure Schedules contains a list of all employees of the Seller who are not citizens of the United States. Except as set forth on Section 2.19 of the Disclosure Schedule, to the Knowledge of the Seller, no Key Employee or group of employees has any plans to terminate employment with the Seller (other than for the purpose of accepting employment with the Buyer following the Closing) or not to accept employment with the Buyer. The Seller is in material compliance with all applicable laws relating to the hiring and employment of employees.

(b) The Seller is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or

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other collective bargaining disputes. The Seller has no Knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Seller.

2.20 Employee Benefits. Section 2.20 of the Disclosure Schedules sets forth all plans, programs, or arrangements that Seller has maintained, sponsored, adopted or obligated itself under with respect to employees' benefits, including pension or retirement plans, medical or dental plans, life or long-term disability insurance, bonus or incentive compensation, stock option or equity participation plans (the "Employee Plans"), and Seller has provided or made available to Buyer copies of the Employee Plans. Seller has no liability or obligation with respect to any employee of Seller under any Employee Plan other than normal salary or wage accruals and paid vacation, sick leave and holiday accruals in accordance with Seller's past practice and policy. Seller has, in all material respects, performed all obligations required to be performed under, and has complied all Legal Requirements in connection with, all such Employee Plans and is not in arrears under any of the terms thereof.

2.21 Environmental Matters. Except as set forth in Section 2.21 of the Disclosure Schedules,

(a) To its Knowledge, the Seller has complied with all applicable Environmental Laws except where failure to do so would not have a Seller Material Adverse Effect. There is no pending or, to the Knowledge of the Seller, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Seller.

(b) To its Knowledge, the Seller does not have any liabilities or obligations arising from the release of any Materials of Environmental Concern into the environment.

(c) The Seller is not a party to or bound by any court order, administrative order, consent order or other agreement with any Governmental Entity entered into in connection with any legal obligation or liability arising under any Environmental Law.

(d) The Seller does not have possession of, or access to, or Knowledge of, any documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently leased by the Seller (whether conducted by or on behalf of the Seller or a third party, and whether done at the initiative of the Seller or directed by a Governmental Entity or other third party).

2.22 Legal Compliance. Except as set forth in Section 2.22 of the Disclosure Schedules, the Seller is currently conducting its business in material compliance with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, and Seller has had valid Permits to conduct such business with respect to each jurisdiction (and at such times) for which it has been required to have such Permits except where the lack of any such Permit would not have a Seller Material Adverse Effect. The Seller has not received any notice or communication from any Governmental Entity alleging noncompliance with any applicable law, rule or regulation.

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2.23 Customers and Suppliers. Section 2.23 of the Disclosure Schedules sets forth a list of Seller's ten largest customers and ten largest suppliers during the last full fiscal year or the interim period through the Most Recent Balance Sheet Date and the amount of revenues accounted for by each such customer or supplier during each such period. To the Knowledge of Seller, no Person identified in the foregoing sentence has provided written or verbal notice to Seller within the past year that it will stop, or materially reduce its activity below historic levels in connection with any contract or arrangement on which Seller currently derives revenue.

2.24 Permits. Section 2.24 of the Disclosure Schedules sets forth a list of all Permits issued to or held by the Seller. Each such Permit is in full force and effect; the Seller is in material compliance with the terms of each such Permit; and, to the Knowledge of the Seller, no suspension or cancellation of such Permit is threatened.

2.25 Certain Business Relationships With Affiliates. To the Knowledge of Seller, no Affiliate of the Seller (a) owns any property or right, tangible or intangible, which is used in the business of the Seller, (b) has any claim or cause of action against the Seller, or (c) owes any money to, or is owed any money by, the Seller. Section 2.25 of the Disclosure Schedules describes any transactions or relationships between the Seller and any Affiliate thereof which occurred or have existed since the beginning of the time period covered by the Financial Statements.

2.26 Brokers' Fees. The Seller does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

2.27 Disclosure. No representation or warranty by the Seller contained in this Agreement, and no statement contained in the Disclosure Schedules or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Seller pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

2.28 Government Contracts. Except as set forth in Section 2.28 of the Disclosure Schedules,

(a) The Seller has not been suspended or debarred from bidding on contracts or subcontracts with any Governmental Entity; and to Seller's Knowledge no such suspension or debarment has been threatened or initiated. The Seller has not been or is not now being audited or investigated by any Governmental Entity or any prime contractor with a Governmental Entity; nor, to the Knowledge of the Seller, has any such audit or investigation been threatened. To the Knowledge of the Seller, there is no valid basis for (i) the suspension or debarment of the Seller from bidding on contracts or subcontracts with any Governmental Entity, or (ii) any claim (including any claim for return of funds to the Government) pursuant to an audit or investigation by any Governmental Entity. The Seller has no agreements, contracts or commitments which require it to obtain or maintain a security clearance with any Governmental Entity.

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(b) To the Knowledge of the Seller, no basis exists for any of the following with respect to any of its contracts or subcontracts with any Governmental Entity: (i) a Termination for Default (as provided in 48 C.F.R. Ch.1 ss.52.249-8, 52.249-9 or similar sections), (ii) a Termination for Convenience (as provided in 48 C.F.R. Ch.1 ss.52.241-1, 52.249-2 or similar sections), or a Stop Work Order (as provided in 48 C.F.R. Ch.1 ss.52.212-13 or similar sections); and the Seller has no reason to believe that funding may not be provided under any contract or subcontract with any Governmental Entity in the upcoming federal fiscal year.

2.29 Securities Representations.

(a) Except as set forth on Schedule 2.29 of the Disclosure Schedule, each Shareholder is an "accredited investor" as defined in Rule 501(a) under the Securities Act.

(b) Each Shareholder is acquiring the Shares for its own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act, or any rule or regulation under the Securities Act.

(c) Each Shareholder has had adequate opportunity to obtain from representatives of the Buyer such information about the Buyer as is necessary for the undersigned to evaluate the merits and risks of its acquisition of the Shares.

(d) Each Shareholder has sufficient expertise in business and financial matters to be able to evaluate the risks involved in the acquisition of the Shares and to make an informed investment decision with respect to such acquisition.

(e) Each Shareholder understands that the Shares have not been registered under the Securities Act and are "restricted securities" within the meaning of Rule 144 under the Securities Act; and the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available.

(f) A legend substantially in the following form will be placed on the certificate(s) representing the Shares:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Seller that the statements contained in this Article III are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing.

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3.2 Authorization of the Transaction. The Buyer has all requisite power and authority to execute and deliver this Agreement, the Secured Promissory Note and the Ancillary Agreements and to perform its obligations hereunder and thereunder. The execution and delivery by the Buyer of this Agreement, the Secured Promissory Note and the Ancillary Agreements and the performance by the Buyer of this Agreement and the Ancillary Agreements and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of the Buyer. This Agreement has been duly and validly executed and delivered by the Buyer and constitutes, and each of the Secured Promissory Note and the Ancillary Agreements, upon its execution and delivery by Buyer will constitute, a valid and binding obligation of the Buyer, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, arrangement or other similar laws from time to time in effect.

3.3 Noncontravention. Neither the execution and delivery by the Buyer of this Agreement, the Secured Promissory Note or the Ancillary Agreements, nor the consummation by the Buyer of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Articles of Incorporation or by-laws of the Buyer, (b) require on the part of the Buyer any notice to or filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Buyer is a party or by which it is bound or to which any of its assets is subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or any of its properties or assets.

3.4 Capitalization. The authorized capital stock of the Buyer consists of 20,000,000 shares of Buyer Common Stock, of which 3,937,500 shares were issued and outstanding, and options, warrants or other rights (the "Equity Rights") to acquire 865,000 shares of Buyer Common Stock were outstanding, in each case, as of October 12, 2007. As of October 12, 2007, there are no outstanding options, warrants or similar rights relating to the Buyer or its equity other than the Convertible Promissory Notes of the Buyer dated July 16, 2007 convertible into an aggregate of up to 833,333 shares of Buyer Common Stock and the Equity Rights. The rights and privileges of each class of the Buyer's capital stock are set forth in the Buyer's Articles of Incorporation, a copy of which has been made available to Seller. All of the issued and outstanding shares of Buyer Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Shares will be, when issued on the terms and conditions of this Agreement, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Buyer's Articles of Incorporation or Bylaws or any agreement to which the Buyer is a party or is otherwise bound.

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3.5 No Prior Activities. As of the date of this Agreement, the Buyer has not engaged in any business operations.

3.6 Litigation. As of the date of this Agreement, there is no Legal Proceeding which is pending or, to the Buyer's knowledge, threatened against the Buyer or any subsidiary of the Buyer which, if determined adversely to the Buyer or such subsidiary, could have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, capitalization, prospects, condition (financial or other), or results of operations of the Seller.

3.7 Brokers' Fees. The Buyer will pay the fees and commissions of Reibling & Associates, LLC, with respect to the transactions contemplated by this Agreement. Buyer has not retained any other brokers, finders or agents with respect to the transactions contemplated hereunder.

ARTICLE IV

PRE-CLOSING COVENANTS

4.1 Closing Efforts. Each of the Parties shall use its Reasonable Best Efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including using its Reasonable Best Efforts to cause (i) its representations and warranties to remain true and correct in all material respects through the Closing Date and
(ii) the conditions to the obligations of the other Party to consummate the transactions contemplated by this Agreement to be satisfied.

4.2 Governmental and Third-Party Notices and Consents. Each of the Parties agrees to cooperate with one another in mutual good faith to seek to obtain all necessary consents and approvals discuss herein:

(a) Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all waivers, permits, consents, approvals or other authorizations from Governmental Entities, and to effect all registrations, filings and notices with or to Governmental Entities, as may be required for such Party to consummate the transactions contemplated by this Agreement and to otherwise comply with all applicable laws and regulations in connection with the consummation of the transactions contemplated by this Agreement.

(b) The Seller shall use its Reasonable Best Efforts to obtain, all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as listed or are required to be listed in the Disclosure Schedules. The Buyer shall reasonably cooperate with the Seller in Seller's efforts to obtain such waivers, consents and approvals.

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obligations with respect thereto at the Closing until such approval or consent is obtained and assignment occurs, at which time Buyer will assume all such liabilities and obligations following the date of such approval or consent, (B) the Seller shall continue to use its Reasonable Best Efforts for a reasonable period of time after the Closing, and in any case not less than nine (9) months, to obtain the necessary consent or approval as soon as practicable after the Closing, (C) upon the obtaining of such consent or approval, the Buyer and the Seller shall execute such further instruments of conveyance (in substantially the form executed at the Closing) as may be necessary to assign and transfer such Assigned Contracts and/or other assets or rights (and the associated liabilities and obligations of the Seller) to the Buyer, and (D) from and after the Closing until the assignment or termination (at the end of any fixed term thereof) of each such Assigned Contract pursuant to clause (C) above, the Buyer shall perform and fulfill, on a subcontractor basis, the obligations of the Seller to be performed under such Assigned Contract, and the Seller shall promptly remit to the Buyer all payments received by it under such Assigned Contract for services performed during such period.

4.3 Exclusivity.

(a) Neither the Seller nor the Shareholders shall from the date of this Agreement until the earlier of the Closing Date or the date this Agreement is terminated, directly or indirectly, (i) initiate, solicit or encourage the submission of any proposal or offer from any Person relating to, or enter into any transaction relating to, any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of shares, sale of material assets or similar business transaction involving the Seller, (ii) furnish any non-public information concerning the business, properties or assets of the Seller to any party (other than the Buyer) except to Seller's, or any of the individual Shareholders', representatives, accountants, attorneys or other affiliated Persons having need of such information, (iii) engage in discussions or negotiations with any party (other than the Buyer) concerning any such transaction, (iv) vote any shares of Seller in favor of any such transaction with any Person (other than the Buyer), or (v) enter into any agreement with any Person (other than the Buyer) concerning any such transaction.

(b) If the Seller or a Shareholder receives any inquiry, proposal or offer of the nature described in paragraph (a) above, the Seller or Shareholder, as applicable, shall, within one business day after such receipt, notify the Buyer of such inquiry, proposal or offer, including the identity of the other party and the terms of such inquiry, proposal or offer.

4.4 Operation of Business. Except as contemplated by this Agreement, during the period from the date of this Agreement to the Closing, the Seller shall conduct its operations in the Ordinary Course of Business and in material compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, prior to the Closing, the Seller shall not, without the written consent of the Buyer:

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(a) issue or sell any shares or other securities of the Seller or any options, warrants or other rights to acquire any such shares or other securities (except pursuant to the conversion or exercise of options, warrants or other convertible securities outstanding on the date hereof);

(b) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its shares, except for a dividend not to exceed $65,000, to be distributed on November 1, 2007;

(c) create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans, advances or capital contributions to, or investments in, any other person or entity;

(d) enter into, adopt or amend any Employee Plan or any employment or severance agreement or arrangement of the type described in Section 2.20 or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its managers, officers or employees, generally or individually, or pay any bonus or other benefit to its managers, officers or employees (except for existing payment obligations in Ordinary Course of Business) or hire any new officers or (except in the Ordinary Course of Business) any new employees;

(e) acquire, sell, lease, license or dispose of any assets or property, other than purchases and sales of assets in the Ordinary Course of Business;

(f) mortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest;

(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;

(h) amend its Articles of Incorporation, Bylaws or other organizational documents in a manner that could have an adverse effect on the transactions contemplated by this Agreement;

(i) change its accounting methods, principles or practices, except insofar as may be required by law or regulatory accounting requirements or make any new elections, or changes to any current elections, with respect to Taxes that affect the Acquired Assets;

(j) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any contract or agreement of a nature listed or required to be listed in
Section 2.12, Section 2.13 or Section 2.14 of the Disclosure Schedules;

(k) make or commit to make any capital expenditure in excess of $5,000 per item or $10,000 in the aggregate;

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(l) institute or settle any Legal Proceeding;

(m) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Seller set forth in this Agreement not being true and correct at the Closing or (ii) any of the conditions to the Closing set forth in Article V not being satisfied; or

(n) agree in writing or otherwise to take any of the foregoing actions.

4.5 Access to Information. Each of Buyer and Seller shall permit representatives of the other party to have full access (at all reasonable times, and in a manner so as not to interfere with normal business operations) to all premises, properties, financial, tax and accounting records, contracts, other records and documents in order to facilitate the due diligence review by each of Buyer and Seller as each may reasonably deem appropriate and to facilitate the preparation of Buyer's audited financial statements.

4.6 Notification. From the date of this Agreement until the Closing, the Seller shall promptly deliver to the Buyer supplemental information concerning facts, conditions, events or circumstances occurring subsequent to the date hereof which would render any representation, warranty or statement in this Agreement or the Disclosure Schedules inaccurate or incomplete at any time after the date of this Agreement until the Closing. Such supplemental information shall be deemed for all purposes to be a part of the Disclosure Schedules as though originally set forth therein and shall be deemed to avoid or cure any breach of any representation, warranty or statement.

4.7 FIRPTA Tax Certificate. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer a certification that the Seller is not a foreign person within the meaning of Section 1445 of the Code, in accordance with the Treasury Regulations under Section 1445 of the Code.

ARTICLE V

CONDITIONS TO CLOSING

5.1 Conditions to Obligations of the Buyer. The obligation of the Buyer to consummate the transactions contemplated by this Agreement to be consummated at the Closing is subject to the satisfaction of the following additional conditions:

(a) the Seller shall have obtained (and shall have provided copies thereof to the Buyer) all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Seller;

(b) the representations and warranties of the Seller set forth in the first sentence of Section 2.1, as well as those set forth in Section 2.3, and any representations and warranties of the Seller set forth

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in this Agreement that are qualified as to materiality shall be true and correct in all respects, and all other representations and warranties of the Seller set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(c) the Seller shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(d) no Legal Proceeding shall be pending or threatened; and no judgment, order, decree, stipulation or injunction shall be in effect that would
(i) prevent consummation of the transactions contemplated by this Agreement,
(ii) cause the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect adversely the right of the Buyer to own, operate or control any of the Acquired Assets, or to conduct the business of the Seller as currently conducted, following the Closing;

(e) the Seller shall have delivered to the Buyer the Seller Certificate;

(f) the Seller shall have delivered to the Buyer an updated list of the Acquired Assets, as of the day prior to the Closing Date;

(g) the Seller shall have delivered to the Buyer documents evidencing the release or termination of (or an undertaking to release or terminate promptly after the Closing) all Security Interests on the Acquired Assets, and copies of filed UCC termination statements with respect to all UCC financing statements evidencing Security Interests;

(h) the Buyer shall have received an opinion from counsel to the Seller in substantially the form attached hereto as Exhibit E, regarding the authorization of the Seller to execute and deliver this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder, addressed to the Buyer and dated as of the Closing Date;

(i) the Seller shall have delivered the Net Working Capital Balance Certificate;

(j) each of the Key Employees shall not have taken any action which would be prohibited thereby in any material respect if such Person's Employment Agreement were in effect at the time of such action and the Seller shall have no Knowledge of any such Key Employee's intention not to accept employment by Buyer following the Closing;

(k) the Buyer shall have entered into a sublease or assignment of the Lease reasonably satisfactory to Seller, or Buyer shall have entered into a new lease with the landlord of the property underlying the Lease;

(l) the Buyer shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities, and Buyer shall have commenced public trading of its common stock with no fewer than four active market makers;

(m) no Seller Material Adverse Effect shall have occurred;

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(n) the Buyer shall be reasonably satisfied that the issuance and sale of the Shares are exempt from the registration requirements of the Securities Act;

(o) Seller shall have received all necessary consents to the assignment of the Assigned Contracts, which consent may be conditioned on the Closing;

(p) the Buyer and its attorneys, accountants, lenders and other representatives and agents shall have satisfactorily completed their due diligence investigation of the Seller and the Business;

(q) the Buyer shall have received such other certificates and instruments (including certificates of good standing of the Seller in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing; and

(r) the Buyer and its independent accountants have been provided with audited financial statements of the Seller, or have obtained such information as the Buyer deems necessary or desirable, in its sole discretion, to prepare audited financial statements of the Seller after the Closing hereof; and

(s) the Shareholders shall have signed such share exchange agreements and other documents as the Buyer may reasonably request in connection with the share exchange transaction currently contemplated by the Buyer on the date of the Closing.

5.2 Conditions to Obligations of the Seller. The obligation of the Seller to consummate the transactions contemplated by this Agreement to be consummated at the Closing is subject to the satisfaction of the following additional conditions:

(a) the Buyer shall have obtained (and shall have provided copies thereof to the Seller) all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Buyer;

(b) the representations and warranties of the Buyer set forth in the first sentence of Section 3.1 and in Sections 3.2 and 3.4 as well as any representations and warranties of the Buyer set forth in this Agreement that are qualified as to materiality shall be true and correct in all respects, and all other representations and warranties of the Buyer set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(c) the Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

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(d) no Legal Proceeding shall be pending or threatened wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect;

(e) the Buyer shall have delivered to the Seller the Buyer Certificate;

(f) the Buyer shall have entered into a sublease or assignment of the Lease reasonably satisfactory to Seller, or Buyer shall have entered into a new lease with the landlord of the property underlying the Lease;

(g) the Seller shall have received such other certificates and instruments (including certificates of good standing of the Buyer in its jurisdiction of organization, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

(h) the Seller shall be reasonably satisfied that the issuance and sale of the Shares to the Shareholders, are exempt from the registration requirements of the Securities Act;

(i) the Buyer shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities, and Buyer shall commence public trading of its common stock with no fewer than four active market makers;

(j) contemporaneously with the Closing, Buyer shall have acquired one or more additional businesses which, when combined with the annualized revenue of the business acquired from Seller, shall be generating annualized revenue reasonably expected to exceed $8.9 million; and

(k) the Seller shall have received an opinion from counsel to the Buyer in substantially the form attached hereto as Exhibit G, regarding (i) the authorization of the Buyer to execute and deliver this Agreement, the Ancillary Agreements and the Secured Promissory Note and to perform its obligations hereunder and thereunder, and (ii) the due authorization and valid issuance of the Shares, addressed to the Seller and dated as of the Closing Date.

ARTICLE VI

POST-CLOSING COVENANTS

6.1 Proprietary Information. From and after the Closing, neither the Seller nor the Shareholders shall disclose or make use of (except to pursue its rights, under this Agreement or the Ancillary Agreements and as may be required by law), and shall use their best efforts to cause all of their Affiliates not to disclose or make use of, any knowledge, information or documents of a confidential nature or not generally known to the public with respect to Acquired Assets, the Seller's business or the Buyer or its business (including the financial information, technical information or data relating to the Seller's products and names of customers of the Seller), except to the extent that such knowledge, information or documents shall have become public knowledge other than through improper disclosure by the Seller or an Affiliate; provided

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that this Section shall not restrict any Key Employee from performing his job function with and for the benefit of Buyer after the Closing.

6.2 Solicitation and Hiring. During the applicable Restricted Period, neither the Seller nor any Shareholder shall, either directly or indirectly (including through an Affiliate), (a) solicit, hire or attempt to induce any Restricted Employee to terminate his employment with the Buyer or any subsidiary of the Buyer; provided that the restrictions on the Shareholder (as such) set forth in this sentence shall not apply to any Shareholder who is a Key Employee and whose employment is terminated by the Company without Cause (as defined in the Key Employee's Employment Agreement) or who terminates his employment with the Company for Good Reason (as defined in the Key Employee's Employment Agreement).

6.3 Non-Competition.

(a) During the applicable Restricted Period, neither the Seller nor any Shareholder shall, either directly or indirectly as a owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise (except as the holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company, and excluding the Shareholders' ownership interest in Buyer), (i) provide any service or design, develop, manufacture, market, sell or license any product which is competitive with any service provided or product designed, developed (or under development), manufactured, sold or licensed by the Seller as of the Closing Date or (ii) engage, within the State of Indiana and the Commonwealth of Kentucky, in any business competitive with the Business of the Seller as conducted as of the Closing Date, including without limitation, network design, engineering, consulting and project management and other provision of information technology services; provided that this sentence shall not apply to any Shareholder who is a Key Employee and whose employment is terminated by the Company without Cause (as defined in the Key Employee's Employment Agreement) or who terminates his employment with the Company for Good Reason (as defined in the Key Employee's Employment Agreement).

(b) Each of the Seller and the Shareholders agree that the duration and geographic scope of the non-competition provision set forth in this Section 6.3 are reasonable. In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the Parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable.

(c) After the Closing Date, the Seller shall, and shall use its Reasonable Best Efforts to cause its Affiliates to, refer all inquiries regarding the business, products and services of the Seller to the Buyer.

6.4 Tax Matters.

(a) All transfer, sales, use, value added, stamp, registration documentary, excise, real property transfer or gains, and similar Taxes related to the sale of the Acquired Assets contemplated by this Agreement shall be paid by the Buyer.

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(b) All Tax liabilities (other than Income Taxes and the taxes referenced in Section 6.4(a)) attributable to the Business through the Closing Date shall be borne by Buyer to the extent that such liabilities are, in the aggregate, included for purposes of calculating the Closing Net Working Capital (collectively, the "Reserved Taxes"). Tax liabilities (other than Income Taxes and the taxes referenced in Section 6.4(a)) attributable to the Business through the Closing Date in excess of the Reserved Taxes shall be borne by the Seller.

(d) All real property taxes, personal property taxes, and similar ad valorem obligations levied with respect to the Acquired Assets, and all rents, utilities and other charges against the Seller with respect to the Acquired Assets, for a taxable period that includes (but does not end on) the Closing Date shall be apportioned between the Buyer and the Seller as of the Closing Date based upon (i) the number of days of such taxable period included in any tax period (or portion thereof) ending on or before the close of business on the Closing Date (the "Pre-Closing Tax Period") and (ii) the number of days of such taxable period included in any tax period (or portion thereof) beginning after the Closing Date (the "Post-Closing Tax Period"). The Seller shall be liable for all such Taxes relating to the Pre-Closing Tax Period, and the Buyer shall be liable for all such Taxes relating to the Post-Closing Tax Period.

(e) If either party pays any Taxes to be borne by the other party under this Section 6.4, the other party shall promptly reimburse such paying party for the Taxes paid. If, in preparing Tax returns or payments after the Closing, it appears to the Buyer that the Seller will be asked to pay additional Taxes, the Buyer shall so notify the Seller, and provide the Seller a reasonable opportunity to review and comment upon any related Tax Returns prior to filing them and paying the Tax. If either party receives any refunds or credits which are the property of the other party under this Section 6.4, such party shall promptly pay the amount of such refunds or credits to the other party.

(f) The Buyer shall make available to the Seller and its representatives all records and materials reasonably required by the Seller to prepare, pursue or contest any Tax matters related to taxable periods (or portions thereof) ending on or before the Closing Date and shall provide reasonable cooperation to the Seller in such case. The Seller shall make available to the Buyer and its representatives all records and materials reasonably required by the Buyer to prepare, pursue or contest any Tax matters arising after the Closing which have factual reference to the Pre-Closing Tax Period and shall provide reasonable cooperation to the Buyer in such case.

6.5 Sharing of Data.

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years following the Closing Date to have reasonable access to those books, records and accounts, including financial and accounting records (including the work papers of the Seller's independent accountants), tax records, correspondence, production records, employment records and other records that are retained by the Seller pursuant to the terms of this Agreement to the extent that any of the foregoing is needed by the Buyer for the purpose of conducting the business of the Seller after the Closing and complying with its obligations under applicable securities, tax, environmental, employment or other laws and regulations. Neither the Buyer nor the Seller shall destroy any such books, records or accounts retained by it without first providing the other Party with the opportunity to obtain or copy such books, records, or accounts at such other Party's expense.

(b) Promptly upon request by the Buyer made at any time following the Closing Date, the Seller shall authorize the release to the Buyer of all files pertaining to the the Acquired Assets or the business or operations of the Seller held by any federal, state, county or local authorities, agencies or instrumentalities.

6.6 Use of Name. The Seller shall not use, and shall not permit any Affiliate to use, the name "Advance Data Systems, Inc.", "ADSnetcurve" or any name reasonably similar thereto after the Closing Date, except as approved by the Buyer in connection with obtaining any approval or consent relating to an Assigned Contract as contemplated by Section 4.2(c), which approval is hereby granted by Buyer, subject to the reasonable approval of Buyer over the manner of use. Within two weeks of the Closing, Seller shall have amended its Articles of Incorporation and governing documents to change its name to something not similar to "Advance Systems, Inc." or "ADSnetcurve".

6.7 Cooperation in Litigation. From and after the Closing Date, each Party shall fully cooperate with the other in the defense or prosecution of any litigation or proceeding already instituted or which may be instituted hereafter against or by such other Party relating to or arising out of the conduct of the business of the Seller or the Buyer prior to or after the Closing Date (other than litigation among the Parties and/or their Affiliates arising out the transactions contemplated by this Agreement). The Party requesting such cooperation shall pay the reasonable expenses incurred in providing such cooperation (including legal fees and disbursements) by the Party providing such cooperation and by its officers, directors, managers, employees and agents, and shall reimburse such Party or its officers, directors, managers, employees and agents, at a reasonable rate, for their time spent in such cooperation in excess of twenty-five hours in the aggregate on such matter.

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6.9 Employees.

(a) Effective as of the Closing, the Seller shall terminate the employment of each of its employees designated on Schedule 6.9 attached hereto (which may be updated prior to the Closing by the mutual agreement of the Buyer and the Seller). The Buyer shall offer employment to each such employee on terms which shall include no fewer than sixty (60) days notice of separation and shall in no event be less favorable to each such employee than each may have as of the date of this Agreement or as may be set forth in any employment agreement with a Key Employee. The Seller hereby consents to the hiring of any such employees by the Buyer and waives, with respect to the employment by the Buyer of such employees, any claims or rights the Seller may have against the Buyer or any such employee under any non-competition, confidentiality or employment agreement.

(b) Buyer and Seller shall cooperate to substitute Buyer for Seller as the contract holder on all insurance contracts providing medical or dental benefits for employees of Seller and their beneficiaries.

(c) Nothing in this Agreement shall prevent Buyer from amending or terminating any plan maintained by Buyer under which a former employee of Seller is a participant.

