printer-friendly

Sample Business Contracts

Securities Purchase Agreement - SheerVision Inc., Laurie C. Scala, Howard A. Scala and Clean Water Technologies Inc.

Sponsored Links

                                                                  EXECUTION COPY

         SECURITIES  PURCHASE  AGREEMENT,  dated as of  November  30,  2005 (the
"AGREEMENT"),  among  SHEERVISION,  INC., a California  corporation with offices
located at 4030 Palos Verdes  Drive North,  Suite 104,  Rolling  Hills  Estates,
California 90274 ("SHEERVISION"); LAURIE C. SCALA, an individual with an address
of 2716 St. Andrews  Boulevard,  Suite 200, Tarpon Springs,  Florida 34688,  and
HOWARD A. SCALA,  an individual  with an address of 2716 St. Andrews  Boulevard,
Suite 200,  Tarpon Springs,  Florida 34688  (collectively,  the "SELLERS");  and
CLEAN WATER TECHNOLOGIES,  INC., a Delaware  corporation with offices located at
2716 St.  Andrews  Boulevard,  Suite 200,  Tarpon  Springs,  Florida  34688 (the
"COMPANY").

                                  INTRODUCTION

         The Sellers collectively own beneficially and of record an aggregate of
4,517,800 shares (the "SHARES") of common stock, par value $0.001 per share (the
"COMMON STOCK"), of the Company, which includes all shares of Common Stock owned
beneficially or of record thereby, or issuable upon the exercise, conversion, or
exchange of securities or obligations held by, or owed to, any Seller other than
an aggregate of 14,330 shares of Common Stock held by the Sellers in a custodial
capacity and one or more individual retirement accounts.  SheerVision desires to
acquire from the Sellers,  and the Sellers  desire to sell to  SheerVision,  the
Shares, in accordance with, and subject to, the terms hereof.

         NOW,   THEREFORE,   in   consideration   of  the  premises  and  mutual
representations,  warranties and covenants herein contained,  the parties hereby
agree as follows:


                                    ARTICLE I

                               CERTAIN DEFINITIONS

         "BUSINESS DAY" shall mean any day which is not a Saturday or Sunday and
is not a day on which banking institutions are generally authorized or obligated
to close in the City of New York, New York.

         "CLOSING"  shall mean the closing of the purchase by  SheerVision  from
the Sellers of the Shares.

         "CLOSING  DATE" shall have the definition  assigned  thereto in Section
2.03(a) hereof.

         "CODE" shall have the definition assigned thereto in Section 3.01(d).

         "COMMON  STOCK"  shall  have  the  definition  assigned  thereto  in to
introduction hereto.

         "COMPANY"   shall  have  the   definition   assigned   thereto  in  the
introductory paragraph hereto.

<PAGE>
         "DGCL" shall mean the Delaware General Corporation Law.

         "DISPOSE OF" shall mean to pledge, hypothecate,  give away, sell, grant
an option (other than pursuant hereto) with respect to, or otherwise transfer.

         "ENVIRONMENTAL  LAWS"  shall have the  definition  assigned  thereto in
Section 3.01(q).

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

         "EXCHANGE  ACT" shall have the definition  assigned  thereto in Section
3.01(a)(i).


         "EXISTING  DIRECTORS"  shall have the  definition  assigned  thereto in
Section 4.04.

         "INVESTMENT  COMPANY ACT" shall have the definition assigned thereto in
Section 3.01(n).

         "LAST COMPANY FINANCIAL STATEMENT DATE" shall mean September 30, 2005.

         "LAST  COMPANY  FINANCIAL  STATEMENTS"  shall mean the  balance  sheet,
statement of income, and statement of cash flows, and the notes thereto,  of the
Company as of the Last Company Financial Statement Date.

         "MAC"  shall  mean MAC  Financial  Corp.,  which has  served as special
financial adviser in connection with the transactions contemplated hereby and in
connection herewith

         "NEW DIRECTORS"  shall have the definition  assigned thereto in Section
4.04.

         "REORGANIZATION" shall mean the proposed contribution to the Company by
the  stockholders of SheerVision of all  outstanding  shares of capital stock of
SheerVision  in exchange  for shares of Common  Stock,  which  transactions  are
referenced  in the  unanimous  consent of directors of the Company,  dated as of
November 30, 2005.

         "SEC" shall mean the United States Securities and Exchange Commission.

         "SEC DOCUMENTS"  shall have the definition  assigned thereto in Section
3.01(a)(i).

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SELLER" shall have the definition assigned thereto in the introductory
paragraph hereto.

         "SHARES" shall have the definition assigned thereto in the introduction
hereto.

         "SHEERVISION"  shall  have  the  definition  assigned  thereto  in  the
introductory paragraph hereto.

         "TAXES" shall have the definitions assigned thereto in Section 3.01(j).

<PAGE>


                                   ARTICLE II

                       ACQUISITION AND EXCHANGE OF SHARES

         SECTION 2.01 THE AGREEMENT.  At the Closing,  SheerVision shall acquire
from the Sellers, and each Seller shall sell to SheerVision,  the portion of the
Shares  set forth in  Schedule  2.01(a)  hereto  in  exchange  for an  aggregate
purchase  price of  US$625,000 in cash, of which $75,000 shall be payable at the
Closing as directed by MAC.

         SECTION 2.02      CLOSING; EXCHANGES.

         (a) The  Closing  shall take  place on the date  hereof  (the  "CLOSING
DATE") at the offices of Reitler Brown & Rosenblatt LLC, 800 Third Avenue,  21st
Floor, New York, New York 10022. At the Closing:

         (i) the Sellers shall  deliver or cause to be delivered to  SheerVision
stock certificates evidencing the Shares,  registered in the name of SheerVision
or its designee;

         (ii) (A) SheerVision  shall deliver to the Sellers the aggregate amount
of US$550,000 by certified or official bank check or by electronic wire transfer
in  accordance  with  instructions   theretofore   provide  by  the  Sellers  to
SheerVision;

         (B) SheerVision  shall deliver to MAC the aggregate amount of US$75,000
by certified or official bank check or by electronic wire transfer in accordance
with instructions theretofore provide by MAC to SheerVision;

         (iii) the Company will deliver to SheerVision an Officer's  Certificate
in the form of Exhibit 2.02(a)(iii) hereto, dated the Closing Date,  certifying,
among  other  things,  that  all  representations,  warranties,  covenants,  and
conditions  set forth herein by the Sellers and the Company are true and correct
as of, or have been fully performed and complied with by, the Closing Date;

         (iv)  the  Sellers  will  deliver  to  SheerVision  and the  Company  a
certificate in the form of Exhibit 2.02(a)(iv)  hereto,  dated the Closing Date,
certifying that all representations,  warranties,  covenants, and conditions set
forth  herein by the Seller and the  Company are true and correct as of, or have
been fully performed and complied with by, the Closing Date;

         (v) SheerVision, or a duly appointed agent thereof, will deliver to the
Sellers one or more Certificates in the form of Exhibit 2.02(a)(v) hereto, dated
the Closing Date, certifying that all representations, warranties, covenants and
conditions set forth herein by  SheerVision  are true and correct as of, or have
been fully performed and complied with by, the Closing Date; and


<PAGE>

         (vi) the Sellers and SheerVision  shall execute a cross-receipt  in the
form of Exhibit 2.02(a)(vi) hereto.

