WITNESETH:

EX-1.0 2 vetcoagmt.htm
AGREEMENT AND PLAN OF MERGER

BY AND AMONG

VETCO HOSPITALS, INC.

AND

SKYLYNX COMMUNICATIONS, INC.

AND

SKYLYNX ACQUISITION CORP.

DATED AS OF November 29, 2005

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered into this 29th day of November 2005, by and among VETCO HOSPITALS, INC., a California corporation ("VETCO"); SKYLYNX COMMUNICATIONS, INC., a Delaware corporation ("SkyLynx"); and SKYLYNX ACQUISITION CORP., a Colorado Subsidiary of SKYLYNX ("SAC"). VETCO, SKYLYNX and SAC are hereinafter sometimes individually referred to as a "party" and collectively as the "parties".

WITNESETH:

WHEREAS, VETCO is engaged in the veterinary pet health care business; and

WHEREAS, SKYLYNX is the owner in the aggregate of ten (10) shares (the "Shares") of the issued and outstanding Common Stock of SAC, $.001 par value per share, representing all the issued and outstanding shares of the capital stock of SAC;

WHEREAS, for federal income tax purposes, the merger of SAC and VETCO is intended to qualify as a tax-free reorganization pursuant to Section 368 of the Internal Revenue Code of 1986,a as amended (the "Code"); and

WHEREAS, the parties hereto desire to set forth certain representations, warranties and covenants under which a merger of SAC and VETCO will occur.

NOW, THEREFORE, for and in consideration of the premises, the mutual representations, warranties and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:

SECTION 1: GENERAL DEFINITIONS

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

1.1 Affiliate. "Affiliate" of any Person shall mean any Person Controlling, Controlled by or under common Control with such Person.

1.2 Agreement. "Agreement" shall include this Agreement and any and all documents and instruments executed in connection with the Merger (as hereinafter defined).

1.3 Best Knowledge. "Best Knowledge" shall mean both what a Person knew as well as what the Person should have known had the Person exercised reasonable diligence. When used with respect to a Person other than a natural person, the term "Best Knowledge" shall include matters that are known to the directors and officers of the Person.

1.4 Control. "Control" and all derivations thereof shall mean the ability to either (i) vote (or direct the vote of) 50% or more of the voting interests in any Person or (ii) direct the affairs of another, whether through voting power, contract or otherwise.

1.5 Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

1.6 RESERVED

1.7 Governmental Authority. "Governmental Authority "shall mean any and all applicable foreign, federal, state or local governments, governmental institutions, public authorities and governmental entities of any nature whatsoever, and any subdivisions or instrumentalities thereof, including, but not limited to, departments, boards, bureaus, commissions, agencies, courts, administrations and panels, and any division or instrumentalities thereof, whether permanent or ad hoc and whether now or hereafter constituted or existing.

1.8 Governmental Requirement. "Governmental Requirement" shall mean any and all applicable laws (including, but not limited to, applicable common law principles), statutes, ordinances, codes, rules regulations, interpretations, guidelines, directions, orders, judgments, writs, injunctions, decrees, decisions or similar items or pronouncements, promulgated, issued, passed or set forth by any Governmental Authority.

1.9 Legal Requirements. "Legal Requirements" means applicable common law and any applicable statute, ordinance, code or other laws, rule, regulation, order, technical or other standard, requirement, judgment, or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority, including, without limitation, any order, decree, award, verdict, findings of fact, conclusions of law, decision or judgment, whether or not final or appealable, of any court, arbitrator, arbitration board or administrative agency.

1.10 Net Worth. "Net Worth" shall mean the assets of a Person minus the liabilities of the Person, as of a given date as determined in accordance with generally accepted accounting principles consistently applied with prior periods.

1.11 Person. "Person" shall mean any natural person, any Governmental Authority and any entity the separate existence of which is recognized by any Governmental Authority or Governmental Requirement, including, but not limited to, corporations, partnerships, joint ventures, joint stock companies, trusts, estates, companies and associations, whether organized for profit or otherwise.

1.12 Exhibit. Unless otherwise stated herein, the term "Exhibit" when used in this Agreement shall refer to the Exhibits to this Agreement. The Exhibits to this Agreement may be attached to this Agreement or may be set forth in a separate document denoted as the Exhibits to this Agreement, or both, and such Exhibits are incorporated herein by reference for all purposes.

1.13 Section. Unless otherwise stated herein, the term "Section" when used in this Agreement shall refer to the Sections of this Agreement.

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

1.15 Taxes. "Tax" and "Taxes" shall mean any and all income, excise, franchise or other taxes and all other charges or fees imposed or collected by any Governmental Authority or pursuant to any Governmental Requirement, and shall also include any and all penalties, interest, deficiencies, assessments and other charges with respect thereto.

SECTION 2: THE MERGER

2.1 The Merger. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 2.3 herein). SAC shall be merged (the "Merger") with and into VETCO upon the terms and conditions set forth herein as permitted by and in accordance with the Colorado Business Corporation Act (the "CBCA") and the California Corporation Code ("CCC"). Thereupon, the separate existence of SAC shall cease, and VETCO, as the surviving corporation in the Merger (the "Surviving Corporation"), shall continue to exist under and be governed by the CCC, with all its purposes, objects, rights, privileges, immunities, powers and franchises continuing unaffected and unimpaired by the Merger. The name of the Surviving Corporation shall be "VETCO Hospitals, Inc."

2.2 Filing. As soon as practicable following fulfillment or waiver of the conditions specified in Sections 8.2 and 8.3 hereof, and provided that this Agreement has not been terminated pursuant to Section 13 hereof, SAC and VETCO will cause a Statement of Merger and Certificate of Merger, in the forms attached hereto as Exhibit 2.2, to be executed, acknowledged and filed with the Secretaries of State of each of Colorado and California as provided in applicable provisions of the CBCA and CCC and obtain a copy of the Statement and Certificate of Merger, certified by the Secretaries of State of the States of Colorado and California.

2.3 Effective Time of the Merger. The Merger shall become effective immediately upon the filing of the Statement of Merger and Articles of Merger with the Secretaries of State of the States of Colorado and California in accordance with the CBCA and CCC. The date and time of the completion of such filings is herein sometimes referred to as the "Effective Time".

2.4 Closing: Closing Date. Subject to the terms and conditions set forth in the Agreement, the consummation of the transactions referenced above shall take place (the "Closing") on or before December 30, 2005, at 10:00 a.m. Eastern Time at the offices of SKYLYNX, 500 John Ringling Boulevard, Sarasota, Florida 34242, or at such other time, date and place as VETCO and SAC shall designate (the "Closing Date").

SECTION 3: APPROVALS AND REGULATORY MATTERS

3.1 SKYLYNX Approvals. Subject to the provisions hereof, the Board of Directors of SKYLYNX shall approve the Merger and the transactions provided for or contemplated by this Agreement; provided, however, that such approvals shall be subject to their satisfaction that the consummation of the Merger shall be and is exempt from the registration requirements of the Securities Act, is undertaken without violation of the anti-fraud provisions of the Securities Act and has been consummated in conformity with all other applicable Legal Requirements.

3.2 VETCO Board of Directors Approval. Subject to the provisions hereof, the Board of Directors of VETCO shall approve the Merger and the transactions provided for or contemplated by this Agreement; provided, however, that such approvals shall be subject to their satisfaction that the consummation of the Merger shall be and is exempt from the registration requirements of the Securities Act, is undertaken without violation of the anti-fraud provisions of the Securities Act and has been consummated in conformity with all other applicable Legal Requirements.

3.3 VETCO Shareholder Approval. As promptly as practicable after the date hereof, VETCO shall exercise reasonable efforts to take all action necessary or appropriate to prepare any and all documents necessary to solicit and obtain the approval of the Merger and the other transactions provided for or contemplated by this Agreement of all VETCO shareholders (the "VETCO Shareholders").

3.4 Income Tax Considerations. It is the intention of the parties hereto that the Merger provided for in this Agreement will qualify for treatment as a tax-free reorganization under Section 368(a)(2)(E) of the Code and the parties will agree to undertake all appropriate actions necessary both before and after the Effective Date of the Merger to effect such treatment. Notwithstanding the foregoing, neither SKYLYNX nor any of its affiliates shall have any liability whatsoever to VETCO or the VETCO shareholders for the treatment ultimately accorded the Merger by federal or state taxing and regulatory authorities; and VETCO shall bear all responsibility for any tax or other assessment levied, imposed or assessed by any regulatory or governmental authority on VETCO by virtue of the consummation of the Merger and the other transactions provided f or in this Agreement. The VETCO shareholders shall bear all responsibility for any tax or other assessment levied, imposed or assessed by any regulatory or governmental authority on the VETCO shareholders by virtue of the consummation of the Merger or other transactions provided for in this Agreement.

3.5 Compliance with Securities Laws. The Merger provided for in this Agreement shall be undertaken in reliance upon an exemption from the registration requirements contained in Section 5 of the Securities Act and set forth in Section 4(2) of the Securities Act and Regulation D thereunder. All shares issued to the VETCO shareholders in connection with the Merger shall be "restricted securities" within the meaning of Rule 144 under the Securities Act.

3.6 Restrictive Legend. Certificates representing the shares of SKYLYNX preferred stock issued in connection with the Merger shall be "restricted securities" under the Securities Act and shall bear the following restrictive legend:

The shares represented by this certificate have not been registered under the Securities Act of 1933 ("the Act") and are "restricted securities" as that term is defined in Rule 144 under the Act. The shares may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act, the availability of which is to be established to the satisfaction of the Company.

3.7 Dissenter Rights. At all times, and as applicable, SKYLYNX and VETCO shall comply with applicable Legal Requirements including, without limitation, the payment of cash for dissenting shares related to the Merger. In the event that there are VETCO dissenting shares, related to the Merger, SKYLYNX shall make the cash payment contemplated hereby and deduct the amount of such payment from the SKYLYNX Common Stock held pursuant to the Closing Escrow Agreement (as hereinafter defined) as set forth in Section 5.4 hereof.

SECTION 4. ADDITIONAL AGREEMENTS
4.1. VETCO Financial Statements. Not later than 75 days following the Closing Date, VETCO shall use best efforts to cause to be prepared and delivered to SkyLynx together with its legal counsel, audited balance sheets, income statements, statements of cash flows and stockholders' equity as of and for the two year period ended June 30, 2005 and unaudited balance sheets, income statements and statements of cash flows as of and for the interim period ended September 30, 2005 accompanied by a report of its independent certified public accountants (the "VETCO Financial Statements"). The VETCO Financial Statements (including any related schedules and/or notes), will show all liabilities, direct or contingent, required at the time of preparation to be shown in accordance with U.S. generally accepted accounting principles ("GAAP") and fairly present the financial position and results of operations of VETCO as of the date thereof and fo r the periods indicated in accordance with GAAP, consistently applied with all prior periods. Except as otherwise disclosed in the Agreement, including, without limitation, Exhibit 4.1 hereof, VETCO will have no material liability or obligation of any nature (whether liquidated, unliquidated, accrued, absolute, contingent or otherwise, whether due or to become due) except those set forth on the VETCO Financial Statements and except liabilities incurred and current liabilities (determined in accordance with GAAP) incurred since the date of the VETCO Financial Statements in the ordinary course of business consistent with past practice ("VETCO undisclosed liability"). The VETCO Financial Statements shall conform in all respects to the requirements of Regulation SB, Item 310 under the Securities Act. The Financial Statements to be prepared following the Closing shall also include pro forma financial information ("Pro Forma Financial Information") in accordance with the requirements of Regulation SB, Item 310. VETCO agrees to indemnify, defend and hold harmless SKYLYNX and its respective past and present officers and directors from any debt, damage, liability or obligation whatsoever arising from any failure on the part of VETCO to prepare the VETCO Financial Statements and Pro Forma Financial Information in accordance with this Section 4.1. SKYLYNX will cooperate with VETCO to prepare the Pro Forma Financial Information. SKYLYNX will indemnify, defend and hold harmless VETCO and its past and present officers and directors from any debt, damage, liability or obligation arising from financial information related to SKYLYNX that is incorporated in the Pro Forma Financial Information. All costs and expenses incurred in connection with the preparation of the VETCO Financial Statements and the Pro Forma Financial Information, including fees and disbursements of the Auditor, shall be borne exclusively by SkyLynx.