6.10 Maintenance of Corporate Existence. For a period of at least one year following the Closing Date, the Seller shall not dissolve, or adopt any resolutions or a plan therefor.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification by the Seller. The Seller shall indemnify the Buyer (and its officers, directors and Affiliates) in respect of, and hold the Buyer (and its officers, directors and Affiliates) harmless against, Damages incurred or suffered by the Buyer or any Affiliate thereof resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Seller or any Shareholder contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Seller to the Buyer pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of the Seller contained in this Agreement, any Ancillary Agreement or any agreement or instrument furnished by the Seller to the Buyer pursuant to this Agreement; it being agreed and understood that if Seller fails to perform any pre-Closing covenant and Buyer elects to effect the Closing notwithstanding such failure, Seller shall not be liable following the Closing for the failure to perform such pre-Closing covenant; or

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7.2 Indemnification by the Buyer. The Buyer shall indemnify the Seller (and its officers, directors and Affiliates) in respect of, and hold Seller (and its officers, directors and Affiliates) harmless against, any and all Damages incurred or suffered by the Seller resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Buyer contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Buyer to the Seller pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of the Buyer contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Buyer to the Seller pursuant to this Agreement; it being agreed and understood that if Buyer fails to perform any pre-Closing covenant and Seller elects to effect the Closing notwithstanding such failure, Buyer shall not be liable following the Closing for the failure to perform such pre-Closing covenant; or

7.3 Indemnification Claims - Third Party Actions.

(a) An Indemnified Party shall give written notification to the Indemnifying Party of the commencement of any Third Party Action. Such notification shall be given within 20 days after receipt by the Indemnified Party of notice of such Third Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Indemnified Party; provided that (i) the Indemnifying Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any Damages that may be assessed against the Indemnified Party in connection with such Third Party Action constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VII and (B) the amount of damages claimed is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VII and (ii) the Indemnifying Party may not assume control of the defense of Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party. If the Indemnifying Party does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Indemnified Party shall control such defense. The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any

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written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. Notwithstanding any other provision of this Agreement, the reasonable fees and expenses of counsel to the Indemnified Party with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (i) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this
Section 7.3(a) or (ii) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. If the Indemnified Party withholds its consent to any such settlement or entry of judgment which settlement or entry of judgment relates to cash Damages only, then the liability of the Indemnifying Party to the Indemnified Party with respect to the matter which would have been concluded or settled shall be limited to the amount for which such matters could have been concluded or settled but for the fact the Indemnified Party withheld its consent. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

(b) In order to seek indemnification under this Article VII, an Indemnified Party shall deliver a Claim Notice to the Indemnifying Party. If the Indemnified Party is the Buyer, the Indemnifying Party shall deliver a copy of the Claim Notice to both the Seller and the Escrow Agent.

(d) During the 30 day period following the delivery of Response that reflects a Dispute, the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 30 day period, the Parties may pursue their respective rights and remedies hereunder.

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("Tax Matters"), 2.20 ("Employee Benefits") and 2.21 ("Environmental Matters")
shall survive until 30 days following expiration of all statutes of limitation applicable to the matters referred to therein. The rights to indemnification set forth in this Article VII shall not be affected by any investigation conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the date of this Agreement or the Closing Date (excluding, however, knowledge acquired through supplemental information provided pursuant to by Section 4.6), with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder.

7.5 Treatment of Indemnity Payments. Any payments made to an Indemnified Party pursuant to this Article VII or pursuant to the Escrow Agreement shall be treated as an adjustment to the Purchase Price for tax purposes.

7.6 Limitations.

(a) The Parties agree that their exclusive remedy at law for a breach of this Agreement by any other Party shall be this Article VII.

(b) Notwithstanding any other provisions of this Agreement, the Buyer agrees that the Seller's obligations under Section 7.1(a) shall be set off solely from amounts due to Seller under the Secured Promissory Note in satisfaction of such indemnification claim. The exercise of such right of setoff by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute an event of default under the Secured Promissory Note or any instrument securing the Secured Promissory Note.

(c) Notwithstanding any other provisions of this Agreement, the Seller shall have no liability (for indemnification or otherwise) with respect to claims under Section 7.1(a) unless and until the total of all Damages with respect to such matters exceeds $50,000, at which point the Seller shall be liable for any and all Damages, subject to a maximum aggregate liability for indemnification under this Agreement and the Ancillary Agreements of the amount of $180,000).

(d) Notwithstanding any other provisions of this Agreement, the Buyer shall have no liability (for indemnification or otherwise) with respect to claims under Section 7.2(a) unless and until the total of all Damages with respect to such matters exceeds $50,000, at which point the Seller shall be liable for any and all Damages, subject to a maximum aggregate liability for indemnification under this Agreement and the Ancillary Agreements of the amount of $180,000).

ARTICLE VIII

TERMINATION

8.1 Termination of Agreement. The Parties may terminate this Agreement prior to the Closing, as provided below:

(a) the Parties may terminate this Agreement by mutual written consent;

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(b) the Buyer may terminate this Agreement by giving written notice to the Seller in the event the Seller or any Shareholder is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in clauses (b) or (c) of Section 5.1 not to be satisfied and (ii) is not cured within 20 days following delivery by the Buyer to the Seller of written notice of such breach;

(c) the Seller may terminate this Agreement by giving written notice to the Buyer in the event the Buyer is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in clauses (b) or (c) of Section 5.2 not to be satisfied and (ii) is not cured within 20 days following delivery by the Seller to the Buyer of written notice of such breach;

(d) the Buyer by giving written notice to Seller, if Seller has delivered to Buyer any notice pursuant to Section 4.6 of this Agreement and the fact, condition, or change this is subject of the notice, individually or in the aggregate with any other fact, condition or change also the subject of such a notice, would reasonably be expected to cause a Seller Material Adverse Effect; or

(e) unless the Closing is extended pursuant to Section 8.3 below, either Party may terminate this Agreement by giving written notice to the other Party if the Closing shall not have occurred on or before November 30, 2007 by reason of the failure of any condition precedent under Section 5.2 (unless the failure results primarily from a breach by the terminating Party of any representation, warranty or covenant contained in this Agreement).

8.2 Effect of Termination. If either Party terminates this Agreement pursuant to Section 8.1, all obligations of the Parties hereunder shall terminate without any liability of either Party to the other Party (except for any liability of a Party for breaches of this Agreement occurring prior to such termination); provided, however, that Sections 4.3 ("Exclusivity"), 10.1 ("Press Releases and Announcements"), 10.3 ("Entire Agreement"), and 10.11 ("Expenses") shall survive any such termination.

8.3 Extension of Closing. If the Closing has not occurred by November 30, 2007, this Agreement may only be extended by written mutual consent of the Seller and the Buyer and a non-refundable deposit of one percent (1%) of the Purchase Price for any and every 30 day extension period. Such deposit is to be paid in immediately available funds by the Buyer to Seller, delivered with a mutually signed extension agreement and applied to the cash portion of the Purchase Price at the Closing; provided that, if the Closing does not occur, Seller may keep such deposit(s).

ARTICLE IX

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

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"Acquired Assets" shall mean, except as otherwise provided herein, all of the assets, properties and rights of the Seller existing as of the Closing, including:

(a) all trade and other accounts receivable and notes and loans receivable that are payable to the Seller, and all rights to unbilled amounts for products delivered or services provided, together with any security held by the Seller for the payment thereof;

(b) all computers, machinery, equipment, tools and tooling, furniture, fixtures, supplies, leasehold improvements, motor vehicles and other tangible personal property;

(d) all inventory;

(e) all Intellectual Property;

(f) all Assigned Contracts;

(g) all claims, prepayments, deposits, refunds, causes of action, choses in action, rights of recovery, rights of setoff and rights of recoupment, but in no event shall include Seller's:

(i) rights relating to refunds, recovery or recoupment of Taxes;

(ii) rights relating to prepayments by Seller on insurance policies not assumed;

(iii) rights under this Agreement or under the Ancillary Agreements or any other document or instrument pursuant to this Agreement;

(iv) any Excluded Assets;

(h) all books, records, accounts, ledgers, files, documents, correspondence, lists (including customer and prospect lists), employment records, manufacturing and procedural manuals, Intellectual Property records, sales and promotional materials, studies, reports and other printed or written materials (excluding, however, Seller's corporate records); and

(i) all rights of Seller in and with respect to the Employee Plans assumed by Buyer.

"Affiliate" shall mean any affiliate, as defined in Rule 12b-2 under the Exchange Act.

"Agreed Amount" shall mean an amount agreed upon by the Indemnifying Party and the Indemnified Party.

"Ancillary Agreements" shall mean the Security Agreement, the Escrow Agreement, the bill of sale and other instruments of conveyance referred to herein and the instrument of assumption and other instruments referred to herein

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"Assigned Contracts" shall mean the customer contracts, supplier contracts and vendor contracts listed on Section 2.14 of the Disclosure Schedules (except for those vendor contracts that are specifically indicated as excluded), and the Lease described in Section 2.12 of the Disclosure Schedules.

"Assumed Liabilities" shall mean (a) all liabilities and obligations related to the Acquired Assets and the Business arising after the Closing, (b) all liabilities and obligations of Seller related to any warranties for Seller's products or services, (c) all obligations of the Seller arising after the Closing under the Assigned Contracts, other than any liabilities for any breach, act or omission by the Seller prior to the Closing under any Assigned Contract,
(d) all accounts payable listed on Schedule2.8, (e) all liabilities for unused vacation and personal and sick days accrued by the employees of Seller who are hired by Buyer, (f) all liabilities and obligations related to the Employee Plans assumed by Buyer; (g) customer retention bonus and non-owner discretionary profit sharing plan, in each case based on a bi-weekly accrual from January 1, 2007 to the Closing Date as accepted by Buyer and as reflected in Net Working Capital as of the Closing, and (h) any liability for Taxes in accordance with
Section 6.4.

"Business" means any of the following, to the extent actually conducted by the Seller: (i) computer systems management (sales, service and support); (ii) computer telephony integration; (iii) telephone systems management (sales, service and support); (iv) cabling; (v) software development; (vi) network engineering, design and project management; and (vii) provision or resale of LAN/WAN services.

"Buyer" shall have the meaning set forth in the first paragraph of this Agreement.

"Buyer Certificate" shall mean a certificate to the effect that each of the conditions specified in clauses (a) through (c) (insofar as clause (c) relates to Legal Proceedings involving the Buyer) of Section 5.2 is satisfied in all respects.

"Buyer Common Stock" shall mean the common shares of the Buyer or following the Closing, the common stock, $0.0001 par value, of the Public Company.

"Cash Consideration" has the meaning set forth in Section 1.3 of this Agreement.

"CERCLA" shall mean the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

"Claim Notice" shall mean written notification which contains (i) a description of the Damages incurred or reasonably expected to be incurred by the Indemnified Party and the Claimed Amount of such Damages, to the extent then known, (ii) a statement that the Indemnified Party is entitled to indemnification under Article VII for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment in the amount of such Damages.

"Claimed Amount" shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified Party.

"Closing" shall mean the closing of the transactions contemplated by this Agreement.

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"Closing Date" shall mean (a) November 30, 2007, (b) the date two (2) business days after the satisfaction or waiver of all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby (excluding the delivery at the Closing of any of the documents set forth in Article V) but in no event later than November 30, 2007, or (c) such other date as the Parties may mutually agree in writing.

"Closing Net Working Capital" shall mean the Net Working Capital shown on the Net Working Capital Balance Certificate.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Controlling Party" shall mean the party controlling the defense of any Third Party Action.

"Customer Offerings" shall mean (a) the services that the Seller (i) currently provides or makes available to third parties, or (ii) has provided or made available to third parties within the previous four years, or (iii) currently plans to provide or make available to third parties in the future and
(b) the products (including Software and Documentation) that the Seller (i) currently develops, manufactures, markets, distributes, makes available, sells or licenses to or for third parties, or (ii) has developed, manufactured, marketed, distributed, made available, sold or licensed to or for third parties within the previous four years, or (iii) currently plans to develop, manufacture, market, distribute, make available, sell or license to or for third parties in the future. A true and complete list of all Customer Offerings is set forth in Section 2.13(c) of the Disclosure Schedules.

"Damages" shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation), but excluding incidental and consequential damages and liabilities.

"Disclosure Schedules" shall mean the disclosure schedules provided by the Seller to the Buyer on the date hereof and accepted in writing by the Buyer.

"Dispute" shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

"Documentation" shall mean printed, visual or electronic materials, reports, white papers, documentation, specifications, designs, flow charts, code listings, instructions, user manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports, marketing materials, packaging, labeling, service manuals and other information describing the use, operation, installation, configuration, features, functionality, pricing, marketing or correction of a product, whether or not provided to end user.

"Employee Plan" shall have the meaning set forth in Section 2.20.

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"Employment Agreements" shall have the meaning set forth in the recitals.

"Environmental Law" shall mean any federal, state or local law, statute, rule, order, directive, judgment, Permit or regulation or the common law relating to the environment, occupational health and safety, or exposure of persons or property to Materials of Environmental Concern, including any statute, regulation, administrative decision or order pertaining to: (i) the presence of or the treatment, storage, disposal, generation, transportation, handling, distribution, manufacture, processing, use, import, export, labeling, recycling, registration, investigation or remediation of Materials of Environmental Concern or documentation related to the foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release, threatened release, or accidental release into the environment, the workplace or other areas of Materials of Environmental Concern, including emissions, discharges, injections, spills, escapes or dumping of Materials of Environmental Concern; (v) transfer of interests in or control of real property which may be contaminated; (vi) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (vii) the protection of wild life, marine life and wetlands, and endangered and threatened species; (viii) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (ix) health and safety of employees and other persons. As used above, the term "release" shall have the meaning set forth in CERCLA.

"Escrow Agent" shall mean the escrow agent named in the Escrow Agreement.

"Escrow Agreement" shall mean the escrow agreement attached hereto as Exhibit B.

"Escrow Account" shall mean the escrow account established pursuant to the Escrow Agreement.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC issued under such Act, as they each may, from time to time, be in effect.

"Excess Net Working Capital" means the amount, if any, by which Closing Net Working Capital exceeds $105,000.00.

"Excluded Assets" shall mean the following assets of the Seller:

(a) all cash, short-term investments, deposits, bank accounts and other similar assets;

(b) the corporate charter and governing documents, qualifications to conduct business as a foreign limited liability company or entity, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, share or security transfer books and other documents relating to the organization and existence of the Seller as a corporation;

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(d) any of the rights of the Seller under this Agreement or under the Ancillary Agreements;

(e) prepayments by Seller on insurance policies not assumed; and

(f) any item identified on Schedule 1.1(b).

"Expected Claim Notice" shall mean a notice that, as a result of a legal proceeding instituted by or written claim made by a third party, an Indemnified Party reasonably expects to incur Damages for which it is entitled to indemnification under Article VII.

"Exploit" shall mean develop, design, test, modify, make, use, sell, have made, used and sold, import, reproduce, market, distribute, commercialize, support, maintain, correct and create derivative works of.

"Financial Statements" shall mean:

(a) the unaudited balance sheets and statements of income, changes in Shareholders' equity and cash flows of the Seller as of the end of and for each of the years ended December 31, 2004, December 31, 2005 and December 31, 2006; and

(b) the Most Recent Balance Sheet and the unaudited statements of income, changes in Shareholders' equity and cash flows for the three months ended as of the Most Recent Balance Sheet Date.

"GAAP" shall mean United States generally accepted accounting principles.

"Governmental Entity" shall mean any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency.

"Income Taxes" means any and all income taxes (together with any and all interest, penalties, and additional amounts imposed with respect thereto) imposed by any government or taxing authority.

"Indemnified Party" shall mean a party entitled, or seeking to assert rights, to indemnification under Article VII of this Agreement.

"Indemnifying Party" shall mean the party from whom indemnification is sought by the Indemnified Party.

"Intellectual Property" shall mean the following subsisting throughout the world:

(a) Patent Rights;

(b) Trademarks and all goodwill in the Trademarks;

(c) copyrights, designs, data and database rights and registrations and applications for registration thereof, including moral rights of authors;

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(d) mask works and registrations and applications for registration thereof and any other rights in semiconductor topologies under the laws of any jurisdiction;

(e) inventions, invention disclosures, statutory invention registrations, trade secrets and confidential business information, know-how, manufacturing and product processes and techniques, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether patentable or nonpatentable, whether copyrightable or noncopyrightable and whether or not reduced to practice; and

(f) other proprietary rights relating to any of the foregoing (including remedies against infringement thereof and rights of protection of interest therein under the laws of all jurisdictions).

"Intellectual Property Registrations" means Patent Rights, registered Trademarks, registered copyrights and designs, mask work registrations and applications for each of the foregoing.

"Internal Systems" shall mean the Software and Documentation and the computer, communications and network systems (both desktop and enterprise-wide) used by the Seller in its business or operations or to develop, manufacture, fabricate, assemble, provide, distribute, support, maintain or test the Customer Offerings, whether located on the premises of the Seller or hosted at a third party site. All Internal Systems that are material to the business of the Seller are listed and described in Section 2.13(c) of the Disclosure Schedules.

"Key Employees" means any employee designated as such by the Buyer at Closing.

"Knowledge" - (a) an individual will be deemed to have "Knowledge" of a particular fact or other matter if such individual is presently actually aware of such fact or other matter; and (b) the Seller will be deemed to have "Knowledge" of a particular fact or other matter if any of its directors and officers has Knowledge of such fact or other matter (as set forth in (a) above);

"Lease" shall mean any lease or sublease pursuant to which the Seller leases or subleases from or to another party any real property.

"Legal Proceeding" shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator.

"Materials of Environmental Concern" shall mean any: pollutants, contaminants or hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof), or any other material (or article containing such material) listed or subject to regulation under any law, statute, rule, regulation, order, Permit, or directive due to its potential, directly or indirectly, to harm the environment or the health of humans or other living beings.

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"Most Recent Balance Sheet" shall mean the unaudited balance sheet of the Seller as of the Most Recent Balance Sheet Date.

"Most Recent Balance Sheet Date" shall mean August 31, 2007.

"Net Working Capital" shall mean the amount equal to (i) the sum of accounts receivable (which amount shall include all accounts receivable aged less than 90 days, with the balance of the accounts receivable subject to review on a case-by-case basis and included by mutual consent only), prepaid expenses and deposits, other receivables and other current assets; minus (ii) the sum of checks written in excess of cash, accounts payable, accrued payroll and related benefits, accrued expenses and other current liabilities.

"Net Working Capital Balance Certificate" shall mean a certificate from the Seller's chief executive officer and chief financial officer which sets forth the total amount of Net Working Capital of the Seller as of the Closing Date.

"Net Working Capital Difference" means the amount, if any, by which Closing Net Working Capital (as adjusted for Retained Liabilities and Excluded Assets) is less than $105,000.00,

"Non-controlling Party" shall mean the party not controlling the defense of any Third Party Action.

"Open Source Materials" means all Software, Documentation or other material that is distributed as "free software", "open source software" or under a similar licensing or distribution model, including, but not limited to, the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), or any other license described by the Open Source Initiative as set forth on www.opensource.org.

"Ordinary Course of Business" shall mean the ordinary course of business consistent with the Person's past custom and practice (including with respect to frequency and amount).

"Parties" shall mean the Buyer, the Seller and the Shareholders, where applicable. References which contrast "Party" to the other "Party" shall mean the Buyer on the one hand and the Seller and the Shareholders, collectively, on the other hand.

"Patent Rights" shall mean all patents, patent applications, utility models, design registrations and certificates of invention and other governmental grants for the protection of inventions or industrial designs (including all related continuations, continuations-in-part, divisionals, reissues and reexaminations).

"Permits" shall mean all permits, licenses, registrations, certificates, orders, approvals, franchises, variances and similar rights issued by or obtained from any Governmental Entity (including those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property).

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"Person" shall mean any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity.

      "Post-Closing  Tax Period" has the meaning set forth in Section  6.4(d) of
this Agreement.

      "Pre-Closing  Tax Period"  has the meaning set forth in Section  6.4(d) of
this Agreement.

"Public Company" means any successor entity to the Buyer that is subject to the reporting requirements of the Securities Exchange Act of 1934.

"Purchase Price" has the meaning set forth in Section 1.3.

"Reasonable Best Efforts" shall mean best efforts, to the extent commercially reasonable and without requiring the payment of money in the case of obtaining any third party consents or waivers.

"Reserved Taxes" shall have the meaning set forth in Section 6.4(b) of this Agreement.

"Response" shall mean a written response containing the information provided for in Section 7.3(c).

"Restricted Employee" shall mean any person who either (i) was an employee of the Buyer on either the date of this Agreement or the Closing Date or (ii) was an employee of the Seller on either the date of this Agreement or the Closing Date; provided, however, that Restricted Employee shall not include any person included in (i) and (ii) in the preceding clause whose employment is terminated by Buyer, in the good faith determination of the Board of Directors of Buyer, not for cause or not for a material failure to perform.

"Restricted Period" shall mean from the date of this Agreement until (i) twenty-four months following his termination of employment with the Buyer with respect to each Key Employee, and (ii) two years following the date of this Agreement with respect to the Seller and all other Shareholders of Seller not specifically identified in the foregoing clauses (i) or (ii).

"Retained Liabilities" shall mean any and all liabilities or obligations (whether known or unknown, absolute or contingent, liquidated or unliquidated, due or to become due and accrued or unaccrued, and whether claims with respect thereto are asserted before or after the Closing) of the Seller which are not Assumed Liabilities. The Retained Liabilities shall include, without limitation, all liabilities and obligations of the Seller:

(g) for Taxes imposed upon the Seller and/or the Shareholders arising prior to the Closing or in connection with the consummation of the transactions contemplated by this Agreement, except to the extent provided in
Section 6.4;

(h) for costs and expenses incurred in connection with this Agreement or the consummation of the transactions contemplated by this Agreement;

(i) under this Agreement or the Ancillary Agreements;

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(j) related to the Excluded Assets;

(k) arising prior to the Closing under the Assigned Contracts, and all liabilities for any breach, act or omission by the Seller prior to the Closing under any Assigned Contract;

(l) arising out of events, conduct or conditions existing or occurring prior to the Closing that constitute a violation of or non-compliance with any law, rule or regulation (including Environmental Laws), any judgment, decree or order of any Governmental Entity, or any Permit or that give rise to liabilities or obligations with respect to Materials of Environmental Concern;

(m) to pay severance benefits to any employee of the Seller whose employment is terminated (or treated as terminated) in connection with the consummation of the transactions contemplated by this Agreement, and all liabilities resulting from the termination of employment of employees of the Seller prior to the Closing that arose under any federal or state law or under any Employee Plan established or maintained by the Seller;

(n) to indemnify any person or entity by reason of the fact that such person or entity was a manager, officer, employee, or agent of the Seller or was serving at the request of the Seller as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement, or otherwise);

(o) injury to or death of persons or damage to or destruction of property occurring prior to the Closing (including any workers compensation claim);

(p) for medical, dental and disability (both long-term and short-term) benefits, whether insured or self-insured, owed to employees or former employees of the Seller based upon (A) exposure to conditions in existence prior to the Closing or (B) disabilities existing prior to the Closing (including any such disabilities which may have been aggravated following the Closing);

(q) for benefits under any Employee Plan that is not assumed by Buyer; and

(r) for any retrospective premium increases under any Employee Plan assumed by Buyer that relates to periods before and including the Closing.

"SEC" means the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.

"Secured Promissory Note" shall mean the Secured Promissory Note attached hereto as Exhibit A.

"Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC issued under such Act, as they each may, from time to time, be in effect.

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"Security Interest" shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (i) mechanic's, materialmen's, and similar liens, (ii) liens arising under worker's compensation, unemployment insurance, social security, retirement, and similar legislation, (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of the Seller and not material to the Seller, and (iv) liens for Taxes which are not yet due and payable.

"Seller" shall have the meaning set forth in the first paragraph of this Agreement.

"Seller Certificate" shall mean a certificate to the effect that each of the conditions specified in Section 5.1 is satisfied in all respects.

"Seller Intellectual Property" shall mean shall the Seller Owned Intellectual Property and the Seller Licensed Intellectual Property.

"Seller Licensed Intellectual Property" shall mean all Intellectual Property that is licensed to the Seller by any third party.

"Seller Material Adverse Effect" shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, (i) the business, assets, liabilities, capitalization, prospects, condition (financial or other), or results of operations of the Seller, or (ii) the ability of the Buyer to operate the business of the Seller immediately after the Closing. For the avoidance of doubt, the parties agree that the terms "material", "materially" or "materiality" as used in this Agreement with an initial lower case "m" shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Seller Material Adverse Effect.

"Seller Owned Intellectual Property" shall mean all Intellectual Property owned or purported to be owned by the Seller, in whole or in part.

"Seller Registrations" shall mean Intellectual Property Registrations that are registered or filed in the name of the Seller, alone or jointly with others.

"Seller Source Code" shall mean the source code for any Software included in the Customer Offerings or Internal Systems or other confidential information constituting, embodied in or pertaining to such Software.

"Shares" has the meaning set forth in Section 1.3 of this Agreement and shall include any shares of the Public Company issued in exchange therefor.

"Shareholder" or "Shareholders" has the meaning set forth in introductory paragraph of this Agreement.

"Software" shall mean computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.

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"Subsidiary" shall mean any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which the Seller holds stock or other ownership interests representing (a) more than 50% of the voting power of all outstanding stock or ownership interests of such entity or
(b) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity.

"Taxes" (including with correlative meaning "Tax" and "Taxable") means (x) any and all taxes, and any and all other charges, fees, levies, duties, deficiencies, customs or other similar assessments or liabilities in the nature of a tax, including without limitation any income, gross receipts, ad valorem, net worth, premium, value-added, alternative or add-on minimum, excise, severance, stamp, occupation, windfall profits, real property, personal property, assets, sales, use, capital stock, capital gains, documentary, recapture, transfer, transfer gains, estimated, withholding, employment, unemployment insurance, unemployment compensation, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, gains, franchise and other taxes imposed by any federal, state, local, or foreign Governmental Entity, (y) any interest, fines, penalties, assessments, or additions resulting from, attributable to, or incurred in connection with any items described in this paragraph or any contest or dispute thereof, and (z) any items described in this paragraph that are attributable to another person but that the Seller is liable to pay by law, by contract, or otherwise.

"Tax Returns" means any and all reports, returns, declarations, statements, forms, or other information required to be supplied to a Governmental Entity or to any individual or entity in connection with Taxes and any associated schedules, attachments, work papers or other information provided in connection with such items, including any amendments, thereof.

"Third Party Action" shall mean any suit or proceeding by a person or entity other than Buyer or Seller or their affiliates for which indemnification may be sought by Buyer or Seller under Article VII.

"Trademarks" shall mean all registered trademarks and service marks, logos, Internet domain names, corporate names and doing business designations and all registrations and applications for registration of the foregoing, common law trademarks and service marks and trade dress.

ARTICLE X

MISCELLANEOUS

10.1 Press Releases and Announcements. Except to the extent required by law, no Party, nor any of its representatives, shall issue any press release or make any public comment, statement, or announcement relating to the existence of this Agreement, its subject matter, or the existence or subject matter of discussions or negotiations relating to this Agreement, without the prior written consent of the other Parties.

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10.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

10.3 Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, with respect to the subject matter hereof, including, without limitation, that certain letter of intent dated September 10, 2007; provided that any Confidentiality Agreement between the Buyer and the Seller shall survive the Closing or termination of this Agreement in accordance with its terms.

10.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Neither Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties; provided that the Buyer may assign some or all of its rights, interests and/or obligations hereunder to entity in any merger between the Buyer and such entity one or more Affiliates of the Buyer or such surviving entity, including, without limitation, the Public Company. Any attempted assignment in contravention of this provision shall be void.