         (b) The Shares shall be authorized,  issued,  and outstanding shares of
Common Stock. All Shares shall be deemed  "RESTRICTED  SECURITIES" as defined in
paragraph  (a) of  Rule  144  under  the  Securities  Act.  The  acquisition  by
SheerVision of the Shares shall be subject to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder.  Certificates representing the
Shares shall bear a restrictive legend in substantially the following form:

         THE SHARES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN  REGISTERED
         UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  AND MAY NOT BE OFFERED
         FOR SALE, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
         REGISTRATION  PROVISIONS  OF SUCH ACT OR PURSUANT TO AN EXEMPTION  FROM
         SUCH  REGISTRATION  PROVISIONS,  THE  AVAILABILITY  OF  WHICH  IS TO BE
         ESTABLISHED TO THE SATISFACTION OF THE COMPANY.

         SECTION 2.03 APPROVAL. In anticipation of this Agreement,  the Board of
Directors  of the  Company  and of  SheerVision  has  taken  all  necessary  and
requisite  corporate and other action in order to approve this Agreement and all
transactions contemplated hereby and in connection herewith.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         SECTION  3.01  REPRESENTATIONS  AND  WARRANTIES  OF THE  SELLER AND THE
COMPANY.  The Sellers and the  Company,  jointly and  severally,  represent  and
warrant to, and agree with, SheerVision as follows:

(a) (i) The  Common  Stock  has  been  registered  under  Section  12(g)  of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the Company
is subject to the periodic reporting  requirements of Section 13 of the Exchange
Act. The Company has made available to SheerVision true,  complete,  and correct
copies  of all  forms,  reports,  schedules,  statements,  and  other  documents
required to be filed by it under the  Exchange  Act since at least July 1, 2001,
as such  documents  have  been  amended  since  the time of the  filing  thereof
(collectively,  including all forms, reports, schedules,  statements,  exhibits,
and other documents filed by the Company  therewith,  the "SEC DOCUMENTS").  The
SEC  Documents,  including,  without  limitation,  any financial  statements and
schedules included therein, at the time filed or, if subsequently amended, as so
amended, (i) did not contain any untrue statement of a material fact required to
be stated  therein or  necessary  in order to make the  statements  therein  not
misleading and (ii) complied in all respects with the applicable requirements of
the Exchange Act and the applicable  rules and  regulations  thereunder.  To the
Company's knowledge,  each director and executive officer thereof has filed with
the SEC on a timely  basis  all  statements  required  by  Section  16(a) of the
Exchange  Act and the rules and  regulations  thereunder  since at least July 1,
2001.


<PAGE>

         (ii) The Company maintains  disclosure controls and procedures required
by Rule 13a-15 or 15d-15 under the Exchange Act;  such  controls and  procedures
are effective to ensure that:

                  (A) all material  information  concerning  the Company is made
         known  on a  timely  basis  to  the  individuals  responsible  for  the
         preparation  of the  Company's  filings  with the SEC and other  public
         disclosure documents;

                  (B) transactions are executed in accordance with  management's
         general or specific authorizations;

                  (C)   transactions   are   recorded  as  necessary  to  permit
         preparation  of  financial  statements  in  accordance  with  generally
         accepted accounting principles and to maintain asset accountability;

                  (D)  access to assets is  permitted  only in  accordance  with
         management's general or specific authorization; and

                  (E) the recorded  accountability  for assets is compared  with
         the existing assets at reasonable  intervals and appropriate  action is
         taken with respect to any differences.

The  Company  has  made  available  to   SheerVision   copies  of,  all  written
descriptions  of, and all policies,  manuals and other  documents  promulgating,
such disclosure controls and procedures.  The books, records and accounts of the
Company  accurately and fairly reflect,  in reasonable  detail, the transactions
in, and  dispositions  of, the assets of, and the results of operations  of, the
Company all to the extent required by generally accepted accounting principles.

                  (iii)  The Chief  Executive  Officer  and the Chief  Financial
Officer of the Company  have signed,  and the Company has  furnished to the SEC,
all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of
2002; such certifications contain no qualifications or exceptions to the matters
certified  therein  and have not been  modified  or  withdrawn;  and neither the
Company nor any of its officers has received notice from any governmental entity
questioning or challenging the accuracy,  completeness, form or manner of filing
or submission of such certifications.

                  (iv) The Company has  heretofore  has provided to  SheerVision
complete and correct copies of all certifications filed with the SEC pursuant to
Sections  302  and  906 of  Sarbanes-Oxley  Act of 2002  and  hereby  reaffirms,
represents and warrants to SheerVision  the matters and statements  made in such
certificates.

         (b) At the date hereof and at the Closing Date:

                  (i) the Common  Stock is eligible to trade and be quote on the
over-the-counter  Bulletin  Board market  maintained  by The Nasdaq Stock Market
(the "OTCBB");

                  (ii) the Company has and shall have performed or satisfied all
of its undertakings  to, and of its obligations and requirements  with, the SEC;
and


<PAGE>

                  (iii) the Company has not, and shall not have taken any action
that would preclude, or otherwise jeopardize,  the inclusion of the Common Stock
for quotation on the OTCBB.