4.2 &nbs p; INTENTIONALLY OMITTED

4.3 Notification of Certain Matters. VETCO shall give prompt notice to SKYLYNX and SKYLYNX shall give prompt notice to VETCO of (i) the occurrence or non-occurrence of any event which would cause any representation or warranty made by the respective parties in this Agreement to be materially untrue or inaccurate when made and (ii) any failure of SKYLYNX or VETCO, as the case may be, to materially comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this section shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice and, provided further, that the failure to give such notice shall not be treated as a breach of covenant for the purposes of this Agreem ent unless the failure to give such notice results in material prejudice to the other party.

4.4 Further Action. Upon the terms and subject to the conditions hereof, each of the parties hereto shall use all commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement, to obtain in a timely manner all necessary waivers, consents and approvals and to effect all necessary registrations and filings, and to otherwise satisfy or cause to be satisfied all conditions precedent to its obligations under this Agreement.

4.5 Public Announcements. VETCO and SKYLYNX shall consult with each other before issuing any press release or other public statement with respect to the Merger or this Agreement and shall not issue any such press release or make any such public statement without the prior consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that a party may, without the prior consent of the other party, issue such press release or make such public statement as may, upon the advice of counsel, be required by law if it has used reasonable efforts to first consult with the other party.

Neither party shall unilaterally contact the customers, creditors or shareholders of the other party without the prior written consent of the other party.

4.6 Cooperation in Securities Filings. VETCO shall provide such information regarding VETCO, its business, its officers, directors and affiliates, as is reasonably required by SKYLYNX for purposes of preparing any notices, reports and other filings with the SEC. Moreover, following the Closing, the current officers and directors of VETCO shall provide such information as the post-closing management of SKYLYNX shall reasonably request for the purpose of preparing any notices, reports and other filings by SKYLYNX with the SEC, including but not limited to, in connection with the preparation of any financial statements required to be filed under the Exchange Act or Securities Act by SKYLYNX.

4.7 Additional Documents. The parties shall deliver or cause to be delivered such documents or certificates as may be necessary, in the reasonable opinion of counsel for either of the parties, to effectuate the transactions provided for in this Agreement. If at any time the parties or any of their respective successors or assigns shall determine that any further conveyance, assignment or other document or any further action is necessary desirable to further effectuate the transactions set forth herein or contemplated hereby, the parties and their officers, directors and agents shall execute and deliver, or cause to be executed and delivered, all such documents as may be reasonably required to effectuate such transactions.

SECTION 5: CONVERSION OR CANCELLATION OF SHARES

5.1 Conversion or Cancellation of Shares. At the Effective Time, all the issued and outstanding shares of Common Stock of VETCO ("VETCO Common Stock") shall, by virtue of the Merger, be cancelled and converted into the right to receive shares of the capital stock of SKYLYNX, as follows:

(a) The shares of VETCO Common Stock issued and outstanding immediately prior to the Effective Time, excluding any such shares held in the treasury of VETCO, shall be converted automatically into an aggregate of 1,000,000 shares of SkyLynx Series A Convertible Preferred Stock having a Stated Value of $3.00 per share (the "Series A Preferred"). The number of shares of Series A Preferred to be issued to the VETCO shareholders shall be adjusted at the time of Closing such that the total number of shares of SkyLynx Common Stock issuable upon conversion of the Series A Preferred (the "Conversion Stock") shall represent, at closing, 55% of the total issued and outstanding shares of SkyLynx Common Stock, on the Closing Date, on a fully diluted basis, excluding shares of Common Stock i ssued or reserved for issuance pursuant to Securities Purchase Agreements and related instruments entered into by SkyLynx with NIR Group investors. Subject to the provisions of Section 5.4 below, such right may be exercised by the surrender of the certificates representing such shares of VETCO Common Stock in accordance with Section 5.2 hereof. The Series A Preferred Stock shall have the rights and preferences set forth below, which shall be incorporated into a Certificate of Designation in the form of Exhibit 5.1 (the "Certificate of Designation"):

Voting Rights: Each issued and outstanding share of Series A Preferred shall entitle a holder to vote on any and all matters presented to the shareholders of SkyLynx for approval, including the election of directors, based on the number of shares of Conversion Stock into which the Series A Preferred is then convertible. The Series A Preferred shall vote together with all other outstanding shares of voting securities, voting as a single class.

Dividend: None.

Redemption Right: None.

Conversion: Each share of Series A Preferred is convertible into the number of shares of Conversion Stock as set forth in the Certificate of Designation, at any time, at the option of the holder, subject to adjustment under certain circumstances. In addition, the shares of Series A Preferred to be issued hereunder will automatically convert into Conversion Stock upon there being made available for issuance a sufficient number of shares of SkyLynx Common Stock that are not reserved for issuance pursuant to the exercise of outstanding rights to acquire shares of SkyLynx Common Stock.

Liquidation Preference. $3.00 per share of Preferred Stock, senior to the rights of holders of Common Stock, subject to subordination of their interests if required by any new financing obtained by SkyLynx and approved by the board of directors.

(b) Each share of Series A Preferred, issued under paragraph (a) above shall be restricted securities pursuant to Rule 144 promulgated under the Securities Act.

(c) Each share of VETCO Common Stock, if any, held in VETCO's treasury immediately prior to the Effective Time shall be canceled and retired and no payment shall be made in respect thereof.

(d) At the Effective Time, all outstanding shares of SAC shall be converted into an aggregate of 100 shares of Common Stock of VETCO. Each share of SAC Common Stock, if any, held in SAC's treasury immediately prior to the Effective Time shall be canceled and retired and no payment shall be made in respect thereof.

(e) At the Effective Time, all issued and outstanding options, warrants and other rights to acquire shares of VETCO common stock, if any, shall be converted into identical rights with respect to SkyLynx Common Stock. No new options are to be granted prior to closing.

5.2 Surrender and Payment. Subject to the provisions of Section 5.4 below, after the Effective Time, each holder of a certificate representing an issued and outstanding share of VETCO Common Stock shall be entitled upon surrender of such certificate along with a fully executed Subscription Agreement in the form of Exhibit 5.3, to SKYLYNX, to receive the Series A Preferred as set forth in Section 5.1 above. Until so surrendered, each certificate which immediately prior to the Effective Time represented an issued and outstanding share of VETCO Common Stock shall, upon and after the Effective Time, be deemed for all purposes to represent and evidence only the right to receive Series A Preferred as set forth in Section 5.1. If any exchange for shares of VETCO Common Stock is to be made in a name other than that in which the certificate therefor surrendered for exchange is registered, it shall be a condition of such payment that the certificate so surrendered be properly endorsed or otherwise in proper form for transfer and that the person requesting such payment either pay to SKYLYNX any transfer or other similar taxes required by reason of the payment to a person other than the registered holder of the certificate surrendered or establish to the satisfaction of SKYLYNX that such tax has been paid or is not payable.

5.3 Subscription Agreements. Each of the VETCO Shareholders receiving Series A Preferred pursuant to the terms hereof shall have delivered a fully executed Subscription Agreement substantially in the form of Exhibit 5.3.

5.4 Closing Escrow. All shares of Series A Preferred to be issued in the merger (the "Merger Securities") shall be delivered to and deposited into escrow (the "Closing Escrow") with the SkyLynx acting corporate secretary, as escrow agent, pursuant to the terms of a Closing Escrow Agreement, substantially in the form of Exhibit 5.4, attached hereto (the "Closing Escrow Agreement"). Under the terms of the Closing Escrow Agreement, the Merger Securities shall be held in escrow until VETCO shall have delivered to SkyLynx the VETCO Financial Statements and Pro Forma Financial Information required pursuant to Section 4.1 hereof and Form 8-K under the Exchange Act, provided, however, that in the event that any VETCO Undisclosed Liability arises in connection with the VETCO Financial Statements, an amount of shares of Series A Preferred shall be he ld in the Closing Escrow contemplated hereby until such VETCO Undisclosed Liability is disposed to the satisfaction of the auditors who prepared the VETCO Financial Statements. If such VETCO Undisclosed Liability can not be satisfied within 75 days after delivery of the VETCO Financial Statements to SkyLynx, then the number of shares of Series A Preferred to be distributed to the VETCO Shareholders from the Closing Escrow shall be reduced by the value of the liability based upon a Series A Preferred value of $3.00 per share.

5.5 Assumption of VETCO Debt. VETCO currently has outstanding indebtednesses in the form of Convertible Debentures in the aggregate principal amount of $100,000 (the "VETCO Debt"). This VETCO Debt shall be converted into SkyLynx Series A Preferred Stock as part of the 1,000,000 shares to be delivered to VETCO hereunder. At Closing Date, VETCO shall have no liabilities other than liabilities incurred in the ordinary course of business, the VETCO Debt and those set forth in the VETCO Financial Statements and otherwise disclosed pursuant to Section 4.1. The Series A Preferred shall have the same rights and preferences as described in Section 5.1 hereinabove.

5.6 No Further Transfers. On and after the Effective Time, no transfer of the shares of VETCO Common Stock issued and outstanding immediately prior to the Effective Time shall be made on the stock transfer books of VETCO.

SECTION 6: CERTAIN EFFECTS OF MERGER

6.1 Effect of Merger. On and after the Effective Time, the separate existence of SAC shall cease and SAC shall be merged with and into VETCO, which as the Surviving Corporation (herein sometimes so called) shall, consistently with its Articles of Incorporation succeed to, and without other transfer, possess all the rights, privileges, immunities, powers and franchises of public as well as private nature, and be subject to all restrictions, disabilities and duties of SAC; and all rights, privileges, immunities, powers and franchises of SAC, and all property, real, personal and mixed, causes of action and every other asset of, and all debts due to SAC on whatever account as well as stock subscriptions and all other things in action or belonging to SAC shall vest in the Surviving Corporation; and all property, rights, privileges, immunities, pow ers and franchises, and all and every other interest shall be thereafter as effectually the property of the Surviving Corporation as they were of SAC, and the title to any real estate vested by deed or otherwise in SAC, and the title to any real estate vested by deed or otherwise in SAC shall not revert or be in any way impaired but all rights of creditors and all liens upon any property of SAC shall be preserved unimpaired, and all debts, liabilities and duties of SAC shall thenceforth attach to the Surviving Corporation, and may be enforced against it to the same extent as if such debts, liabilities and duties had been incurred or contracted by it. Any action or proceeding pending by or against SAC may be prosecuted to judgment, which shall bind the Surviving Corporation, or the Surviving Corporation may be proceeded against or substituted in its place.

6.2 Further Assurances. If at any time after the Effective Time the Surviving Corporation shall consider any further deeds, assignments or assurances in law or any other action necessary, desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation the title to any property or rights of SAC acquired or to be acquired by reason of, or as a result of, the Merger, or (b) otherwise to carry out the intents and purposes of this Agreement, SAC and SKYLYNX agree that it and its proper officers and directors shall and will execute and deliver, or cause to be executed and delivered, all such property, deeds, assignments and assurances in law and take all other action necessary, desirable or proper to vest, perfect or confirm title to such property or right in the Surviving Corporation and otherwise to carry out the purposes of this Agreement.