10.5 Counterparts and Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature or electronic delivery.

10.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

10.7 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly delivered four business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case to the intended recipient as set forth below:

If to the Seller or a Shareholder:        Copy to:

Advance Data Systems, Inc.                Wyatt, Tarrant & Combs, LLP
11405 Park Road, Suite 180                500 West Jefferson Street, Suite #2800
P.O. Box 23539                            Louisville, KY 40202-2898
Anchorage, KY  40223                      Attn:    Jeffrey E. Wallace
Attn: Dean A. Holland, Chairman

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If to the Buyer: Copy to:

Beacon Enterprise Solutions Group, Inc. Frost Brown Todd LLC

ITRC Building                             400 West Market Street, 32nd Floor
9001 Shelbyville Road, Ste. 101           Louisville, KY  40202
Louisville, KY  40222                     Attn:   William G. Strench
Attn:  Chief Executive Officer

Either Party may give any notice, request, demand, claim, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. A Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

10.8 Governing Law. This Agreement (including the validity and applicability of the arbitration provisions of this Agreement, the conduct of any arbitration of a Dispute, the enforcement of any arbitral award made hereunder and any other questions of arbitration law or procedure arising hereunder) shall be governed by and construed in accordance with the internal laws of the Commonwealth of Kentucky, without giving effect to any choice or conflict of law provision or rule (whether of the Commonwealth of Kentucky or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the Commonwealth of Kentucky.

10.9 Amendments and Waivers. The Buyer and the Seller may mutually amend any provision of this Agreement at any time prior to the Closing. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed. No waiver by a Party of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver. No waiver by a Party with respect to any default, misrepresentation, or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

10.10 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.

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10.11 Expenses. Except as set forth in Article VII and the Escrow Agreement, each Party shall bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

10.13 Specific Performance and Release of Covenants upon Certain Conditions. Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event of any breaches of Sections 6.1, 6.2 and 6.3. Accordingly, each Party agrees that the other Party shall be entitled to an injunction or other equitable relief to prevent such breaches and to enforce specifically the terms and provisions of such Sections in addition to any other remedy to which it may be entitled, at law or in equity. In the event that the Seller or the Shareholders have exercised their rights under the Security Agreement to acquire possession of all or substantially all of the Acquired Assets upon (and only upon) an Event of Default (as defined in the Secured Promissory Note) and have so acquired possession of such Acquired Assets, whether by foreclosure, negotiated transfer or other process, or in the event that bankruptcy, insolvency or liquidation proceedings have been commenced against the Buyer and have not been dismissed or otherwise resolved in favor of the Buyer within ninety (90) days of the commencement of such proceedings, then
(i) the covenants of the Seller and the Shareholders contained in Section 6.1 shall be released to the extent necessary for the Seller or the Shareholder to reclaim and make use of the Acquired Assets once acquired, (ii) the covenants of the Seller and the Shareholders contained in Section 6.2 shall be released with respect to those Restricted Employees who are employees of the Seller as of the Closing Date, and (iii) the covenants of the Seller and the Shareholders in
Section 6.3 shall be released without limitation.

10.14 Construction.

(a) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against a Party.

(b) Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

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(d) Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

BUYER:                                      SELLER:

BEACON ENTERPRISE SOLUTIONS                 ADVANCE DATA SYSTEMS, INC.
GROUP, INC.                                          D/B/A ADSNETCURVE

By: /s/ Bruce Widener                       By: /s/ Dean A. Holland
   -------------------------------             ---------------------------------
     Name:  Bruce Widener                        Name:  Dean A. Holland
     Title: Chief Executive Officer              Title: Chairman

                                            SHAREHOLDERS:

                                            /s/ Dean A. Holland
                                            ------------------------------------
                                            Dean A. Holland

                                            /s/ Christopher P. O'Bryan
                                            ------------------------------------
                                            Christopher P. O'Bryan

                                            /s/ Nelson E. Clemmens
                                            ------------------------------------
                                            Nelson E. Clemmens

                                            /s/ Dr. Eric S. Harter
                                            ------------------------------------
                                            Dr. Eric S. Harter

                                            /s/ Mark H. O'Brien
                                            ------------------------------------
                                            Mark H. O'Brien

-47-

Exhibit 10.6

Beacon Enterprise Solutions Group Inc.

SECURED PROMISSORY NOTE

$300,000.00 December 20, 2007

FOR VALUE RECEIVED, Beacon Enterprise Solutions Group Inc., an Indiana corporation (the "Buyer"), promises to pay to the order of ADVANCE DATA SYSTEMS, INC. (the "Holder") the principal sum of THREE HUNDRED THOUSAND DOLLARS ($300,000.00) (the "Principal Amount"), together with interest accruing on the unpaid portion of the Principal Amount from the date hereof until the Maturity Date (as defined in Section 2(a)), at an annual rate equal to the "Prime Rate" as published in The Wall Street Journal from time to time (the "Interest Rate"). Accrued interest under this Note shall be compounded annually.

1. Terms. This Note is issued and delivered by the Buyer pursuant to
Section 1.3 of that certain Asset Purchase Agreement dated October 15, 2007 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Purchase Agreement"), by and among the Buyer and the Holder. Unless otherwise set forth herein, all capitalized terms used herein without definition shall have the meanings given to such terms in the Purchase Agreement. This Note is secured by certain Collateral, as described in that certain Security Agreement of even date herewith (the "Security Agreement"), by and between the Buyer and the Holder.

2. Payments.

(a) Subject to the adjustments provided for in Section 2(b) below and any rights of set-off that the Buyer may have under the terms of the Purchase Agreement, the Buyer shall make monthly payments of principal and interest, in the amortized amount of $7,219.00, to the Holder on the last day of each month, commencing December 31, 2007 and ending on November 30, 2011 (the "Maturity Date").

(b) In the event that on December 31, 2008, the actual revenue generated by the Collateral during the period commencing on December 31, 2007 and ending on December 30, 2008 (the "Actual Revenue") is less than $1,800,000 (the "Minimum Revenue"), then the Principal Amount hereunder shall be deemed to be reduced to an amount equal to the initial Principal Amount set forth above, multiplied by the greater of: a) a fraction the numerator of which is equal to the Actual Revenue and the denominator of which is equal to the Minimum Revenue; or b) forty percent (40%). (That is, the Principal Amount shall not be reduced to an amount less than $120,000.00 hereby.) No such adjustment shall take place in the event that the Actual Revenue exceeds the Minimum Revenue. To the extent that the monthly amounts previously paid exceed the amount of such recalculated monthly payments, the aggregate amount of such excess payments prior to the time of the recalculation shall be a credit against further payments due hereunder, to be applied ratably against future payment amounts hereunder. If the

aggregate amount of excess payments prior to the time of the recalculation exceeds the aggregate of future payments hereunder, then the Holder shall refund the appropriate difference to the Buyer. The Buyer shall recalculate the monthly payments for the remainder of the term of this Note and shall send the Holder a statement of its computations in support of the recalculated monthly payment amount.

(c) The Buyer may apply any rights of set-off that the Buyer may have under the terms of the Purchase Agreement by providing notice of its exercise of such rights of set-off to the Holder (and, if applicable, the shareholders of the Holder) with the Claim Notice described in the Purchase Agreement; provided, however, that if it is ultimately determined that Buyer was not entitled to such set-off, Buyer shall immediately pay to Holder any and all amounts claimed by Buyer under such set-off rights. The amount of any set-off to which Buyer is ultimately determined to be entitled shall be treated as a prepayment of the amounts otherwise due and payable under the Note.

(d) All payments due and payable from the Buyer to Holder under this Note shall be made in lawful currency of the United States of America at the address of Holder as set forth in Section 10.7 of the Purchase Agreement, or such other place as Holder shall designate in writing, and, at Holder's option, shall be payable by check or wire transfer.

(e) The Buyer shall make additional payments of principal to the Holder equal to three and 2/10 percent (3.2%) of the net amount in excess of One Million Dollars ($1,000,000) received by the Buyer from the proceeds of any sale and issuance of equity after the Closing Date (as defined in the Purchase Agreement), until the obligations under this Note are paid in full.

3. Prepayments. The Buyer may prepay all or any portion of the outstanding Principal Amount, or any accrued and unpaid interest thereon, of this Note.

4. Events of Default.

(a) An "Event of Default" under this Note shall mean the occurrence of any of the following:

(i) Failure to Make Payments When Due. Failure of the Buyer to pay any principal, interest or other amount due under this Note when due, whether at stated maturity, by declaration, acceleration, demand or otherwise, and the failure of the Buyer to cure such default within ten (10) business days thereafter.

(ii) Breach of Covenants. Any other material failure by the Buyer to perform its obligations under this Note (other than the making of payments under this Note), and the failure of the Buyer to cure such default within ten (10) business days of written notice of such default by Holder to the Buyer, in each case as determined by the Collateral Agent (as defined in the Security Agreement);

(iii) Acceleration of Other Indebtedness. Any event or condition shall occur which results in the acceleration of the maturity of any indebtedness (other than this Note)

of the Buyer or enables the holder of such indebtedness or any person acting on such holder's behalf to accelerate the maturity thereof, if the aggregate principal amount of indebtedness (regardless of whether such indebtedness arises in one or more related or unrelated transactions) with respect to which such events or conditions shall have occurred exceeds $500,000;

(iv) Judgments or Court Orders. Judgments or orders for the payment of money in excess of $500,000 (net of any amount (x) covered by insurance or (y) covered by a third-party indemnity from a solvent third party financially capable of making such payments) shall be rendered and properly entered against the Buyer, and such judgments or orders shall continue unsatisfied and unstayed for a period of sixty (60) days, unless being contested in good faith by appropriate legal or administrative proceedings, and in any such case as to which the Buyer shall have set aside adequate cash reserves in accordance with generally accepted accounting principles;

(v) Involuntary Bankruptcy, Etc. (A) Any involuntary case or other proceeding shall be commenced against the Buyer or a subsidiary thereof seeking liquidation, reorganization or other relief under Title 11 of the United States Code entitled "Bankruptcy" (as now and hereinafter in effect, or any successor thereto, the "Bankruptcy Code"), or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety (90) days, or an order for relief shall be entered against the Buyer or a subsidiary thereof under the Bankruptcy Code or any other domestic or foreign bankruptcy laws as now or hereafter in effect, or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of the Buyer;

(vi) Voluntary Bankruptcy, Etc. An order for relief shall be entered with respect to the Buyer or a subsidiary thereof shall commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property, or the Buyer or a subsidiary thereof shall make an assignment for the benefit of creditors; or the Buyer or a subsidiary thereof shall admit in writing its inability to pay its debts as such debts become due; or the Board of Directors of the Buyer shall adopt any resolution or otherwise authorize action to approve any of the foregoing; or

(vii) Default under Security Agreement. There is an Event of Default under the Security Agreement.

(b) Upon the occurrence of an Event of Default under Section 4(a) of this Note, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall become immediately due and payable.

(c) Upon the occurrence and during the continuation of any Event of Default as determined by the Collateral Agent, subject to Section 5 of this Note, the per annum rate of

interest on the Principal Amount shall increase from the Interest Rate to the Interest Rate plus three percent.

(d) The Buyer hereby agrees that it will, upon demand, pay to the Collateral Agent the amount of any and all reasonable advances, charges, costs and expenses, including the fees and expenses of counsel and of any experts or agents engaged by the Collateral Agent, that the Collateral Agent may incur in connection with the failure by the Buyer to perform or observe any of the provisions of this Note.

5. Usury. Regardless of any other provision of this Note or the Purchase Agreement to the contrary, if for any reason the effective rate of interest under this Note shall have been determined by a court of competent jurisdiction to exceed the maximum lawful rate of interest, after giving effect to any applicable exemption to applicable usury laws, then the effective rate of interest under this shall be deemed reduced to, and shall be, such maximum lawful rate of interest, and (a) the amount which would otherwise be excessive interest shall be deemed applied to the reduction of the outstanding Principal Amount and not the payment of interest, and (b) if the loan evidenced by this Note has been or is hereby paid in full, the excess principal payment under the foregoing clause (a) shall be returned to the Buyer.

6. Replacement of Lost Note. Upon receipt of evidence satisfactory to the Buyer of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Buyer, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Buyer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor dated as of the date from which unpaid interest has then accrued on the lost, stolen, destroyed or mutilated Note.

7. Miscellaneous.

7.1 Governing Law. This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, without regard to its conflicts of laws principles.

7.2 Entire Agreement; Amendment. This Note, together with all of the other documents executed in connection herewith, constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.

7.3 Amendments. No term of this Note may be amended, waived, discharged or terminated except by a written instrument signed by the Buyer and the Holder. Any amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon the Holder.

7.4 Notices, etc. All notices, requests, demands and other communications made under this Note shall be made in accordance with Section 10.7 of the Purchase Agreement.

7.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Holder upon any breach or default of the Buyer under this Note shall

impair any such right, power or remedy of Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Holder of any breach or default under this Note, or any waiver on the part of the Holder of any provision or condition of this Note must be made in writing and shall be effective as to Holder only to the extent specifically set forth in such writing. All remedies, either under this Note or by law or otherwise afforded to Holder, shall be cumulative and not alternative.

7.6 Severability. In case any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

7.7. Titles. The titles of the Sections and subsections of this Note are for convenience or reference only and are not to be considered in construing this Note.

7.8. Assignment. Holder may assign this Note and Holder's rights hereunder and delegate Holder's obligations hereunder to Holder's shareholders (the "Shareholders"), and the Shareholders may further assign this Note and the Shareholders' rights hereunder and delegate the Shareholders' obligations hereunder to an entity wholly-owned or controlled by the Shareholders.

IN WITNESS WHEREOF, this Note is executed as of the date first above written.

BUYER:

BEACON ENTERPRISE SOLUTIONS
GROUP, INC.
an Indiana corporation

By: /s/ Bruce Widener
   ----------------------------------------
   Bruce Widener
   Chief Executive Officer

[Remainder of Page Intentionally Left Blank - Holder's Signature Page Follows]

HOLDER'S COUNTERPART SIGNATURE PAGE
TO
SECURED PROMISSORY NOTE

The undersigned Holder agrees to be bound by the terms of the Secured Promissory Note of Beacon Enterprise Solutions Group Inc., an Indiana corporation, executed by the Buyer in favor of the undersigned Holder, and agrees to all of the terms thereof.

ADVANCE DATA SYSTEMS, INC.:

Date: December ___, 2007

Name of Entity: Advance Data Systems, Inc. d/b/a ADSnetcurve

Signature: /s/ Dean A. Holland
          --------------------------------
          Dean A. Holland
Title of Signatory: Chairman

EXHIBIT 10.7

ASSET PURCHASE AGREEMENT

dated October 15, 2007

by and among

BEACON ENTERPRISE SOLUTIONS GROUP, INC.,

CETCON INCORPORATED

and

all of the Shareholders of CETCON Incorporated

TABLE OF CONTENTS

                                                                            Page

ARTICLE I             THE ASSET PURCHASE......................................1
         1.1      Purchase and Sale of Assets.................................1
         1.2      Assumption of Liabilities...................................1
         1.3      Purchase Price..............................................2
         1.4      Escrow......................................................2
         1.5      The Closing.................................................2
         1.6      Allocation..................................................3
         1.7      Further Assurances..........................................3
         1.8      Withholding.................................................4

ARTICLE II            REPRESENTATIONS AND WARRANTIES OF THE SELLER............4
         2.1      Organization, Qualification and Corporate Power.............4
         2.2      Capitalization..............................................4
         2.3      Authorization of Transaction.................................
         2.4      Noncontravention............................................5
         2.5      Subsidiaries................................................5
         2.6      Financial Statements........................................5
         2.7      Absence of Certain Changes..................................6
         2.8      Undisclosed Liabilities.....................................6
         2.9      Tax Matters.................................................6
         2.10     Ownership and Condition of Assets...........................8
         2.11     Owned Real Property.........................................8
         2.12     Real Property Leases........................................8
         2.13     Intellectual Property.......................................9
         2.14     Contracts..................................................12
         2.15     Accounts Receivable........................................13
         2.16     Insurance..................................................14
         2.17     Litigation.................................................14
         2.18     Warranties.................................................14
         2.19     Employees..................................................14
         2.20     Employee Benefits..........................................15
         2.21     Environmental Matters......................................16
         2.22     Legal Compliance...........................................17
         2.23     Customers and Suppliers....................................17
         2.24     Permits....................................................17
         2.25     Certain Business Relationships With Affiliates.............17
         2.26     Brokers' Fees..............................................18
         2.27     Books and Records..........................................18
         2.28     Disclosure.................................................18
         2.29     Projections................................................18
         2.30     Government Contracts.......................................18
         2.31     Securities Representations.................................19


                                       (i)

ARTICLE III           REPRESENTATIONS AND WARRANTIES OF THE BUYER............20
         3.1      Organization and Corporate Power...........................20
         3.2      Authorization of the Transaction...........................20
         3.3      Noncontravention...........................................20
         3.4      Capitalization.............................................20
         3.5      No Prior Activities........................................21
         3.6      Litigation.................................................21

ARTICLE IV            PRE-CLOSING COVENANTS..................................21
         4.1      Closing Efforts............................................21
         4.2      Governmental and Third-Party Notices and Consents..........21
         4.3      Exclusivity................................................22
         4.4      Operation of Business......................................22
         4.5      Access to Information......................................24
         4.6      Notice of Breaches.........................................24
         4.7      FIRPTA Tax Certificate.....................................25

ARTICLE V             CONDITIONS TO CLOSING..................................25
         5.1      Conditions to Obligations of the Buyer.....................25
         5.2      Conditions to Obligations of the Seller....................27

ARTICLE VI            POST-CLOSING COVENANTS.................................28
         6.1      Proprietary Information....................................28
         6.2      Solicitation and Hiring....................................28
         6.3      Non-Competition............................................28
         6.4      Tax Matters................................................29
         6.5      Sharing of Data............................................30
         6.6      Use of Name................................................30
         6.7      Cooperation in Litigation..................................30
         6.8      Collection of Accounts Receivable..........................31
         6.9      Employees..................................................31
         6.10     Enforcement of Insurance Claims............................31
         6.11     Maintenance of Corporate Existence;
                  Distribution of Shares.....................................32

ARTICLE VII           INDEMNIFICATION........................................32
         7.1      Indemnification by the Seller..............................32
         7.2      Indemnification by the Buyer...............................33
         7.3      Indemnification Claims.....................................33
         7.4      Survival of Representations and Warranties.................36
         7.5      Treatment of Indemnity Payments............................37
         7.6      Limitations................................................37

ARTICLE VIII          TERMINATION............................................38
         8.1      Termination of Agreement...................................38
         8.2      Effect of Termination......................................39

ARTICLE IX            DEFINITIONS............................................39


                                      (ii)

ARTICLE X             MISCELLANEOUS..........................................50
         10.1     Press Releases and Announcements...........................50
         10.2     No Third Party Beneficiaries...............................50
         10.3     Entire Agreement...........................................50
         10.4     Succession and Assignment..................................51
         10.5     Counterparts and Facsimile Signature.......................51
         10.6     Headings...................................................51
         10.7     Notices....................................................51
         10.8     Governing Law..............................................52
         10.9     Amendments and Waivers.....................................52
         10.10    Severability...............................................52
         10.11    Expenses...................................................52
         10.12    Submission to Jurisdiction.................................52
         10.13    Specific Performance.......................................53
         10.14    Construction...............................................53

Exhibits
Exhibit A - Secured Promissory Note
Exhibit B - Security Agreement
Exhibit C - Bill of Sale
Exhibit D - Instrument of Assumption
Exhibit E - Opinion of Seller's counsel
Exhibit F - Escrow Agreement

Schedules
Schedule 1.1(b) -Specified Excluded Assets
Schedule 1.2(b) - Specified Retained Liabilities
Schedule 1.6 -Allocation of Purchase Price
Schedule 6.9 -Employees To Be Offered Employment By Buyer
Disclosure Schedule

(iii)

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is entered into as of October __, 2007 by and among BEACON ENTERPRISE SOLUTIONS GROUP, INC., an Indiana corporation (the "Buyer"), CETCON INCORPORATED, an Ohio corporation (the "Seller") and the shareholders of Seller (the "Shareholders").

This Agreement contemplates a transaction in which the Buyer will purchase substantially all of the assets and assume certain of the liabilities of the Seller.

Capitalized terms used in this Agreement shall have the meanings ascribed to them in Article IX.

In consideration of the representations, warranties and covenants herein contained, the Parties agree as follows.

ARTICLE I

THE ASSET PURCHASE

1.1 Purchase and Sale of Assets.

(b) Notwithstanding the provisions of Section 1.1(a), the Acquired Assets shall not include the Excluded Assets, including without limitation those listed on Schedule 1.1(b).

1.2 Assumption of Liabilities.

(a) Upon and subject to the terms and conditions of this Agreement, the Buyer shall assume and become responsible for, from and after the Closing, the Assumed Liabilities.

(c) Immediately prior to the Closing, Seller shall pay and satisfy in full all of the Retained Liabilities of Seller including those shown on the Most Recent Balance Sheet, provided that the amounts paid shall be the amounts of such liabilities as of the date of payment,

or shall have made, in the reasonable determination of the Buyer, adequate provision for such Retained Liabilities.

1.3 Purchase Price. The Purchase Price to be paid by the Buyer for the Acquired Assets shall be (a) $700,000.00 in cash (the "Cash Consideration"), (b) 900,000 shares (the "Shares") of Buyer Common Stock; and (c) a Secured Promissory Note in the principal amount of $600,000.00, with a maturity date of sixty (60) months from the date of Closing, and in the form attached hereto as Exhibit A.

1.4 Escrow. At the Closing, the Buyer shall deliver to the Escrow Agent a stock certificate registered in the name of the Escrow Agent or its nominee representing the Escrow Fund for the purpose of securing the indemnification obligations of the Seller and the Shareholders set forth in this Agreement. The Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms thereof. The Escrow Fund shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes of and in accordance with the terms of the Escrow Agreement. Until the termination of the escrow in accordance with the terms of the Escrow Agreement, the Seller shall have the right, in its sole discretion to direct the sale for cash of all or any portion of the Escrow Shares (if any then make-up a portion of the Escrow Fund) in one or more transactions provided that
(i) the price per share for the sale of the Escrow Shares is not less than $1.00, (ii) the proceeds from any such sale(s) shall be held in escrow by the Escrow Agent pursuant to the terms of the Escrow Agreement, and (iii) Seller may not direct any such sale during any blackout period under any insider trading policy or blackout policy of Buyer, and the Buyer shall promptly execute any and all required joint instructions to the Escrow Agent to facilitate any and all such sales of the Escrow Shares. Further, Seller shall have the sole discretion to direct the investment of amounts held in the Escrow Fund pursuant to the investment options specified in, and in accordance with the restrictions of, the Escrow Agreement, and Buyer agrees to promptly execute any and all joint instructions to the Escrow Agent to facilitate any and all such investments.

1.5 The Closing.

(b) At the Closing:

(i) the Seller shall deliver to the Buyer the various certificates, instruments and documents referred to in Section 5.1;

(ii) the Buyer shall deliver to the Seller the various certificates, instruments and documents referred to in Section 5.2;

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(iii) the Buyer shall execute and deliver to the Seller the Secured Promissory Note in substantially the form attached hereto as Exhibit A

(iv) the Buyer and the Seller shall execute and deliver to each other the Security Agreement in substantially the form attached hereto as Exhibit B;

(vii) the Buyer shall pay to the Seller, payable by wire transfer or other delivery of immediately available U.S. funds to an account designated by the Seller, the Cash Consideration;

(viii) the Buyer shall deliver to the Seller a stock certificate registered in the name of the Seller representing a number of shares of Buyer Common Stock as is equal to the number of Shares minus the number of Escrow Shares;

(ix) the Buyer, the Seller and the Escrow Agent shall execute and deliver the Escrow Agreement in substantially the form attached hereto as Exhibit F and the Buyer shall deposit a stock certificate representing the Escrow Shares with the Escrow Agent in accordance with Section 1.4;

(x) the Seller shall deliver to the Buyer, or otherwise put the Buyer in possession and control of, all of the Acquired Assets of a tangible nature; and

(xi) the Buyer and the Seller shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above.

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Buyer may reasonably request to more effectively transfer, convey and assign to the Buyer, and to confirm the Buyer's rights to, title in and ownership of, the Acquired Assets and to place the Buyer in actual possession and operating control thereof.

1.8 Withholding. Notwithstanding any other provision of this Agreement, each of the Buyer and the Escrow Agent shall be entitled to deduct and withhold from the payments to be made pursuant to this Agreement and/or the Escrow Agreement such amounts as it reasonably determines after consultation with its Tax advisors that it is required to deduct and withhold with respect to the making of such payments under the Code or any other applicable provision of law and to collect Forms W-8 or W-9, as applicable, or similar information from the Seller, the Shareholders and any other recipients of payments hereunder or thereunder. To the extent that amounts are so withheld by the Buyer, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the recipient in respect of which such deduction and withholding was made by the Buyer or Escrow Agent.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller represents and warrants to the Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article II are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article II. Disclosures in any section or subsection of the Disclosure Schedule shall qualify such other sections or subsections of the Disclosure Schedule to the extent it is reasonably apparent from the content of such disclosure that such disclosure is relevant to such other sections or subsections.

2.1 Organization, Qualification and Corporate Power. The Seller is a corporation validly existing and in good standing under the laws of the State of Ohio. The Seller is duly qualified to conduct business and is in good standing under the laws of each jurisdiction listed in Section 2.1 of the Disclosure Schedule, which jurisdictions constitute the only jurisdictions in which the nature of the Seller's business or the ownership or leasing of its properties requires such qualification. The Seller has all requisite power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it. The Seller has furnished to the Buyer complete and accurate copies of its Articles of Incorporation and Bylaws. The Seller is not in default under or in violation of any provision of its Articles of Incorporation or Bylaws. There are no other agreements or instruments setting forth (i) rights, preferences and privileges of the Shareholders with respect to the Seller and/or among the Shareholders, or (ii) matters relating to the operation and governance of the Seller.

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There are no outstanding agreements or commitments to which the Seller is a party or which are binding upon the Seller for the redemption of any of its equity. The Seller has only one class of shares outstanding. There are no outstanding options, warrants or similar rights relating to the Seller or its equity securities.

2.3 Authorization of Transaction. The Seller has all requisite power and authority to execute and deliver this Agreement and the Ancillary Agreements and to perform its obligations hereunder and thereunder. The performance by the Seller of this Agreement and the Ancillary Agreements and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary actions on the part of the Seller.

This Agreement has been duly and validly executed and delivered by the Seller and constitutes, and each of the Ancillary Agreements, upon its execution and delivery by the Seller, will constitute, a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, arrangement or other similar laws from time to time in effect and except as to the remedy of specific performance which may not be available under the laws of various jurisdictions.

2.4 Noncontravention. Neither the execution and delivery by the Seller of this Agreement or the Ancillary Agreements, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Articles of Incorporation or Bylaws of the Seller,
(b) require on the part of the Seller any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Seller is a party or by which the Seller is bound or to which any of its assets is subject, except with respect to contracts that are not customer contracts listed on Section 2.4 of the Disclosure Schedules, for any such conflict, breach, default, acceleration, or right to terminate, modify or cancel, or failure to notify or obtain consent or waiver that would not have a Seller Material Adverse Effect, (d) result in the imposition of any Security Interest upon any asset or assets of the Seller or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Seller or any of its properties or assets.

2.5 Subsidiaries. The Seller has no Subsidiaries. The Seller does not control directly or indirectly or have any direct or indirect equity participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association or entity.

2.6 Financial Statements. The Seller has provided to the Buyer the Financial Statements. The Financial Statements (i) were prepared on a consistent basis throughout the periods covered thereby (except as may be indicated in the notes to such financial statements) and, in the case of the balance sheet and statement of income, changes in shareholder's equity and cash flows of the Seller as of the end of and for the year ended December 31, 2006, in accordance with reasonable accounting practices, and (ii) fairly present the financial position of the Seller as of the dates thereof and the results of its operations and cash flows for the periods

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indicated, consistent with the books and records of the Seller, except that the unaudited interim financial statements are subject to normal and recurring year-end adjustments which will not be material in amount or effect and do not include footnotes.

2.7 Absence of Certain Changes. Except as set forth in Section 2.7 of the Disclosure Schedules, since the Most Recent Balance Sheet Date, (a) there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Seller Material Adverse Effect, and (b) the Seller has not taken any of the actions set forth in paragraphs (a) through (n) of Section 4.4.

2.8 Undisclosed Liabilities. The Seller has no knowledge of any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet, (b) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet and which are not material, and (c) liabilities which have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business and which are listed on Schedule 2.8.