         (c) The Company has no subsidiaries  or affiliated  corporation or owns
any  interest  in any other  enterprise  (whether  or not such  enterprise  is a
corporation).  The Company has been duly organized and is validly  existing as a
corporation  in good standing  under the laws of the State of Delaware with full
power and  authority  (corporate  and  other)  to own,  lease  and  operate  its
respective  properties and conduct its  respective  business as described in the
SEC  Documents;  the  Company  is duly  qualified  to do  business  as a foreign
corporation and is in good standing in each  jurisdiction in which the ownership
or leasing  of its  properties  or the  conduct of its  business  requires  such
qualification,  except  where  the  failure  to be so  qualified  or be in  good
standing would not have a material  adverse  effect on its business,  prospects,
condition (financial or otherwise), and results of operations of the Company; no
proceeding has been instituted in any such jurisdiction,  revoking,  limiting or
curtailing,  or seeking to revoke, limit or curtail, such power and authority or
qualification;  the Company is in  possession  of, and  operating in  compliance
with, all authorizations,  licenses, certificates,  consents, orders and permits
from state, federal,  foreign and other regulatory authorities that are material
to the  conduct  of its  business,  all of which are valid and in full force and
effect;  the Company is not in  violation of its charter or bylaws or in default
in the  performance  or observance  of any  obligation,  agreement,  covenant or
condition contained in any material bond,  debenture,  note or other evidence of
indebtedness, or in any material lease, contract,  indenture,  mortgage, deed of
trust,  loan agreement,  joint venture or other agreement or instrument to which
it is a party or by which it or its  properties  or assets  may be bound,  which
violation  or  default  would have a material  adverse  effect on the  business,
prospects,  financial condition or results of operations of the Company; and the
Company  is  not in  violation  of  any  law,  order,  rule,  regulation,  writ,
injunction,  judgment or decree of any court,  government or governmental agency
or body,  domestic or foreign,  having jurisdiction over the Company or over its
properties or assets,  which violation  would have a material  adverse effect on
the  business,  prospects,  financial  condition or results of operations of the
Company taken as a whole. The SEC Documents accurately describe any corporation,
association or other entity owned or controlled,  directly or indirectly, by the
Company.

         (d) (i) Each of the Sellers and the Company has all requisite power and
authority  to  execute,  deliver,  and perform  this  Agreement.  All  necessary
proceedings  of the Company  have been duly taken to  authorize  the  execution,
delivery,  and  performance of this Agreement  thereby.  This Agreement has been
duly  authorized,  executed,  and  delivered  by the  Sellers  and the  Company,
constitutes the legal,  valid, and binding  obligation of each of the Seller and
the Company,  and is enforceable as to the Sellers and the Company in accordance
with its terms.  Except as otherwise  set forth in this  Agreement,  no consent,
authorization,  approval, order, license,  certificate, or permit of or from, or
declaration or filing with, any federal,  state,  local,  or other  governmental
authority  or any  court or other  tribunal  is  required  by any  Seller or the
Company for the execution,  delivery,  or performance of this Agreement thereby.
No consent,  approval,  authorization  or order of, or  qualification  with, any
court,  government or governmental agency or body,  domestic or foreign,  having
jurisdiction over any Seller or the Company or over its respective properties or
assets is required  for the  execution  and delivery of this  Agreement  and the
consummation  by  the  Sellers  and  the  Company  of  the  transactions  herein
contemplated,

<PAGE>

except such as may be required  under the Securities Act or under state or other
securities  or blue  sky  laws,  all of  which  requirements  have  been,  or in
accordance therewith will be, satisfied in all material respects.  No consent of
any party to any  material  contract,  agreement,  instrument,  lease,  license,
arrangement,  or understanding to which any Seller or the Company is a party, or
to which its or any of its  respective  businesses,  properties,  or assets  are
subject,  is  required  for the  execution,  delivery,  or  performance  of this
Agreement;  and the execution,  delivery, and performance of this Agreement will
not  violate,  result in a breach of,  conflict  with,  or (with or without  the
giving of notice or the passage of time or both)  entitle any party to terminate
or call a default under,  entitle any party to receive rights or privileges that
such party was not entitled to receive  immediately  before this  Agreement  was
executed  under,  or  create  any  obligation  on the part of any  Seller or the
Company  to which it was not  subject  immediately  before  this  Agreement  was
executed under, any term of any such material contract,  agreement,  instrument,
lease, license, arrangement, or understanding,  or violate or result in a breach
of any term of the certificate of incorporation or by-laws of the Company or (if
the provisions of this Agreement are satisfied) violate,  result in a breach of,
or conflict with any law, rule, regulation, order, judgment, decree, injunction,
or writ of any court,  government or  governmental  agency or body,  domestic or
foreign,  having  jurisdiction  over  any  Seller  or the  Company  or over  its
respective properties or assets.

                  (ii) Each  Seller is an  individual  who has  reached  the age
majority in his or her state of residence.

         (e) There is not any pending or, to the best of each  Seller's  and the
Company's knowledge,  threatened,  action, suit, claim or proceeding against any
Seller or the Company, or any of the Company's officers or any of the respective
properties,  assets or rights of any Seller or of the Company, before any court,
government  or  governmental  agency  or  body,  domestic  or  foreign,   having
jurisdiction  over any Seller or the Company or over the  Company's  officers or
the properties of any Seller or the Company, or otherwise that (i) is reasonably
likely to result in any  material  adverse  change in the  respective  business,
prospects,  financial  condition or results of  operations  of any Seller or the
Company or might  materially and adversely  affect their  properties,  assets or
rights taken as a whole,  (ii) might prevent  consummation  of the  transactions
contemplated  by this Agreement,  or (iii) alleging  violation of any Federal or
state securities laws.

         (f) The authorized  capital stock of the Company consists of 50,000,000
shares  of  Common  Stock,  of  which  8,217,855  shares  of  Common  Stock  are
outstanding. Each of such outstanding shares of Common Stock is duly and validly
authorized,  validly issued, fully paid, and nonassessable,  has not been issued
and is not owned or held in  violation  of any  preemptive  or similar  right of
stockholders.  Except  as  disclosed  in the  SEC  Documents,  (i)  there  is no
commitment,  plan, or arrangement to issue, and no outstanding option,  warrant,
or other right  calling for the issuance  of, any share of capital  stock of, or
any  security  or  other  instrument   convertible  into,  exercisable  for,  or
exchangeable for capital stock of, the Company,  and (ii) except as described in
the SEC  Documents,  there  is  outstanding  no  security  or  other  instrument
convertible  into  or  exchangeable  for  capital  stock  of the  Company.  When
delivered by the Sellers against  payment  therefor in accordance with the terms
of this Agreement, the Shares will be duly and validly issued and fully paid and
nonassessable,  and will be sold free and clear of any  pledge,  lien,  security
interest,  encumbrance,  claim  or  equitable  interest  of  any  kind;  and  no
preemptive or similar right,  co-sale right,  registration right, right of first
refusal or other similar

<PAGE>

right of  stockholders  exists with respect to any of the Shares or the issuance
and sale thereof other than those that have been  expressly  waived prior to the
date hereof and those that will automatically  expire upon the execution hereof.
No further approval or authorization of any stockholder,  the Board of Directors
of the Company or others is required  for the  issuance  and sale or transfer of
the Shares,  except as may be required under the  Securities  Act, the rules and
regulations  promulgated  thereunder or under state or other  securities or blue
sky laws. The description of the Company's  stock option,  stock bonus and other
stock  plans or  arrangements,  and the  options  or other  rights  granted  and
exercised  thereunder,  set forth in the SEC  Documents  accurately  and  fairly
presents  the  information  required  to be shown with  respect  to such  plans,
arrangements, options and rights under the Securities Act, the Exchange Act, and
the rules and regulations promulgated thereunder.