SECTION 7: POST-MERGER GOVERNANCE

7.1 Articles of Incorporation and Bylaws. At the Effective Time, the Articles of Incorporation and By-Laws of VETCO as in effect immediately prior to the Effective Time, shall be and continue to be the Articles of Incorporation and By-Laws of VETCO, as the Surviving Corporation, until duly amended in accordance with applicable law.

7.2 Directors, Officers and Employees.

(a) Directors of SKYLYNX. Concurrently with the Closing and for a period of two (2) years following Closing, the Board of Directors of SKYLYNX shall, in accordance with the Delaware General Corporation Law (the "DGCL") and the Articles of Incorporation and By-Laws of SKYLYNX consist of an odd number of directors. SkyLynx and Bryan Shobe, on behalf of the VETCO shareholders, shall each select five (5) directors, and those directors shall select the final, odd-number, director. The provisions of this Section 7.2 (a) shall be effectuated pursuant to a Voting Agreement in the form of Exhibit 7.2 (a). Upon satisfaction of the Witzer loan the board will be reduced to seven (7) members with SkyLynx and Shobe each selecting three (3) directors and those six (6) choosing a se venth member.

(b) Executive Officers of SKYLYNX. K. Bryan Shobe shall be elected to serve as an executive officer of SkyLynx in a capacity to be determined.

(c) Directors of VETCO. Concurrently with the Closing, the Board of Directors of VETCO shall, in accordance with the CCC and the Articles of Incorporation and by-laws of VETCO, shall consist of an odd number of directors, which shall include K. Bryan Shobe and John MacKinzie or another nominee selected by K. Bryan Shobe. SKYC shall select two (2) and these four (4) shall then select a fifth member.

(d) Executive Officers of VETCO. Following the Closing, K. Bryan Shobe shall be elected to serve as Chief Executive Officer of VETCO.

(e) Employment Agreements. At Closing, VETCO shall enter into employment agreements with K. Bryan Shobe, Gary Brown and Kenneth L. Marshall in substantially the form of Exhibit 7.2(e) hereto.

SECTION 8: COVENANTS AND CONDITIONS OF CLOSING

8.1 Covenants Regarding the Closing. The parties hereto hereby covenant and agree that they shall (i) use all commercially reasonable efforts to cause all of their respective representations and warranties set forth in this Agreement to be true on and as of the Closing Date, (ii) use all commercially reasonable efforts to cause all of their respective obligations that are to be fulfilled on or prior to the Closing Date to be so fulfilled, (iii) use all commercially reasonable efforts to cause all conditions to the Closing set forth in this Agreement to be satisfied on or prior to the Closing Date, and (iv) deliver to each other at the Closing the certificates, updated lists, opinion of counsel, notices, consents, authorizations, approvals, agreements, transfer documents, receipts and amendments contemplated by Sections 8, 9 and 11 (with such additions or exceptions to such items as are necessary to make the statements set forth in such items accurate, provided that if any such additions or exceptions cause any of the conditions to the parties' obligations hereunder as set forth in Sections 8, 9 and 11 below not to be fulfilled, such additions and exceptions shall in no way limit the rights of the parties to terminate this Agreement or refuse to consummate the transactions contemplated hereby.) All indemnifications, guarantees, covenants, agreements, representations and warranties made by the parties hereunder or pursuant hereto or in connection with the transactions contemplated hereby shall survive the Closing regardless of any investigation at any time made by or on behalf of the parties.

8.2 Conditions to Obligation of SKYLYNX and SAC. The obligation of SKYLYNX and SAC to complete the Merger on the Closing date on the terms set forth in this Agreement is, at the option of SKYLYNX and SAC, subject to the satisfaction or waiver by SKYLYNX and SAC of each of the following conditions:

(a) Accuracy of Representations and Warranties. The representations and warranties made by VETCO in this Agreement shall be correct in all material respects on and as of the Closing Date with the same force and effect as though such representations and warranties had been made on the Closing Date.

(b) Compliance with Covenants. All covenants which VETCO is required to perform or comply with on or before the Closing date shall have been fully complied with or performed in all material respects.

(c) Corporate Approvals. The Board of Directors and shareholders of VETCO shall have approved and ratified this Agreement and shall have authorized the appropriate officers of VETCO to execute the same and fully perform its terms.

(d) Consents and Approvals. To the extent that any material lease, mortgage, deed of trust, contract or agreement to which VETCO is a party shall require the consent of any person to the exchange of VETCO's shares of common stock or any other transaction provided for herein, such consent shall have been obtained; provided, however, that VETCO shall not make, as a condition for the obtaining of any such consent, any agreements or undertakings not approved in writing by SKYLYNX and SAC to the extent that such condition otherwise has an adverse effect on SKYLYNX and SAC.

(e) Review and Due Diligence. SKYLYNX and SAC, its investment bankers, legal counsel and/or auditors shall have had the opportunity to complete, and shall have completed, a satisfactory due diligence investigation of VETCO together with a satisfactory review of VETCO's corporate status and the title to VETCO's property.

(f) No Governmental Actions. No action or proceeding before any governmental authority shall have been instituted or threatened to restrain or prohibit the transactions contemplated by this Agreement, and the parties shall have delivered to each other certificates dated as of the Closing Date and executed by such parties, stating that to their Best Knowledge, no such items exist. No governmental authority shall have taken any other action as a result of which the management of SKYLYNX or SAC, in its sole discretion, reasonably deems it inadvisable to proceed with the transactions contemplated by this Agreement.

(g) No Material Adverse Change. No material adverse change in the business, property or assets of any party hereto shall have occurred, and no loss or damage to any of the assets, whether or not covered by insurance, with respect to any party hereto has occurred, and the parties hereto shall have delivered to each other certificates dated as of the Closing Date and executed by each of the parties to all such effects.

(h) Update of Contracts. The parties hereto shall have delivered to each other an accurate list, as of the Closing Date, showing all agreements, contracts and commitments of the type listed on Exhibits 9.17 and 11.20 entered into since the date of this Agreement (the "New Contracts"); and all true, complete and accurate copies of all New Contracts. Each party shall have had the opportunity to review and approve the New Contracts of the other, and any of the parties shall have the right to delay the Closing for up to ten (10) days if it in its sole discretion deems such delay necessary to enable it to adequately review the New Contracts.

(i) Approval of Counsel. All actions, proceedings, instruments and documents required or incidental to carry out this Agreement, including all schedules and exhibits thereto, and all other related legal matters shall have been approved by Bruce D. Campbell, P.C., counsel to VETCO, and Clifford L. Neuman, P.C., counsel to SKYLYNX and SAC.

(j) No Adverse Information. The investigations with respect to the parties, the assets and the respective businesses performed by each party's respective professional advisors and other representatives shall not have revealed any information concerning the other parties, their assets or their business that has not been made known to the discovering party, in writing prior to the date of this Agreement and that materially and adversely affects the business or assets of the other party or the viability of the transaction contemplated by this Agreement.

(k) Ordinary Course of Business. During the period from the date of this Agreement until the Closing Date, VETCO shall have carried on its business in the ordinary and usual course, and shall have delivered to SKYLYNX and SAC a certificate to that effect.

(l) Liens. VETCO shall have delivered to SKYLYNX a reasonably current lien and judgment search (both state and county levels in each jurisdiction where the party is qualified to or is doing business or owns material assets) confirming the absence of any judicial liens, security interests, tax liens and similar such liens affecting any of its business or assets. Unless otherwise agreed by SKYLYNX, each and every lien or encumbrance of any nature, if any, relating to the assets, business, or the shares of common stock of VETCO shall have been terminated and released, and proof thereof delivered to SKYLYNX.

(m) Other Documents. The parties shall have delivered or caused to be delivered all other documents, agreements, resolutions, certificates or declarations as each respective party or its attorneys may have reasonably requested.

(n) Governmental and Regulatory Approvals. The parties shall have obtained evidence, in form and substance satisfactory to each of them, that there have been obtained all consents, approvals and authorizations required by this Agreement, including, without limitation, the following:

(i) SKYLYNX and VETCO Board of Directors and VETCO Common Stockholder approval of all the transactions contemplated pursuant to this Agreement; and

(ii) All regulatory approvals necessary for VETCO to conduct business in the ordinary course in each jurisdiction where such approval may be required and the failure to obtain such approval would cause a material adverse affect to the financial condition, business or operations of VETCO.

(o) Compliance with Securities Laws. SKYLYNX shall have undertaken all actions necessary or advisable to consummate the Merger in conformity with all Governmental and Legal Requirements including, without limitation, applicable federal and state securities laws.

(p) Appraisal Rights and/or Dissenters' Rights. At or prior to Closing, no beneficial or record owner of any outstanding shares of VETCO Common Stock shall have exercised or shall have given notice to SKYLYNX or VETCO of their intent to exercise any rights under applicable state law, if any, to dissent from the Merger or obtain the payment of the fair market value of such shares of VETCO Common Stock in lieu of participating in the Merger in accordance with the terms and subject to the conditions set forth herein.

(q) Financial Advisory Fees. At or prior to Closing, all obligations or commitments of SKYLYNX and VETCO to their respective financial advisors and investment bankers shall have been paid or otherwise satisfied upon terms satisfactory to the parties, and SKYLYNX and VETCO shall each have been delivered and received such written consents, approvals, estoppel certificates or other instruments or undertakings from its advisors or other third parties as each may deem reasonable, necessary or advisable.

(r) VETCO Debt Restructure. The VETCO debt referred to in

(s) Compliance with Sections 5 and 17 of the Securities Act. The Board of Directors of SKYLYNX shall be satisfied that consummation of the Merger and the issuance of SKYLYNX Preferred Stock to the VETCO securityholders are in compliance with the provisions of Sections 5 and 17 of the Securities Act.

(t) Closing Escrow Agreement. At Closing, VETCO, the VETCO shareholders and SKYLYNX shall have executed and delivered the Closing Escrow Agreement substantially in the form of Exhibit 5.4 hereto and shall have delivered the Series A Preferred to be held in escrow in accordance with the terms and conditions thereof.

8.3 Conditions to Obligation of VETCO. The obligations of VETCO to complete the Merger on the Closing date on the terms set forth in this Agreement is, at the option of VETCO, subject to the satisfaction or waiver by VETCO of each of the following conditions:

(a) Accuracy of Representations and Warranties. The representations and warranties made by SKYLYNX and SAC in this Agreement shall be correct in all material respects on and as of the Closing date with the same force and effect as though such representations and warranties had been made on the Closing date.

(b) Compliance with Covenants. All covenants which SKYLYNX and SAC is required to perform or comply with on or before the Closing date shall have been fully complied with or performed in all material respects.

(c) Corporate Approvals. The Board of Directors of SKYLYNX and SAC shall have approved and ratified this Agreement and the transactions contemplated hereby, including approval of the Certificate of Designation and issuance of the Series A Preferred, and shall have authorized the appropriate officers to execute same and fully perform its terms.

(d) Consents and Approvals. To the extent that any material lease, mortgage, deed of trust, contract or agreement to which SKYLYNX and SAC is a party shall require the consent of any person to the exchange of SKYLYNX and SAC's shares of common stock or any other transaction provided for herein, such consent shall have been obtained; provided, however, that SKYLYNX and SAC shall not make, as a condition for the obtaining of any such consent, any agreements or undertakings not approved in writing by VETCO to the extent that such condition otherwise has an effect on VETCO or SKYLYNX and SAC.

(e) Review and Due Diligence. VETCO and its legal counsel and/or auditors shall have had the opportunity to complete, and shall have completed, a satisfactory due diligence investigation of SKYLYNX and SAC, together with a satisfactory review of SKYLYNX and SAC's corporate status, the marketability of title to SKYLYNX and SAC's property, and compliance with all reporting requirements imposed by or on account of any federal or state securities laws or regulations.