2.9 Tax Matters.

(a) The Seller has properly filed on a timely basis all material Tax Returns that it is and was required to file, and all such Tax Returns were true, correct and complete in all material respects. The Seller has properly paid on a timely basis all material Taxes, whether or not shown on its Tax Returns, that were due and payable. All material Taxes that the Seller is or was required by law to withhold or collect have been withheld or collected and, to the extent required, have been properly paid on a timely basis to the appropriate Governmental Entity. The Seller has complied with all information reporting and back-up withholding requirements in all material respects, including maintenance of the required records with respect thereto, in connection with amounts paid to any employee, independent contractor, creditor or other third party.

(c) No examination or audit of any Tax Return of the Seller by any Governmental Entity is currently in progress or, to the knowledge of the Seller, threatened or contemplated. Section 2.9(c) of the Disclosure Schedule sets forth each jurisdiction (other than United States federal) in which the Seller files, or is required to file or has been required to file a material Tax Return or is or has been liable for material Taxes on a "nexus" basis. The Seller has not been informed by any jurisdiction that the jurisdiction believes that the Seller was required to file any Tax Return that was not filed.

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(d) The Seller is, and has been since its inception, validly classified and treated as an "S corporation," having made a valid election under
Section 1362 of the Internal Revenue Code and has been validly treated in a similar manner for purposes of the income Tax laws of all states in which it has been subject to taxation.

(e) Except as set forth in Section 2.9(e) of the Disclosure Schedules, the Seller has delivered or made available to the Buyer (i) complete and correct copies of all Tax Returns of the Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of assessment, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations has not yet expired.

(g) The Seller is not a party to any litigation regarding Taxes.

(h) There are no Security Interests with respect to Taxes upon any of the Acquired Assets, other than with respect to Taxes not yet due and payable. To the Seller's and Shareholders' knowledge, there is no basis for the assertion of any claim relating or attributable to Taxes, which, if adversely determined, would result in any Security Interest on the Acquired Assets, or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

(j) The Seller has maintained complete and accurate records, including all applicable exemption, resale or other certificates, of (i) all sales to purchasers claiming to be exempt from sale and use Taxes based on the exempt status of the purchaser, and (ii) all other sales for which sales Tax or use Tax was not collected by the Seller and as to which the seller is required to receive and retain resale certificates or other certificates relating to the exempt nature of the sale or use or non-applicability of the sale and use Taxes.

(k) The Seller is not bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(l) The Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.

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2.10 Ownership and Condition of Assets.

(a) The Seller is the true and lawful owner, and has good title to, all of the Acquired Assets, free and clear of all Security Interests. Upon execution and delivery by the Seller to the Buyer of the instruments of conveyance referred to in Section 1.5(b)(iii), the Buyer will become the true and lawful owner of, and will receive good title to, the Acquired Assets, free and clear of all Security Interests, except for Security Interests created by Buyer.

(b) The Acquired Assets are sufficient for the conduct of the Seller's business as presently conducted and as presently proposed to be conducted and constitute all assets used by the Seller in such business. Each tangible Acquired Asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

(c) Section 2.10(c) of the Disclosure Schedule lists individually
(i) all Acquired Assets which are fixed assets (within the meaning of GAAP) having a book value greater than $1,000, indicating the cost, accumulated book depreciation (if any) and the net book value of each such fixed asset as of the Most Recent Balance Sheet Date, (ii) all other Acquired Assets of a tangible nature (other than inventories) whose book value exceeds $5,000; and (iii) all Acquired Assets that are Assigned Contracts and specifically identifying all customer contracts.

(d) Except as set forth on Section 2.10(d) of the Disclosure Schedule, each item of equipment, motor vehicle and other asset that is being transferred to the Buyer as part of the Acquired Assets and that the Seller has possession of pursuant to a lease agreement or other contractual arrangement is in such condition that, if returned to its lessor or owner under the applicable lease or contract on the Closing Date, the obligations of the Seller to such lessor or owner would have been discharged in full.

2.11 Owned Real Property. The Seller does not own, and has never owned, any real property.

2.12 Real Property Leases. Section 2.12 of the Disclosure Schedule lists all Leases and lists the term of such Lease, any extension and expansion options, and the rent payable thereunder. The Seller has delivered to the Buyer complete and accurate copies of the Leases. With respect to each Lease and except as set forth in Section 2.12 of the Disclosure Schedule:

(a) such Lease is legal, valid, binding, enforceable and in full force and effect;

(b) such Lease is assignable by the Seller to the Buyer without the consent or approval of any party and such Lease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing;

-8-

or otherwise, would constitute a material breach or default by the Seller or, to the knowledge of the Seller, any other party under such Lease;

(d) the Seller is not a party to any dispute, oral agreement or forbearance program as to such Lease, and to Seller's knowledge no other person is party to such dispute, oral agreement or forbearance program relating to or affecting the Lease;

(e) the Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold;

(f) to the knowledge of the Seller, all facilities leased or subleased thereunder are supplied with utilities and other services adequate for the operation of said facilities; and

(g) the Seller is not aware of any Security Interest, easement, covenant or other restriction applicable to the real property subject to such Lease which would reasonably be expected to materially impair the current uses or the occupancy by the Seller of the property subject thereto.

2.13 Intellectual Property.

(a) Seller Registrations. There are no Seller Registrations.

(b) Prosecution Matters. Seller has no Patent Rights.

(c) Ownership; Sufficiency. Except as otherwise identified in
Section 2.13 of the Disclosure Schedule, each item of Seller Intellectual Property will be owned or available for use by the Buyer immediately following the Closing on substantially identical terms and conditions as it was immediately prior to the Closing. The Seller is the sole and exclusive owner of all Seller Owned Intellectual Property, free and clear of any Security Interests and all joint owners of the Seller Owned Intellectual Property are listed in
Section 2.13(c) of the Disclosure Schedule. Except as otherwise identified in
Section 2.13 of the Disclosure Schedule, the Seller Intellectual Property constitutes all Intellectual Property necessary (i) to Exploit the Customer Offerings in the manner so done currently by the Seller, (ii) to Exploit the Internal Systems as they are currently used by the Seller, and (iii) otherwise to conduct the Seller's business in all material respects in the manner currently conducted by the Seller. Seller has not licensed the Software included in the Customer Offerings, or any portion thereof, to any third party. Seller has Exploited the Software solely in connection with Seller's internal use and makes no representation and warranty that the Software can be made available to third parties (whether by license or otherwise), except in the manner so done currently by the Seller.

(d) Protection Measures. The Seller has taken reasonable measures to protect the proprietary nature of each item of Seller Owned Intellectual Property, and to maintain in confidence all trade secrets and confidential information comprising a part thereof. The Seller has complied with all applicable contractual and legal requirements pertaining to information privacy and security. No complaint relating to an improper use or disclosure of, or a breach in the security of, any such information has been made or, to the knowledge of the Seller, threatened against the Seller. To the knowledge of the Seller, there has been no: (i) unauthorized disclosure of any third party proprietary or confidential information in the possession, custody or

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control of the Seller or (ii) breach of the Seller's security procedures wherein confidential information has been disclosed to a third person. The Seller has actively policed the quality of all goods and services sold, distributed or marketed under each of its Trademarks and has enforced adequate quality control measures to ensure that no Trademarks that it has licensed to others shall be deemed to be abandoned.

(e) Infringement by Seller. None of the Customer Offerings, or the Exploitation thereof by the Seller or by any reseller, distributor, customer or user thereof, or any other activity of the Seller, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party. None of the Internal Systems, or the Seller's past, current or currently contemplated Exploitation thereof, or any other activity undertaken by them in connection with the Business, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party. The Seller has not received any complaint, claim or notice, or threat of any of the foregoing (including any notification that a license under any patent is or may be required), alleging any such infringement, violation or misappropriation and any request or demand for indemnification or defense received by the Seller from any reseller, distributor, customer, user or any other third party; and the Seller has not received any legal opinions, studies, market surveys and analyses relating to any alleged or potential infringement, violation or misappropriation.

(f) Infringement of Rights. To Seller's knowledge, no person (including, without limitation, any current or former employee or consultant of Seller) is infringing, violating or misappropriating any of the Seller Owned Intellectual Property or any Seller Licensed Intellectual Property.

(g) Outbound IP Agreements. Seller has not assigned, transferred, licensed, distributed or otherwise granted any right or access to any person (except for access to customers necessary to Exploit the Customer Offerings), or covenanted not to assert any right, with respect to any past, existing or future Seller Intellectual Property. The Seller has not agreed to indemnify any person against any infringement, violation or misappropriation of any Intellectual Property rights with respect to any Customer Offerings or any third party Intellectual Property rights. The Seller is not a member of or party to any patent pool, industry standards body, trade association or other organization pursuant to the rules of which it is obligated to license any existing or future Intellectual Property to any person.

(h) Inbound IP Agreements. Section 2.13(h) of the Disclosure Schedule identifies (i) each item of Seller Licensed Intellectual Property and the license or agreement pursuant to which the Seller Exploits it (excluding currently-available, off the shelf software programs that are part of the Internal Systems and are licensed by the Seller pursuant to "shrink wrap" licenses, the total fees associated with which are less than $2,500). There is no agreement, contract, assignment or other instrument pursuant to which the Seller has obtained any joint or sole ownership interest in or to any item of Seller Owned Intellectual Property. No third party inventions, methods, services, materials, processes or Software are included in or required to Exploit the Customer Offerings or Internal Systems in the manner so done currently by Seller. None of the Customer Offerings or Internal Systems includes "shareware," "freeware" or other Software or other material that was obtained by the Seller from third parties other than pursuant to the license agreements listed in Section 2.13(h) of the Disclosure Schedule.

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(i) Source Code. The Seller has not licensed, distributed or disclosed, and knows of no distribution or disclosure by others (including its employees and contractors) of, the Seller Source Code to any person, and the Seller has taken all reasonable physical and electronic security measures to prevent disclosure of such Seller Source Code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, nor will the consummation of the transactions contemplated hereby, result in the disclosure or release of such Seller Source Code by the Seller, or escrow agent(s) or any other person to any third party.

(j) Authorship. All of the Software and Documentation comprising, incorporated in or bundled with the Customer Offerings or Internal Systems have been designed, authored, tested and debugged by regular employees of the Seller within the scope of their employment or by independent contractors of the Seller who have executed valid and binding agreements expressly assigning all right, title and interest in such copyrightable materials to the Seller, waiving their non-assignable rights (including moral rights) in favor of the Seller and its permitted assigns and licensees, and have no residual claim to such materials.

(k) Open Source Code. Section 2.13(k) of the Disclosure Schedule lists all Open Source Materials that the Seller has either incorporated into the Customer Offering or Internal Systems, and/or those Customer Offerings and/or Internal Systems (or portions thereof) that are derivative works of Open Source Materials. Except as identified in Section 2.13(k) of the Disclosure Schedules, the Seller has not (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Customer Offerings; or (ii) used Open Source Materials that create, or purport to create, obligations for the Seller with respect to the Customer Offerings or grant, or purport to grant, to any third party, any rights or immunities under Intellectual Property rights (including, but not limited to, using any Open Source Materials that require, as a condition of Exploitation of such Open Source Materials, that other Software incorporated into, derived from or distributed with such Open Source Materials be (x) disclosed or distributed in source code form, (y) licensed for the purpose of making derivative works, or (z) redistributable at no charge or minimal charge). Seller has no distributed Open Source Materials in conjunction with any other software developed or distributed by the Seller.

(l) Employee and Contractor Assignments. [Intentionally deleted.]

(m) Quality. The Customer Offerings and the Internal Systems are free from significant defects in design, workmanship and materials and conform in all material respects to the written Documentation and specifications therefor. The Customer Offerings and the Internal Systems do not contain any disabling device, virus, worm, back door, Trojan horse or other disruptive or malicious code that may or are intended to impair their intended performance or otherwise permit unauthorized access to, hamper, delete or damage any computer system, software, network or data. The Seller has not received any warranty claims, contractual terminations or requests for settlement or refund due to the failure of the Customer Offerings to meet their specifications or otherwise to satisfy end user needs or for harm or damage to any third party.

(n) Support and Funding. The Seller has neither sought, applied for nor received any support, funding, resources or assistance from any federal, state, local or foreign

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governmental or quasi-governmental agency or funding source in connection with the Exploitation of the Customer Offerings, the Internal Systems or any facilities or equipment used in connection therewith.

(o) Certifications. Section 2.13(o) of the Disclosure Schedule identifies all channel partner authorizations, accreditations or similar qualifications with third party technology providers held by the Seller or its employees. Except as disclosed on Section 2.13(o), all such certifications, accreditations and similar qualifications may be transferred or assigned to the Buyer without the consent of such third parties.

2.14 Contracts.

(a) Section 2.14 of the Disclosure Schedule lists the following agreements (written or oral) to which the Seller is a party as of the date of this Agreement (other than this Agreement and the Ancillary Agreements):

(ii) any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, (B) which involves more than the sum of $5,000, or (C) in which the Seller has granted manufacturing rights, "most favored nation" pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer, manager or Shareholder or an Affiliate thereof;

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(ix) any agreement under which the consequences of a default or termination would reasonably be expected to have a Seller Material Adverse Effect;

(x) any agreement which contains any provisions requiring the Seller to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale or license of products entered into in the Ordinary Course of Business);

(xi) any agreement that could reasonably be expected to have the effect of prohibiting or impairing the conduct of the business of the Seller or of the Buyer or any of its subsidiaries as currently conducted and as currently proposed to be conducted;

(xii) any agreement under which the Seller is restricted from selling, licensing or otherwise distributing any of its technology or products, or providing services to, customers or potential customers or any class of customers, in any geographic area, during any period of time or any segment of the market or line of business;

(xiii) any agreement which would entitle any third party to receive a license or any other right to intellectual property of the Buyer or any of the Buyer's Affiliates following the Closing; and

(xiv) any other agreement (or group of related agreements) either involving more than $10,000 or not entered into in the Ordinary Course of Business.

(b) The Seller has delivered to the Buyer a complete and accurate copy of each agreement listed in Section 2.13 or Section 2.14 of the Disclosure Schedule. With respect to each agreement so listed and except as disclosed in
Section 2.14 of the Disclosure Schedules: (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) for those agreements to which the Seller is a party, the agreement is assignable by the Seller to the Buyer without the consent or approval of any party and will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing; and (iii) neither the Seller nor, to the knowledge of the Seller, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Seller, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Seller or, to the knowledge of the Seller, any other party under such agreement.

2.15 Accounts Receivable. All accounts receivable of the Seller reflected on the Most Recent Balance Sheet (other than those paid since such date) are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 days after the date on which it first became due and payable), net of the applicable reserve for bad debts on the Most Recent Balance Sheet. A complete and accurate list of the accounts receivable reflected on the Most Recent Balance Sheet, showing the aging thereof, is included in Section 2.15 of the Disclosure Schedule. All accounts receivable of the Seller that have arisen since the Most Recent Balance Sheet Date are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 days after the date on which it first became due and payable), net of a reserve for bad debts in an amount proportionate to the reserve shown on the Most Recent

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Balance Sheet. The Seller has not received any written notice from an account debtor stating that any account receivable in an amount in excess of $5,000 is subject to any contest, claim or setoff by such account debtor.

2.16 Insurance. Section 2.16 of the Disclosure Schedule lists each insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, business interruption, environmental, product liability, errors and omissions, professional liability, and automobile insurance policies and bond and surety arrangements) to which the Seller is a party, all of which are in full force and effect. There is no material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy. All premiums due and payable under all such policies have been paid, the Seller may not be liable for retroactive premiums or similar payments, and the Seller is otherwise in compliance in all material respects with the terms of such policies. The Seller has no knowledge of any threatened termination of, or premium increase with respect to, any such policy. Upon payment of amounts required to obtain tail coverage on Seller's professional liability (errors and omissions) insurance policy, such policy will be in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.

2.17 Litigation. Except as set forth in Section 2.17 of the Disclosure Schedule, there is no Legal Proceeding which is pending or has been threatened in writing against the Seller. There are no judgments, orders or decrees outstanding against the Seller.

2.18 Warranties. No service or product delivered, made, sold, leased or licensed by the Seller is subject to any guaranty, warranty, right of return, right of credit or other indemnity.

2.19 Employees.

(a) Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller, their position with Seller and their annual rate of compensation. Except as set forth on Section 2.19 of the Disclosure Schedule, each current employee of the Seller and each past employee of the Seller has entered into a confidentiality and assignment of inventions agreement with the Seller, a copy or form of which has previously been delivered to the Buyer.
Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller who are a party to a non-competition agreement with the Seller; copies of such agreements have previously been delivered to the Buyer. Each such agreement referenced in the two preceding sentences to which the Seller is a party is assignable by the Seller to the Buyer without the consent or approval of any party and will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing. Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller who are not citizens of the United States. To the knowledge of the Seller, no key employee or group of employees has any plans to terminate employment with the Seller (other than for the purpose of accepting employment with the Buyer following the Closing) or not to accept employment with the Buyer. The Seller is in compliance with all applicable laws relating to the hiring and employment of employees.

(b) The Seller is not a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or

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other collective bargaining disputes. The Seller has no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Seller.

2.20 Employee Benefits.

(a) Section 2.20(a) of the Disclosure Schedule contains a complete and accurate list of all Seller Plans. Complete and accurate copies of (i) all Seller Plans which have been reduced to writing, (ii) written summaries of all unwritten Seller Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, and (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R and (for all funded plans) all plan financial statements for the last five plan years for each Seller Plan, have been delivered to the Buyer.

(b) Each Seller Plan being assumed by Buyer under this Agreement has been administered in all material respects in accordance with its terms and each of the Seller and the ERISA Affiliates has in all material respects met its obligations with respect to each such Seller Plan and has made all required contributions thereto. The Seller, each ERISA Affiliate and each such Seller Plan are in compliance in all material respects with the currently applicable provisions of ERISA and the Code and the regulations thereunder (including
Section 4980B of the Code, Subtitle K, Chapter 100 of the Code and Sections 601 through 608 and Section 701 et seq. of ERISA). All filings and reports as to each Seller Plan being assumed by Buyer under this Agreement required to have been submitted to the Internal Revenue Service or to the United States Department of Labor have been duly submitted. No Seller Plan being assumed by Buyer under this Agreement has assets that include securities issued by the Seller or any ERISA Affiliate.

(c) There are no Legal Proceedings (except claims for benefits payable in the normal operation of the Seller Plans being assumed by Buyer under this Agreement and proceedings with respect to qualified domestic relations orders) against or involving any Seller Plan or asserting any rights or claims to benefits under any Seller Plan that could give rise to any material liability.

(d) Neither the Seller nor any ERISA Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA.

(e) At no time has the Seller or any ERISA Affiliate been obligated to contribute to any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).

(f) There are no unfunded obligations under any Seller Plan being assumed by Buyer providing benefits after termination of employment to any employee of the Seller (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, but excluding continuation of health coverage required to be continued under Section 4980B of the Code or other applicable law and insurance conversion privileges under state law.

(g) No act or omission has occurred and no condition exists with respect to any Seller Plan that would subject the Buyer or any Affiliate of Buyer to (i) any material fine, penalty, tax or liability of any kind imposed under ERISA or the Code or (ii) any contractual

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indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Seller Plan.

(h) No Seller Plan is funded by, associated with or related to a "voluntary employee's beneficiary association" within the meaning of Section 501(c)(9) of the Code.

(i) Each Seller Plan being assumed by Buyer is amendable and terminable unilaterally by the Seller at any time without liability or expense to the Seller or such Seller Plan as a result thereof (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto) and no Seller Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Seller from amending or terminating any such Seller Plan.

(j) Section 2.20 of the Disclosure Schedule discloses each: (i) agreement with any Shareholder, manager, executive officer or other key employee of the Seller (A) the benefits of which are contingent, or the terms of which are altered, upon the occurrence of a transaction involving the Seller of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such manager, executive officer or key employee; (ii) agreement, plan or arrangement under which any person may receive payments from the Seller that may be subject to the tax imposed by Section 4999 of the Code or included in the determination of such person's "parachute payment" under Section 280G of the Code; and (iii) agreement or plan binding the Seller, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Seller Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.

(k) Section 2.20 of the Disclosure Schedule sets forth the policy of the Seller with respect to accrued vacation, accrued sick time and earned time off and the amount of such liabilities as of August 31, 2007.

(l) No insurance policy that provides medical or dental benefits under a Seller Plan provides for any retrospective premium increases.

(m) No Seller Plan that provides medical or dental benefits is providing to any individual any continuation coverage mandated by Section 4980B of the Code (or any similar law).

2.21 Environmental Matters.

(a) To its knowledge, the Seller has complied with all applicable Environmental Laws except where failure to do so would not have a Seller Material Adverse Effect. There is no pending or, to the knowledge of the Seller, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Seller.

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(b) To its knowledge, the Seller does not have any liabilities or obligations arising from the release of any Materials of Environmental Concern into the environment.

(d) The Seller does not have possession of, or access to, or knowledge of, any documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently or previously owned or operated by the Seller (whether conducted by or on behalf of the Seller or a third party, and whether done at the initiative of the Seller or directed by a Governmental Entity or other third party).

(e) The Seller is not aware of any material environmental liability of any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Seller.

2.22 Legal Compliance. Except as set forth in Section 2.22 of the Disclosure Schedule, the Seller is currently conducting, and has at all times conducted, its business in material compliance with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, and Seller has had valid Permits to conduct such business with respect to each jurisdiction (and at such times) for which it has been required to have such Permits except where the lack of any such Permit would not have a Seller Material Adverse Effect. The Seller has not received any notice or communication from any Governmental Entity alleging noncompliance with any applicable law, rule or regulation.

2.23 Customers and Suppliers. Section 2.23 of the Disclosure Schedule sets forth a list of (a) each customer or supplier arrangement that accounted for more than 1% of the revenues of the Seller during the last full fiscal year or the interim period through the Most Recent Balance Sheet Date and the amount of revenues accounted for by such customer or supplier arrangement during each such period and (b) each other supplier of services or goods that is a critical or sole supplier of any significant aspect of Seller's business. No person identified in the foregoing sentence has provided written or verbal notice to Seller within the past year that it will stop, or materially reduce its activity below historic levels in connection with any contract or arrangement on which Seller currently derives revenue.

2.24 Permits. Section 2.24 of the Disclosure Schedule sets forth a list of all Permits issued to or held by the Seller. Such listed Permits are the only Permits that are required for the Seller to conduct its business as presently conducted or as proposed to be conducted. Each such Permit is in full force and effect; the Seller is in material compliance with the terms of each such Permit; and, to the knowledge of the Seller, no suspension or cancellation of such Permit is threatened.

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relationships between the Seller and any Affiliate thereof which occurred or have existed since the beginning of the time period covered by the Financial Statements.

2.26 Brokers' Fees. The Seller does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement, except Great Western Business Services, which commission will be paid by the Seller.

2.27 Books and Records. The minute books and other similar records of the Seller contain complete and accurate records of all actions taken at any meetings of the Seller's Shareholders, managers or any committee thereof and of all written consents executed in lieu of the holding of any such meeting. The books and records of the Seller accurately reflect, in all material respects, the assets, liabilities, business, financial condition and results of operations of the Seller. Section 2.27 of the Disclosure Schedule contains a list of all bank accounts and safe deposit boxes of the Seller and the names of persons having signature authority with respect thereto or access thereto.

2.28 Disclosure. No representation or warranty by the Seller contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Seller pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

2.29 Projections. The projections included in Section 2.29 of the Disclosure Schedule were prepared by the Seller in good faith using the best information available to management of the Seller and represent Seller management's good faith estimates of the future performance of the Seller for the periods referred to therein. The Buyer acknowledges that the projections are estimates and Seller makes no representation or warranty as to actual future performance.

2.30 Government Contracts.

(a) The Seller has not been suspended or debarred from bidding on contracts or subcontracts with any Governmental Entity; and to Seller's knowledge no such suspension or debarment has been threatened or initiated; and the consummation of the transactions contemplated by this Agreement will not result in any such suspension or debarment of the Seller or the Buyer (assuming that no such suspension or debarment will result solely from the identity of the Buyer). The Seller has not been or is not now being audited or investigated by the United States Government Accounting Office, the United States Department of Defense or any of its agencies, the Defense Contract Audit Agency, the contracting or auditing function of any Governmental Entity with which it is contracting, the United States Department of Justice, the Inspector General of the United States, or any prime contractor with a Governmental Entity; nor, to the knowledge of the Seller, has any such audit or investigation been threatened. To the knowledge of the Seller, there is no valid basis for (i) the suspension or debarment of the Seller from bidding on contracts or subcontracts with any Governmental Entity or (ii) any claim (including any claim for return of funds to the Government) pursuant to an audit or investigation by any of the entities named in the foregoing sentence. The Seller has no agreements, contracts

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or commitments which require it to obtain or maintain a security clearance with any Governmental Entity.

(b) To the knowledge of the Seller, no basis exists for any of the following with respect to any of its contracts or subcontracts with any Governmental Entity: (i) a Termination for Default (as provided in 48 C.F.R. Ch.1 ss.52.249-8, 52.249-9 or similar sections), (ii) a Termination for Convenience (as provided in 48 C.F.R. Ch.1 ss.52.241-1, 52.249-2 or similar sections), or a Stop Work Order (as provided in 48 C.F.R. Ch.1 ss.52.212-13 or similar sections); and the Seller has no reason to believe that funding may not be provided under any contract or subcontract with any Governmental Entity in the upcoming federal fiscal year.

2.31 Securities Representations.

(a) Seller is an "accredited investor" as defined in Rule 501(a) under the Securities Act. Seller has not been organized, reorganized or recapitalized specifically for the purpose of acquiring the Shares.

(b) The Seller is acquiring the Shares for its own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act, or any rule or regulation under the Securities Act.

(c) The Seller has had adequate opportunity to obtain from representatives of the Buyer such information about the Buyer as is necessary for the undersigned to evaluate the merits and risks of its acquisition of the Shares.

(d) The Seller has sufficient expertise in business and financial matters to be able to evaluate the risks involved in the acquisition of the Shares and to make an informed investment decision with respect to such acquisition.

(e) The Seller understands that the Shares have not been registered under the Securities Act and are "restricted securities" within the meaning of Rule 144 under the Securities Act; and the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available.

(f) A legend substantially in the following form will be placed on the certificate(s) representing the Shares:

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

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Incorporation, a copy of which has been made available to Seller. All of the issued and outstanding shares of Buyer Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Shares will be, when issued on the terms and conditions of this Agreement, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Buyer's Articles of Incorporation or Bylaws or any agreement to which the Buyer is a party or is otherwise bound.

3.5 No Prior Activities. As of the date of this Agreement, the Buyer has not engaged in any business operations.

ARTICLE IV

PRE-CLOSING COVENANTS

4.2 Governmental and Third-Party Notices and Consents.

(b) The Seller shall use its Reasonable Best Efforts to obtain, at its expense, all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as listed or are required to be listed in the Disclosure Schedule. The Buyer shall reasonably cooperate with the Seller in Seller's efforts to obtain such waivers, consents and approvals.

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Contracts and/or other assets or rights shall not be assigned and transferred by the Seller to the Buyer at the Closing and the Buyer shall not assume the Seller's future liabilities or future obligations with respect thereto at the Closing until such approval or consent is obtained and assignment occurs, at which time Buyer will assume all such liabilities and obligations following the date of such approval or consent, (B) the Seller shall continue to use its Reasonable Best Efforts for a reasonable period of time after the Closing, and in any case not less than nine (9) months, to obtain the necessary consent or approval as soon as practicable after the Closing, (C) upon the obtaining of such consent or approval, the Buyer and the Seller shall execute such further instruments of conveyance (in substantially the form executed at the Closing) as may be necessary to assign and transfer such Assigned Contracts and/or other assets or rights (and the associated liabilities and obligations of the Seller) to the Buyer, and (D) from and after the Closing until the assignment or termination (at the end of any fixed term thereof or by the Buyer after nine (9) months from the date hereof) of each such Assigned Contract pursuant to clause
(C) above, the Buyer shall perform and fulfill, on a subcontractor basis, the obligations of the Seller or the applicable Subsidiary to be performed under such Assigned Contract, and the Seller or such Subsidiary shall promptly remit to the Buyer all payments received by it under such Assigned Contract for services performed during such period.