         (g)  Baumann  Raymondo & Company PA  ("BRC"),  which has  examined  the
financial  statements of the Company,  together  with the related  schedules and
notes,  for the period  from  September  25, 2002  through  June 25,  2005,  and
Acquavella,  Chiarelli & Shuster & Co., LLP ("ACS",  and, together with BRC, the
"AUDITORS"),  which  has  examined  the  financial  statements  of the  Company,
together with the related schedules and notes, for the period from June 25, 2000
through September 25, 2002, in each case filed with the SEC as a part of the SEC
Documents, are independent accountants within the meaning of the Securities Act,
the Exchange  Act, and the rules and  regulations  promulgated  thereunder;  the
audited financial statements of the Company, together with the related schedules
and notes,  and the  unaudited  financial  information,  forming part of the SEC
Documents, fairly present and will fairly present the financial position and the
results  of  operations  of the  Company  at the  respective  dates  and for the
respective periods to which they apply; and all audited financial  statements of
the Company,  together with the related  schedules and notes,  and the unaudited
financial information, filed with the SEC as part of the SEC Documents, complied
and will comply as to form in all material  respects with applicable  accounting
requirements  and with the rules and  regulations of the SEC with respect hereto
when filed, have been and will be prepared in accordance with generally accepted
accounting  principles  consistently  applied  throughout  the periods  involved
except as may be  otherwise  stated  therein  (except as may be indicated in the
notes  thereto  or as  permitted  by the rules and  regulations  of the SEC) and
fairly  present and will fairly  present,  subject in the case of the  unaudited
financial  statements,  to customary year end audit  adjustments,  the financial
position  of  the  Company  as at the  dates  thereof  and  the  results  of its
operations and cash flows. The procedures  pursuant to which the  aforementioned
financial  statements  have been audited are compliant with  generally  accepted
auditing  standards.  The selected and summary  financial and  statistical  data
included in the SEC Documents  present and will present  fairly the  information
shown  therein  and have been  compiled on a basis  consistent  with the audited
financial  statements  presented  therein.  No  other  financial  statements  or
schedules  are  required  to be  included in the SEC  Documents.  The  financial
statements  referred to in this Section 3.01(g) contain all  certifications  and
statements  required  under the SEC's Order,  dated June 27,  2002,  pursuant to
Section  21(a)(1) of the  Exchange Act (File No.  4-460),  Rule 13a-14 or 15d-14
under the Exchange Act, or 18 U.S.C.  Section 1350  (Sections 302 and 906 of the
Sarbanes-Oxley  Act of 2002) with respect to the report relating thereto.  Since
the Last Company Financial Statement Date:

<PAGE>

                  (i) There has at no time been a material adverse change in the
         financial  condition,  results of operations,  businesses,  properties,
         assets,  liabilities, or future prospects of the Company and Subsidiary
         taken as a whole;

                  (ii)  The  Company  has not  authorized,  declared,  paid,  or
         effected any dividend or liquidating or other  distribution  in respect
         of its capital stock or any direct or indirect redemption, purchase, or
         other acquisition of any stock of the Company or Subsidiary.


                  (iii) Except as set forth in the SEC Documents, the operations
         and  businesses of the Company have been conducted in all respects only
         in the ordinary course.

There is no fact known to the Company which materially  adversely  affects or in
the  future  (as far as the  Company  can  reasonably  foresee)  may  materially
adversely  affect the financial  condition,  results of operations,  businesses,
properties,  assets,  liabilities, or future prospects of the Company; provided,
however,  that the  Company  expresses  no opinion as to  political  or economic
matters of general  applicability.  The Company has made known,  or caused to be
made known,  to the  accountants  or auditors who have  prepared,  reviewed,  or
audited the aforementioned  consolidated financial statements all material facts
and circumstances which could affect the preparation, presentation, accuracy, or
completeness thereof.

         (h) Subsequent to the respective dates as of which information is given
in the SEC Documents,  there has not been (i) any material adverse change in the
business,  prospects,  financial  condition  or  results  of  operations  of the
Company,  (ii) any transaction  committed to or consummated  that is material to
the Company, (iii) any obligation, direct or contingent, that is material to the
Company  incurred by the Company,  except such obligations as have been incurred
in the  ordinary  course of  business,  (iv) any change in the capital  stock or
outstanding  indebtedness  of the Company or Subsidiary  that is material to the
Company,  other than the  issuance of  1,000,000  shares of Common  Stock to the
Sellers in payment of the outstanding  indebtedness of the Company thereto,  (v)
any dividend or distribution of any kind declared,  paid, or made on the capital
stock of the Company, or (vi) any loss or damage (whether or not insured) to the
property of the Company  which has a material  adverse  effect on the  business,
prospects, condition (financial or otherwise), or results of operations thereof.

         (i) Except as set forth in the SEC Documents,  (i) the Company has good
and marketable title to all properties and assets described in the SEC Documents
as  owned  by it,  free  and  clear  of any  pledge,  lien,  security  interest,
encumbrance,  claim or equitable  interest,  other than such as would not have a
material  adverse  effect on the  business,  prospects,  financial  condition or
results of operations of the Company,  (ii) the  agreements to which the Company
is a  party  described  in the  SEC  Documents  are  legal,  valid  and  binding
agreements,  enforceable by the Company in accordance with their terms,  and, to
the best of the  Company's  knowledge,  the other  contracting  party or parties
thereto are not in breach or default under any of such agreements, and (iii) the
Company has valid and enforceable leases for all properties described in the SEC
Documents as leased by it. Except as set forth in the SEC Documents, the Company
owns or leases all such properties as are necessary to its respective operations
as now conducted and as described in the SEC Documents.