(f) No Governmental Actions. No action or proceeding before any governmental authority shall have been instituted or threatened to restrain or prohibit the transactions contemplated by this Agreement, and the parties hereto shall have delivered to each other certificates dated as of the Closing Date and executed by such parties, staling that to their Best Knowledge, no such items exist. No governmental authority shall have taken any other action as a result of which the management of any of the parties, in its sole discretion, reasonably deems it inadvisable to proceed with the transactions contemplated by this Agreement.

(g) No Material Adverse Change. No material adverse change in the business, property or assets of any party hereto shall have occurred, and no loss or damage to any of the assets, whether or not covered by insurance, with respect to any party hereto has occurred, and the parties shall have delivered to each other certificates dated as of the Closing Date and executed by each of the parties to all such effects.

(h) Update of Contracts. The parties shall have delivered to each other an accurate list, as of the Closing Date, showing all agreements, contracts and commitments of the type listed on Exhibits 9.17 and 11.20 entered into since the date of this Agreement (the "New Contracts"); and all true, complete and accurate copies of all New Contracts. Each party shall have had the opportunity to review the New Contracts of the other, and any of the parties shall have the right to delay the Closing for up to ten (10) days if it in its sole discretion deems such delay necessary to enable it to adequately review the New Contracts.

(i) Approval of Counsel. All actions, proceedings, instruments and documents required or incidental to carry out this Agreement, including all schedules and exhibits thereto, and all other related legal matters shall have been approved as to substance and form by Bruce D. Campbell, P.C., counsel to VETCO, and Clifford L. Neuman, P.C., counsel to SKYLYNX and SAC.

(j) No Adverse Information. The investigations with respect to the parties, the assets and their respective businesses performed by each party's respective professional advisors and other representatives shall not have revealed any information concerning the other panes, their assets or their business that has not been made known to the discovering party, in writing prior to the date of this Agreement and that materially and adversely affects the business or assets of the other party or the viability of the transaction contemplated by this Agreement.

(k) Ordinary Course of Business. During the period from the date of this Agreement until the Closing Date, SKYLYNX shall have carried on its business in the ordinary and usual course, and shall have delivered to VETCO a certificate to that effect.

(1) Other Documents. The parties shall have delivered or caused to be delivered all other documents, agreements, resolutions, certificates or declarations as each respective party or its attorneys may have reasonably requested.

(m) Governmental and Regulatory Approvals. The parties shall have obtained evidence, in form and substance satisfactory to each of them, that there have been obtained all consents, approvals and authorizations required by this Agreement, including, without limitation, the following:

			(i)	SKYLYNX and VETCO Board of Directors and VETCO Common Stockholder approval of all the transactions contemplated pursuant to this Agreement; and

			(ii)	All regulatory approvals necessary for SAC to conduct business in the ordinary course in each jurisdiction where such approval may be required.

(n) Compliance with Securities Laws. VETCO shall have undertaken all actions necessary or advisable to consummate the Merger in conformity with all Governmental and Legal Requirements including, without limitation, applicable federal and state securities laws.

(o) Appraisal Rights and/or Dissenters' Rights. At or prior to Closing, no beneficial or record owner of any outstanding shares of VETCO Common Stock shall have exercised or shall have given notice to SKYLYNX or VETCO of their intent to exercise any rights under applicable state law, if any, to dissent from the Merger or obtain the payment of the fair market value of such shares of VETCO Common Stock in lieu of participating in the Merger in accordance with the terms and subject to the conditions set forth herein.

(p) Financial Advisory Fees. At or prior to Closing, all obligations or commitments of SKYLYNX and VETCO to their respective financial advisors and investment bankers shall have been paid or otherwise satisfied upon terms satisfactory to the parties, and SKYLYNX and VETCO shall each have been delivered and received such written consents, approvals, estoppel certificates or other instruments or undertakings from its advisors or other third parties as each may deem reasonable, necessary or advisable.

(q) VETCO Debt Restructure. The VETCO Debt described in Section 5.5 above shall be converted into SkyLynx Series A Preferred Stock as part of the 1,000,000 shares to be delivered to VETCO hereunder.

(r) Compliance with Sections 5 and 17 of the Securities Act. The Board of Directors of SKYLYNX shall be satisfied that consummation of the Merger and the issuance of SKYLYNX Preferred Stock to the VETCO securityholders are in compliance with the provisions of Sections 5 and 17 of the Securities Act.

(s) Closing Escrow Agreement. At Closing, VETCO, the VETCO shareholders and SKYLYNX shall have executed and delivered the Closing Escrow Agreement substantially in the form of Exhibit 5.4 hereto and shall have delivered the Series A Preferred to be held in escrow in accordance with the terms and conditions thereof.

(t) Liens. SKYLYNX shall have delivered to VETCO a reasonably current lien and judgment search (both state and county levels in each jurisdiction where the party is qualified to or is doing business or owns material assets) confirming the absence of any judicial liens, security interests, tax liens and similar such liens affecting any of its business or assets. Unless otherwise agreed by VETCO or set forth on Exhibit 11.18, each and every lien or encumbrance of any nature, if any, relating to the assets, business, or the shares of common stock of SKYLYNX shall have been terminated and released, and proof thereof delivered to VETCO.

8.4 Specific Items to be delivered at the Closing. The parties shall deliver the following items to the appropriate party at the Closing of the transactions contemplated by this Agreement.

(a) To be delivered by VETCO (in duplicate original):

			(i)	Copy of corporate resolutions authorizing the execution of this Agreement, and the consummation by VETCO of the transactions contemplated by this Agreement.

			(ii)	A certificate of the President of VETCO stating that the representations and warranties of VETCO set forth in this Agreement are true and correct. Said certificate shall further verify and affirm that all consents or waivers, if any, which may be necessary to execute and deliver this Agreement have been obtained and are in full force and effect.

			(iii)	A certificate dated the Closing Date, signed by the Chief Executive Officer and the Chief Financial Officer of VETCO, in form and substance reasonably satisfactory to the other party and its legal counsel, certifying that all conditions precedent set forth in this Agreement to the obligations of VETCO to close, have been fulfilled, and that no event of default hereunder and no event which, with the giving of notice or passage of time, or both, would be an event of default, has occurred as of such date.

			(iv)	Certificates dated the Closing Date, signed by the Secretary of VETCO, (i) certifying resolutions duly adopted by the Board of Directors and Shareholders of VETCO, authorizing the execution of this Agreement and all of the other transactions to be consummated pursuant thereto; (ii) certifying the names and incumbency of the officers of VETCO who are empowered to execute the foregoing documents for and on behalf of such company; (iii) certifying the authenticity of copies of the Articles of Incorporation and Bylaws of VETCO; and (iv) certifying the authenticity of a reasonably current Certificate of Good Standing, from all jurisdictions in which the company is qualified to conduct business.

			(v)	The Closing Escrow Agreement substantially in the form of Exhibit 5.4.

			(viii)	Articles of Merger and Statement of Merger in proper form to be filed with the Secretaries of States of Colorado and California in such form as may be required to consummate the Merger as of the Effective Time.

(b) To be delivered by Shareholders of VETCO (in duplicate original):

			(i)	Certificate or certificates representing 100% of the issued and outstanding common shares of VETCO, which stock certificates shall be endorsed in favor of SKYLYNX.

			(ii)	Fully executed Subscription Agreements substantially in the form of Exhibit 5.3.

			(iii)	The Closing Escrow Agreement substantially in the form of Exhibit 5.4.

			(i)	Certificate or certificates representing 1,000,000shares of SKYLYNX Series A Preferred, which certificates shall be issued in the names of each VETCO Shareholder, pro rata, and delivered in escrow under the Closing Escrow Agreement;

			(ii)	Copy of corporate resolution authorizing the execution of this Agreement and the consummation by SKYLYNX and SAC of the transactions contemplated by this Agreement, including, but not limited to, the issuance of SKYLYNX Common Stock in the amounts and manner set forth in Section 5.1 above;

			(iii)	A certificate dated the Closing Date, signed by the Chief Executive Officer and the Chief Financial Officer of SKYLYNX and SAC, in form and substance reasonably satisfactory to the other party and its legal counsel, certifying that all conditions precedent set forth in this Agreement to the obligations of SKYLYNX and SAC to close, have been fulfilled, and that no event of default hereunder and no event which, with the giving of notice or passage of time, or both, would be an event of default, has occurred as of such date.

			(iv)	Certificates dated the Closing Date, signed by the Secretary of SKYLYNX and SAC, (i) certifying resolutions duly adopted by the Board of Directors of SKYLYNX and SAC, authorizing the execution of this Agreement and all of the other transactions to be consummated pursuant thereto; (ii) certifying the names and incumbency of the officers of SKYLYNX and SAC who are empowered to execute the foregoing documents for and on behalf of such company; (iii) certifying the authenticity of copies of the Articles of Incorporation and Bylaws of SKYLYNX and SAC; and (iv) certifying the authenticity of a reasonably current Certificate of Good Standing, from all jurisdictions in which SKYLYNX and SAC are qualified to conduct business.

			(v)	The Closing Escrow Agreement substantially in the form of Exhibit 5.4.

			(vi)	The Employment Agreements in substantially the form of Exhibit 7.2(e).

			(vii)	The Voting Agreement in substantially the form of Exhibit 7.2 (a).

			(viii)	Statement of Merger and Certificate of Merger in proper form to be filed with the Secretaries of States of Colorado and California in such form as may be required to consummate the Merger as of the Effective Time.

SECTION 9: REPRESENTATIONS AND WARRANTIES OF VETCO

As a material inducement to SKYLYNX to enter into this Agreement and with the understanding and expectations that SKYLYNX will be relying thereon in consummating the Merger contemplated hereunder, VETCO (hereinafter VETCO shall be referred to as the "Corporation" unless the context otherwise requires for the purposes of this Section 9 only) hereby represents and warrants as follows:

9.1 Organization and Standing. The Corporation is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, and has all requisite corporate power and authority to own its assets and properties and to carry on its business as it is now being conducted.

9.2 Subsidiaries, Etc. The Corporation does not have any direct or indirect Ownership Interest in any corporation, partnership, joint venture, association or other business enterprise.

9.3 Qualification. The Corporation is not qualified to engage in business as a foreign corporation in any state, and there is no other jurisdiction wherein the character of the properties presently owned by the Corporation or the nature of the activities presently conducted by the Corporation makes necessary the qualification, licensing or domestication of the Corporation as a foreign corporation.

9.4 Corporate Authority. Except as set forth on Exhibit 9.4 hereto, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby or the compliance by the Corporation with any on the provisions hereof will not:

(a) Conflict with or result in a breach of any provision of its Articles of Incorporation or By-Laws or similar documents of any Subsidiary;

(b) Result in a default (or give rise to any right of termination, cancellation, or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Corporation is a party, or by which any of its properties or assets may be bound except for such default (or right of termination, cancellation, or acceleration) as to which requisite waivers or consents shall either have been obtained by the Corporation prior to the Closing Date or the obtaining of which shall have been waived by SKYLYNX; or

(c) Violate any order, writ, injunction, decree or, to the Corporation's Best Knowledge, any statute, rule or regulation applicable to the Corporation or any of its properties or assets. No consent or approval by any Governmental Authority is required in connection with the execution and delivery by the Corporation of this Agreement or the consummation by the Corporation of the transactions contemplated hereby, except for possible notice under plant closing laws.