4.3 Exclusivity.

(a) Neither the Seller nor the Shareholders shall, directly or indirectly, (i) initiate, solicit, encourage or otherwise facilitate any inquiry, proposal, offer or discussion with any party (other than the Buyer) concerning any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of shares, sale of material assets or similar business transaction involving the Seller, (ii) furnish any non-public information concerning the business, properties or assets of the Seller to any party (other than the Buyer), (iii) engage in discussions or negotiations with any party (other than the Buyer) concerning any such transaction, (iv) vote any shares of Seller in favor of any such transaction with any party (other than the Buyer), or (v) enter into any agreement with any party (other than the Buyer) concerning any such transaction.

(b) The Seller and each Shareholder shall immediately notify any party with which discussions or negotiations of the nature described in paragraph (a) above were pending that the Seller or the Shareholder, as applicable, is terminating such discussions or negotiations. If the Seller or a Shareholder receives any inquiry, proposal or offer of the nature described in paragraph (a) above, the Seller or Shareholder, as applicable, shall, within one business day after such receipt, notify the Buyer of such inquiry, proposal or offer, including the identity of the other party and the terms of such inquiry, proposal or offer.

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of the foregoing, prior to the Closing, the Seller shall not, without the written consent of the Buyer:

(b) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its shares other than any distributions by the Seller to its Shareholders for the payment of Taxes consistent with past practice;

(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in
Section 2.20(k) or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its managers, officers or employees, generally or individually, or pay any bonus or other benefit to its managers, officers or employees (except for existing payment obligations listed in Section 2.20 of the Disclosure Schedule) or hire any new officers or (except in the Ordinary Course of Business) any new employees;

(e) acquire, sell, lease, license or dispose of any assets or property, other than purchases and sales of assets in the Ordinary Course of Business;

(f) mortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest;

(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;

(h) amend its Articles of Incorporation, Bylaws or other organizational documents in a manner that could have an adverse effect on the transactions contemplated by this Agreement;

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(k) make or commit to make any capital expenditure in excess of $5,000 per item or $10,000 in the aggregate;

(l) institute or settle any Legal Proceeding;

(n) agree in writing or otherwise to take any of the foregoing actions.

4.5 Access to Information.

(a) The Seller shall permit representatives of the Buyer to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Seller) to all premises, properties, financial, tax and accounting records (including the work papers of the Seller's independent accountants), contracts, other records and documents, and personnel, of or pertaining to the Seller, and contacts at Seller's principal suppliers and customers, for the purpose of performing such inspections and tests as the Buyer deems necessary or appropriate.

(b) If the Closing has not occurred by October 31, 2007, within 15 days after the end of each month ending prior to the Closing, beginning with September 30, 2007, the Seller shall furnish to the Buyer an unaudited income statement for such month and a balance sheet as of the end of such month, prepared on a basis consistent with the Financial Statements. Such financial statements shall present fairly the financial condition and results of operations of the Seller as of the dates thereof and for the periods covered thereby, and shall be consistent with the books and records of the Seller.

4.6 Notice of Breaches.

(a) From the date of this Agreement until the Closing, the Seller shall promptly deliver to the Buyer supplemental information concerning events or circumstances occurring subsequent to the date hereof which would render any representation, warranty or statement in this Agreement or the Disclosure Schedule inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation, warranty or statement in this Agreement or the Disclosure Schedule.

(b) From the date of this Agreement until the Closing, the Buyer shall promptly deliver to the Seller supplemental information concerning events or circumstances occurring subsequent to the date hereof which would render any representation or warranty in this Agreement inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation or warranty in this Agreement.

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4.7 FIRPTA Tax Certificate. Within 10 days prior to the Closing, the Seller shall deliver or cause to be delivered to the Buyer a certification that the Seller is not a foreign person within the meaning of Section 1445 of the Code, in accordance with the Treasury Regulations under Section 1445 of the Code.

4.8 Preparation of Audited Financial Statements. The Seller shall permit the Buyer and the Buyer's independent accountants to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Seller) to all premises, properties, financial, tax and accounting records (including the work papers of the Seller's independent accountants), contracts, other records and documents, and personnel, of or pertaining to the Seller, and contacts at Seller's principal suppliers and customers, for the purpose of preparing audited financial statements of the Seller.

ARTICLE V

CONDITIONS TO CLOSING

(a) the Seller shall have obtained at its own expense (and shall have provided copies thereof to the Buyer) all of the waivers, permits, consents, approvals or other authorizations, and effected all of the registrations, filings and notices, referred to in Section 4.2 which are required on the part of the Seller;

(b) the representations and warranties of the Seller set forth in the first sentence of Section 2.1 and in Sections 2.2 and 2.3 and any representations and warranties of the Seller set forth in this Agreement that are qualified as to materiality shall be true and correct in all respects, and all other representations and warranties of the Seller set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(c) the Seller shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(e) the Seller shall have delivered to the Buyer the Seller Certificate;

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(f) the Seller shall have delivered to the Buyer an updated list of the Acquired Assets, as of the day prior to the Closing Date;

(g) the Seller shall have delivered to the Buyer documents evidencing the release or termination of all Security Interests on the Acquired Assets, and copies of filed UCC termination statements with respect to all UCC financing statements evidencing Security Interests;

(h) the Buyer shall have received an opinion from counsel to the Seller in substantially the form attached hereto as Exhibit E, addressed to the Buyer and dated as of the Closing Date;

(i) each of the Key Employees shall not have taken any action which would be prohibited thereby in any material respect if such Person's Employment Agreement were in effect at the time of such action and the Seller shall have no knowledge of any such Key Employee's intention not to accept employment by Buyer following the Closing;

(j) the Buyer shall have entered into a sublease or assignment of the Lease reasonably satisfactory to Seller, or Buyer shall have entered into a new lease with the landlord of the property underlying the Lease;

(k) the Buyer or a successor entity thereto shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities;

(l) no Seller Material Adverse Effect shall have occurred;

(m) the Buyer shall be reasonably satisfied that the issuance and sale of the Shares are exempt from the registration requirements of the Securities Act;

(n) the Seller shall have received all necessary consents to the assignment of any material customer contracts, as set forth in Section 2.10(c) of the Disclosure Schedule, which consent may be conditioned on the Closing;

(o) the Buyer and its attorneys, accountants, lenders and other representatives and agents shall have satisfactorily completed their due diligence investigation of the Seller and the Business;

(p) the Buyer shall have received such other certificates and instruments (including certificates of good standing of the Seller in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

(q) the Shareholders shall have signed such share exchange agreements and other documents as the Buyer may reasonably request in connection with the share exchange transaction currently contemplated by the Buyer; and

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(a) the representations and warranties of the Buyer set forth in the first sentence of Section 3.1 and in Section 3.2 and any representations and warranties of the Buyer set forth in this Agreement that are qualified as to materiality shall be true and correct in all respects, and all other representations and warranties of the Buyer set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(b) the Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(c) no Legal Proceeding shall be pending or threatened wherein an unfavorable judgment, order, decree, stipulation or injunction would (i) prevent consummation of the transactions contemplated by this Agreement or (ii) cause the transactions contemplated by this Agreement to be rescinded following consummation, and no such judgment, order, decree, stipulation or injunction shall be in effect;

(d) the Buyer shall have delivered to the Seller the Buyer Certificate;

(e) the Buyer shall have entered into a sublease or assignment of the Lease reasonably satisfactory to Seller, or Buyer shall have entered into a new lease with the landlord of the property underlying the Lease;

(f) the Seller shall have received such other certificates and instruments (including certificates of good standing of the Buyer in its jurisdiction of organization, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

(g) the Seller shall be reasonably satisfied that the issuance and sale of the Shares, and any subsequent transfers of the Shares to the Shareholders, are exempt from the registration requirements of the Securities Act; and

(h) the Buyer or a successor entity thereto shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities.

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ARTICLE VI

POST-CLOSING COVENANTS

6.1 Proprietary Information. From and after the Closing, neither the Seller nor the Shareholders shall disclose or make use of (except to pursue its rights, under this Agreement or the Ancillary Agreements), and shall use their best efforts to cause all of their Affiliates not to disclose or make use of, any knowledge, information or documents of a confidential nature or not generally known to the public with respect to Acquired Assets, the Seller's business or the Buyer or its business (including the financial information, technical information or data relating to the Seller's products and names of customers of the Seller), as well as filings and testimony (if any) presented in the course of any arbitration of a Dispute pursuant to Section 7.3 and the arbitral award and the Arbitrator's reasons therefor relating to the same), except to the extent that such knowledge, information or documents shall have become public knowledge other than through improper disclosure by the Seller or an Affiliate; provided that this Section shall not restrict any Key Employee from performing his job function with and for the benefit of Buyer after the Closing.

6.3 Non-Competition.

(a) During the applicable Restricted Period, neither the Seller nor any Shareholder shall, either directly or indirectly as a owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise (except as the holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company, and excluding Seller's ownership interest in Buyer), (i) provide any service or design, develop, manufacture, market, sell or license any product anywhere in the world which is competitive with any service provided or product designed, developed (or under development), manufactured, sold or licensed by the Seller as of the Closing Date or (ii) engage anywhere in the world in any business competitive with the Business of the Seller as conducted as of the Closing Date, including without limitation, network design, engineering, consulting and project management and other provision of information technology services; provided that this sentence shall not apply to any Shareholder who is a Key Employee and whose employment is terminated by the Company without Cause (as defined in the Key Employee's Employment Agreement) or who terminates his employment with the Company for Good Reason (as defined in the Key Employee's Employment Agreement).

(b) Each of the Seller and the Shareholders agree that the duration and geographic scope of the non-competition provision set forth in this Section 6.3 are reasonable.

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In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the Parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable. The Parties intend that this non-competition provision shall be deemed to be a series of separate covenants, one for each and every county of each and every state of the United States of America and each and every political subdivision of each and every country outside the United States of America where this provision is intended to be effective.

(c) After the Closing Date, the Seller shall, and shall use its best efforts to cause its Affiliates to, refer all inquiries regarding the business, products and services of the Seller to the Buyer.

6.4 Tax Matters.

(b) All Tax liabilities (other than Income Taxes) attributable to the Business through the Closing Date shall be borne by Buyer to the extent that such liabilities are, in the aggregate, included for purposes of calculating the Closing Adjustment (collectively, the "Reserved Taxes"). Tax liabilities (other than Income Taxes) attributable to the Business through the Closing Date in excess of the Reserved Taxes shall be borne by the Seller.

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6.5 Sharing of Data.

(a) The Seller shall have the right for a period of seven years following the Closing Date to have reasonable access to such books, records and accounts, including financial and tax information, correspondence, production records, employment records and other records that are transferred to the Buyer pursuant to the terms of this Agreement for the limited purposes of concluding its involvement in the business conducted by the Seller prior to the Closing Date and for complying with its obligations under applicable securities, tax, environmental, employment or other laws and regulations. The Buyer shall have the right for a period of seven years following the Closing Date to have reasonable access to those books, records and accounts, including financial and accounting records (including the work papers of the Seller's independent accountants), tax records, correspondence, production records, employment records and other records that are retained by the Seller pursuant to the terms of this Agreement to the extent that any of the foregoing is needed by the Buyer for the purpose of conducting the business of the Seller after the Closing and complying with its obligations under applicable securities, tax, environmental, employment or other laws and regulations. Neither the Buyer nor the Seller shall destroy any such books, records or accounts retained by it without first providing the other Party with the opportunity to obtain or copy such books, records, or accounts at such other Party's expense.

(b) Promptly upon request by the Buyer made at any time following the Closing Date, the Seller shall authorize the release to the Buyer of all files pertaining to the Seller, the Acquired Assets or the business or operations of the Seller held by any federal, state, county or local authorities, agencies or instrumentalities.

6.6 Use of Name. The Seller shall not use, and shall not permit any Affiliate to use, the name "CETCON Incorporated", "CETCON" or any name reasonably similar thereto after the Closing Date, except as approved by the Buyer in connection with obtaining any approval or consent relating to an Assigned Contract as contemplated by Section 4.2(c), which approval is hereby granted by Buyer for a period of nine (9) months from the date hereof, subject to the reasonable approval of Buyer over the manner of use. Within a timely manner after the Closing, Seller shall have amended its Articles of Incorporation and governing documents to change its name to something not similar to "CETCON Incorporated" or "CETCON".

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contemplated by this Agreement). The Party requesting such cooperation shall pay the reasonable out-of-pocket expenses incurred in providing such cooperation (including legal fees and disbursements) by the Party providing such cooperation and by its officers, directors, managers, employees and agents, and shall reimburse such Party or its officers, directors, managers, employees and agents, at a reasonable rate, for their time spent in such cooperation in excess of twenty-five hours in the aggregate on such matter.

6.8 Collection of Accounts Receivable. The Seller agrees that it shall forward promptly to the Buyer any monies, checks or instruments received by the Seller after the Closing Date with respect to the accounts receivable purchased by the Buyer from the Seller pursuant to this Agreement. The Seller shall provide to the Buyer such reasonable assistance as the Buyer may request with respect to the collection of any such accounts receivable, provided the Buyer pays the reasonable out-of-pocket expenses of the Seller and its officers, managers and employees incurred in providing such assistance. The Seller hereby grants to the Buyer a power of attorney to endorse and cash any checks or instruments payable or endorsed to the Seller or its order which are received by the Buyer and which relate to accounts receivable purchased by the Buyer from the Seller. If, and to the extent that, Buyer is unable to collect on any accounts receivable acquired from the Seller hereunder and Buyer obtains indemnification from Seller under this Agreement for such accounts, Buyer shall assign such accounts to the Seller and Seller shall be entitled to collect such accounts for its own account and, if Seller collects such account, it shall have no obligation to remit such amount collected to the Buyer.

6.9 Employees.

(a) Effective as of the Closing, the Seller shall terminate the employment of each of its employees designated on Schedule 6.9 attached hereto (which may be updated prior to the Closing by the mutual agreement of the Buyer and the Seller). The Buyer shall be permitted to offer employment to each such employee, terminable at the will of the Buyer except as may be set forth in any employment agreement with a Key Employee. The Seller hereby consents to the hiring of any such employees by the Buyer and waives, with respect to the employment by the Buyer of such employees, any claims or rights the Seller may have against the Buyer or any such employee under any non-competition, confidentiality or employment agreement.

(c) Nothing in this Agreement shall prevent Buyer from amending or terminating any plan maintained by Buyer under which a former employee of Seller is a participant.

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obligation by the Seller to the Buyer under Article VII; provided that the Buyer may not exercise such right or power unless the Seller fails to promptly and expeditiously pursue and enforce its rights under its insurance policies with respect to such occurrence, claim or loss. The power of attorney conferred upon the Buyer by the Seller pursuant to this Section 6.10 is an agency coupled with an interest and all authority conferred hereby shall be irrevocable, and shall not be terminated by the dissolution or the liquidation of the Seller or any other act of the Seller.

6.11 Maintenance of Corporate Existence; Distribution of Shares. For a period of at least one year following the Closing Date, the Seller shall not distribute the Shares or dissolve, or adopt any resolutions or a plan therefor.

6.12 Sales of Shares under Rule 144. The Buyer shall utilize its Reasonable Best Efforts to ensure that the provisions of Rule 144 promulgated under the Securities Act of 1933 are available for the resale of the Shares for Shareholders and other persons complying with all of the holding period, volume of sale, manner of sale, broker's transaction, notice of sale and other requirements of Rule 144 Specifically, the Buyer shall make available adequate current public information by filing all reports required under the Securities Exchange Act of 1934 or otherwise making publicly available the information concerning the issuer specified in paragraphs (a)(5)(i) to (xiv), inclusive, and paragraph (a)(5)(xvi) of Rule 15c2-11 (Sec. 240.15c2-11 of this chapter) under that Act.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification by the Seller. The Shareholders, severally and not jointly, and the Seller, shall indemnify the Buyer (and its officers, directors and affiliates) in respect of, and hold the Buyer (and its officers, directors and affiliates) harmless against, Damages incurred or suffered by the Buyer or any Affiliate thereof resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Seller or Shareholders contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Seller or the Shareholders to the Buyer pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of the Seller or the Shareholders contained in this Agreement, any Ancillary Agreement or any agreement or instrument furnished by the Seller to the Buyer pursuant to this Agreement; it being agreed and understood that if Seller fails to obtain as of Closing one or more consents to the assignment of customer contracts and provides notice to the Buyer of such failure (in writing) and Buyer elects to effect the Closing notwithstanding the absence of such consents, then, so long as Seller is not in violation of Section 4.2, Seller shall not be liable following the Closing for the failure to obtain the consent to assignment of such customer contracts.

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(d) any error, inaccuracy or omission in the financial statements used to compute the Closing Adjustment, and for which the Buyer submits a Claim Notice within 120 days of the Closing Date; or

(e) the failure of the Buyer and the Seller, in connection with the sale of the Acquired Assets by the Seller to the Buyer pursuant to this Agreement, to comply with, and obtain for the Buyer the benefits afforded by compliance with, any applicable bulk transfers laws.

7.2 Indemnification by the Buyer. The Buyer shall indemnify the Seller (and its officers, directors and affiliates) in respect of, and hold Seller (and its officers, directors and affiliates) harmless against, any and all Damages incurred or suffered by the Seller resulting from, relating to or constituting:

7.3 Indemnification Claims.

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keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. Notwithstanding any other provision of this Agreement, the reasonable fees and expenses of counsel to the Indemnified Party with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (i) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 7.3(a) or (ii) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. If the Indemnified Party withholds its consent to any such settlement or entry of judgment which settlement or entry of judgment relates to cash Damages only, then the liability of the Indemnifying Party to the Indemnified Party with respect to the matter which would have been concluded or settled shall be limited to the amount for which such matters could have been concluded or settled but for the fact the Indemnified Party withheld its consent. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

(c) Within 20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver to the Indemnified Party a Response, in which the Indemnifying Party shall: (i) agree that the Indemnified Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to disburse to the Buyer an amount from the Escrow Fund equal to the Claimed Amount), (ii) agree that the Indemnified Party is entitled to receive the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; provided that if the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, within three days following the delivery of the Response, a written notice executed by both parties instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount equal to the Agreed Amount) or (iii) dispute that the Indemnified Party is entitled to receive any of the Claimed Amount.

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(d) During the 30-day period following the delivery of a Response that reflects a Dispute, the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve the Dispute. If the Dispute is not resolved within such 30-day period, the Indemnifying Party and the Indemnified Party shall discuss in good faith the submission of the Dispute to binding arbitration, and if the Indemnifying Party and the Indemnified Party agree in writing to submit the Dispute to such arbitration, then the provisions of
Section 7.3(e) shall become effective with respect to such Dispute. The provisions of this Section 7.3(d) shall not obligate the Indemnifying Party and the Indemnified Party to submit to arbitration or any other alternative dispute resolution procedure with respect to any Dispute, and in the absence of an agreement by the Indemnifying Party and the Indemnified Party to arbitrate any Dispute, such Dispute shall be resolved in a state or federal court sitting in the Commonwealth of Kentucky, in accordance with Section 10.12. If the Indemnified Party is the Buyer, the Indemnifying Party and the Indemnified Party shall deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Fund shall be disbursed to the Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).

(e) If, as set forth in Section 7.3(d), the Indemnified Party and the Indemnifying Party agree to submit any Dispute to binding arbitration, the arbitration shall be conducted by the Arbitrator in accordance with the Commercial Rules in effect from time to time and the following provisions:

(i) In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be controlling.

(ii) The parties shall commence the arbitration by jointly filing a written submission with the office of the AAA having responsibility for matters to be arbitrated in Louisville, Kentucky, in accordance with Commercial Rule 5 (or any successor provision).

(iii) No depositions or other discovery shall be conducted in connection with the arbitration.

(iv) Not later than 30 days after the conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the parties a writing setting forth the arbitral award and the Arbitrator's reasons therefor. Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction (subject to Section 10.12), provided that the Arbitrator shall have no power or authority to grant injunctive relief, specific performance or other equitable relief.

(v) The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (x) modify or disregard any provision of this Agreement, including the provisions of this Section 7.3(e), or (y) address or resolve any issue not submitted by the parties.

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(vi) In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the parties (which shall not include any party's attorneys' fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the Indemnified Party and the Indemnifying Party.

(f) Notwithstanding the other provisions of this Section 7.3, if a third party asserts (other than by means of a lawsuit) that an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which such Indemnified Party may be entitled to indemnification pursuant to this Article VII, and such Indemnified Party reasonably determines that it has a valid business reason to fulfill such obligation, then (i) such Indemnified Party shall be entitled to satisfy such obligation, without prior notice to or consent from the Indemnifying Party, and
(ii) such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VII, and shall be reimbursed, in accordance with the provisions of this Article VII, for any such Damages for which it is entitled to indemnification pursuant to this Article VII (subject to the right of the Indemnifying Party to dispute the Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VII).

(g) Any amounts to be disbursed by the Escrow Agent hereunder shall first be satisfied against the Value of the Escrow Shares and second against any other assets held in the Escrow Fund.

7.4 Survival of Representations and Warranties. All representations and warranties that are covered by the indemnification agreements in Section 7.1(a) and Section 7.2(a) shall (a) survive the Closing and (b) shall expire on the date that is eighteen (18) months following the Closing Date, except that (i) the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 3.1 and 3.2 shall survive the Closing without limitation and (ii) the representations and warranties set forth in Sections 2.9, 2.20 and 2.21 shall survive until 30 days following expiration of all statutes of limitation applicable to the matters referred to therein. If an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or an Expected Claim Notice based upon a breach of such representation or warranty, then the applicable representation or warranty shall survive until, but only for purposes of, the resolution of the matter covered by such notice. If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party; and if the Indemnified Party has delivered a copy of the Expected Claim Notice to the Escrow Agent and Escrow Funds have been retained in escrow after the Termination Date (as defined in the Escrow Agreement) with respect to such Expected Claim Notice, the Indemnifying Party and the Indemnified Party shall promptly deliver to the Escrow Agent a written notice executed by both parties instructing the Escrow Agent to disburse such retained Escrow Fund in accordance with such withdrawal or resolution and the terms of the Escrow Agreement. The rights to indemnification set forth in this Article VII shall not be affected by (i) any investigation

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conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the date of this Agreement or the Closing Date (including through supplemental information provided pursuant to by Section 4.6), with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder or (ii) any waiver by an Indemnified Party of any closing condition relating to the accuracy of any representations and warranties or the performance of or compliance with agreements and covenants.

7.6 Limitations.

(b) The Parties agree that their exclusive remedy at law for a breach of this Agreement by any other Party shall be this Article VII.

(c) Notwithstanding any other provisions of this Agreement, the Buyer agrees that the Seller's and the Shareholders' obligations under Section 7.1(a) shall be limited solely to the principal amount of the Secured Promissory Note and the Escrow Fund held by the Escrow Agent, and any indemnification payments under Section 7.1(a) shall be limited to the Escrow Fund (based on the Value of the Escrow Shares plus any other cash or property then held in the Escrow Fund) in satisfaction of such indemnification claim; provided that the limitations set forth in this sentence shall not apply to a claim pursuant to
Section 7.1(a) relating to a breach of the representations and warranties set forth in Sections 2.1, 2.3, 2.9, 2.20 or 2.21.

(d) Notwithstanding any other provisions of this Agreement, the Seller agrees that the Buyer's obligations under Section 7.2(a) shall be limited solely to an amount equal to the value of the Escrow Shares based on an assumed value of $1.00 per share calculated as of, the date of Closing; provided that the limitations set forth in this sentence shall not apply to a claim pursuant to Section 7.2 relating to a breach of the representations and warranties set forth in Sections 3.1 or 3.2.

(e) The Seller and the Shareholders shall have no liability (for indemnification or otherwise) with respect to claims under Section 7.1(a) until the total of all Damages with respect to such matters exceeds $50,000 at which point the Seller and the Shareholders shall be liable for any and all Damages. However, the restrictions of this paragraph will not apply to any claim pursuant to Section 7.1(a) relating to a breach of the representations and warranties set forth in Sections 2.1, 2.3, 2.6 (last sentence only), 2.9, 2.20 or 2.21.

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the restrictions of this paragraph will not apply to any claim pursuant to
Section 7.2(a) relating to a breach of the representations and warranties set forth in Sections 3.1 or 3.2.

(g) No Shareholder shall have any personal liability or indemnification obligation under this Article VII for (i) any breach or violation of Section 6.1, 6.2 or 6.3 by a person other than the Shareholder (provided that this Section 7.6(g) does not limit the availability of the Escrow Fund to the Buyer for breaches or violations of such section(s)), and (ii) any amount (including such Shareholder's pro rata share of the Escrow Fund) greater than the product of (x) (A) $1,300,000.00 plus (B) $900,000.00 or, if less, the value of 900,000 Shares as of the date payment for indemnification is made, times (y) such Shareholder's ownership percentage of Seller as of the date of Closing.

(h) Buyer must first seek to satisfy any claim by the Buyer against the Seller or any Shareholder under this Article VII by the right of setoff set forth in Section 7.6(i), or, with respect to any claim by the Buyer against a given Shareholder under this Article VII, against any of the Shares (at the Value thereof) then held by such Shareholder (or, if such Shares have not been distributed to such Shareholder by the Seller, by such Shareholder's (and only such Shareholder's) pro-rata portion of the total number of Shares issued to the Seller on the Closing Date, based on such Shareholder's ownership percentage of Seller as of the date of Closing less any Shares that have been sold by the Seller at the direction of such Shareholder), and with respect to matters exceeding such Value and the amount of any setoff, Buyer may seek cash to satisfy such claim (subject to the aggregate limitation set forth in Section 7.6(g)(ii) above).

(i) Upon notice to Seller and Shareholders specifying in reasonable detail the basis therefor, Buyer may set off any amount to which it may be entitled under this Article VII against amounts otherwise payable under the Secured Promissory Note or may give notice of a claim in such amount under the Escrow Agreement. The exercise of such right of setoff by Buyer in good faith, whether or not ultimately determined to be justified, will not constitute an event of default under the Secured Promissory Note or any instrument securing the Secured Promissory Note. Neither the exercise of nor the failure to exercise such right of setoff or to give a notice of a claim under the Escrow Agreement will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it.

ARTICLE VIII

TERMINATION

8.1 Termination of Agreement. The Parties may terminate this Agreement prior to the Closing, as provided below:

(a) the Parties may terminate this Agreement by mutual written consent;

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not to be satisfied and (ii) is not cured within 20 days following delivery by the Buyer to the Seller of written notice of such breach;

(c) the Seller may terminate this Agreement by giving written notice to the Buyer in the event the Buyer is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in clauses (a) or (b) of Section 5.2 not to be satisfied and (ii) is not cured within 20 days following delivery by the Seller to the Buyer of written notice of such breach;

(d) the Buyer may terminate this Agreement by giving written notice to the Seller if the Closing shall not have occurred on or before December 31, 2007 by reason of the failure of any condition precedent under Section 5.1 (unless the failure results primarily from a breach by the Buyer of any representation, warranty or covenant contained in this Agreement); or

(e) the Seller may terminate this Agreement by giving written notice to the Buyer if the Closing shall not have occurred on or before December 31, 2007 by reason of the failure of any condition precedent under Section 5.2 (unless the failure results primarily from a breach by the Seller or a Shareholder of any representation, warranty or covenant contained in this Agreement).

ARTICLE IX

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

"AAA" shall mean the American Arbitration Association.

"Acquired Assets" shall mean all of the assets, properties and rights of the Seller existing as of the Closing, including:

(a) all cash, short-term investments, deposits, bank accounts and other similar assets;

(b) all trade and other accounts receivable and notes and loans receivable that are payable to the Seller, and all rights to unbilled amounts for products delivered or services provided, together with any security held by the Seller for the payment thereof;

(c) all computers, machinery, equipment, tools and tooling, furniture, fixtures, supplies, leasehold improvements, motor vehicles and other tangible personal property;

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(d) all leaseholds and subleaseholds in real property, and easements, rights-of-way and other appurtenants thereto;

(e) all Intellectual Property;

(f) all rights under Assigned Contracts;

(g) all claims, prepayments, deposits, refunds, causes of action, chooses in action, rights of recovery, rights of setoff and rights of recoupment;

(i) all rights of the Seller in and with respect to the assets associated with its medical and dental Employee Benefit Plans.