         (j) The  Company has no material  liability  of any nature,  accrued or
contingent,  including,  without  limitation,  liabilities  for federal,  state,
local, or foreign taxes and penalties,

<PAGE>

interest,  and  additions  to tax  ("TAXES"),  and  liabilities  to customers or
suppliers, other than the following:

                           (i)  Liabilities  for which full  provision  has been
                  made  on  the  balance  sheet  included  in the  Last  Company
                  Financial Statements; and


                           (ii) Other liabilities arising since the Last Company
                  Financial  Statement  Date  and  prior to the  Closing  in the
                  ordinary   course  of  business   (which   shall  not  include
                  liabilities  to customers on account of defective  products or
                  services) which are not inconsistent with the  representations
                  and  warranties of the Company or any other  provision of this
                  Agreement.

Without  limiting  the  generality  of  the  foregoing,  the  amounts  set up as
provisions for Taxes in the Last Company Financial Statements are sufficient for
all accrued and unpaid Taxes of the Company,  whether or not due and payable and
whether  or not  disputed,  under  tax laws,  as in  effect on the Last  Company
Financial Statement Date or now in effect, for the period ended on such date and
for all fiscal periods prior thereto. The execution,  delivery,  and performance
of this  Agreement by the Company will not cause any Taxes to be payable  (other
than those that may possibly be payable by the Seller as a result of the sale of
the Shares) or cause any lien,  charge, or encumbrance to secure any Taxes to be
created either immediately or upon the nonpayment of any Taxes other than on the
properties or assets of the Sellers.  The Internal  Revenue  Service has audited
and settled or the statute of  limitations  has run upon all federal  income tax
returns of the Company and each Seller for all taxable years up to and including
the taxable year ended  December  31,  1998.  The Company has filed all federal,
state,  local,  and  foreign  tax  returns  required to be filed by it; has made
available to  SheerVision  a true and correct copy of each such return which was
filed in the past six years;  has paid (or has  established  on the last balance
sheet included in the last Company Financial Statement a reserve for) all Taxes,
assessments,  and other  governmental  charges  payable or  remittable  by it or
levied upon it or its properties,  assets,  income,  or franchises which are due
and payable;  and has  delivered to  SheerVision  a true and correct copy of any
report as to  adjustments  received by it from any taxing  authority  during the
past six years  and a  statement  as to any  litigation,  governmental  or other
proceeding (formal or informal),  or investigation  pending,  threatened,  or in
prospect  with respect to any such report or the subject  matter of such report.
Each  Seller  has paid all  taxes  payable  thereby  due on or prior to the date
hereof.

         (k) The Company currently maintains no insurance;  however, the Company
has at no time been refused any insurance coverage sought or applied for.

         (l) (i) No labor disturbance by the employees of the Company exists or,
to the best of the Company's knowledge, is imminent. The Company is not aware of
any existing or imminent  labor  disturbance  by the  employees of any principal
suppliers  or  customers  of the Company that might be expected to result in any
material  adverse change in the business,  prospects,  financial  condition,  or
results of operations of the Company. No collective  bargaining agreement exists
with any of the  Company's  employees  and, to the best of each Seller's and the
Company's knowledge, no such agreement is imminent.


                  (ii) The  Company  does not have,  or  contribute  to, and has
never maintained or contributed to, any pension,  profit-sharing,  option, other
incentive  plan,  or any other  type of

<PAGE>

Employee  Benefit Plan (as defined in Section 3(3) of ERISA) or Pension Plan (as
defined in ERISA) and the Company does not have any  obligation  to or customary
arrangement  with  employees  for bonuses,  incentive  compensation,  vacations,
severance  pay,  sick pay, sick leave,  insurance,  service  award,  relocation,
disability, tuition refund, or other benefits, whether oral or written.


         (m) The Company owns or possesses  adequate  rights to use all patents,
patent rights, inventions, trade secrets, know-how,  trademarks,  service marks,
trade names, logos, and copyrights described or referred to in the SEC Documents
as  owned by or used by it or that  are  necessary  to  conduct  its  respective
businesses as described in the SEC  Documents;  the Company has not received any
notice of, or has  knowledge of, any  infringement  of or conflict with asserted
rights of the  Company by others with  respect to any  patents,  patent  rights,
inventions,  trade secrets,  know-how,  trademarks,  service marks, trade names,
logos,  or copyrights  described or referred to in the SEC Documents as owned by
or used by it;  and the  Company  has not  received  any  notice  of,  or has no
knowledge of, any infringement  of, or conflict with,  asserted rights of others
with respect to any patents, patent rights, inventions, trade secrets, know-how,
trademarks,  service  marks,  trade names,  logos,  or  copyrights  described or
referred  to in  the  SEC  Documents  as  owned  by  or  used  by  it or  which,
individually  or in the  aggregate,  in the  event of an  unfavorable  decision,
ruling or  finding,  would  have a  material  adverse  effect  on the  business,
prospects, financial condition or results of operations of the Company.

         (n) The Company has been advised  concerning the Investment Company Act
of  1940,  as  amended  (the  "INVESTMENT  COMPANY  ACT"),  and  the  rules  and
regulations  thereunder,  and has in the  past  conducted,  and  intends  in the
future,  to conduct its affairs in such a manner as to ensure that it is not and
will  not  become  an  "investment  company"  or a  company  "controlled"  by an
"investment  company" within the meaning of the Investment  Company Act and such
rules and regulations.

         (o) (i) The Company has not,  and no person or entity  acting on behalf
or at the request of the Company has, at any time during the last five years (i)
made any unlawful  contribution to any candidate for foreign office or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental  officer or official,  or other person charged
with similar  public or  quasi-public  duties,  other than payments  required or
permitted by the laws of the United States or any other applicable jurisdiction.

                  (ii)  Neither  any  Seller,  nor  any  officer,   director  or
affiliate of the Company,  has been, within the five years ending on the Closing
Date,  a party to any  bankruptcy  petition  against  such person or against any
business of which such person was affiliated; convicted in a criminal proceeding
or subject to a pending criminal  proceeding  (excluding  traffic violations and
other  minor  offenses);   subject  to  any  order,   judgment  or  decree,  not
subsequently  reversed,   suspended  or  vacated,  of  any  court  of  competent
jurisdiction,  permanently  or  temporarily  enjoining,  barring,  suspending or
otherwise  limiting  their  involvement  in any type of business,  securities or
banking  activities;  or found by a court of competent  jurisdiction  in a civil
action, by the SEC or the Commodity Futures Trading  Commission to have violated
a federal or state  securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
<PAGE>

         (p) The Company has not, and no person  acting on behalf  thereof,  has
taken or will take,  directly or  indirectly,  any action  designed  to, or that
might  reasonably be expected to cause or result in,  stabilization in violation
of law, or manipulation, of the price of the Common Stock to facilitate the sale
or resale of the Shares.