9.5 Financial Information. In connection with the investigations performed by and audit to be undertaken by VETCO, VETCO furnished certain financial information and data including, without limitation, tax and accounting records, financial records, statements, worksheets and other information requested by SKYLYNX and its auditors necessary to undertake and complete the audited financial examinations. VETCO represents and warrants that any and all such information furnished in connection with the conduct of such investigations and audits shall be true, accurate and complete in all material respects and shall not contain any material misstatements nor any material omissions of fact or information respecting the financial condition or results of operation of the business for the respective periods covered by the audits.

9.6 Capitalization of the Corporation. The authorized capital stock of VETCO is as set forth on Exhibit 9.6 hereto. The names of one hundred percent (100%) of the record owners of the issued and outstanding Common Stock are set forth on Exhibit 9.6 hereto. All issued and outstanding shares of VETCO Common Stock have been duly authorized and validly issued and are fully paid and non-assessable, free and clear of any liens, encumbrances, claims of any kind and nature except restrictions against transferability without compliance with applicable federal and state securities laws. Other than shares of Common Stock that are issuable upon conversion of the VETCO Debt, there are no other outstanding rights, options, warrants, subscriptions, calls, convertible securities or agreement of any character or nature under which the Corporation is or may become obligated to issue any shares of its capital stock of any kind, other than those shares indicated in this Section as presently outstanding. There are no voting trusts, stockholder agreements, or other voting arrangements to which the Corporation is a party or, to the Best Knowledge of the Corporation, to which any of the Corporation's stockholders is a party or bound.

9.7 Taxes. Except as set forth in Exhibit 9.7:

(a) The Corporation has filed (or has obtained extensions for filing) all income, excise, sales, corporate franchise, property, payroll and other tax returns or reports required to be filed by it, as of the date hereof by the United States of America, any state or other political subdivision thereof or any foreign country and has paid all Taxes or assessments relating to the time periods covered by such returns or reports; and

(b) The Corporation has paid all tax liabilities imposed or assessed by any governmental authority for all periods prior to the Closing Date for which such taxes have become due and payable and has received no notice from any such governmental authority of any deficiency or delinquency with respect to such obligation. The Corporation is not currently undergoing any audit conducted by any taxing authority and has received no notice of audit covering any prior period for which taxes have been paid or are or will be due and payable prior to the Closing Date. There are no present disputes as to taxes of any nature payable by the Corporation.

9.8 No Actions, Proceeding, Etc. There is no action or proceeding (whether or not purportedly on behalf of the Corporation) pending or to its Best Knowledge threatened by or against the Corporation which might result in any material adverse change in the condition, financial or otherwise, of the Corporation's business or assets. No order, writ or injunction or decree has been issued by, or requested of any court or Governmental Agency that does, nor may result in, any material adverse change in the Corporation's assets or properties or in the financial condition or the business of the Corporation. Except for liabilities referred to in attached Exhibit 9.8, the Corporation is not liable for damages to any employee or former employee as a result of any violation of any state, federal or foreign laws directly or indirectly relating to such em ployee or former employee.

9.9 Post Balance Sheet Changes. Except as set forth on the attached Exhibit 9.9 and as contemplated by this Agreement, since the date of the VETCO Financial Statements, the Corporation has not (a) issued, bought, redeemed or entered into any agreements, commitments or obligations to sell, buy or redeem any shares of its capital stock; (b) incurred any obligation or liability (absolute or contingent), other than current liabilities incurred, and obligations under contracts entered into, in the ordinary course of business; (c) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities incurred in the ordinary course of business; (d) mortgaged, pledged or subjected to lien charges, or other encumbrance any of its assets, other than the lien of current or real prop erty taxes not yet due and payable; (e) waived any rights of substantial value, whether or not in the ordinary course of business; (f) suffered any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting its assets or its business; (g) made or suffered any amendment or termination of any material contract or any agreement which adversely affects its business; (h) received notice or had knowledge of any labor trouble other than routine grievance matters, none of which is material; (i) increased the salaries or other compensation of any of its directors, officers or employees or made any increase in other benefits to which employees may be entitled, other than employee salary increases made in the ordinary course of business and reflected on an exhibit hereto; (j) sold, transferred or otherwise disposed of any of its assets, other than in the ordinary course of business; (k) declared or made any distribution or payments to any of its shareholders, officers or employ ees, other than wages and salaries made to employees in the ordinary course of business; (l) revalued any of its assets; or (m) entered into any transactions not in the ordinary course of business.

9.10 No Breaches. The Corporation is not in violation of, and the consummation of the transactions contemplated hereby do not and will not result in any material breach of, any of the terms or conditions of any mortgage, bond, indenture, agreement, contract, license or other instrument or obligation to which the Corporation is a party or by which its assets are bound; nor will the consummation of the transactions contemplated hereby cause VETCO to violate any applicable statute, regulation, judgment, writ, injunction or decree of any court, threatened or entered in a proceeding or action in which the Corporation is, was or may be bound or to which any of the Corporation's assets are subject.

9.11 Condition of the Corporation's Assets. Except as set forth on Exhibit 9.11, VETCO's assets are currently in good and usable condition and there are no defects or other conditions which, in the aggregate, materially and adversely affects the operation or values of such assets taken as a whole. Except as disclosed on Exhibit 9.11, no person, to VETCO's Best Knowledge, other than VETCO (including any officer or employee of the Corporation) has any proprietary interest in any know-how or other intangible assets used by the Corporation in the conduct of its business.

9.12 Corporate Contracts and Proceedings. This Agreement has been duly authorized by all necessary corporate action on behalf of VETCO, has been duly executed and delivered by an authorized officer of VETCO, and is a valid and binding Agreement on the part of VETCO that is enforceable against VETCO in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent transfers, reorganization or other similar laws affecting the enforcement of creditors' rights generally and to judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies.

9.13 Registered Rights and Proprietary Information.

(a) Exhibit 9.13 hereto contains a true and complete list of all patents, letters patent and patent applications, service marks, trademark and service mark registrations and applications, copyright, copyright registrations and applications, grants of licenses and rights to the Corporation with respect to the foregoing, both domestic and foreign, claimed by the Corporation or used or proposed to be used by the Corporation in the conduct of its business (collectively herein, "VETCO Proprietary Information"). Except as described in Exhibit 9.13 hereto, the Corporation is not obligated or under any liability whatever to make any payments by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, any VETCO Proprietary Information with respect to the us e thereof in the conduct of it's business or otherwise.

(b) Except as described in Exhibit 9.13 hereto, to the Corporation's Best Knowledge, the Corporation owns and has the unrestricted right to use the VETCO Proprietary Information required for or incident to the design, development, manufacture, operation, sale and use of all products and services sold or rendered or proposed to be sold or rendered by the Corporation or relating to the conduct or proposed conduct of its business free and clear of any right, title, interest, equity or claim of others. As soon as practicable following the execution of this Agreement, and except as described in Exhibit 9.13 hereto, the Corporation agrees to take all necessary steps (including without limitation entering into appropriate confidentiality, assignment of rights and non-competition agreements with all officers, directors, employees and consultants of the Corporation and others with access to or knowledge of the VETCO Proprietary Information) to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, the VETCO Proprietary Information and all related documentation and intellectual property rights therein necessary for the conduct or proposed conduct of its business.

(c) Except as described in Exhibit 9.13 hereto, the Corporation has not sold, transferred, assigned, licensed or subjected to any right, lien, encumbrance or claim of others, any VETCO Proprietary Information, or any interest therein, related to or required for the design, development, manufacture, operation, sale or use of any product or service currently under development or manufactured, or proposed to be developed, sold or manufactured, by it. Exhibit 9.13 contains a true and complete list and description of all licenses of VETCO Proprietary Information granted to the Corporation by others or to others by the Corporation. Except as described in Exhibit 9.13 hereto, to VETCO's Best Knowledge, there are no claims or demands of any person pertaining to, or any proceedings tha t are pending or threatened, which challenge the rights of the Corporation in respect of any VETCO Proprietary Information used in the conduct of its business.

(d) Except as described in Exhibit 9.13 hereto, the Corporation owns and on the Closing Date shall own, has and shall have, holds and shall hold, exclusively all right, title and interest in the VETCO Proprietary Information, free and clear of all liens, encumbrances, restrictions, claims and equities of any kind whatsoever, has and shall have the exclusive right to use, sell, license or dispose of, and has and shall have the exclusive right to bring action for the infringement of the VETCO Proprietary Information. To the Best Knowledge of Corporation, the marketing, promotion, distribution or sale by the Corporation of any products or interests making use of VETCO Proprietary Information shall not constitute an infringement of any patent, copyright, trademark, service mark or misappropriation or violation of any other party's proprietary rights or a violation of any license or agreement by the Corporation. Except as described in Exhibit 9.13 hereto, to VETCO's Best Knowledge, no facts or circumstances exist that could result in the invalidation of any of the VETCO Proprietary Information.

9.14 No Liens or Encumbrances. The Corporation has good and marketable title to all of the property and assets, tangible and intangible, employed in the operations of its business, free of any material mortgages, security interests, pledges, easements or encumbrances of any kind whatsoever.

9.15 Employee Matters. Exhibit 9.15 attached hereto contains a true, complete and accurate list of all employees of the Corporation and the remuneration of each (including wages, salaries and fringe benefits). The Corporation has no information or a fact indicating that any employee listed on Exhibit 9.15 intends to terminate his/her employment relationship with the Corporation prior or subsequent to the Closing Date, except as may be required by this Agreement. Except as specifically described on Exhibit 9.15, the Corporation has no employee benefit plans (including, but not limited to, pension plans and health or welfare plans), arrangements or understandings, whether formal or informal. The Corporation does not now and has never contributed to a "multi-employer plan" as defined in Section 400(a)(3) of the ERISA. The Corporation has co mplied with all applicable provisions of ERISA and all rules and regulations promulgated thereunder, and neither the Corporation nor any trustee, administrator, fiduciary, agent or employee thereof has at any time been involved in a transaction that would constitute a "prohibited transaction" within the meaning of Section 406 of ERISA as to any covered plan of the Corporation. The Corporation is not a party to any collective bargaining or other union agreement. The Corporation has not, within the past five (5) years had, or been threatened with, any union activities, work stoppages or other labor trouble with respect to its employees which had a material adverse effect on the Corporation, its business or assets. Except as set forth in Exhibit 9.15, the Corporation has not made any commitment or agreements to increase the wages or modify the conditions or terms of employment of any of the employees of the Corporation used in connection with its business, and between the date of this Agreement and the Closi ng Date, the Corporation will not make any agreement to increase the wages or modify the conditions or terms of employment of any of the employees of the Corporation used in the conduct of its business, without the prior written consent of all parties hereto.

9.16 Legal Proceedings and Compliance with Law. VETCO has not received notice of any legal, administrative, arbitration or other proceeding or governmental investigation pending or threatened (including those relating to the health, safety, employment of labor, or protection of the environment) pertaining to VETCO which might result in the aggregate in money damages payable by VETCO in excess of insurance coverage or which might result in a permanent injunction against VETCO. Except as set forth in such Exhibit 9.16, VETCO has substantially complied with, and is not in default in any respect under any applicable laws, ordinances, requirements, regulations, or orders applicable to the business of VETCO, the violation of which might materially and adversely affect it. Except as set forth in such Exhibit 9.16, VETCO is not a party to any agre ement or instrument, nor is it subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree, rule, regulation, code or ordinance which materially and adversely affects, or might reasonably be expected materially and adversely to affect the business, operations, prospects, property, assets or condition, financial or otherwise, of VETCO.