"Affiliate" shall mean any affiliate, as defined in Rule 12b-2 under the Exchange Act.

"Agreed Amount" shall mean an amount agreed upon by the Indemnifying Party and the Indemnified Party.

"Ancillary Agreements" shall mean the Security Agreement, the Escrow Agreement, the bill of sale and other instruments of conveyance referred to in
Section 1.5(b)(iii), and the instrument of assumption and other instruments referred to in Section 1.5(b)(iv).

"Arbitrator" shall mean a single arbitrator selected by the Buyer and the Seller in accordance with the Commercial Rules.

"Assigned Contracts" shall mean the customer contracts, supplier contracts and vendor contracts listed on Section 2.14 of the Disclosure Schedule (except for those vendor contracts that are specifically indicated as excluded), and the Lease described in Section 2.12 of the Disclosure Schedules.

"Assumed Liabilities" shall mean (a) all current and long term liabilities on the Seller's Balance Sheet at the time of closing except those identified on Schedule 1.2(b) (Specified Retained Liabilities), (b) all obligations of the Seller arising after the Closing under the Assigned Contracts, other than any liabilities for any breach, act or omission by the Seller prior to the Closing under any Assigned Contract, (c) vacation accrued by employees, customer retention bonus and non-owner discretionary profit sharing plan, in each case based on a bi-weekly accrual from January 1, 2007 to the Closing Date as accepted by Buyer and (d) any liability for Taxes in accordance with Sections 6.4(a), (b), (c) and (d).

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development; (vi) network engineering, design and project management; and (vii) provision or resale of LAN/WAN services.

"Buyer" shall have the meaning set forth in the first paragraph of this Agreement.

"Buyer Common Stock" shall mean the common shares of the Buyer or following the Closing, the common stock, $0.0001 par value, of any successor entity to the Buyer.

"Cash Consideration" has the meaning set forth in Section 1.3 of this Agreement.

"CERCLA" shall mean the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

"Claimed Amount" shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified Party.

"Closing" shall mean the closing of the transactions contemplated by this Agreement.

"Closing Date" shall mean the date two business days after the satisfaction or waiver of all of the conditions to the obligations of the Parties to consummate the transactions contemplated hereby (excluding the delivery at the Closing of any of the documents set forth in Article V), or such other date as may be mutually agreeable to the Parties.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Commercial Rules" shall mean the Commercial Arbitration Rules of the AAA.

"Controlling Party" shall mean the party controlling the defense of any Third Party Action.

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manufacture, market, distribute, make available, sell or license to or for third parties in the future. A true and complete list of all Customer Offerings is set forth in Section 2.13(c) of the Disclosure Schedule.

"Damages" shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation), other than those costs and expenses of arbitration of a Dispute which are to be shared equally by the Indemnified Party and the Indemnifying Party as set forth in Section 7.3(e)(vi).

"Disclosure Schedule" shall mean the disclosure schedule provided by the Seller to the Buyer on the date hereof and accepted in writing by the Buyer.

"Dispute" shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

"Earnout" has the meaning set forth in Section 1.3 of this Agreement.

"Employee Benefit Plan" shall mean any "employee pension benefit plan" (as defined in Section 3(2) of ERISA), any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA), and any other written or oral plan, agreement or arrangement involving direct or indirect compensation, including insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement compensation.

"Employment Agreements" shall have the meaning set forth in the recitals.

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property which may be contaminated; (vi) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (vii) the protection of wild life, marine life and wetlands, and endangered and threatened species; (viii) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (ix) health and safety of employees and other persons. As used above, the term "release" shall have the meaning set forth in CERCLA.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

"ERISA Affiliate" shall mean any entity which is, or at any applicable time was, a member of (1) a controlled group of corporations (as defined in
Section 414(b) of the Code), (2) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (3) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under
Section 414(o) of the Code), any of which includes or included the Seller.

"Escrow Agent" shall mean [ ].

"Escrow Agreement" shall mean an escrow agreement in substantially the form attached hereto as Exhibit F.

"Escrow Fund" shall mean the Escrow Shares or any cash, securities or property received with respect to, in exchange for, or upon the sale of such shares.

"Escrow Shares" shall mean 450,000 of the Shares.

"Excluded Assets" shall mean the following assets of the Seller:

(a) the corporate charter and governing documents, qualifications to conduct business as a foreign limited liability company or entity, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, share or security transfer books and other documents relating to the organization and existence of the Seller as a corporation;

(b) all rights relating to refunds, recovery or recoupment of Taxes; and

(d) prepayments by Seller on insurance policies not assumed; and

(e) any item identified on Schedule 1.1(b).

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"Financial Statements" shall mean:

(b) the Most Recent Balance Sheet and the unaudited statements of income, changes in Shareholders' equity and cash flows for the three months ended as of the Most Recent Balance Sheet Date.

"GAAP" shall mean United States generally accepted accounting principles.

"Governmental Entity" shall mean any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency.

"Income Taxes" means any and all income taxes (together with any and all interest, penalties, and additional amounts imposed with respect thereto) imposed by any government or taxing authority.

"Indemnified Party" shall mean a party entitled, or seeking to assert rights, to indemnification under Article VII of this Agreement.

"Indemnifying Party" shall mean the party from whom indemnification is sought by the Indemnified Party.

"Intellectual Property" shall mean the following subsisting throughout the world:

(a) Patent Rights;

(b) Trademarks and all goodwill in the Trademarks;

(c) copyrights, designs, data and database rights and registrations and applications for registration thereof, including moral rights of authors;

(d) mask works and registrations and applications for registration thereof and any other rights in semiconductor topologies under the laws of any jurisdiction;

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pricing and cost information, business and marketing plans and customer and supplier lists and information, whether patentable or nonpatentable, whether copyrightable or noncopyrightable and whether or not reduced to practice; and

(f) other proprietary rights relating to any of the foregoing (including remedies against infringement thereof and rights of protection of interest therein under the laws of all jurisdictions).

"Intellectual Property Registrations" means Patent Rights, registered Trademarks, registered copyrights and designs, mask work registrations and applications for each of the foregoing.

"Key Employees" means Ken Kerr, Homer Wicke and any other employee designated as such by the Buyer at Closing.

"Lease" shall mean any lease or sublease pursuant to which the Seller leases or subleases from another party any real property.

"Lease Agreement" means that certain Lease, dated [ ], between Seller and
[ ].

"Legal Proceeding" shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator.

"Most Recent Balance Sheet" shall mean the unaudited balance sheet of the Seller as of the Most Recent Balance Sheet Date.

"Most Recent Balance Sheet Date" shall mean September 30, 2007.

"Non-controlling Party" shall mean the party not controlling the defense of any Third Party Action.

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"Ordinary Course of Business" shall mean the ordinary course of business consistent with past custom and practice (including with respect to frequency and amount).

"Other Holders" means holders of securities of the Buyer (other than Shareholders) who are entitled, by contract with the Buyer, to have securities included in a Registration Statement.

      "Post-Closing  Tax Period" has the meaning set forth in Section  6.4(d) of
this Agreement.

      "Pre-Closing  Tax Period"  has the meaning set forth in Section  6.4(d) of
this Agreement.

"Purchase Price" shall mean the purchase price to be paid by the Buyer for the Acquired Assets.

"Reasonable Best Efforts" shall mean best efforts, to the extent commercially reasonable.

"Reserved Taxes" shall have the meaning set forth in Section 6.4(b) of this Agreement.

"Response" shall mean a written response containing the information provided for in Section 7.3(c).

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"Restricted Period" shall mean from the date of this Agreement until (i) twenty-four months following his termination of employment with the Buyer with respect to each Key Employee, and (ii) five years following the date of this Agreement with respect to the Seller and all other Shareholders of Seller not specifically identified in the foregoing clauses (i) or (ii).

(a) for income, transfer, sales, use or other Taxes imposed upon the Seller and/or the Shareholders arising in connection with the consummation of the transactions contemplated by this Agreement (including any income Taxes arising as a result of the transfer by the Seller to the Buyer of the Acquired Assets), except to the extent provided in Section 6.4;

(b) for costs and expenses incurred in connection with this Agreement or the consummation of the transactions contemplated by this Agreement;

(d) except to the extent provided in Section 6.4, for (i) any Taxes imposed upon the Seller and/or the Shareholders, including deferred Taxes or Taxes measured by income of the Seller and/or the Shareholders earned prior to the Closing, (ii) any liabilities for federal or state income tax and FICA taxes of employees of the Seller and/or the Shareholders which the Seller and/or the Shareholders are legally obligated to withhold, (iii) any liabilities of the Seller and/or the Shareholders for employer FICA and unemployment taxes incurred, and (iv) any liabilities of the Seller and/or the Shareholders for sales, use or excise taxes or customs and duties;

(e) under any agreements, contracts, leases or licenses which are associated with Excluded Assets on Schedule 1.1(b) or are specifically listed as Retained Liabilities on Schedule 1.2(b);

(f) arising prior to the Closing under the Assigned Contracts, and all liabilities for any breach, act or omission by the Seller prior to the Closing under any Assigned Contract;

(g) arising out of events, conduct or conditions existing or occurring prior to the Closing that constitute a violation of or non-compliance with any law, rule or regulation (including Environmental Laws), any judgment, decree or order of any Governmental Entity, or any Permit or that give rise to liabilities or obligations with respect to Materials of Environmental Concern;

(h) to pay severance benefits to any employee of the Seller whose employment is terminated (or treated as terminated) in connection with the consummation of the transactions contemplated by this Agreement, and all liabilities resulting from the termination of employment of employees of the Seller prior to the Closing that arose under any federal or state law or under any Employee Benefit Plan established or maintained by the Seller;

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(i) to indemnify any person or entity by reason of the fact that such person or entity was a manager, officer, employee, or agent of the Seller or was serving at the request of the Seller as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement, or otherwise);

(j) injury to or death of persons or damage to or destruction of property occurring prior to the Closing (including any workers compensation claim);

(k) for medical, dental and disability (both long-term and short-term) benefits, whether insured or self-insured, owed to employees or former employees of the Seller based upon (A) exposure to conditions in existence prior to the Closing or (B) disabilities existing prior to the Closing (including any such disabilities which may have been aggravated following the Closing);

(l) for benefits under any Seller Plan accruing prior to or on the date of closing; and

(m) for any retrospective premium increases under any Seller Plan assumed by Buyer that relates to periods before and including the Closing.

"SEC" means the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.

"Secured Promissory Note" shall mean the Secured Promissory Note referred to in Section 1.3 hereof.

"Seller" shall have the meaning set forth in the first paragraph of this Agreement.

"Seller Certificate" shall mean a certificate to the effect that each of the conditions specified in Section 5.1 is satisfied in all respects.

"Seller Intellectual Property" shall mean shall the Seller Owned Intellectual Property and the Seller Licensed Intellectual Property.

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"Seller Licensed Intellectual Property" shall mean all Intellectual Property that is licensed to the Seller by any third party.

"Seller Material Adverse Effect" shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, (i) the business, assets, liabilities, capitalization, prospects, condition (financial or other), or results of operations of the Seller, or (ii) the ability of the Buyer to operate the business of the Seller immediately after the Closing. A material decrease in the net value of the Acquired Assets and the Assumed Liabilities shall constitute a "Seller Material Adverse Effect" as well. For the avoidance of doubt, the parties agree that the terms "material", "materially" or "materiality" as used in this Agreement with an initial lower case "m" shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Seller Material Adverse Effect.

"Seller Owned Intellectual Property" shall mean all Intellectual Property owned or purported to be owned by the Seller, in whole or in part.

"Seller Plan" shall mean any Employee Benefit Plan maintained, or contributed to, by the Seller, or any ERISA Affiliate.

"Seller Registrations" shall mean Intellectual Property Registrations that are registered or filed in the name of the Seller, alone or jointly with others.

"Shares" has the meaning set forth in Section 1.3 of this Agreement and shall include any shares of any successor entity issued in exchange therefor.

"Software" shall mean computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.

"Stockholder" shall mean a stockholder of the Seller.

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withholding, employment, unemployment insurance, unemployment compensation, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, gains, franchise and other taxes imposed by any federal, state, local, or foreign Governmental Entity, (y) any interest, fines, penalties, assessments, or additions resulting from, attributable to, or incurred in connection with any items described in this paragraph or any contest or dispute thereof, and (z) any items described in this paragraph that are attributable to another person but that the Seller is liable to pay by law, by contract, or otherwise.

"Value" means, with respect to the Shares or the Escrow Shares, the average closing price of Buyer Common Stock on any stock exchange on which such Buyer Common Stock is listed for the 30-days on which the Common Stock of the Buyer is traded immediately prior to the day any portion of the Shares or the Escrow Shares are disbursed in satisfaction of a claim, or if such shares are not then publicly traded, the value as of such date as determined by the Board of Directors of the Buyer in good faith.

ARTICLE X

MISCELLANEOUS

10.1 Press Releases and Announcements. No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided, however, that Buyer may make any public disclosure it believes in good faith is required by applicable law, regulation or stock market rule (in which case the Buyer shall use Reasonable Best Efforts to advise the Seller and provide it with a copy of the proposed disclosure prior to making the disclosure).

10.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns.

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subject matter hereof, including, without limitation, that certain letter of intent dated August 7, 2007.

10.4 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. Neither Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties; provided that the Buyer may assign some or all of its rights, interests and/or obligations hereunder to entity in any merger between the Buyer and such entity one or more Affiliates of the Buyer or such surviving entity, including, without limitation, any successor entity to the Buyer. Any attempted assignment in contravention of this provision shall be void.

10.6 Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

If to the Seller or a Shareholder:           Copy to:

CETCON Incorporated                          Cuni, Fergunson & LeVay
2800 E. Kemper Road                          10655 Springfield Pike
Cincinnati, Ohio 45241                       Cincinnati, Ohio 45215
                                             Attn: Tom Cuni

If to the Buyer:                             Copy to:

Beacon Enterprise Solutions Group, Inc.      Frost Brown Todd LLC
ITRC Building                                400 West Market Street, 32nd Floor
9001 Shelbyville Road, Ste. 101              Louisville, KY  40202
Louisville, KY  40222                        Attn:   William G. Strench
Attn:  Chief Executive Officer

Either Party may give any notice, request, demand, claim, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger

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service, telecopy, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended. A Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

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have to a trial by jury with respect to any action or proceeding arising out of or relating to this Agreement or the Ancillary Agreements; provided in each case that, solely with respect to any arbitration of a Dispute, the Arbitrator shall resolve all threshold issues relating to the validity and applicability of the arbitration provisions of this Agreement, contract validity, applicability of statutes of limitations and issue preclusion, and such threshold issues shall not be heard or determined by such court. Each Party agrees to accept service of any summons, complaint or other initial pleading made in the manner provided for the giving of notices in Section 10.7, provided that nothing in this Section 10.12 shall affect the right of a Party to serve such summons, complaint or other initial pleading in any other manner permitted by law.

10.13 Specific Performance. Each Party acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement (including Sections 6.1, 6.2 and 6.3) are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the other Party shall be entitled to an injunction or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in addition to any other remedy to which it may be entitled, at law or in equity. Notwithstanding the foregoing, the Parties agree that if a Dispute is submitted to arbitration in accordance with Section 7.3(d) and Section 7.3(e), then the foregoing provisions of this Section 10.13 shall not apply to such Dispute, and the provisions of Section 7.3(d) and Section 7.3(e) shall govern availability of injunctive relief, specific performance or other equitable relief with respect to such Dispute.

10.14 Construction.

(a) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against a Party.

(b) Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

(d) Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

BUYER:                                    SELLER:

BEACON ENTERPRISE SOLUTIONS               CETCON INCORPORATED
GROUP, INC.

By:                                       By:
   -----------------------------------       -----------------------------------
     Name:                                     Name:
     Title:                                    Title:

                                          SHAREHOLDERS:

                                          /s/ Kenneth E. Kerr
                                          --------------------------------------
                                          Kenneth E. Kerr

                                          /s/ Homer A. Wicke
                                          --------------------------------------
                                          Homer A. Wicke

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Exhibit 10.8

SECURITY AGREEMENT

This SECURITY AGREEMENT (this "Agreement") is made and entered into as of this ____ day of December 2007, by and among BEACON ENTERPRISE SOLUTIONS GROUP INC., an Indiana corporation (the "Buyer"), and CETCON INCORPORATED ("CETCON"), an Ohio corporation (the "Secured Party").

R E C I T A L S

A. The Buyer and the Secured Party have executed an Asset Purchase Agreement dated October 15, 2007 (the "Purchase Agreement"), pursuant to which the Buyer has agreed to purchase substantially all of the assets of the Secured Party and has issued Secured Promissory Notes (the "Secured Notes") in partial payment therefor. The Purchase Agreement and the Secured Notes are referred to herein as the "Related Agreements." Capitalized terms used herein but which are not otherwise defined shall have the meanings given to them in the Purchase Agreement.

B. As a condition to the Secured Party's consummation of the transactions contemplated by the Purchase Agreement, the Buyer has agreed to grant to the Secured Party a security interest in the Collateral (as defined in Section 2) to secure the Buyer's obligations pursuant to the terms of the Secured Notes.

A G R E E M E N T

In consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows:

1. Obligations Secured. This Agreement secures the payment by Buyer of its obligations to the Secured Party under the Secured Notes issued to the Secured Party. The security interest granted hereby shall not extend to any other obligations of the Buyer to the Secured Party or their affiliates and shall terminate upon the payment in full, release, cancellation or satisfaction of the Secured Notes.

2. Grant of Security Interest. Buyer grants to the Secured Party a security interest in the contracts and accounts representing the revenue stream acquired from CETCON under the Purchase Agreement and in any additional commissions generated by the Buyer (the "Collateral"), as described in more detail on Schedule 1 attached hereto.

3. Buyer's Warranties and Representations. Buyer warrants and represents that:

(a) Except for the security interest granted above and any security interest granted pursuant to bank or other institutional financing under which the assets of the Buyer

become subject (collectively, "Permitted Encumbrances"), the Collateral is free from and will be kept free from all liens, claims, security interests, and encumbrances;

(b) except as filed in connection with any Permitted Encumbrance, no financing statement covering the Collateral or any proceeds is on file in favor of anyone other than Secured Party, but if such other financing statement is on file, it will be terminated or subordinated.

4. Buyer's Agreements. The Buyer agrees:

(a) to defend at the Buyer's own cost any action, proceeding, or claim affecting the Collateral;

(b) to pay reasonable attorneys' fees and other expenses incurred by the Collateral Agent (as defined in Section 9) in enforcing the rights of the Secured Parties against the Buyer under this Agreement;

(c) to pay promptly all taxes, assessments, license fees and other public or private charges when levied or assessed against the Collateral or this Agreement, and this obligation shall survive the termination of this Agreement;

(d) that if a certificate of title shall be required or permitted by law, at the request of the Collateral Agent, the Buyer shall obtain such certificate with respect to the Collateral, showing the security interest of the Secured Party and do everything necessary or expedient to preserve or perfect the security interest of the Secured Party;

(e) that the Buyer will not misuse, fail to keep in good repair, secrete, or without the prior written consent of the Collateral Agent, and notwithstanding the Secured Party's claim to proceeds, sell, rent, lend, encumber or transfer any of the Collateral other than sales of inventory in the ordinary course of the Buyer's business;

(f) that the Collateral Agent or his or her designees may enter upon the Buyer's premises or wherever the Collateral may be located at any reasonable time to inspect the Collateral, and Buyer's books and records pertaining to the Collateral, and the Buyer shall assist the Secured Party in making such inspection; and

(g) that the security interest granted by the Buyer to the Secured Party shall continue to be effective so long as there are any obligations owed to the Secured Party under the Secured Notes.

5. Events of Default; Acceleration. The following are events of default under this Agreement which will allow the Collateral Agent to take such action under this Agreement as it, he or she deems necessary:

(a) the Buyer materially breaches any warranty or provision of this Agreement;

(b) the Buyer becomes insolvent or ceases to do business as a going concern; and

(c) an "Event of Default" (as defined in the Secured Notes) shall have occurred and be continuing under any of the Secured Notes.

6. Remedies After Default. Upon the occurrence of any event of default, the Secured Party shall have all rights, privileges, powers and remedies of a secured party under the Uniform Commercial Code and any other applicable laws, including without limitation, the right to contact all persons obligated to the Buyer on any account and to instruct such person to deliver all payments directly to the Secured Party, which rights, privileges, powers and remedies may be exercised with the consent of the Collateral Agent.

The Collateral Agent will give the Buyer reasonable notice of the time and place of any public sale of the Collateral or of the time after which any private sale or any other intended disposition of the Collateral is to be made. Unless otherwise provided by law, the requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the Buyer shown herein at least ten (10) calendar days before the time of the sale or disposition. The Buyer shall pay to the Collateral Agent all expenses incurred by the Collateral Agent, directly or indirectly, in the enforcement of this Agreement, including expenses of collection, retaking, holding, preparing for sale, selling and the like and shall include reasonable attorneys' fees and other legal expenses. The Buyer understands that the Secured Party's rights are cumulative and not alternative.

7. Waiver of Defaults; Agreement Inclusive. The Collateral Agent may in its, his or her sole discretion waive a default, or cure, at the Buyer's expense, a default. Any such waiver in a particular instance or of a particular default shall not be a waiver of other defaults or the same kind of default at another time. No modification or change in this Agreement or any related note, instrument or agreement shall bind the Secured Party unless in writing signed by the Secured Party. No oral agreement shall be binding.

8. Financing Statements; Expenses. The Buyer authorizes the Collateral Agent to file one or more financing statements with respect to the Collateral. At the request of the Collateral Agent, the Buyer will execute any agreements or documents, in form satisfactory to the Collateral Agent which the Collateral Agent may deem necessary or advisable to establish and maintain a perfected security interest in the Collateral, and will pay the cost of filing or recording the same in all public offices deemed necessary or advisable by the Collateral Agent.

9. Collateral Agent. THE SECURED PARTY HEREBY ELECTS AND APPOINTS KENNETH E. KERR TO ACT AS THE EXCLUSIVE AGENT ("COLLATERAL AGENT") FOR THE SECURED PARTY FOR THE PURPOSES OF (A) EXERCISING THE RIGHTS AND REMEDIES OF THE SECURED PARTY UNDER THIS AGREEMENT, (B) RECEIVING AND MANAGING THE COLLATERAL INCLUDING THE EXECUTION OF ALL INSTRUMENTS, THE MAKING OF ALL FILINGS AND CONTINUATION STATEMENTS AND SIMILAR INSTRUMENTS IN ANY APPLICABLE JURISDICTION

AND THE TAKING OF ALL ACTIONS, AS SHALL, IN THE REASONABLE JUDGMENT OF THE COLLATERAL AGENT, BE NECESSARY TO CONTINUE THE EFFECTIVENESS, FOR THE BENEFIT OF THE SECURED PARTY, AS SECURITY FOR THE RESPECTIVE OBLIGATIONS VALID, PERFECTED LIENS ON ALL OF THE COLLATERAL, AND (C) RECEIVING NOTICES AND OTHER COMMUNICATIONS FROM THE BUYER AND PROVIDING NOTICES TO THE SECURED PARTY, ALL UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH HEREIN. THE COLLATERAL AGENT MAY BE REMOVED, AND A NEW COLLATERAL AGENT ELECTED, BY THE WRITTEN CONSENT OF THE SECURED PARTY.

10. Miscellaneous.

(a) Entire Agreement; Amendments and Waivers. This Agreement, the Purchase Agreement and each of the Related Agreements constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants, except as specifically set forth herein or therein. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Secured Party. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Secured Party.

(b) Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Kentucky, without giving effect to principles of conflict of laws.

(c) Successors and Assigns. Each of the terms, provisions and obligations of this Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the parties and their respective legal representatives, successors and permitted assigns.

(d) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single agreement.

(e) Assignment. The Secured Party may not assign this Agreement, or assign the rights or delegate its duties hereunder, without the prior written consent of the Buyer.

(f) Notices. All notices, requests, demands and other communications made by a party to another party under this Agreement shall be provided to such other party in the manner set forth in Section 10.7 of the Purchase Agreement.

IN WITNESS WHEREOF, the parties have executed this Security Agreement as of the date first above written.

BUYER:

BEACON ENTERPRISE SOLUTIONS GROUP INC.,
an Indiana corporation

By: /s/ Bruce Widener
   ---------------------------------------
   Bruce Widener,  Chief Executive Officer

[Remainder of Page Intentionally Left Blank - Secured Parties' Signature Pages Follow]

SCHEDULE 1

[ATTACHMENT]

SECURED PROMISSORY NOTE

$600,000.00 December 20, 2007

FOR VALUE RECEIVED, Beacon Enterprise Solutions Group Inc., an Indiana corporation (the "Buyer"), promises to pay to the order of CETCON, Incorporated (the "Holder") the principal sum of Six Hundred Thousand Dollars and 00/100 ($ 600,000.00) (the "Principal Amount"), together with interest accruing on the unpaid portion of the Principal Amount from the date hereof until the Maturity Date (as defined in Section 2(a)), at the rate of eight percent (8%) per annum, compounded annually (the "Interest Rate").

2. Payments.

(a) Subject to the adjustments provided for in Section 2(b) below and any rights of set-off that the Buyer may have under the terms of the Purchase Agreement, the Buyer shall make monthly payments of principal and interest, in the amortized amount of $ 12,165.84, to the Holder on the 15th of each month, commencing January 20, 2008 and ending on December 20, 2012 (the "Maturity Date").

(b) In the event that on December 20, 2008, the actual revenue generated by the Collateral during the period commencing on December 20, 2007 and ending on October 31, 2008 (the "Actual Revenue") is less than $ 2,000,000.00 (the "Minimum Revenue"), then the Principal Amount hereunder shall be deemed to be reduced to an amount equal to the initial Principal Amount set forth above, multiplied by a fraction the numerator of which is equal to the Actual Revenue and the denominator of which is equal to the Minimum Revenue. No such adjustment shall take place in the event that the Actual Revenue exceeds the Minimum Revenue. To the extent that the monthly amounts previously paid exceed the amount of such recalculated monthly payments, the aggregate amount of such excess payments prior to the time of the recalculation shall be a credit against further payments due hereunder, to be applied ratably against future payment amounts hereunder. If the aggregate amount of excess payments prior to the time of the recalculation exceeds the aggregate of future payments hereunder, then the Holder shall refund the appropriate difference to the Buyer. The Buyer shall recalculate the monthly payments for the remainder of the term of this Note and shall send the Holder a statement of its computations in support of the recalculated monthly payment amount.

3. Prepayments. The Buyer may prepay all or any portion of the outstanding Principal Amount, or any accrued and unpaid interest thereon, of this Note. The Buyer shall make additional principal payments equal to three (3) percent of the net amount received by Buyer from any capital raised in excess of $ 1,000,000 after the closing date.

4. Events of Default.

(a) An "Event of Default" under this Note shall mean the occurrence of any of the following:

(ii) Breach of Covenants. Any other material failure by the Buyer to perform its obligations under this Note, and the failure of the Buyer to cure such default within ten (10) business days of written notice of such default by Holder to the Buyer, in each case as determined by the Collateral Agent (as defined in the Security Agreement);

(iii) Acceleration of Other Indebtedness. Any event or condition shall occur which results in the acceleration of the maturity of any indebtedness (other than this Note) of the Buyer or enables the holder of such indebtedness or any person acting on such holder's behalf to accelerate the maturity thereof, if the aggregate principal amount of indebtedness (regardless of whether such indebtedness arises in one or more related or unrelated transactions) with respect to which such events or conditions shall have occurred exceeds $500,000;

Buyer shall have set aside adequate cash reserves in accordance with generally accepted accounting principles;

(b) Upon the occurrence of an Event of Default under Sections 4(a)(i) through (iv), inclusive, of this Note, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall become due and payable at the option of the Collateral Agent upon notice to the Buyer of such acceleration. Upon the occurrence of an Event of Default under Section 4(a)(v) or (vi) of this Note, the entire unpaid portion of the Principal Amount, all accrued but unpaid interest and all other amounts due Holder hereunder shall immediately become due and payable.