         (q)  Except as set forth in the SEC  Documents,  (i) the  Company is in
compliance  in all  material  respects  with all  rules,  laws  and  regulations
relating to the use,  treatment,  storage and disposal of toxic  substances  and
protection  of  health  or  the  environment  ("ENVIRONMENTAL  LAWS")  that  are
applicable  to its business,  (ii) the Company has not received  notice from any
governmental  authority or third party of an asserted claim under  Environmental
Laws, which claim is required to be disclosed in the SEC Documents, (iii) to the
best knowledge of the Company,  the Company is not likely to be required to make
future material capital  expenditures to comply with  Environmental Laws (iv) no
property which is owned,  leased or occupied by the Company has been  designated
as a Superfund site pursuant to the Comprehensive  Response,  Compensation,  and
Liability  Act of 1980, as amended (42 U.S.C.  ss. 9601, ET SEQ.),  or otherwise
designated as a contaminated  site under  applicable state or local law, and (v)
the  Company  is not in  violation  of any  federal  or state law or  regulation
relating to occupational safety or health.

         (r) There are no outstanding  loans,  advances  (except normal advances
for business  expenses in the ordinary  course of  business)  or  guarantees  of
indebtedness  by the Company  to, or for the  benefit  of, any of the  officers,
directors,  or  director-nominees  of the  Company or any of the  members of the
families of any of them, except as disclosed in the SEC Documents.

         (s) The Company has not incurred any liability, direct or indirect, for
finders' or similar  fees on behalf of or payable by the Company or  SheerVision
in connection with the Transaction Agreements or any other transaction involving
the Company and SheerVision.

         (t) No  stockholder  of the Company has any right to request or require
the Company to register the sale of any shares owned by such  stockholder  under
the Securities Act on any registration statement.

         (u) Neither  Company,  nor, to the best knowledge of any Seller nor the
Company,  any director,  officer,  agent,  employee,  or other person associated
with, or acting on behalf of, the Company, has, directly or indirectly: used any
corporate  funds for  unlawful  contributions,  gifts,  entertainment,  or other
unlawful expenses relating to political  activity;  made any unlawful payment to
foreign or domestic government  officials or employees or to foreign or domestic
political  parties or campaigns from corporate funds;  violated any provision of
the  Foreign  Corrupt  Practices  Act of 1977,  as  amended;  or made any bribe,
rebate,  payoff,  influence payment,  kickback,  or other unlawful payment.  The
Company's  internal  accounting  controls and procedures are sufficient to cause
the Company to comply in all respects with the Foreign Corrupt  Practices Act of
1977, as amended.


         (v) The Company is in  compliance  with,  and is not in  violation  of,
applicable  federal,  state,  local or foreign  statutes,  laws and  regulations
(including without  limitation,  any applicable  building,  zoning or other law,
ordinance  or  regulation)  affecting  its  properties  or the  operation of its
business,  including,  without  limitation,  Sarbanes-Oxley  Act of 2002 and the
rules and

<PAGE>

regulations  promulgated  pursuant  thereto or  thereunder.  The  Company is not
subject  to any  order,  decree,  judgment  or  other  sanction  of  any  court,
administrative agency or other tribunal.

         (w) (i) The Shares are owned of record and  beneficially  solely by the
Sellers  free  and  clear  of any  security  interest,  pledge,  mortgage,  lien
(including,   without   limitation,   environmental  and  tax  liens),   charge,
encumbrance, adverse claim, preferential arrangement or restriction of any kind,
including,  without  limitation,  any restriction on the use,  voting,  transfer
(except as otherwise  provided  herein),  receipt of income or other exercise of
any  attributes  of  ownership.  The  Shares  are not  subject  to any  options,
warrants,  convertible securities or other rights,  agreements,  arrangements or
commitments of any character relating to interests therein.  There are no voting
trusts,  member  agreements,  proxies,  or other agreements or understandings in
effect with  respect to the voting or transfer of any of the Shares.  Other than
the  Shares,  the Sellers own  beneficially  or of record,  no shares of capital
stock or other  securities  of the Company,  and do not own  beneficially  or of
record, any securities exercisable for, or convertible into or exchangeable for,
securities  of the Company,  other than an aggregate of 14,330  shares of Common
Stock held by the Sellers in a  custodial  capacity  and one or more  individual
retirement accounts.

                  (ii) The  Sellers  acquired  the  Shares  from the  Company in
private  transactions  not involving a public offering and, on the dates of such
acquisitions,  the Sellers paid the full purchase price therefor. The Shares are
"RESTRICTED SECURITIES" as defined in Rule 144(a) under the Securities Act.

                  (iii)  Neither any Seller nor any  affiliate  thereof knows of
any material adverse information regarding the current or prospective operations
of the Company which has not been publicly disclosed.

         (x)   Neither   the   transactions   contemplated   hereby,   nor   the
Reorganization, shall be subject to Section 203 of the DGCL.

         SECTION 3.02 REPRESENTATIONS AND WARRANTIES OF SHEERVISION. SheerVision
hereby represents and warrants to, and agrees with, each Seller:

                  (a)  SheerVision  has all  requisite  power and  authority  to
execute,  deliver,  and perform this  Agreement.  All necessary  proceedings  of
SheerVision  have been duly taken to  authorize  the  execution,  delivery,  and
performance of this Agreement thereby.  This Agreement has been duly authorized,
executed,  and  delivered by  SheerVision,  constitutes  the legal,  valid,  and
binding  obligation of  SheerVision,  and is  enforceable  as to  SheerVision in
accordance with its terms.  Except as otherwise set forth in this Agreement,  no
consent,  authorization,  approval, order, license, certificate, or permit of or
from,  or  declaration  or filing with,  any  federal,  state,  local,  or other
governmental authority or any court or other tribunal is required by SheerVision
for the  execution,  delivery,  or performance  of this  Agreement  thereby.  No
consent, approval,  authorization or order of, or qualification with, any court,
government  or  governmental  agency  or  body,  domestic  or  foreign,   having
jurisdiction  over  SheerVision or over its  respective  properties or assets is
required for the execution and delivery of this  Agreement and the  consummation
by SheerVision of the transactions  herein  contemplated,  except such as may be
required under the Securities Act or under state or other securities or blue sky
laws, all of which  requirements have