9.17 Contract Schedules. Attached as Exhibit 9.17 hereto is an accurate list of the following:

(a) All contracts, leases, agreements, covenants, licenses, instruments or commitments of VETCO pertaining to the business of VETCO calling for the payment of Five Thousand Dollars ($5,000) or more or which is otherwise material to the business of VETCO, including, without limitation, the following:

	(i)	Licenses and contracts held in the ordinary course of business;

	(ii)	Executory contracts for the purchase, sale or lease of any assets;

	(iii)	Management or consulting contracts;

	(iv)	Patent, trademark and copyright applications, registrations or licenses, and know-how, intellectual property and trade secret agreements or other licenses;

	(v)	Note agreements, loan agreements, indentures and the like, other than those entered into and executed in the ordinary course of business;

	(vi)	All sales, agency, distributorship or franchise agreements; and

	(vii)	Any other contracts not in the ordinary course of business.

(b) All labor contracts, employment agreements and collective bargaining agreements to which VETCO is a party.

(c) All instruments evidencing any liens or security interest securing any indebtedness of VETCO covering any asset of VETCO.

(d) All profit sharing, pension, stock option, severance pay, retirement, bonus, deferred compensation, group life and health insurance or other employee benefit plans, agreements, arrangements or commitments of any nature whatsoever, whether or not legally binding, and all agreements with any present or former officer, director or shareholder of the Corporation.

(e) Any and all documents, instruments and other writings not listed in any other schedule hereto which are material to the business operations of VETCO.

Except as set forth in Exhibit 9.17, all of such contracts, agreements, leases, licenses, plans, arrangements and commitments and all other such items set forth above are valid, binding and in full force and effect in accordance with their terms and conditions, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent transfer, reorganization or other similar laws affecting the enforcement of contracts generally, and there is no existing material default thereunder or breach thereof by the Corporation, or to VETCO's knowledge by any party to such contracts, or any conditions which, with the passage of time or the giving of notice or both, might constitute such a default by the Corporation or by any other party to the contracts.

9.18 Labor Matters. There are no strikes, slowdowns, stoppages, organizational efforts, discrimination charges or other labor disputes pending or, to the knowledge of VETCO or any of its agent or employees, threatened against VETCO.

9.19 Insurance. Exhibit 9.19 hereto sets forth the name, policy number, and coverage limits of all policies of insurance maintained by VETCO on its assets and business operations. All premiums due, owing and required to be paid on such policies have been paid in a timely fashion and, all such policies are and remain effective and in full force and effect.

9.20 Environmental. Except as disclosed on Exhibit 9.20, VETCO has never owned or operated any real property except for leased office and warehouse space:

(a) To the Best Knowledge of VETCO, no real property (or the subsurface soil and the ground water thereunder) now or previously leased by VETCO (the "Leased Premises") either contains any Hazardous Substance (as hereinafter defined) or has underneath it any underground fuel or liquid storage tanks;

(b) To the Best Knowledge of VETCO, there has been no generation, transportation, storage, treatment or disposal of any Hazardous Substance on or beneath the Leased Premises, now or in the past;

(c) VETCO is not aware of any pending or threatened litigation or proceedings before any court or administrative agency in which any person alleges, or threatens to allege, the presence, release, threat of release, placement on or in the Leased Premises, or the generation, transportation, storage, treatment or disposal at the Leased Premises, of any Hazardous Substance;

(d) VETCO has not received any written notice and has no knowledge that any Governmental Authority or any employee or agent thereof has determined or alleged, or is investigating the possibility, that there is or has been any presence, release, threat of release, placement on or in the Leased Premises, or any generation, transportation, storage, treatment or disposal at the Leased Premises, of any Hazardous Substance;

(e) To the Best Knowledge of VETCO, there have been no communications or agreements with any Governmental Authority or agency (federal, state, or local) or any private person or entity (including, without limitation, any prior owner of the Leased Premises and any present or former occupant or tenant of the Leased Premises) relating in any way to the presence, release, threat of release, placement on or in the Leased Premises, or any generation, transportation, storage, treatment or disposal at the Leased Premises, of any Hazardous Substance. VETCO further agrees and covenants that VETCO will not store or deposit on, otherwise release or bring onto or beneath, the Leased Premises any Hazardous Substance prior to the Closing Date; and

(f) There is no litigation, proceeding, citizen's suit or governmental or other investigation pending, or, to VETCO's Best Knowledge, threatened, against VETCO, and VETCO knows of no facts or circumstances which might give rise to any future litigation, proceeding, citizen's suit or governmental or other investigation, which relate to VETCO's compliance with environmental laws, regulations, rules, guidelines and ordinances.

For purposes of this Section 9.20, "Hazardous Substance" shall mean and include (i) a hazardous substance as defined in 42 U.S.C. Section 9601(14), the Regulations at 40 C.F.R. Part 302, (2) any substance regulated under the Emergency Planning and Community Right to Know Act (including without limitation any extremely hazardous substances listed at 40 C.F.R. Part 355 and any toxic chemical listed at 40 C.F.R. Part 372), (iii) hazardous wastes and hazardous substances as specified under any California state or local Governmental Requirement governing water pollution, groundwater protection, air pollution, solid wastes, hazardous wastes, spills and other releases of toxic or hazardous substances, transportation of hazardous substances, materials and wastes and occupational or employee health and safety, and (iv) any other material, gas or substance known or suspected to be toxic or hazardous (including, without limitation, any radioactive substance, methane gas, volatile hydrocarbon, industrial solvent, and asbestos) or which could cause a material detriment to, or materially impair the beneficial use of, the Leased Premises, or constitute a material health, safety or environmental risk to any person exposed thereto or in contact therewith. For purposes of this Section 9.20, "Hazardous Substance" shall not mean and shall not include the following, to the extent used normally and required for everyday uses or normal housekeeping or maintenance: (a) fuel oil and natural gas for heating, (b) lubricating, cleaning, coolant and other compounds customarily used in building maintenance, (c) materials routinely used in the day-to-day operations of an office, such as copier toner, (d) consumer products, (e) material reasonably necessary and customarily used in construction and repair of an office project, and (f) fertilizers, pesticides and herbicides commonly used for routine office landscaping.

9.21 Disclosure of Information. The Corporation represents and warrants that all statements, data and other written information provided by it to any party hereto as well as their respective consultants and representatives have been accurate copies or true originals. The Corporation represents and warrants that, to its Best Knowledge, (i) there exists no material information concerning the Corporation which has been requested but not been disclosed to or made available to the other parties and their representatives or consultants and which would be material to a decision to consummate the transactions provided for in this Agreement and (ii) in the aggregate, such information does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in them, in light of the circumstances under which they are made, not misleading.

9.22 Representations and Warranties. The representations and warranties contained in this Agreement shall be true on and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date. Such representations and warranties shall survive the Closing Date and shall remain operative in full force and effect for the period of eighteen months from the date of Closing regardless of any investigation at any time made by or on behalf of SKYLYNX and shall not be deemed merged in any document or instruction so executed and/or delivered by VETCO or Shareholders.

9.23 Absence of Questionable Payments. To the Best Knowledge of VETCO, neither VETCO, nor any director, officer, agent, employee or other person acting on any its behalf has (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials or others or established or maintained any unlawful or unrecorded funds in violation of Section 30A of the Exchange Act or any other applicable foreign, federal or state law; or (ii) accepted or received any unlawful contributions, payments, expenditures or gifts.

SECTION 10: COVENANTS OF VETCO

10.1 Preservation of Business. Until Closing, VETCO shall use its best efforts to cause VETCO to:

(a) Preserve intact the present business organization of VETCO;

(b) Maintain its property and assets in its present state of repair, order and condition, reasonable wear and tear excepted;

(c) Preserve and protect the goodwill and advantageous relationships of VETCO with its customers and all other persons having business dealings with VETCO;

(d) Preserve and maintain in force all licenses, permits, registrations, franchises, patents, trademarks, tradenames, trade secrets, service marks, copyrights, bonds and other similar rights of VETCO; and

(e) Comply with all laws applicable to the conduct of its business

10.2 Ordinary Course. Until Closing, VETCO shall conduct its business only in the usual, regular and ordinary course, in substantially the same manner as previously, and shall not make any substantial change to its methods of management or operation in respect of such business or property. Without limiting the foregoing, VETCO shall not, with respect to VETCO:

(a) Sell, mortgage, pledge or encumber or agree to sell, mortgage, pledge or encumber, any of its property or assets, other than in the ordinary course of business;

(b) Incur any obligation (contingent or otherwise) or purchase, acquire, transfer, or convey, any material assets or property or enter into any contract or commitment, except in the ordinary course of business.

(c) Except as otherwise contemplated by this Agreement or without the consent of SKYLYNX, which consent shall not be unreasonably withheld, pay or retire any debt or liabilities except for (i) general, administrative and overhead expenses, (ii) salaries and other employee obligations previously committed, (iii) normal trade payables and vendor liabilities; and (iv) other expenses incurred in the ordinary course of business.

10.2 Negative Covenants. Until Closing, except as contemplated by this Agreement or as disclosed in Exhibits to this Agreement, from the date hereof until the Closing Date, unless and until SKYLYNX otherwise consents in writing, VETCO will not:

(a) change or alter the physical contents or character of the inventories of its business, so as to materially affect the nature of the Corporation's business or materially and adversely change the total dollar valuation of such inventories, other than in the ordinary course of business;

(b) incur any obligations or liabilities (absolute or contingent) other than current liabilities incurred and obligations under contracts entered into in the ordinary course of business;

(c) mortgage, pledge or voluntarily subject to lien, charge or other encumbrance any assets, tangible or intangible, other than the lien of current property taxes not due and payable;

(d) sell, assign or transfer any of its assets or cancel any debts or claims, other than in the ordinary course of business;

(e) waive any right of any substantial value;

(f) declare or make any payment or distribution to Shareholders or issue, purchase or redeem any shares of its capital stock or other equity securities or issue or sell any rights to acquire the same or effect any stock split, recapitalization, combination, or reclassification of its capital stock, or reorganization;

(g) grant any increase in the salary or other compensation of any of its directors, officers, or employees or make any increase in any benefits to which such employees might be entitled or enter into any employment agreement or consulting agreement;

(h) institute any bonus, benefit, profit sharing, stock option, pension, retirement plan or similar arrangement, or make any changes in any such plans or arrangements presently existing;

(i) enter into any transactions or series of transactions other than in the ordinary course of business;

(j) amend or propose to amend its Articles of Incorporation or By-Laws;

(k) make any change in accounting methods, principles or practices;

(l) authorize capital expenditures or make any acquisition of, or investment in, assets or stock of any other Person;

(m) enter into or amend any material contract or agreement other than in the ordinary course of business;

(n) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability;

(o) permit any material insurance policy to be canceled or terminated, except in the ordinary course of business;

(p) assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person or make any loans or advances;

(q) maintain its real and personal properties in as good a state of operating condition and repair as they are on the date of this Agreement, except for ordinary wear and tear or insured casualty in amounts less than $5,000;

(r) terminate or modify any material leases, contracts, licenses, and permits or other authorizations or agreements affecting its business or its real and/or personal property, or the operation thereof, or enter into any additional lease or contract requiring expenditure by it of any amount affecting such properties or the operation thereof; or

(s) discharge, satisfy or pay any liens, encumbrances, obligations or liabilities relating to it, whether absolute or contingent (including litigation claims), other than liabilities shown on Exhibit 4.1 and liabilities incurred after the date thereof in the ordinary course of business, and no such discharge, satisfaction or payment shall be effected other than in accordance with the ordinary payment terms relating to the liability discharged, satisfied or paid.