(c) Upon the occurrence and during the continuation of any Event of Default as determined by the Collateral Agent, subject to Section 5 of this Note, the per annum rate of interest on the Principal Amount shall increase from the Interest Rate to eleven percent (11%).

5. Usury. Regardless of any other provision of this Note or the Purchase Agreement to the contrary, if for any reason the effective rate of interest under this Note should exceed the maximum lawful rate of interest, after giving effect to any applicable exemption to applicable usury laws, then the effective rate of interest under this shall be deemed reduced to, and shall be, such maximum lawful rate of interest, and (a) the amount which would otherwise be excessive interest shall be deemed applied to the reduction of the outstanding Principal Amount and not the payment of interest, and (b) if the loan evidenced by this Note has been or is hereby paid in full, the excess principal payment under the foregoing clause (a) shall be returned to the Buyer. The parties agree that any such application of excessive interest to the outstanding Principal Amount or the refunding of such excess interest shall be a complete settlement and acquittance thereof.

7. Miscellaneous.

7.1 Governing Law. This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky.

7.4 Notices, etc. All notices, requests, demands and other communications made under this Note shall be made in accordance with Section 10.7 of the Purchase Agreement.

7.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to Holder upon any breach or default of the Buyer under this Note shall impair any such right, power or remedy of Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Holder of any breach or default under this Note, or any waiver on the part of the Holder of any provision or condition of this Note must be made in writing and shall be effective as to Holder only to the extent specifically set forth in such writing. All remedies, either under this Note or by law or otherwise afforded to Holder, shall be cumulative and not alternative.

7.7. Titles. The titles of the Sections and subsections of this Note are for convenience or reference only and are not to be considered in construing this Note.

IN WITNESS WHEREOF, this Note is executed as of the date first above written.

BUYER:

BEACON ENTERPRISE SOLUTIONS GROUP INC.
an Indiana corporation

By: /s/ Bruce Widener
   -----------------------------------
   Bruce Widener
   Chief Executive Officer

[Remainder of Page Intentionally Left Blank - Holder's Signature Page Follows]

EXHIBIT 10.9

ASSET PURCHASE AGREEMENT

dated October 15, 2007

by and among

BEACON ENTERPRISE SOLUTIONS GROUP, INC.,

STRATEGIC COMMUNICATIONS, LLC

and

all of the Members of Strategic Communications, LLC

TABLE OF CONTENTS

Page

Exhibits
Exhibit A - Bill of Sale
Exhibit B - Instrument of Assumption
Exhibit C - Opinion of the Seller's counsel Exhibit D - Escrow Agreement

Schedules
Schedule 1.4(c) - Certain Retained Liabilities Schedule 1.6 - Allocation of Purchase Price Schedule 3.7 - Ownership and Management
Schedule 4.2 - Assumption of Liabilities Schedule 6.9 - Employees to Be Offered Employment by the Buyer Disclosure Schedule

(i)

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is entered into as of October 15, 2007 by and among BEACON ENTERPRISE SOLUTIONS GROUP, INC., an Indiana corporation (the "Buyer"), STRATEGIC COMMUNICATIONS, LLC, a Kentucky limited liability company ("Strategic" or the "Seller") and the members of the Seller (collectively, the "Members").

This Agreement contemplates a transaction in which the Buyer will purchase substantially all of the assets (including without limitation inventory and equipment, but excluding accounts receivable) and assume certain of the liabilities of the Seller (the "Assumed Liabilities" as defined in Article IX, below).

Contemporaneously with the execution and delivery of this Agreement, the Buyer, RFK Communications, LLC, and the members of RFK Communications, LLC, shall enter into an Asset Purchase Agreement (the "RFK Purchase Agreement").

Capitalized terms used in this Agreement shall have the meanings ascribed to them in Article IX.

In consideration of the representations, warranties and covenants herein contained, the Parties agree as follows.

ARTICLE I

THE ASSET PURCHASE

1.1 Purchase and Sale of Assets.

(b) Notwithstanding the provisions of Section 1.1(a), the Acquired Assets shall not include the Excluded Assets.

1.2 Assumption of Liabilities.

(a) Upon and subject to the terms and conditions of this Agreement, the Buyer shall assume and become responsible for, from and after the Closing, the Assumed Liabilities. In no event shall the amount of accounts payable and other payment obligations under the Assigned Contracts accrued as of the date of the Closing exceed $500,000.00. The liabilities of the Seller that are not Assumed Liabilities shall remain Retained Liabilities.

1.3 Purchase Price. The Purchase Price to be paid by the Buyer for the Acquired Assets shall be (a) $562,500.00 in cash (the "Cash Consideration"), and
(b) 200,000 shares (the "Shares") of Buyer Common Stock.

1.4 Escrow.

(a) At the Closing, the Buyer shall deliver to the Escrow Agent $330,000 of the Cash Consideration and a stock certificate registered in the name of the Escrow Agent or its nominee representing the Escrow Shares for the purpose of securing the indemnification obligations of the Seller and the Members set forth in this Agreement. The Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms thereof. The Escrow Fund shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any party, and shall be held and disbursed solely for the purposes of and in accordance with the terms of the Escrow Agreement.

(b) Until the termination of the escrow in accordance with the terms of the Escrow Agreement, the Seller shall have the right, in its sole discretion to direct the sale for cash of all or any portion of the Escrow Shares (if any then make up a portion of the Escrow Fund) in one or more transactions provided that (i) the price per share for the sale of the Escrow Shares is not less than $1.00, (ii) the proceeds from any such sale(s) shall be held in escrow by the Escrow Agent pursuant to the terms of the Escrow Agreement, and (iii) the Seller may not direct any such sale during any blackout period under any insider trading policy or blackout policy of the Buyer, and the Buyer shall promptly execute any and all required joint instructions to the Escrow Agent to facilitate any and all such sales of the Escrow Shares. Further, the Seller shall have the sole discretion to direct the investment of amounts held in the Escrow Fund pursuant to the investment options specified in, and in accordance with the restrictions of, the Escrow Agreement, and Buyer agrees to promptly execute any and all joint instructions to the Escrow Agent to facilitate any and all such investments.

(c) Upon the payment and satisfaction by the Seller of those Retained Liabilities listed on Schedule 1.4(c) attached hereto, the Buyer shall authorize the Escrow Agent to release such amounts of cash and shares from the Escrow Fund as the Buyer and the Seller may at such time agree. The Buyer and the Seller may at any time authorize the Escrow Agent to distribute amounts of cash and shares from the Escrow Fund to pay and satisfy any Retained Liabilities, and the Buyer shall have no liability to the Seller or the Members with respect to the amounts so distributed.

(d) Notwithstanding any of the foregoing, on the date that is ninety
(90) days after the date of Closing, the Buyer shall have the right to authorize the Escrow Agent to distribute such amounts from the Escrow Fund to any creditor of the Seller that holds a Security Interest in any of the Acquired Assets (specifically including the Internal Revenue Service and the Kentucky Department of Revenue), other than any creditor associated with the Assumed Liabilities to the extent of such Assumed Liabilities, as may be required to release the Acquired Assets from such Security Interest, and the Buyer shall have no liability to the Seller or the Members with respect to the amounts so distributed.

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1.5 The Closing.

(b) At the Closing:

(i) the Seller shall deliver to the Buyer the various certificates, instruments and documents referred to in Section 5.1;

(ii) the Buyer shall deliver to the Seller the various certificates, instruments and documents referred to in Section 5.2;

(iii) the Seller shall execute and deliver to the Buyer a bill of sale in substantially the form attached hereto as Exhibit A and such other instruments of conveyance as the Buyer may reasonably request in order to effect the sale, transfer, conveyance and assignment to the Buyer of valid ownership of the Acquired Assets;

(iv) the Buyer shall execute and deliver to the Seller an instrument of assumption in substantially the form attached hereto as Exhibit B and such other instruments as the Seller may reasonably request in order to effect the assumption by the Buyer of the Assumed Liabilities;

(v) the Buyer shall pay to the Seller, payable by wire transfer or other delivery of immediately available U.S. funds to an account designated by the Seller the Cash Consideration, minus the amount placed in escrow pursuant to Section 1.4(a) above;

(vi) the Buyer shall deliver to the Seller a stock certificate registered in the name of the Seller representing a number of shares of Buyer Common Stock as is equal to the number of Shares minus the number of Escrow Shares;

(vii) the Buyer, the Seller and the Escrow Agent shall execute and deliver the Escrow Agreement in substantially the form attached hereto as Exhibit D and the Buyer shall deposit the amount of cash to be placed in escrow (as set forth in Section 1.4(a) above) and a stock certificate representing the Escrow Shares with the Escrow Agent in accordance with Section 1.4;

(viii) the Seller shall deliver to the Buyer, or otherwise put the Buyer in possession and control of, all of the Acquired Assets of a tangible nature; and

(ix) the Buyer and the Seller shall execute and deliver to each other a cross-receipt evidencing the transactions referred to above.

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1.6 Allocation. The Buyer and the Seller agree to allocate the Purchase Price (and all other capitalizable costs) among the Acquired Assets and the non-solicitation and non-competition covenants set forth in Sections 6.2 and 6.3 for all purposes (including financial accounting and tax purposes) in accordance with the allocation schedule attached hereto as Schedule 1.6. Seller and Buyer agree to use the allocations determined pursuant to this Section 1.6 for all tax purposes, including without limitation, those matters subject to Section 1060 of the Code, and the Treasury regulations promulgated thereunder. Buyer and the Seller shall prepare and submit to the other for review their IRS Forms 8594 within ninety (90) days after Closing. Each party shall have thirty (30) days to complete its review.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE SELLER

2.1 Organization, Qualification and Corporate Power. The Seller is a limited liability company validly existing and in good standing under the laws of the Commonwealth of Kentucky. The Seller is duly qualified to conduct business and is in good standing under the laws of each jurisdiction listed in
Section 2.1 of the Disclosure Schedule, which jurisdictions constitute the only jurisdictions in which the nature of the Seller's business or the ownership or leasing of their properties requires such qualification. The Seller has all requisite power and authority to carry on the business in which it is engaged and to own and use the properties owned and used by it. The Seller has furnished to the Buyer complete and accurate copies of its Articles of Organization, as amended, and its Operating Agreement. The Seller is not in default under or in violation of any provision of its Articles of Organization, as amended, or its Operating Agreement. There are no other agreements or instruments setting forth
(i) rights, preferences and privileges of the Members with respect to the Seller and/or among the Members, or (ii) matters relating to the operation and governance of the Seller.

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2.2 Capitalization. Section 2.2 of the Disclosure Schedule sets forth a complete and accurate list, as of the date of this Agreement, of (i) all Members, indicating the number of shares or membership interests or units, as applicable, of the Seller held by each Member and (ii) all outstanding options, warrants or other instruments giving any party the right to acquire any shares, membership interests or units or equity securities of the Seller. There are no outstanding agreements or commitments to which the Seller is a party or which are binding upon the Seller for the redemption of any of its equity. The Seller has only one class of shares outstanding. There are no outstanding options, warrants or similar rights relating to the Seller or its respective equity securities.

2.4 Noncontravention. Neither the execution and delivery by the Seller of this Agreement or the Ancillary Agreements, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Articles of Organization or Operating Agreement of the Seller, (b) require on the part of the Seller any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity,
(c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Seller is a party or by which the Seller is bound or to which any of its assets is subject, except with respect to contracts that are not customer contracts listed on Section 2.4 of the Disclosure Schedules, for any such conflict, breach, default, acceleration, or right to terminate, modify or cancel, or failure to notify or obtain consent or waiver that would not have a Seller Material Adverse Effect, (d) result in the imposition of any Security Interest upon any asset or assets of the Seller or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Seller or any of its properties or assets.

2.6 Financial Statements. The Seller has provided to the Buyer the Financial Statements. The Financial Statements (i) were prepared on a consistent basis throughout the

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periods covered thereby (except as may be indicated in the notes to such financial statements) and, in the case of the balance sheet and statement of income, changes in members' equity and cash flows of the Seller as of the end of and for the year ended June 30, 2007, in accordance with reasonable accounting practices, and (ii) fairly and accurately present the financial position of the Seller as of the dates thereof and the results of its operations and cash flows for the periods indicated, consistent with the books and records of the Seller, except that the unaudited interim financial statements are subject to normal and recurring year-end adjustments which will not be material in amount or effect and do not include footnotes. The parties acknowledge and agree that the financial statements of the Seller that are being audited by the Buyer's accountants shall supersede the unaudited Financial Statements for all purposes, upon the review and approval of such audited financial statements by the Buyer.

2.8 Undisclosed Liabilities. The Seller has no knowledge of any liability (whether known or unknown to the Buyer, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet, (b) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet and which are not material, and (c) liabilities which have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business and which are listed on Schedule 2.8.

2.9 Tax Matters.

(a) Except as set forth on Schedule 2.9(a), the Seller has: (i) properly filed all material Tax Returns that it is and was required to file, and all such Tax Returns were true, correct and complete in all material respects;
(ii) has properly paid on a timely basis all material Taxes, whether or not shown on its Tax Returns, that were due and payable; has withheld or collected all material Taxes that the Seller is or was required by law to withhold or collect and, to the extent required, have been properly paid on a timely basis to the appropriate Governmental Entity; and (iv) has complied with all information reporting and back-up withholding requirements in all material respects, including maintenance of the required records with respect thereto, in connection with amounts paid to any employee, independent contractor, creditor or other third party.

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(d) Strategic is, and has been since its inception, validly classified and treated as a "partnership" for federal income tax purposes and has been validly treated in a similar manner for purposes of the income Tax laws of all states in which it has been subject to taxation.

(e) Except as set forth in Section 2.9(e) of the Disclosure Schedules, the Seller has delivered or made available to the Buyer (i) complete and correct copies of all Tax Returns relating to Taxes for all Taxable periods ending December 31, 2006, 2005 and 2004 and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of assessment, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Seller relating to Taxes for all Taxable periods for which the applicable statute of limitations has not yet expired.

(f) Except as disclosed on Schedule 2.9(f) of the Disclosure Schedule, the Seller has not (i) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, (ii) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, or (iii) executed or filed any power of attorney relating to Taxes with any Governmental Entity.

(g) The Seller is not a party to any litigation regarding Taxes.

(h) Except as disclosed on Schedule 2.9(h) of the Disclosure Schedule, (i) there are no Security Interests with respect to Taxes upon any of the Acquired Assets, other than with respect to Taxes not yet due and payable; and (ii) to the Seller's and Members' knowledge, there is no basis for the assertion of any claim relating or attributable to Taxes, which, if adversely determined, would result in any Security Interest on the Acquired Assets, or would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

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(k) The Seller is not bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(l) The Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.

2.10 Ownership and Condition of Assets.

(a) Except as disclosed on Section 2.10(a) of the Disclosure Schedule, the Seller is the true and lawful owner, and has good title to, all of the Acquired Assets, free and clear of all Security Interests. Upon execution and delivery by the Seller to the Buyer of the instruments of conveyance referred to in Section 1.5(b)(iii), the Buyer will become the true and lawful owner of, and will receive good title to, the Acquired Assets, free and clear of all Security Interests, except for Security Interests created by the Buyer or permitted under the Escrow Agreement.

(b) The Acquired Assets are sufficient for the conduct of the Seller's business as presently conducted and as presently proposed to be conducted and constitute all assets used by the Seller in such business. Each depreciable tangible Acquired Asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

(c) Section 2.10(c) of the Disclosure Schedule lists individually
(i) all Acquired Assets which are fixed assets (within the meaning of GAAP) having a book value greater than $1,000, indicating the cost, accumulated book depreciation (if any) and the net book value of each such fixed asset as of the Most Recent Balance Sheet Date, (ii) all other Acquired Assets of a tangible nature (other than inventories) whose net book value exceeds $5,000; and (iii) all Acquired Assets that are Assigned Contracts and specifically identifying all customer contracts.

(d) Except as disclosed on Section 2.l0(d) of the Disclosure Schedule, each item of equipment, motor vehicle and other asset that is being transferred to the Buyer as part of the Acquired Assets and that the Seller has possession of pursuant to a lease agreement or other contractual arrangement is in such condition that, if returned to its lessor or owner under the applicable lease or contract on the Closing Date, the obligations of the Seller to such lessor or owner would have been discharged in full.

(e) Section 2.10(e) of the Disclosure Schedule describes the inventory held by the Seller. All items included in the inventory consist of a quality and quantity usable and, with respect to finished goods, saleable, in the ordinary course of business of the Seller except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value on the balance sheets in the Financial Statements or on the accounting records of the Seller as of the Closing Date, as the case may be. Seller is not in possession of any inventory not owned by Seller, including goods already sold.

2.11 Owned Real Property. The Seller does not own, and has never owned, any real property.

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(a) such Lease is legal, valid, binding, enforceable and in full force and effect;

(c) neither the Seller nor, to the knowledge of the Seller, any other party, is in breach or violation of, or default under, any such Lease, and no event has occurred, is pending or, to the knowledge of the Seller, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a material breach or default by the Seller or, to the knowledge of the Seller, any other party under such Lease;

(e) the Seller has not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold;

(f) to the knowledge of the Seller, all facilities leased or subleased thereunder are supplied with utilities and other services adequate for the operation of said facilities; and

2.13 Intellectual Property.

(a) Except for the confidential business information of the Seller, which has been disclosed to the Buyer, there is no Seller Intellectual Property.

(b) Certifications. Section 2.13(b) of the Disclosure Schedule identifies all channel partner authorizations, accreditations or similar qualifications with third party technology providers held by the Seller or their employees.

(c) Websites, Phone Numbers, etc. Section 2.13(c) of the Disclosure Schedule identifies all websites, phone numbers, IP and web addresses, and uniform resource locators (URLs) used by the Seller. Except as disclosed on
Section 2.13(c), all such websites, phone numbers, IP and web addresses, and uniform resource locators (URLs) may be transferred or assigned to the Buyer without the consent of such third parties.

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2.14 Contracts.

(ii) any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, (B) which involves more than the sum of $5,000, or (C) in which the Seller has granted manufacturing rights, "most favored nation" pricing provisions or marketing or distribution rights relating to any products or territory or has agreed to purchase a minimum quantity of goods or services or has agreed to purchase goods or services exclusively from a certain party;

(iii) any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;

(vi) any agreement concerning exclusivity or confidentiality;

(vii) any employment or consulting agreement;

(viii) any agreement involving any current or former officer, manager or Member or an Affiliate thereof;

(ix) any agreement under which the consequences of a default or termination would reasonably be expected to have a Seller Material Adverse Effect;

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(xiii) any agreement which would entitle any third party to receive a license or any other right to intellectual property of the Buyer or any of the Buyer's Affiliates following the Closing; and

(xiv) any other agreement (or group of related agreements) either involving more than $10,000 or not entered into in the Ordinary Course of Business.

(c) The Assigned Contracts shall be listed as such on Section 2.14 of the Disclosure Schedule, which may be amended at the time of Closing. The Assigned Contracts shall include no more than $500,000 of accounts payable and other payment obligations of the Seller accrued as of the time of the Closing.

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Seller is otherwise in compliance in all material respects with the terms of such policies. The Seller has no knowledge of any threatened termination of, or premium increase with respect to, any such policy. Upon payment of amounts required to obtain tail coverage on Seller's professional liability (errors and omissions) insurance policy, if any, such policy will be in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.

2.18 Warranties. Except as set forth in Section 2.18 of the Disclosure Schedule, no service or product delivered, made, sold, leased or licensed by the Seller is subject to any guaranty, warranty, right of return, right of credit or other indemnity.

2.19 Employees.

(a) Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller, their position with the Seller and their annual rate of compensation. Except as set forth on Section 2.19 of the Disclosure Schedule, each current employee of the Seller and each past employee of the Seller has entered into a confidentiality agreement with the Seller, a copy or form of which has previously been delivered to the Buyer. Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller who are a party to a non-competition agreement with the Seller; copies of such agreements have previously been delivered to the Buyer. Each such agreement referenced in the two preceding sentences to which the Seller is a party is assignable by the Seller to the Buyer without the consent or approval of any party and will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing. Section 2.19 of the Disclosure Schedule contains a list of all employees of the Seller who are not citizens of the United States. To the knowledge of the Seller, no key employee or group of employees has any plans to terminate employment with the Seller (other than for the purpose of accepting employment with the Buyer following the Closing) or not to accept employment with the Buyer. The Seller is in compliance with all applicable laws relating to the hiring and employment of employees.

(b) Neither of the Seller is a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Seller has no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Seller.

2.20 Employee Benefits.

(a) There are no Seller Plans. Neither the Seller nor any ERISA Affiliate has ever maintained an Employee Benefit Plan subject to Section 412 of the Code or Title IV of ERISA. At no time has the Seller or any ERISA Affiliate been obligated to contribute to any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).

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(b) Section 2.20(b) of the Disclosure Schedule discloses each: (i) agreement with any Member, manager, executive officer or other key employee of the Seller (A) the benefits of which are contingent, or the terms of which are altered, upon the occurrence of a transaction involving the Seller of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such manager, executive officer or key employee; (ii) agreement, plan or arrangement under which any person may receive payments from the Seller that may be subject to the tax imposed by Section 4999 of the Code or included in the determination of such person's "parachute payment" under Section 280G of the Code; and (iii) agreement or plan binding the Seller, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Seller Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.

(c) Section 2.20(c) of the Disclosure Schedule sets forth the policy of the Seller with respect to accrued vacation, accrued sick time and earned time off and the amount of such liabilities as of August 31, 2007.

2.21 Environmental Matters.

(b) To its knowledge, the Seller does not have any liabilities or obligations arising from the release of any Materials of Environmental Concern into the environment.

(e) The Seller is not aware of any material environmental liability of any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Seller.

2.22 Legal Compliance. Except as set forth in Section 2.22 of the Disclosure Schedule, the Seller is currently conducting, and has at all times conducted, its business in material compliance

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with each applicable law (including rules and regulations thereunder) of any federal, state, local or foreign government, or any Governmental Entity, and the Seller has had valid Permits to conduct such business with respect to each jurisdiction (and at such times) for which it has been required to have such Permits except where the lack of any such Permit would not have a Seller Material Adverse Effect. The Seller has not received any notice or communication from any Governmental Entity alleging noncompliance with any applicable law, rule or regulation.

2.23 Customers and Suppliers. Section 2.23 of the Disclosure Schedule sets forth a list of (a) each customer or supplier arrangement that accounted for more than 1% of the revenues of the Seller during the last full fiscal year or the interim period through the Most Recent Balance Sheet Date and the amount of revenues accounted for by such customer or supplier arrangement during each such period and (b) each other supplier of services or goods that is a critical or sole supplier of any significant aspect of the Seller's business. No person identified in the foregoing sentence has provided written or verbal notice to the Seller within the past year that it will stop, or materially reduce its activity below historic levels in connection with any contract or arrangement on which the Seller currently derives revenue.

2.25 Certain Business Relationships With Affiliates. No Affiliate of the Seller (a) owns any property or right, tangible or intangible, which is used in the business of the Seller, (b) has any claim or cause of action against the Seller, or (c) owes any money to, or is owed any money by, the Seller. Section 2.25 of the Disclosure Schedule describes any transactions or relationships between the Seller and any Affiliate thereof which occurred or have existed since the beginning of the time period covered by the Financial Statements.

2.26 Brokers' Fees. The Seller does not have any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

2.27 [RESERVED]

2.29 Projections. The projections included in Section 2.29 of the Disclosure Schedule were prepared by the Seller in good faith and represent their management's good faith estimates of the future performance of the Seller for the periods referred to therein. The Buyer

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acknowledges that the projections are estimates and the Seller makes no representation or warranty as to actual future performance.

2.30 Government Contracts.

(a) The Seller has not been suspended or debarred from bidding on contracts or subcontracts with any Governmental Entity; and to Seller's knowledge no such suspension or debarment has been threatened or initiated; and the consummation of the transactions contemplated by this Agreement will not result in any such suspension or debarment of the Seller or the Buyer (assuming that no such suspension or debarment will result solely from the identity of the Buyer). The Seller has not been nor are now being audited or investigated by the United States Government Accounting Office, the United States Department of Defense or any of its agencies, the Defense Contract Audit Agency, the contracting or auditing function of any Governmental Entity with which it is contracting, the United States Department of Justice, the Inspector General of the United States, or any prime contractor with a Governmental Entity; nor, to the knowledge of the Seller, has any such audit or investigation been threatened. To the knowledge of the Seller, there is no valid basis for (i) the suspension or debarment of the Seller from bidding on contracts or subcontracts with any Governmental Entity or (ii) any claim (including any claim for return of funds to the Government) pursuant to an audit or investigation by any of the entities named in the foregoing sentence. The Seller has no agreements, contracts or commitments which require the Seller to obtain or maintain a security clearance with any Governmental Entity.

2.31 Securities Representations.

(a) The Seller is an "accredited investor" as defined in Rule 501(a) under the Securities Act. The Seller has not been organized, reorganized or recapitalized specifically for the purpose of acquiring the Shares.

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(f) A legend substantially in the following form will be placed on the certificate(s) representing the Shares:

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BUYER

3.2 Authorization of the Transaction. The Buyer has all requisite power and authority to execute and deliver this Agreement, and the Ancillary Agreements and to perform its obligations hereunder and thereunder. The execution and delivery by the Buyer of this Agreement, and the Ancillary Agreements and the performance by the Buyer of this Agreement and the Ancillary Agreements and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of the Buyer. This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by the Buyer and upon their execution and delivery by the Buyer will constitute, valid and binding obligations of the Buyer, enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, arrangement or other similar laws from time to time in effect.

3.3 Noncontravention. Neither the execution and delivery by the Buyer of this Agreement or the Ancillary Agreements, nor the consummation by the Buyer of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the Articles of Incorporation or by-laws of the Buyer,
(b) require on the part of the Buyer any notice to or filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under,

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result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Buyer is a party or by which it is bound or to which any of its assets is subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or any of its properties or assets.

3.4 Capitalization. The authorized capital stock of the Buyer consists of 20,000,000 shares of Buyer Common Stock, of which 3,937,500 shares were issued and outstanding, and options, warrants or other rights (the "Equity Rights") to acquire 865,000 shares of Buyer Common Stock were outstanding, in each case, as of October 15, 2007. As of October 15, 2007, there are no outstanding options, warrants or similar rights relating to the Buyer or its equity other than the Convertible Promissory Notes of the Buyer dated July 16, 2007 convertible into an aggregate of up to 833,333 shares of Buyer Common Stock and the Equity Rights. The rights and privileges of each class of the Buyer's capital stock are set forth in the Buyer's Articles of Incorporation, a copy of which has been made available to the Seller. All of the issued and outstanding shares of Buyer Common Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Shares will be, when issued on the terms and conditions of this Agreement, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Buyer's Articles of Incorporation or Bylaws or any agreement to which the Buyer is a party or is otherwise bound.

3.5 No Prior Activities. As of the date of this Agreement, the Buyer has not engaged in any business operations.

3.7 Ownership and Management. (a) Schedule 3.7(a) attached hereto accurately sets forth the directors and officers of the Buyer as of the date of this Agreement.

(b) Schedule 3.7(b) attached hereto accurately sets forth the ownership and ownership percentages of the Buyer as of the date of this Agreement and a pro forma of the ownership and ownership percentages of the Buyer immediately after Closing after giving effect to the other transactions that the Buyer Currently contemplates; provided that, except to the extent set forth otherwise herein, the Buyer makes no representation or warranty that all or any such transactions will be consummated on the terms and assumptions underlying such pro forma, or at all..

(c) Except as set forth on Schedule 3.7(c) attached hereto, Buyer has not acquired, contracted to acquire or negotiated to acquire any other business, either through a purchase of assets or a purchase of equity ownership.

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ARTICLE IV

PRE-CLOSING COVENANTS

4.2 Governmental and Third-Party Notices and Consents.

(b) The Seller shall use their Reasonable Best Efforts to obtain, at the Buyer's expense, all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as listed or are required to be listed in the Disclosure Schedule. The Buyer shall reasonably cooperate with the Seller in the Seller's efforts to obtain such waivers, consents and approvals.