<PAGE>

been, or in accordance therewith will be, satisfied in all material respects. No
consent of any party to any material  contract,  agreement,  instrument,  lease,
license,  arrangement,  or understanding to which  SheerVision is a party, or to
which its or any of its  businesses,  properties,  or  assets  are  subject,  is
required for the execution,  delivery, or performance of this Agreement; and the
execution,  delivery, and performance of this Agreement will not violate, result
in a breach of,  conflict  with, or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or call a default under,
entitle  any party to  receive  rights  or  privileges  that such  party was not
entitled to receive  immediately  before this Agreement was executed  under,  or
create any  obligation  on the part of  SheerVision  to which it was not subject
immediately  before this  Agreement  was  executed  under,  any term of any such
material  contract,  agreement,  instrument,  lease,  license,  arrangement,  or
understanding,  or  violate  or result in a breach of any term of the  operating
agreement of the Company or (if the  provisions of this Agreement are satisfied)
violate,  result in a breach of, or  conflict  with any law,  rule,  regulation,
order,  judgment,  decree,  injunction,  or writ  of any  court,  government  or
governmental  agency or body,  domestic or  foreign,  having  jurisdiction  over
SheerVision or over its properties or assets.

         (b)  SheerVision is an "accredited  investor" as defined in Rule 501 of
Regulation D under the Securities  Act.  SheerVision is acquiring the Shares for
its own account (and not for the account of others) for  investment and not with
a view to the distribution or resale thereof in violation of the Securities Act.
SheerVision understands that it may not sell or otherwise Dispose Of such Shares
in  the  absence  of  either  an  effective  registration  statement  under  the
Securities  Act  or  an  exemption  from  the  registration  provisions  of  the
Securities  Act.  SheerVision  acknowledges  being  informed  that the shares of
Common  Stock  acquired  thereby  shall be  unregistered,  shall be  "RESTRICTED
SECURITIES" as defined in Rule 144(a) under the Securities Act, and must be held
indefinitely  unless (i) they are  subsequently  registered under the Securities
Act, or (ii) an  exemption  from such  registration  is  available.  SheerVision
further  acknowledges  that the Company does not have an obligation to currently
register such securities for the account of SheerVision.

         (c) By virtue of SheerVision's position, it has access to the same kind
  of  information  which would be available in a  registration  statement  filed
  under the Securities Act.  SheerVision  acknowledges that it has been afforded
  access to all  material  information  which it has  requested  relevant to its
  decision to acquire the Shares to acquired thereby and to ask questions of the
  Company's  management and that, except as set forth herein,  neither Seller or
  the Company nor anyone acting on behalf of the Seller or the Company, has made
  any   representations   or  warranties  to  SheerVision  which  have  induced,
  persuaded, or stimulated SheerVision to acquire such Shares.

         (d)  Either  alone,  or  together  with  their  investment  advisor(s),
  SheerVision has the knowledge and experience in financial and business matters
  to be capable of evaluating the merits and risks of the prospective investment
  in the Shares to be acquired  thereby,  and SheerVision is and will be able to
  bear the economic risk of the investment in such Shares.

<PAGE>

                                   ARTICLE IV

                              ADDITIONAL COVENANTS


                  SECTION 4.01  INDEMNITY.  The Sellers,  jointly and severally,
agree to indemnify and hold harmless  SheerVision  and its officers,  directors,
employees,  counsel, agents, and stockholders, in each case past, present, or as
they may exist at any time after the date of this Agreement, and each person, if
any, who controls, controlled, or will control any of them within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act
of 1934,  as  amended,  against any and all losses,  liabilities,  damages,  and
expenses  whatsoever (which shall include,  for all purposes of this Article IV,
but not be limited to, counsel fees and any and all expenses whatsoever incurred
in investigating,  preparing, or defending against any litigation,  commenced or
threatened, or any claim whatsoever,  and any and all amounts paid in settlement
of any claim or litigation) as and when incurred  arising out of, based upon, or
in connection with (a) any breach of any representation,  warranty, covenant, or
agreement of any Seller or the Company  contained in this  Agreement and (b), if
the Closing takes place,  any act,  alleged act,  omission,  or alleged omission
occurring at or prior to the Closing  (including  without  limitation  any which
arise out of, are based upon, or are in connection with any of the  transactions
contemplated  hereby). The foregoing agreement to indemnify shall be in addition
to any  liability  any  Seller or the  Company  may  otherwise  have,  including
liabilities arising under this Agreement.


         SECTION 4.02 STOCKHOLDERS;  OTHER SECURITIES.  The Sellers hereby agree
that  immediately  prior to the  Closing,  the  Company  will  have at least 500
stockholders.  Prior  to the  date  of  this  Agreement,  all  of the  Company's
outstanding  convertible debt,  options,  warrants and all other indebtedness of
the Company have been converted to shares of Common Stock.

         SECTION 4.03  ASSETS AND LIABILITIES. At the Closing, the Company shall
have no material assets and no liabilities.

         SECTION 4.04  CORPORATE  GOVERNANCE.  At the Closing,  (a) the Board of
Directors of the Company shall consist of two current  directors  (the "EXISTING
DIRECTORS") and two directors  appointed by SheerVision  (the "NEW  DIRECTORS"),
and (b) all  officers of the  Company  shall  resign and the Board of  Directors
shall appoint the designees of SheerVision and the sole officers thereof.



                                    ARTICLE V

                                  MISCELLANEOUS

         SECTION 5.01 EXPENSES.  Whether or not the transactions contemplated in
this Agreement are  consummated,  all costs and expenses  incurred in connection
with this Agreement and the transactions  contemplated  hereby,  will be paid by
the party incurring such expense or as otherwise agreed to herein.

<PAGE>

         SECTION 5.02  NECESSARY  ACTIONS.  Subject to the terms and  conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take,  or cause to be taken,  all action and to do, or cause to be done,  all
things  necessary,  proper or advisable under applicable laws and regulations to
consummate and make effective the  transactions  contemplated by this Agreement.
In the event at any time after the Closing,  any further  action is necessary or
desirable to carry out the purposes of this  Agreement,  the Seller,  the proper
executive officers and/or directors of the Company, or SheerVision,  as the case
may be, will take all such necessary action.

         SECTION 5.03  NOTICES.  Any notice or other  communication  required or
permitted  to be given  hereunder  shall be in  writing  and  shall be mailed by
certified mail, return receipt requested or by the most nearly comparable method
if mailed  from or to a  location  outside  of the  United  States or by Federal
Express,  Express  Mail,  or similar  overnight  delivery or courier  service or
delivered  (in  person or by  telecopy,  telex,  or  similar  telecommunications
equipment)  against  receipt  to the  party  to  which  it is to be given at the
address of such party set forth in the introductory  paragraph to this Agreement
(or to such  other  address  as the party  shall  have  furnished  in writing in
accordance  with the  provisions  of this  Section  5.03.) Any  notice  shall be
addressed to the  attention of the  Corporate  Secretary.  A copy of any and all
notices to  SheerVision  shall be delivered in  accordance  with this section to
Reitler Brown & Rosenblatt  LLC, 800 Third Avenue,  21st Floor,  New York 10022,
Attention: Robert Steven Brown, Esq. A copy of any and all notices to any Seller
shall be delivered in accordance with this section to Edwin B. Kagan, P.A., 2709
Rocky  Point  Drive,  Suite  102,  Tampa,  Florida  33607.  Any  notice or other
communication  given by certified mail (or by such  comparable  method) shall be
deemed given at the time of certification  thereof (or comparable  act),  except
for a notice  changing a party's  address which will be deemed given at the time
of receipt  thereof.  Any notice given by other means  permitted by this Section
5.03 shall be deemed given at the time of receipt thereof.

         SECTION  5.03  PARTIES IN  INTEREST.  Except as  expressly  provided in
Section 4.01 hereof,  this Agreement will inure to the benefit of and be binding
upon the parties  hereto and the respective  successors and assigns.  Nothing in
this  Agreement  is intended to confer,  expressly or by  implication,  upon any
other person any rights or remedies under or by reason of this Agreement.

         SECTION 5.04 ENTIRE AGREEMENT;  MODIFICATION. This Agreement sets forth
the entire  understanding  of the parties  with  respect to the  subject  matter
hereof (except as provided in Section 5.04),  supersedes all existing agreements
among them concerning such subject matter, and may be modified only by a written
instrument duly executed by each party hereto.

         SECTION 5.05 AVAILABILITY OF EQUITABLE REMEDIES.  Since a breach of the
provisions  of this  Agreement  could not  adequately  be  compensated  by money
damages,  any party shall be entitled,  in addition to any other right or remedy
available to it, to an injunction  restraining such breach or threatened  breach
and to specific performance of any such provision of this Agreement, and no bond
or other  security  shall be required in connection  therewith,  and the


<PAGE>

parties hereby consent to the issuance of such an injunction and to the ordering
of specific performance.

         SECTION   5.06   SURVIVAL.   Each   of   the   covenants,   agreements,
representations,  and warranties  contained in this Agreement  shall survive the
Closing Date until the date 18 months  thereafter.  The statements  contained in
any  document  executed by either the Seller or the Company  relating  hereto or
delivered to SheerVision in connection with the transactions contemplated hereby
or thereby, or in any statement,  certificate, or other instrument delivered by,
or on behalf of, either the Seller or the Company  pursuant hereto or thereto or
delivered to SheerVision in connection with the transactions contemplated hereby
or  thereby  shall be  deemed  representations  and  warranties,  covenants  and
agreements,  or  conditions,  as the case may be, of the Seller or the  Company,
respectively,  hereunder  for all  purposes  of this  Agreement  (including  all
statements,  certificates,  or other  instruments  delivered  pursuant hereto or
thereto or  delivered in  connection  with this  Agreement,  or any of the other
transactions  contemplated  hereby).  The  statements  contained in any document
executed by SheerVision relating hereto or delivered to either the Seller or the
Company in connection with the transactions  contemplated  hereby or thereby, or
in any statement,  certificate,  or other instrument  delivered by, or on behalf
of, SheerVision  pursuant hereto or thereto or delivered to either the Seller or
the Company in connection with the transactions  contemplated  hereby or thereby
shall be deemed  representations  and warranties,  covenants and agreements,  or
conditions,  as the case may be, of  SheerVision  hereunder  for all purposes of
this Agreement  (including all statements,  certificates,  or other  instruments
delivered  pursuant  hereto or  thereto or  delivered  in  connection  with this
Agreement, or any of the other transactions contemplated hereby).

         SECTION 5.07 BINDING EFFECT.  The provisions of this Agreement shall be
binding  upon  and  inure  to  the  benefit  of the  Seller,  the  Company,  and
SheerVision,  and their respective  successors and assigns;  provided,  however,
that no party hereto  shall have the right to assign its rights and  obligations
hereunder without the prior written consent of the other parties hereto.

         SECTION 5.08 COUNTERPART. This Agreement may be executed in one or more
counterparts,  each of which will be deemed an original  and all  together  will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.

         SECTION 5.09  SEVERABILITY.  The  provisions of this  Agreement will be
deemed severable and the invalidity or  unenforceability of any provision hereof
will not affect the validity or  enforceability  of any of the other  provisions
hereof. If any provisions of this Agreement,  or the application  thereof to any
person or any circumstance, is illegal, invalid or unenforceable, (a) a suitable
and equitable  provision will be substituted  therefor in order to carry out, so
far as may be valid and  enforceable,  the intent and purpose of such invalid or
unenforceable  provision,  and  (b) the  remainder  of  this  Agreement  and the
application  of such  provision to other  persons or  circumstances  will not be
affected by such  invalidity or  unenforceability,  nor will such  invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.


<PAGE>

         SECTION 5.10  HEADINGS.  The Article and Section  headings are provided
herein for  convenience  of reference  only and do not constitute a part of this
Agreement  and  will not be  deemed  to limit  or  otherwise  affect  any of the
provisions hereof.

         SECTION 5.11 GOVERNING LAW. This Agreement will be deemed to be made in
and in all  respects  will be  interpreted,  construed  and  governed  by and in
accordance with the law of the State of New York, without regard to the conflict
of law principles thereof.




                     [REMAINDER OF PAGE INTENTIONALLY BLANK]


<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement  in a manner  legally  binding  upon them as of the date  first  above
written.

                                           SHEERVISION, INC.



                                           BY  /S/ SUZANNE LEWSADDER
                                               ---------------------------------
                                               NAME:  SUZANNE LEWSADDER
                                               TITLE:    CHIEF EXECUTIVE OFFICER


                                           /S/ LAURIE C. SCALA
                                           -------------------------------------
                                           LAURIE C. SCALA


                                           /S/ HOWARD A. SCALA
                                           -------------------------------------
                                           HOWARD A. SCALA

                                           CLEAN WATER TECHNOLOGIES, INC.



                                           BY /S/ LAURIE C. SCALA
                                              ----------------------------------
                                              NAME:  LAURIE C. SCALA
                                              TITLE:    PRESIDENT