10.4 Additional Covenants.

(a) VETCO will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments, and governmental charges or levies imposed upon the income, profits, property or business of VETCO or any subsidiary; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if VETCO shall have set aside on its books adequate reserves therefor; and provided, further, that VETCO will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor. VETCO will promptly pay or cause to be paid when due, o r in conformance with customary trade terms, all other indebtedness incident to the operations of VETCO;

(b) VETCO will keep its properties and those of its subsidiaries in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and VETCO will at all times comply with the provisions of all material leases to which any of them is a party or under which any of them occupies property so as to prevent any loss or forfeiture thereof or thereunder;

(c) VETCO will keep its assets that are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, extended coverage and explosion insurance in amounts customary for companies in similar businesses similarly situated; and immediately following the Closing, VETCO will maintain, with financially sound and reputable insurers, insurance against other hazards, risks and liabilities to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated;

(d) VETCO will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with its past practices consistently applied;

(e) VETCO will comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which could have a material adverse effect on its business or credit;

(f) VETCO shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use patents, processes, licenses, trademarks, trade names or copyrights owned or possessed by it or any subsidiary and deemed by VETCO to be necessary to the conduct of its business;

(g) VETCO will, consistent with its practices in the ordinary course of business, endeavor to retain its business relationships with its customers and suppliers that it believes to be advantageous; and

(h) VETCO shall deliver to SKYLYNX copies of its statements of operation and financial condition and similar statements as and when prepared (if at all) in the ordinary course of its business.

10.5 Access to Books and Records, Premises, Etc. From the date of this Agreement through the Closing Date, VETCO will grant SKYLYNX and its authorized representatives reasonable access during normal business hours to its books and records, premises, products, employees and customers and other parties with whom it has contractual relations during reasonable business hours and in a manner not to disrupt or interfere with VETCO's business relationships for purposes of enabling SKYLYNX to fully investigate the business of VETCO.

10.6 Compensation. Except as contemplated by this Agreement, VETCO shall not enter into or agree to enter into any employment contract or agreement for consulting, professional, or other services which will adversely and materially affect the operation of VETCO prior to the Closing Date, except for any extensions of said contracts or agreements on substantially the same terms and conditions as were previously in effect.

10.7 No Solicitation.

(a) Except in connection with the transactions contemplated by this Agreement, VETCO shall not, nor shall it permit any of its subsidiaries to, nor shall it authorize or permit any officer, director or employee of or any investment banker, attorney or other advisor or representative of, VETCO or any of its subsidiaries to, (i) solicit, initiate or encourage the submission of, any takeover proposal, (ii) enter into any agreement with respect to any takeover proposal or (iii) participate in any discussions or negotiations regarding, or furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any takeover proposal. Without limi ting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by any executive officer of VETCO or any of its subsidiaries or any investment banker, attorney or other advisor or representatives of VETCO or any of its subsidiaries or otherwise, shall be deemed to be a breach of this Section by VETCO. For purposes of this Agreement, "takeover proposal" means any proposal for a merger, consolidation or reorganization or other business combination involving VETCO or any of its subsidiaries or any proposal or offer to acquire in any manner, directly or indirectly, an equity interest in, any voting securities of, or options, rights, warrants or other interests convertible or exercisable for or into such voting securities, or a substantial or material portion of the assets or business of VETCO or any of its subsidiaries, other than the transactions contemplated by this Agreement.

(b) Except upon a material breach of this Agreement by SKYLYNX or SAC or following termination hereof and except for action permitted or contemplated by this Agreement, including a party's right to terminate this Agreement under certain circumstances, neither the Board of Directors of VETCO nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to SKYLYNX, the approval or recommendation by such Board of Directors of any such committee of this Agreement or the Merger or (ii) approve or recommend, or propose to approve or recommend, any takeover proposal.

(c) VETCO promptly shall advise SKYLYNX orally and in writing of any takeover proposal or any inquiry with respect to or which could lead to any takeover proposal and the identity of the person making any such takeover proposal or inquiry. VETCO will keep SKYLYNX fully informed of the status and details of any such takeover proposal or inquiry.

(d) The provisions of this Section 10.7 shall not be construed to prevent any investment banker, attorney or other advisor or representative of VETCO to engage in discussions with third parties in the ordinary course of business with respect to transactions not involving the parties to this Agreement.

SECTION 11: REPRESENTATIONS AND WARRANTIES OF SKYLYNX AND SAC

As a material inducement to VETCO to enter into this Agreement and with the understanding and expectation that VETCO will be relying thereon in consummating the Merger contemplated hereunder, SKYLYNX and SAC (which hereafter may collectively be referred to in Sections 11 and 12 only as the "Corporation") represent and warrant as follows:

11.1 Organization and Standing. SKYLYNX and SAC are corporations duly organized, validly existing and in good standing under the laws of the states of their respective formation and organization and have all requisite corporate power and authority to own their assets and properties and to carry on their businesses as they are now being conducted.

11.2 Subsidiaries, etc. SAC is a subsidiary of and is wholly owned by SKYLYNX, a Colorado corporation. Other than its ownership interests disclosed in its SEC Documents, as hereinafter defined, SKYLYNX has no direct or indirect ownership interest in any corporation, partnership, joint venture, association or other business enterprise. SAC does not have any direct or indirect ownership interest in any corporation, partnership, joint venture, association or other business enterprise, and, at the Effective Time, will have no assets and no liabilities.

11.3 Qualification. SKYLYNX and SAC are not qualified to engage in business as foreign corporations in any state, and there is no other jurisdiction wherein the character of the properties presently owned by SKYLYNX and SAC or the nature of the activities presently conducted by SKYLYNX and SAC make necessary the qualification, licensing or domestication of SKYLYNX or SAC as foreign corporations.

11.4 Corporate Authority. Except as set forth on Exhibit 11.4 hereto, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby nor compliance by SKYLYNX and SAC with any on the provisions hereof will:

(a) Conflict with or result in a breach of any provision of its Articles of Incorporation or By-Laws or similar documents of any Subsidiary;

11.5 SEC Documents; Financial Statements. The Common Stock of SKYLYNX is registered pursuant to Section 12(g) of the Exchange Act. VETCO has had the opportunity to obtain on VETCO's behalf true and complete copies of the SEC Documents (except for exhibits and incorporated documents). SKYLYNX has not provided to VETCO any information which, according to applicable law, rule or regulation, should have been disclosed publicly by SKYLYNX but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement.

As of their respective dates, all of SKYLYNX's reports, statements and other filings with the Commission (the "SEC Documents") complied in all material respects with the requirements of the Act or the Exchange Act as the case may be and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents contained any untrue statement of a material fact or omitted 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. The financial statements of SKYLYNX included in the SEC Documents comply as to form in all material respects with applicable accounting requirements and the published rules and regulat ions of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of SKYLYNX as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

11.6 Capitalization of the Corporation. The authorized capital stock of SKYLYNX consists entirely of 100,000,000 shares of Common Stock having a par value of $.0001 per share, and 25,000,000 shares of Preferred Stock having a par value of $.0001 per share. As of November 11, 2005, there were a total of 29,714,036 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding. All outstanding shares of SKYLYNX's capital stock have been validly issued, are fully paid and non-assessable, and are not subject to pre-emptive rights. The issuance of the shares of SKYLYNX Series A Preferred to be issued to the VETCO Shareholders on the Closing Date in accordance with Sections 5.1 and 5.5 hereof have been duly approved by the Directors of SKYLYNX and will, upon their issuance, have been validly issued and wil l be fully paid and non-assessable, free of any liens, encumbrances and claims of any kind and nature except restrictions against transferability without compliance with applicable federal and state securities laws. Except as described in SKYLYNX's SEC Documents, there are no equity securities of SKYLYNX authorized, issued or outstanding, and except as set forth in SKYLYNX's SEC Documents or on Exhibit 11.6 hereto, there are no authorized, issued or outstanding subscriptions, options, warrants, contracts, calls, commitments or other purchase rights of any nature or character relating to any of SKYLYNX's capital stock, equity securities, debt or other securities convertible into stock or equity securities of SKYLYNX. As of the date of this Agreement, there are no outstanding contractual obligations of SKYLYNX to repurchase, redeem or otherwise acquire any shares of capital stock of SKYLYNX. There are no voting trusts, stockholder agreements or other voting arrangements to which the Corporation is a party o r, to the Best Knowledge of SKYLYNX, to which any of the SKYLYNX Common Stockholders is a party or bound.

11.7 No Actions, Proceedings, Etc. Except as listed on the attached Exhibit 11.7, there is no action or proceeding (whether or not purportedly on behalf of the Corporation) pending or to its knowledge threatened by or against the Corporation, which might result in any material adverse change in the condition, financial or otherwise, of the Corporation's business or assets. No order, writ, injunction or decree has been issued by, or requested of any court or Governmental Agency that may result in any material adverse change in the Corporation's assets or properties or in the financial condition or the business of the Corporation. The Corporation is not liable for damages to any employee or former employee as a result of any violation of any state, federal or foreign laws directly or indirectly relating to such employee or former employee.

11.8 Taxes. Except as set forth in Exhibit 11.8:

11.9 Post Balance Sheet Changes. Except as set forth on Exhibit 11.9 and as contemplated by this Agreement, since the date of the latest financial statements, the Corporation has not:

(a) issued, bought, redeemed or entered into any agreements, commitments or obligations to sell, buy or redeem any shares of its capital stock, including but not limited to any options or warrants to purchase any securities of the Corporation or any securities convertible into capital stock of the Corporation;

(b) incurred any obligation or liability (absolute or contingent), other than current liabilities incurred, and obligations under contracts entered into, in the ordinary course of business;

(c) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities incurred in the ordinary course of business;

(d) mortgaged, pledged or subjected to lien charges, or other encumbrance any of its assets, other than the lien of current or real property taxes not yet due and payable;

(e) waived any rights of substantial value, whether or not in the ordinary course of business;

(f) suffered any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting its assets or its business;

(g) made or suffered any amendment or termination of any material contract or any agreement which adversely affects its business;

(h) received notice or had knowledge of any labor trouble other than routine grievance matters, none of which is material;

(i) increased the salaries or other compensation of any of its directors, officers or employees or made any increase in other benefits to which employees may be entitled, other than employee salary increases made in the ordinary course of business and reflected on an exhibit hereto;

(j) sold, transferred or otherwise disposed of any of its assets, other than in the ordinary course of business;

(k) declared or made any distribution or payments to any of its shareholders, officers or employees, other than wages and salaries made to employees in the ordinary course of business;

(l) revalued any of its assets; or

(m) entered into any transactions not in the ordinary course of business.

11.10 No Breaches. Except as set forth on Exhibit 11.10, the Corporation is not in violation of, and the consummation of the transactions contemplated hereby do not and will not result in any material breach of, any of the terms or conditions of any mortgage, bond, indenture, agreement, contract, license or other instrument or obligation to which the Corporation is a party or by which its assets are bound; nor will the consummation of the transactions contemplated hereby cause SKYLYNX or any Subsidiary to violate any statute, regulation, judgment, writ, injunction or decree of any court, threatened or entered in a proceeding or action in which the Corporation is, was or may be bound or to which any of the Corporation's assets are subject.

11.11 Corporate Acts and Proceedings. This Agreement has been duly authorized by all necessary corporate action on behalf of SKYLYNX, has been duly executed and delivered by authorized officers of SKYLYNX, and is a valid and binding Agreement on the part of SKYLYNX that is enforceable against SKYLYNX in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent transfers, reorganization or other similar laws affecting the enforcement of creditors' rights generally and to judicial limitations on the enforcement of the remedy of specific performance and other equitable remedies. All corporate action necessary to issue and deliver to the VETCO Shareholders the SKYLYNX Series A Preferred (as described in Sections 5.1) has been taken.