(c) If (i) any of the Assigned Contracts or other assets or rights constituting Acquired Assets may not be assigned and transferred by the Seller to the Buyer (as a result of either the provisions thereof or applicable law) without the consent or approval of a third party, (ii) the Seller, after using their Reasonable Best Efforts, are unable to obtain such consent or approval prior to the Closing and (iii) the Closing occurs nevertheless, then (A) such Assigned Contracts and/or other assets or rights shall not be assigned and transferred by the Seller to the Buyer at the Closing and, except as provided in
Section 4.2(c) of the Disclosure Schedule, the Buyer shall not assume the Seller's future liabilities or future obligations with respect thereto at the Closing until such approval or consent is obtained and assignment occurs, at which time Buyer will assume all such liabilities and obligations following the date of such approval or consent, (B) the Seller shall continue to use its Reasonable Best Efforts for a reasonable period of time after the Closing, and in any case not less than nine (9) months, to obtain the necessary consent or approval as soon as practicable after the Closing, (C) upon the obtaining of such consent or approval, the Buyer and the Seller shall execute such further instruments of conveyance (in substantially the form executed at the Closing) as may be necessary to assign and transfer such Assigned Contracts and/or other assets or rights (and the associated liabilities and obligations of the Seller) to the Buyer, and (D) from and after the Closing until the assignment or termination (at the end of any fixed term thereof or by the Buyer after nine (9) months from the date hereof) of each such Assigned Contract pursuant to clause
(C) above, the Buyer shall perform and fulfill, on a subcontractor basis, the obligations of the Seller or the applicable Subsidiary to be performed under such Assigned Contract, and the Seller or such Subsidiary

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shall promptly remit to the Buyer all payments received by it under such Assigned Contract for services performed during such period, net of associated cost of sales and expenses.

4.3 Exclusivity.

(a) Neither the Seller nor the Members shall, directly or indirectly, (i) initiate, solicit, encourage or otherwise facilitate any inquiry, proposal, offer or discussion with any party (other than the Buyer) concerning any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of shares, sale of material assets or similar business transaction involving the Seller, (ii) furnish any non-public information concerning the business, properties or assets of the Seller to any party (other than the Buyer), (iii) engage in discussions or negotiations with any party (other than the Buyer) concerning any such transaction, (iv) vote any shares of the Seller in favor of any such transaction with any party (other than the Buyer), or (v) enter into any agreement with any party (other than the Buyer) concerning any such transaction.

(b) The Seller and each Member shall immediately notify any party with which discussions or negotiations of the nature described in paragraph (a) above were pending that the Seller or the Member, as applicable, is terminating such discussions or negotiations. If the Seller or a Member receives any inquiry, proposal or offer of the nature described in paragraph (a) above, the Seller or Member, as applicable, shall, within one business day after such receipt, notify the Buyer of such inquiry, proposal or offer, including the identity of the other party and the terms of such inquiry, proposal or offer.

(b) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its shares;

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(d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in
Section 2.20 or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its managers, officers or employees, generally or individually, or pay any bonus or other benefit to its managers, officers or employees (except for existing payment obligations listed in Section 2.20 of the Disclosure Schedule) or hire any new officers or (except in the Ordinary Course of Business) any new employees;

(e) acquire, sell, lease, license or dispose of any assets or property, other than purchases and sales of assets in the Ordinary Course of Business;

(f) mortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest;

(g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business without prior written notice to Buyer;

(h) amend its Articles of Organization, Operating Agreement or other organizational documents in a manner that could have an adverse effect on the transactions contemplated by this Agreement;

(k) make or commit to make any capital expenditure in excess of $5,000 per item or $10,000 in the aggregate;

(l) institute any Legal Proceeding;

(n) agree in writing or otherwise to take any of the foregoing actions.

4.5 Access to Information.

(a) The Seller shall permit representatives of the Buyer to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of

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the Seller) to all premises, properties, financial, tax and accounting records (including the work papers of the Seller's independent accountants), contracts, other records and documents, and personnel, of or pertaining to the Seller, and contacts at Seller's principal suppliers and customers, for the purpose of performing such inspections and tests as the Buyer deems necessary or appropriate.

(b) If the Closing has not occurred by September 30, 2007, within 15 days after the end of each month ending prior to the Closing, beginning with September 30, 2007, the Seller shall furnish to the Buyer an unaudited income statement for such month and a balance sheet as of the end of such month, prepared on a basis consistent with the Financial Statements. Such financial statements shall present fairly the financial condition and results of operations of the Seller as of the dates thereof and for the periods covered thereby, and shall be consistent with the books and records of the Seller.

4.6 Notice of Breaches.

(a) From the date of this Agreement until the Closing, the Seller shall promptly deliver to the Buyer supplemental information concerning material events or circumstances occurring subsequent to the date hereof which would render any representation, warranty or statement in this Agreement or the Disclosure Schedule inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation, warranty or statement in this Agreement or the Disclosure Schedule.

(b) From the date of this Agreement until the Closing, the Buyer shall promptly deliver to the Seller supplemental information concerning material events or circumstances occurring subsequent to the date hereof which would render any representation or warranty in this Agreement inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation or warranty in this Agreement.

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ARTICLE V

CONDITIONS TO CLOSING

(c) the Seller shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(e) the Seller shall have delivered to the Buyer the Seller Certificate;

(f) the Seller shall have delivered to the Buyer an updated list of the Acquired Assets, as of the day prior to the Closing Date;

(g) the Seller shall have delivered to the Buyer documents evidencing the release or termination of all Security Interests on the Acquired Assets other than those permitted under the Escrow Agreement or associated with the Assumed Liabilities, and copies of filed UCC termination statements with respect to all UCC financing statements evidencing such Security Interests;

(h) the Buyer shall have received an opinion from counsel to the Seller in substantially the form attached hereto as Exhibit C, addressed to the Buyer and dated as of the Closing Date;

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(j) the Buyer or a successor entity thereto shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities;

(k) no Seller Material Adverse Effect shall have occurred;

(l) the Buyer shall be reasonably satisfied that the issuance and sale of the Shares are exempt from the registration requirements of the Securities Act;

(m) the Seller shall have received all necessary consents to the assignment of customer contracts (as set forth in Section 2.10(c) or 2.14 of the Disclosure Schedule), which consent may be conditioned on the Closing;

(n) the Buyer and its attorneys, accountants, lenders and other representatives and agents shall have satisfactorily completed their due diligence investigation of the Seller and the Business;

(o) the Buyer shall have received such other certificates and instruments (including certificates of good standing of the Seller in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

(p) the Buyer, RFK and the members of RFK shall have entered into the RFK Purchase Agreement;

(q) the Members shall have signed such share exchange agreements and other documents as the Buyer may reasonably request in connection with the share exchange transaction currently contemplated by the Buyer;

(s) each of the Members shall have entered into agreements with the Buyer for the transfer of personal goodwill of the Members to the Buyer.

(a) the representations and warranties of the Buyer set forth in the first sentence of Section 3.1 and in Section 3.2 and any representations and warranties of the Buyer

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set forth in this Agreement that are qualified as to materiality shall be true and correct in all respects, and all other representations and warranties of the Buyer set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties shall be true and correct as of such date);

(b) the Buyer shall have performed or complied with its agreements and covenants required to be performed or complied with under this Agreement as of or prior to the Closing;

(d) the Buyer shall have delivered to the Seller the Buyer Certificate;

(e) the Seller shall have received such other certificates and instruments (including certificates of good standing of the Buyer in its jurisdiction of organization, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing;

(f) the Seller shall be reasonably satisfied that the issuance and sale of the Shares, and any subsequent transfers of the Shares to the Members, are exempt from the registration requirements of the Securities Act;

(g) the Buyer or a successor entity thereto shall have received aggregate gross proceeds of at least $4.0 million from the sale of its securities; and

(h) each of the Members shall have entered into agreements with the Buyer for the transfer of personal goodwill of the Members to the Buyer.

ARTICLE VI

POST-CLOSING COVENANTS

6.1 Proprietary Information. From and after the Closing, neither the Seller nor the Members shall disclose or make use of (except to pursue its rights, under this Agreement or the Ancillary Agreements), and shall use their best efforts to cause all of their Affiliates not to disclose or make use of, any knowledge, information or documents of a confidential nature or not generally known to the public with respect to Acquired Assets, the Seller's business or the Buyer or its business (including the financial information, technical information or data relating to the Seller's products and names of customers of the Seller), as well as filings and testimony (if any) presented in the course of any arbitration of a Dispute pursuant to Section 7.3 and the

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arbitral award and the Arbitrator's reasons therefor relating to the same), except to the extent that such knowledge, information or documents shall have become public knowledge other than through improper disclosure by the Seller or its Affiliates; provided that this Section shall not restrict any Key Employee from performing his job function with and for the benefit of the Buyer after the Closing.

6.2 Solicitation and Hiring. During the applicable Restricted Period, neither the Seller nor any Member shall, either directly or indirectly (including through an Affiliate), (a) solicit, hire or attempt to induce any Restricted Employee to terminate his employment with the Buyer or any subsidiary of the Buyer; provided that the restrictions on the Member (as such) set forth in this sentence shall not apply to any Member who is a Key Employee and whose employment is terminated by the Company without Cause (as defined in the Key Employee's Employment Agreement) or who terminates his employment with the Company for Good Reason (as defined in the Key Employee's Employment Agreement).

6.3 Non-Competition.

(a) During the applicable Restricted Period, except at the request of the Buyer, neither the Seller nor any Member shall, either directly or indirectly as a owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise (except as the holder of not more than 5% of the combined voting power of the outstanding stock of a publicly held company, and excluding Seller's ownership interest in Buyer), (i) provide any service or design, develop, manufacture, market, sell or license any product anywhere within the States of Indiana, Kentucky or Ohio, or to any person or entity that has been a customer of the Business of the Seller within the last two years, which is competitive with any service provided or product designed, developed (or under development), manufactured, sold or licensed by the Seller as of the Closing Date or (ii) engage anywhere within the States of Indiana, Kentucky or Ohio, in any business competitive with the Business of the Seller as conducted as of the Closing Date; provided that this sentence shall not apply to any Member who is a Key Employee and whose employment is terminated by the Company without Cause (as defined in the Key Employee's Employment Agreement) or who terminates his employment with the Company for Good Reason (as defined in the Key Employee's Employment Agreement).

(b) The Seller and the Members agree that the duration and geographic scope of the non-competition provision set forth in this Section 6.3 are reasonable. In the event that any court determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the Parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable. The Parties intend that this non-competition provision shall be deemed to be a series of separate covenants, one for each and every county of each and every state of the United States of America and each and every political subdivision of each and every country outside the United States of America where this provision is intended to be effective.

(c) After the Closing Date, the Seller shall, and shall use its best efforts to cause their Affiliates to, refer all inquiries regarding the business, products and services of the Seller to the Buyer.

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6.4 Tax Matters.

(b) All Tax liabilities (other than Income Taxes) attributable to the Business through the Closing Date shall be borne by the Buyer to the extent that such liabilities are, in the aggregate (collectively, the "Reserved Taxes"). Tax liabilities (other than Income Taxes) attributable to the Business through the Closing Date in excess of the Reserved Taxes shall be borne by the Seller.

6.5 Sharing of Data.

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that are transferred to the Buyer pursuant to the terms of this Agreement for the limited purposes of concluding its involvement in the business conducted by the Seller prior to the Closing Date and for complying with its obligations under applicable securities, tax, environmental, employment or other laws and regulations. The Buyer shall have the right for a period of seven years following the Closing Date to have reasonable access to those books, records and accounts, including financial and accounting records (including the work papers of the Seller's independent accountants), tax records, correspondence, production records, employment records and other records that are retained by the Seller pursuant to the terms of this Agreement to the extent that any of the foregoing is needed by the Buyer for the purpose of conducting the business of the Seller after the Closing and complying with its obligations under applicable securities, tax, environmental, employment or other laws and regulations. Each party shall store, at its cost, such books, records and accounts returned by it, during such seven year period. Thereafter, neither the Buyer nor the Seller shall destroy any such books, records or accounts retained by it without first providing the other Party with the opportunity to obtain or copy such books, records, or accounts at such other Party's expense.

6.6 Use of Name. For the sole purpose of acting as an agent of the Buyer with respect to the ongoing business of the Buyer or for such other purposes as the Buyer may approve, to obtain any approval or consent relating to an Assigned Contract as contemplated by Section 4.2(c), and otherwise as may be agreed in writing by the Buyer, Strategic shall have a license to use the name "Strategic Communications, LLC", "Strategic", or any name reasonably similar thereto after the Closing Date.

6.7 Cooperation in Litigation. From and after the Closing Date, each Party shall fully cooperate with the other in the defense or prosecution of any litigation or proceeding already instituted or which may be instituted hereafter against or by such other Party relating to or arising out of the conduct of the business of the Seller or the Buyer prior to or after the Closing Date (other than litigation among the Parties and/or their Affiliates arising out the transactions contemplated by this Agreement). The Party requesting such cooperation shall pay the reasonable out-of-pocket expenses incurred in providing such cooperation (including legal fees and disbursements) by the Party providing such cooperation and by its officers, directors, managers, employees and agents, and shall reimburse such Party or its officers, directors, managers, employees and agents, at a reasonable rate, for their time spent in such cooperation in excess of twenty-five hours in the aggregate on such matter.

6.8 Collection of Accounts Receivable. The Buyer agrees that it shall forward promptly to the Seller any monies, checks or instruments received by the Seller after the Closing Date with respect to the accounts receivable of the Seller, as set forth on Section 2.15 of the Disclosure Schedule, or attributable to the business of the Seller before the Closing Date. The Buyer shall provide to the Seller such reasonable assistance as the Seller may request with respect to the collection of any such accounts receivable, provided the Seller pay the reasonable

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out-of-pocket expenses of the Buyer and its officers, managers and employees incurred in providing such assistance.

6.9 Employees.

(a) Effective as of the Closing, the Seller shall terminate the employment of each of its employees designated on Schedule 6.9 attached hereto (which may be updated prior to the Closing by the mutual agreement of the Buyer and the Seller). The Buyer shall be permitted to offer employment to each such employee, terminable at the will of the Buyer except as may be set forth in any employment agreement with a Key Employee. The Seller hereby consent to the hiring of any such employees by the Buyer and waives, with respect to the employment by the Buyer of such employees, any claims or rights the Seller may have against the Buyer or any such employee under any non-competition, confidentiality or employment agreement.

(b) The Buyer and the Seller shall cooperate to substitute the Buyer for the Seller as the contract holder on all insurance contracts providing medical or dental benefits for employees of the Seller and their beneficiaries.

(c) Nothing in this Agreement shall prevent the Buyer from amending or terminating any plan maintained by the Buyer under which a former employee of the Seller is a participant.

6.10 Enforcement of Insurance Claims. The Seller hereby assigns to the Buyer the right to pursue and enforce, and hereby irrevocably appoints the Buyer as its true and lawful attorney-in-fact with full power in the name of and on behalf of the Seller for the purpose of pursuing and enforcing, any and all rights of the Seller under any insurance policies of the Seller which are not assigned to the Buyer pursuant to this Agreement with respect to any occurrence, claim or loss (including any product liability claim) which is the subject of an indemnity obligation by the Seller to the Buyer under Article VII; provided that the Buyer may not exercise such right or power unless the Seller fails to promptly and expeditiously pursue and enforce its rights under its insurance policies with respect to such occurrence, claim or loss. The power of attorney conferred upon the Buyer by the Seller pursuant to this Section 6.10 is an agency coupled with an interest and all authority conferred hereby shall be irrevocable, and shall not be terminated by the dissolution or the liquidation of the Seller or any other act of the Seller.

6.12 Assignment and Assumption of NEC Contracts and Lease. Promptly after the Closing, the Buyer and the Seller shall exercise their Reasonable Best Efforts to assign to the Buyer, and to have the Buyer assume, all of the rights and obligations of the Seller under the NEC contracts (as described in Section 2.14 of the Disclosure Schedule) and the Lease or alternatively to have the Buyer enter into contracts with NEC or a lease (for the real property covered by the Lease) on terms substantially similar to those of the NEC contracts or the Lease, respectively. The liabilities and obligations of the Seller under the NEC contracts and the Lease shall be deemed to be Assumed Liabilities hereunder to the extent that the rights of the Seller

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under the NEC contracts and the Lease have been assigned to the Buyer or the Buyer has entered into contracts with NEC or a lease on terms substantially similar to those of the NEC contracts or the Lease, respectively.

ARTICLE VII

INDEMNIFICATION

7.1 Indemnification by the Seller. The Members, severally and not jointly, and the Seller, shall indemnify the Buyer (and its officers, directors and affiliates) in respect of, and hold the Buyer (and its officers, directors and affiliates) harmless against, Damages incurred or suffered by the Buyer or any Affiliate thereof resulting from, relating to or constituting:

(a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Seller or Members contained in this Agreement, any Ancillary Agreement or any other agreement or instrument furnished by the Seller or the Members to the Buyer pursuant to this Agreement;

(b) any failure to perform any covenant or agreement of the Seller or the Members contained in this Agreement, any Ancillary Agreement or any agreement or instrument furnished by the Seller to the Buyer pursuant to this Agreement; it being agreed and understood that if Seller fails to obtain as of Closing one or more consents to the assignment of customer contracts and provides notice to the Buyer of such failure (in writing) and Buyer elects to effect the Closing notwithstanding the absence of such consents, then, so long as Seller is not in violation of Section 4.2, the Seller shall not be liable following the Closing for the failure to obtain the consent to assignment of such customer contracts.

(d) the failure of the Buyer and the Seller, in connection with the sale of the Acquired Assets by the Seller to the Buyer pursuant to this Agreement, to comply with, and obtain for the Buyer the benefits afforded by compliance with, any applicable bulk transfers laws;

(e) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of RFK or its members contained in the RFK Purchase Agreement, or any ancillary agreement or instrument thereto furnished by RFK or its members to the Buyer pursuant to the RFK Purchase Agreement; or

(f) any failure to perform any covenant or agreement of RFK or its members contained in the RFK Purchase Agreement or any ancillary agreement or instrument thereto furnished by RFK or its members to the Buyer pursuant to the RFK Purchase Agreement.

7.2 Indemnification by the Buyer. The Buyer shall indemnify the Seller (and their officers, directors and affiliates) in respect of, and hold Seller (and its officers, directors and affiliates) harmless against, any and all Damages incurred or suffered by the Seller resulting from, relating to or constituting:

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7.3 Indemnification Claims.

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different defenses available with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. If the Indemnified Party withholds its consent to any such settlement or entry of judgment which settlement or entry of judgment relates to cash Damages only, then the liability of the Indemnifying Party to the Indemnified Party with respect to the matter which would have been concluded or settled shall be limited to the amount for which such matters could have been concluded or settled but for the fact the Indemnified Party withheld its consent. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

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of the Dispute (whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if any) portion of the Escrow Fund shall be disbursed to the Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).

(i) In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be controlling.

(iii) No depositions or other discovery shall be conducted in connection with the arbitration.

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obligation, then (i) such Indemnified Party shall be entitled to satisfy such obligation, without prior notice to or consent from the Indemnifying Party, and
(ii) such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VII, and shall be reimbursed, in accordance with the provisions of this Article VII, for any such Damages for which it is entitled to indemnification pursuant to this Article VII (subject to the right of the Indemnifying Party to dispute the Indemnified Party's entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VII).

(g) Any amounts to be disbursed by the Escrow Agent hereunder shall first be satisfied against the Value of the Escrow Shares and second against any other assets held in the Escrow Fund.

7.4 Survival of Representations and Warranties. All representations and warranties that are covered by the indemnification agreements in Section 7.1(a) and (e) and Section 7.2(a) shall (a) survive the Closing and (b) shall expire on the date that is eighteen (18) months following the Closing Date, except that
(i) the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 3.1 and 3.2, and Sections 2.1, 2.2 and 2.3 of the RFK Purchase Agreement, shall survive the Closing without limitation and (ii) the representations and warranties set forth in Sections 2.9, 2.20 and 2.21 of this Agreement and the RFK Purchase Agreement shall survive until 30 days following expiration of all statutes of limitation applicable to the matters referred to therein. If an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or an Expected Claim Notice based upon a breach of such representation or warranty, then the applicable representation or warranty shall survive until, but only for purposes of, the resolution of the matter covered by such notice. If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party; and if the Indemnified Party has delivered a copy of the Expected Claim Notice to the Escrow Agent and Escrow Funds have been retained in escrow after the Termination Date (as defined in the Escrow Agreement) with respect to such Expected Claim Notice, the Indemnifying Party and the Indemnified Party shall promptly deliver to the Escrow Agent a written notice executed by both parties instructing the Escrow Agent to disburse such retained Escrow Fund in accordance with such withdrawal or resolution and the terms of the Escrow Agreement. The rights to indemnification set forth in this Article VII shall not be affected by (i) any investigation conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the date of this Agreement or the Closing Date (including through supplemental information provided pursuant to by Section 4.6), with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder or (ii) any waiver by an Indemnified Party of any closing condition relating to the accuracy of any representations and warranties or the performance of or compliance with agreements and covenants.

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7.6 Limitations.

(b) The Parties agree that their exclusive remedy at law for a breach of this Agreement by any other Party shall be this Article VII.

(c) Notwithstanding any other provisions of this Agreement, the Buyer agrees that the Seller's and the Members' obligations under Sections 7.1(a) and (e) shall be limited solely to the Escrow Fund held by the Escrow Agent, and any indemnification payments under Sections 7.1(a) and (e) shall be limited to the Escrow Fund (based on the Value of the Escrow Shares plus any other cash or property then held in the Escrow Fund) in satisfaction of such indemnification claim; provided that the limitations set forth in this sentence shall not apply to a claim pursuant to Section 7.1(a) relating to a breach of the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.9, 2.20 or 2.21 of this Agreement or the RFK Purchase Agreement.

(d) Notwithstanding any other provisions of this Agreement, the Seller agrees that the Buyer's obligations under Section 7.2(a) shall be limited solely to an amount equal to the value of the Escrow Shares based on an assumed value of $1.00 per share calculated as of the date of Closing; provided that the limitations set forth in this sentence shall not apply to a claim pursuant to
Section 7.2 relating to a breach of the representations and warranties set forth in Sections 3.1 or 3.2.

(e) The Seller and the Members shall have no liability (for indemnification or otherwise) with respect to claims under Section 7.1(a) until the total of all Damages with respect to such matters exceeds $50,000, at which point the Seller and the Members shall be liable for any and all Damages. However, the restrictions of this paragraph will not apply to any claim pursuant to Section 7.1(a) relating to a breach of the representations and warranties set forth in Sections 2.1, 2.2, 2.3, 2.6 (last sentence only), 2.9, 2.20 or 2.21 of this Agreement or the RFK Purchase Agreement.

(f) The Buyer shall have no liability (for indemnification or otherwise) with respect to claims under Section 7.2(a) until the total of all Damages with respect to such matters exceeds $50,000, at which point the Buyer shall be liable for any and all Damages. However, the restrictions of this paragraph will not apply to any claim pursuant to Section 7.2(a) relating to a breach of the representations and warranties set forth in Sections 3.1 or 3.2.

(g) No Member shall have any personal liability or indemnification obligation under this Article VII for (i) any breach or violation of Section 6.1, 6.2 or 6.3 by a person other than the Member (provided that this Section 7.6(g) does not limit the availability of the Escrow Fund to the Buyer for breaches or violations of such section(s)), and (ii) any amount (including such Member's pro rata share of the Escrow Fund) greater than the product of (x) (A) $562,500.00 plus (B) $200,000 or, if less, the value of 200,000 Shares as of the date payment for

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indemnification is made, times (y) such Member's ownership percentage of the Seller as of the date of Closing.

(h) Buyer must first seek to satisfy any claim by the Buyer against the Seller or, with respect to any claim by the Buyer against a given Member under this Article VII, against any of the Shares (at the Value thereof) then held by such Member (or, if such Shares have not been distributed to such Member by the Seller, by such Member's (and only such Member's) pro-rata portion of the total number of Shares issued to the Seller on the Closing Date, based on such Member's ownership percentage of the Seller (considered together) as of the date of Closing less any Shares that have been sold by the Seller at the direction of such Member), and with respect to matters exceeding such Value, Buyer may seek cash to satisfy such claim (subject to the aggregate limitation set forth in
Section 7.6(g)(ii) above).

(i) Nothing herein shall be construed to restrict the remedies of the Buyer against RFK or its members under the terms of the RFK Purchase Agreement, with respect to any breach of any representation, warranty or covenant of RFK and its members in the RFK Purchase Agreement.

ARTICLE VIII

TERMINATION

8.1 Termination of Agreement. The Parties may terminate this Agreement prior to the Closing, as provided below:

(a) the Parties may terminate this Agreement by mutual written consent;

(b) the Buyer may terminate this Agreement by giving written notice to the Seller in the event the Seller or any Member is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in clauses (b) or (c) of Section 5.1 not to be satisfied and (ii) is not cured within 20 days following delivery by the Buyer to the Seller of written notice of such breach;

(c) the Seller may terminate this Agreement by giving written notice to the Buyer in the event the Buyer is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in clauses (a) or (b) of Section 5.2 not to be satisfied and (ii) is not cured within 20 days following delivery by the Seller to the Buyer of written notice of such breach;

(d) the Buyer may terminate this Agreement by giving written notice to the Seller if the Closing shall not have occurred on or before November 15, 2007 by reason of the failure of any condition precedent under Section 5.1 (unless the failure results primarily from a breach by the Buyer of any representation, warranty or covenant contained in this Agreement); or

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(e) the Seller may terminate this Agreement by giving written notice to the Buyer if the Closing shall not have occurred on or before November 15, 2007 by reason of the failure of any condition precedent under Section 5.2 (unless the failure results primarily from a breach by the Seller or a Member of any representation, warranty or covenant contained in this Agreement).

ARTICLE IX

DEFINITIONS

For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

"AAA" shall mean the American Arbitration Association.

"Acquired Assets" shall mean all of the assets, properties and rights of the Seller existing as of the Closing, other than the Excluded Assets, including:

(a) all computers, machinery, equipment, tools and tooling, furniture, fixtures, supplies, leasehold improvements, motor vehicles and other tangible personal property;

(b) all leaseholds and subleaseholds in real property, and easements, rights-of-way and other appurtenants thereto;

(d) all rights under Assigned Contracts;

(e) all claims, prepayments, deposits, refunds, causes of action, chooses in action, rights of recovery, rights of setoff and rights of recoupment;

(f) all books, records, accounts, ledgers, files, documents, correspondence, lists (including customer and prospect lists), employment records, manufacturing and procedural manuals, Intellectual Property records, sales and promotional materials, studies, reports and other printed or written materials; and

(g) all rights of the Seller in and with respect to the assets associated with its medical and dental Employee Benefit Plans.

"Affiliate" shall mean any affiliate, as defined in Rule 12b-2 under the Exchange Act.

"Agreed Amount" shall mean an amount agreed upon by the Indemnifying Party and the Indemnified Party.

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"Ancillary Agreements" shall mean the Escrow Agreement, the bill of sale and other instruments of conveyance referred to in Section 1.5(b)(iii), and the instrument of assumption and other instruments referred to in Section 1.5(b)(iv).

"Arbitrator" shall mean a single arbitrator selected by the Buyer and the Seller in accordance with the Commercial Rules.

"Assigned Contracts" shall mean the customer contracts, supplier contracts and vendor contracts listed on Section 2.14 of the Disclosure Schedule (excepting those vendor contracts that are specifically indicated as excluded), and the Lease described in Section 2.12 of the Disclosure Schedules. The Assigned Contracts shall include no more than $500,000 of accounts payable and other payment obligations (including obligations under the Leases) accrued as of the time of Closing and shall be listed with specificity on Schedule 2.14 of the Disclosure Schedule.

"Assumed Liabilities" shall mean (a) all obligations of the Seller arising after the Closing under the Assigned Contracts, other than any liabilities for any breach, act or omission by the Seller prior to the Closing under any Assigned Contract, (b) vacation accrued by employees, customer retention bonus and non-owner discretionary profit sharing plan, in each case based on a bi-weekly accrual from January 1, 2007 to the Closing Date as accepted by the Buyer, and (c) any liability for Taxes in accordance with Sections 6.4(a), (b),
(c) and (d).