11.12 Legal Proceedings and Compliance with Law. Except as set forth in Exhibit 11.12, SKYLYNX has not received notice of any legal, administrative, arbitration or other proceeding or governmental investigation pending or threatened (including those relating to the health, safety, employment of labor, or protection of the environment) pertaining to SKYLYNX which might result in the aggregate in money damages payable by SKYLYNX in excess of insurance coverage or which might result in a permanent injunction against SKYLYNX. Except as set forth in such Exhibit 11.12, SKYLYNX has substantially complied with, and is not in default in any respect under any laws, ordinances, requirements, regulations, or orders applicable to the business of SKYLYNX, the violation of which might materially and adversely affect it. Except as set forth in such Exhib it 11.12, SKYLYNX is not a party to any agreement or instrument, nor is it subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree, rule, regulation, code or ordinance which materially and adversely affects, or might reasonably be expected materially and adversely to affect the business, operations, prospects, property, assets or condition, financial or otherwise, of SKYLYNX.

11.13 Disclosure of Information. SKYLYNX represents and warrants that all statements, data and other written information provided by it to any party hereto as well as their respective consultants and representatives have been accurate copies or true originals. SKYLYNX represents and warrants that, to its Best Knowledge, (i) there exists no material information concerning SKYLYNX which has been requested but not been disclosed to or made available to the other parties and their representatives or consultants and which would be material to a decision to consummate the transactions provided for in this Agreement and (ii) in the aggregate, such information does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made in them, in light of the circumstances under which they are made, not misleading.

11.14 Representations and Warranties. The representations and warranties contained in this Agreement shall be true on and as of the Closing Date with the same force and effect as though such representations and warranties had been made on and as of the Closing Date. Such representations and warranties shall survive the Closing Date and shall remain operative in full force and effect for a period of eighteen months from the date of Closing regardless of any investigation at any time made by or on behalf of VETCO and shall not be deemed merged in any document or instruction so executed and/or delivered by SKYLYNX.

11.15 Absence of Questionable Payments. To the Best Knowledge of the Corporation, neither the Corporation, nor any director, officer, agent, employee or other person acting on any its behalf has (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials or others or established or maintained any unlawful or unrecorded funds in violation of Section 30A of the Exchange Act or any other applicable foreign, federal or state law; or (ii) accepted or received any unlawful contributions, payments, expenditures or gifts.

11.16 Condition of the Corporation's Assets. Except as set forth on Exhibit 11.16, the Corporation's assets are currently in good and usable condition and there are no defects or other conditions which, in the aggregate, materially and adversely affects the operation or values of such assets taken as a whole. Except as disclosed on Exhibit 11.16, no person, to the Corporation's Best Knowledge, other than the Corporation (including any officer or employee of the Corporation) has any proprietary interest in any know-how or other intangible assets used by the Corporation in the conduct of its business.

11.17 Registered Rights and Proprietary Information.

(a) Exhibit 11.17 hereto contains a true and complete list of all patents, letters patent and patent applications, service marks, trademark and service mark registrations and applications, copyright, copyright registrations and applications, grants of licenses and rights to the Corporation with respect to the foregoing, both domestic and foreign, claimed by the Corporation or used or proposed to be used by the Corporation in the conduct of its business (collectively herein, "SKYLYNX Proprietary Information"). Except as described in Exhibit 11.17 hereto, the Corporation is not obligated or under any liability whatever to make any payments by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, any SKYLYNX Proprietary Information with respect to the use thereof in the conduct of its business or otherwise.

(b) Except as described in Exhibit 11.17 hereto, to the Corporation's Best Knowledge, the Corporation owns and has the unrestricted right to use the SKYLYNX Proprietary Information required for or incident to the design, development, manufacture, operation, sale and use of all products and services sold or rendered or proposed to be sold or rendered by the Corporation or relating to the conduct or proposed conduct of its business free and clear of any right, title, interest, equity or claim of others. As soon as practicable following the execution of this Agreement, and except as described in Exhibit 11.17 hereto, the Corporation agrees to take all necessary steps (including without limitation entering into appropriate confidentiality, assignment of rights and non-competition a greements with all officers, directors, employees and consultants of the Corporation and others with access to or knowledge of the SKYLYNX Proprietary Information) to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, the SKYLYNX Proprietary Information and all related documentation and intellectual property rights therein necessary for the conduct or proposed conduct of its business.

(c) Except as described in Exhibit 11.17 hereto, the Corporation has not sold, transferred, assigned, licensed or subjected to any right, lien, encumbrance or claim of others, any SKYLYNX Proprietary Information, or any interest therein, related to or required for the design, development, manufacture, operation, sale or use of any product or service currently under development or manufactured, or proposed to be developed, sold or manufactured, by it. Exhibit 11.17 contains a true and complete list and description of all licenses of SKYLYNX Proprietary Information granted to the Corporation by others or to others by the Corporation. Except as described in Exhibit 11.17 hereto, to SKYLYNX's Best Knowledge, there are no claims or demands of any person pertaining to, or any procee dings that are pending or threatened, which challenge the rights of the Corporation in respect of any SKYLYNX Proprietary Information used in the conduct of its business.

(d) Except as described in Exhibit 11.17 hereto, the Corporation owns and on the Closing Date shall own, has and shall have, holds and shall hold, exclusively all right, title and interest in the SKYLYNX Proprietary Information, free and clear of all liens, encumbrances, restrictions, claims and equities of any kind whatsoever, has and shall have the exclusive right to use, sell, license or dispose of, and has and shall have the exclusive right to bring action for the infringement of the SKYLYNX Proprietary Information. To the Best Knowledge of Corporation, the marketing, promotion, distribution or sale by the Corporation of any products or interests making use of SKYLYNX Proprietary Information shall not constitute an infringement of any patent, copyright, trademark, service m ark or misappropriation or violation of any other party's proprietary rights or a violation of any license or agreement by the Corporation. Except as described in Exhibit 11.17 hereto, to SKYLYNX'S Best Knowledge, no facts or circumstances exist that could result in the invalidation of any of the SKYLYNX Proprietary Information.

11.18 No Liens or Encumbrances. Except as set forth on Exhibit 11.18, the Corporation has good and marketable title to all of the property and assets, tangible and intangible, employed in the operations of its business, free of any material mortgages, security interests, pledges, easements or encumbrances of any kind whatsoever.

11.19 Legal Proceedings and Compliance with Law. The Corporation has not received notice of any legal, administrative, arbitration or other proceeding or governmental investigation pending or threatened (including those relating to the health, safety, employment of labor, or protection of the environment) pertaining to the Corporation which might result in the aggregate in money damages payable by the Corporation in excess of insurance coverage or which might result in a permanent injunction against the Corporation. Except as set forth in such Exhibit 11.19, the Corporation has substantially complied with, and is not in default in any respect under any applicable laws, ordinances, requirements, regulations, or orders applicable to the business of the Corporation, the violation of which might materially and adversely affect it. Except as se t forth in such Exhibit 11.19, the Corporation is not a party to any agreement or instrument, nor is it subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree, rule, regulation, code or ordinance which materially and adversely affects, or might reasonably be expected materially and adversely to affect the business, operations, prospects, property, assets or condition, financial or otherwise, of the Corporation.

11.20 Contract Schedules. Attached as Exhibit 11.20 hereto is an accurate list of the following:

(a) All contracts, leases, agreements, covenants, licenses, instruments or commitments of the Corporation pertaining to the business of the Corporation calling for the payment of Five Thousand Dollars ($5,000) or more or which is otherwise material to the business of the Corporation, including, without limitation, the following:

			(i)	Licenses and contracts held in the ordinary course of business;

			(ii)	Executory contracts for the purchase, sale or lease of any assets;

			(iii)	Management or consulting contracts;

			(iv)	Patent, trademark and copyright applications, registrations or licenses, and know-how, intellectual property and trade secret agreements or other licenses;

			(v)	Note agreements, loan agreements, indentures and the like, other than those entered into and executed in the ordinary course of business;

			(vi)	All sales, agency, distributorship or franchise agreements; and

			(vii)	Any other contracts not in the ordinary course of business.

(b) All labor contracts, employment agreements and collective bargaining agreements to which the Corporation is a party.

(c) All instruments evidencing any liens or security interest securing any indebtedness of the Corporation covering any asset of the Corporation.

(c) Any and all documents, instruments and other writings not listed in any other schedule hereto which are material to the business operations of the Corporation.

Except as set forth in Exhibit 11.20, all of such contracts, agreements, leases, licenses, plans, arrangements and commitments and all other such items set forth above are valid, binding and in full force and effect in accordance with their terms and conditions, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, fraudulent transfer, reorganization or other similar laws affecting the enforcement of contracts generally, and there is no existing material default thereunder or breach thereof by the Corporation, or to the Corporation's knowledge by any party to such contracts, or any conditions which, with the passage of time or the giving of notice or both, might constitute such a default by the Corporation or by any other party to the contracts.

11.21 Labor Matters. There are no strikes, slowdowns, stoppages, organizational efforts, discrimination charges or other labor disputes pending or, to the knowledge of the Corporation or any of its agent or employees, threatened against the Corporation.

SECTION 12: COVENANTS OF SKYLYNX AND SAC

12.1 Preservation of Business. Until Closing, except as provided for in this Agreement, SKYLYNX shall use its best efforts to:

(a) Preserve intact the present business organization of SKYLYNX;

(b) Maintain its property and assets in its present state of repair, order and condition, reasonable wear and tear excepted;

(c) Preserve and protect the goodwill and advantageous relationships of SKYLYNX with its customers and all other persons having business dealings with SKYLYNX;

(e) Comply with all laws applicable to the conduct of its business.

12.2 Additional Covenants.

(a) SKYLYNX will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments, and governmental charges or levies imposed upon the income, profits, property or business of SKYLYNX or any subsidiary; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if SKYLYNX shall have set aside on its books adequate reserves therefor and deposited at Closing into an escrow account an amount to cover any such tax, assessment, charge or levy; and provided, further, that SKYLYNX will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to fore close any lien that may have attached as security therefor. SKYLYNX will promptly pay or cause to be paid when due, or in conformance with customary trade terms, all other indebtedness incident to the operations of SKYLYNX;

(b) SKYLYNX will keep its properties and those of its subsidiaries in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and SKYLYNX will at all times comply with the provisions of all material leases to which any of them is a party or under which any of them occupies property so as to prevent any loss or forfeiture thereof or thereunder;

(c) SKYLYNX will keep its assets that are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, extended coverage and explosion insurance in amounts customary for companies in similar businesses similarly situated; and SKYLYNX will maintain, with financially sound and reputable insurers, insurance against other hazards, risks and liabilities to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated;

(d) SKYLYNX will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with its past practices consistently applied;

(e) SKYLYNX will comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, a breach of which could have a material adverse effect on its business or credit;

(f) SKYLYNX shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use patents, processes, licenses, trademarks, trade names or copyrights owned or possessed by it or any subsidiary and deemed by SKYLYNX to be necessary to the conduct of its business;

(g) SKYLYNX will, consistent with its practices in the ordinary course of business, endeavor to retain its business relationships with its customers and suppliers that it believes to be advantageous; and

(h) SKYLYNX shall deliver to VETCO copies of its statements of operation and financial condition and similar statements as and when prepared (if at all) in the ordinary course of its business.

12.3 Access to Books and Records, Premises, Etc. From the date of this Agreement through the Closing Date, SKYLYNX will grant VETCO and its authorized representatives reasonable access during normal business hours upon five (5) days prior notice to the other party, to its and the Subsidiaries' books and records, premises, products, employees and customers and other parties with whom it has contractual relations during reasonable business hours for purposes of enabling VETCO to fully investigate the business of SKYLYNX and the Subsidiaries. SKYLYNX will also deliver copies of the monthly statements of operations and financial condition for the period subsequent to the latest financial statements to VETCO within a reasonable time of such statements becoming available.

12.4 Negative Covenants. Until Closing, except as contemplated by this Agreement or as disclosed in Exhibits to this Agreement, from the date hereof until the Closing Date, unless and until VETCO otherwise consents in writing, SKYLYNX will not: