Exhibit 10.19

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT

("Agreement") is made and entered into as of this 30th day of April, 2004 by and
between CD&M-Electronics, Inc., a Missouri corporation (hereinafter referred to
as "Purchaser") and UQM ELECTRONICS, INC., a Missouri corporation (hereinafter
referred to as the "Seller"). Purchaser and Seller are sometimes collectively
referred to herein as the "Parties" or individually as a "Party".  

RECITALS

 

WHEREAS

, Seller is a wholly owned subsidiary of UQM Technologies, Inc. ("Parent
Company"), a Colorado corporation; and  

WHEREAS

, Seller’s business operations consist of the contract manufacturing of
electronic printed circuit boards and related components in St. Charles County,
Missouri; and  

WHEREAS

, Purchaser intends to purchase, and Seller intends to sell, certain assets upon
the terms and conditions hereinafter set forth in this Agreement.  

NOW THEREFORE

, in consideration of the above recitals, the terms and conditions hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereto agree as follows:    

ARTICLE I

 

PURCHASE AND SALE OF PURCHASED ASSETS

 

1.1

Purchased Assets.

On the basis of the representations, warranties, covenants and agreements and
subject to the satisfaction or waiver of the conditions set forth herein, at
Closing Seller shall sell, convey, assign, transfer and deliver to Purchaser and
Purchaser shall purchase, accept and take possession from Seller, certain of the
assets, properties and other rights owned or leased, licensed or used by Seller,
but excluding the Excluded Assets (as defined herein) (the "Purchased Assets"),
including, without limitation:

(a)

all of Seller’s furniture, fixtures, equipment, leasehold improvements, and
fixed assets as reflected on Seller’s fixed asset and inventory schedules, which
are attached hereto as Schedule 1.1(a) and incorporated herein by reference, as
of the Closing Date (as defined herein). Seller’s interests in leasehold
improvements are limited (as defined) by a certain lease agreement dated May 8,
1996, as amended, between Seller and Elm Point Investment Company, L.L.C, (the
"Lease Agreement"), which is attached hereto as Exhibit 1.1(a);

(b)

all of Seller’s inventory as of April 18, 2004, except for the items of
inventory consumed pursuant to the Memorandum of Understanding between the
parties dated April 18, 2004.

(c)

all of Seller’s written or electronic information relating to historical
customers of Seller (including, without limitation, customer lists, customer
files and other written accounts of Seller) and other reasonable and
specifically requested information, with respect to sales and marketing data,
principal contacts, and pricing information.

The Purchased Assets are being purchased on an "as is" basis without warranty of
merchantability or fitness for any particular purpose.

1.2

Assets of Seller Not Purchased.

Purchaser shall not purchase any assets of Seller other than those described in
Section 1.1 of this Agreement. Without limiting the generality of the previous
sentence, Purchaser shall not purchase the following (the "Excluded Assets"):

(a)

Seller’s Bank Accounts, Cash, Accounts Receivable, Prepaid Assets & Other
Assets, Facility Sub-Rent Receivable, and Security Deposits;

(b)

Seller’s Articles of Incorporation, Minute Books, Corporate Seals, stock books
and other corporate records relating to the corporate organization and
capitalization of Seller;

(c)

shares of the capital stock of Seller, including any shares held as treasury
shares;

(d)

the name(s) UQM Electronics, UQME, UQM and any and all derivatives thereof and
any and all logos and trademarks used by Seller; and

(e)

Leased equipment and assets not identified in Section 1.1.

1.3

Non-Assumption of Liabilities

Except for the liabilities of Seller described in Schedule 1.3 (collectively,
the "Assumed Liabilities"), Purchaser shall not assume any liabilities or debts
of Seller, and Seller shall remain liable for any and all liabilities,
obligations, claims and commitments of or against Seller, excluding the Assumed
Liabilities, whether the same are known or unknown, existing, contingent upon
future events or circumstances, accrued, funded, unfunded or otherwise.

1.4

Conveyance of Purchased Assets.

On the Closing Date, Seller shall convey good and marketable title to the
Purchased Assets owned by Seller to Purchaser free and clear of any claim, lien,
pledge, option, charge, easement, security interest, encumbrance or other right
("Encumbrances").

ARTICLE II

PURCHASE PRICE; PAYMENT

In addition to the assumption of the Assumed Liabilities referenced in Section
1.3 above, Purchaser shall pay to Seller the following as consideration for the
Purchased Assets and other agreements hereunder (hereinafter referred to as the
"Purchase Price"):

2.1

Purchase Price.

The total Purchase Price for the Purchased Assets shall be One Million Four
Hundred Fifty Thousand and no/100 Dollars (U.S. $ 1,450,000.00) and shall be
paid in the form of cash and common stock as provided below.

2.2

Cash Consideration

At Closing, Purchaser shall pay to Seller, at Closing, the sum of Nine Hundred
Thousand and No/100 Dollars (U.S. $900,000.00) in cash subject to adjustment as
provided in Section 2.5 below, by wire transfer of immediately available funds
to an account or accounts designated in writing by Seller prior to Closing (the
"Cash Consideration").

2.3

Stock Consideration.

At Closing, Purchaser shall issue to Seller, or Seller’s assignee, Ten Thousand
Five Hundred Eighty-Eight (10,588) shares of Purchaser’s Common Stock, which the
Parties agree has an aggregate value of Five Hundred Fifty Thousand Dollars
($550,000.00) (the "Stock Consideration").

2.4

Assumption of Liabilities.

Purchaser agrees to assume those liabilities of Seller referenced in Section 1.3
of this Agreement and listed on Schedule 1.3 attached hereto.

2.5

Prorations

Rent, utility charges, maintenance and repair charges, real estate and all other
taxes payable under any assumed lease and all other items of expense and other
similar obligations to third parties (to the extent not completely included as
Assumed Liabilities) shall be prorated between Seller and Purchaser as of the
Closing Date.

ARTICLE III

CLOSING

3.1

Closing Date

.

Subject to the terms and conditions of this Agreement, the closing of the
transactions contemplated by this Agreement (the "Closing") will be held at the
offices of Robert F. Dwornick, Esq., 1023 Executive Parkway Dr. Suite 18, Creve
Coeur, MO 63141 on Tuesday, May 18, 2004, commencing at the hour of 11:00 AM
(the "Closing Date"), or at such other place, date and time as may be mutually
agreed upon by the parties. Unless otherwise agreed, effective control of the
Purchased Assets shall be deemed transferred at 12:01 a.m. on April 30, 2004.

3.2

Actions to be Taken at the Closing.

At the Closing, the Parties shall take the following actions and deliver the
following documents:

(a)

Seller shall execute and deliver to Purchaser a Bill of Sale and Assignment, in
form substantially similar to the form attached hereto at Exhibit 3.2(a),
transferring to Purchaser good title in and to the Purchased Assets, free and
clear of all Encumbrances, except as disclosed on Schedule 4.3;

(b)

Purchaser shall pay the Cash Consideration to Seller;

(c)

Purchaser shall issue the Stock Consideration to Seller, or Seller’s assignee

(d)

Seller will deliver to Purchaser possession of the Purchased Assets; provided,
however, that the Purchased Assets shall be deemed delivered at Closing and, to
the extent any Purchased Assets are not located at the Seller’s location, Seller
will deliver possession of such Purchased Assets to Purchaser as soon as
practicable after the Closing;

(e)

Seller shall deliver to Purchaser a Letter of No Tax Due from the State of
Missouri (dated no later than forty-five (45) days prior to the Date of Closing)
indicating that all Missouri tax returns (sales, use, employment, etc.) relating
to the Seller have been filed and that all taxes owed thereon have been paid by
Seller;

(f)

Purchaser, Seller, and Elm Point Investment Company, L.L.C. ("Seller’s
Landlord") shall jointly execute and deliver to the Parties and Seller’s
Landlord a Sublease Agreement and Consent to Sublease Agreement , in the forms
attached hereto at Exhibit 3.2 (e), relating to the rented building located at
3081 Elm Point Industrial Drive, St. Charles, MO 63301. As referenced in Section
9 of the Consent to Sublease Agreement, Seller shall pay to Seller’s Landlord
the sum of One-Hundred-Thousand Dollars and No/100 Dollars ($100,149.00) in
cash, by wire transfer of immediately available funds to an account designated
in writing by Seller’s Landlord prior to Closing. As referenced in Section 10 of
the Consent to Sublease Agreement, Purchaser shall pay to Seller the sum of
Eighteen-Thousand-Four-Hundred-Seventy-Two and No/100 Dollars ($18,472.00) in
cash, by wire transfer of immediately available funds to an account designated
in writing by Seller prior to Closing.

(g)

The Parties will take such other actions and will execute and deliver such other
instruments, documents, agreements and certificates as are required by the terms
of this Agreement and the Related Agreements (as defined herein) or as may be
reasonably requested by Purchaser or Seller, as the case may be, in connection
with the consummation of the transactions contemplated herein;

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

At all times from the date of this Agreement through and including the Closing
Date, Seller represents and warrants to Purchaser that to the best of Seller’s
information, knowledge and belief, and without independent investigation, as
follows

4.1

Organization, Qualification and Corporate Power

Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Missouri. Seller has full power and lawful
authority to (i) own and operate its assets, (ii) enter into this Agreement and
all related agreements, and (iii) consummate the transactions contemplated by
this Agreement and in any other agreement or instrument executed by Seller
pursuant to or in connection with this Agreement (the "Related Agreements").

4.2

Authorization of Transaction; Non-contravention. This Agreement and the Related
Agreements have each been duly authorized by all necessary corporate action on
the part of Seller as required by the statutes of the State of Missouri and as
required by the Articles of Incorporation and Bylaws of Seller, including
shareholder and director authorization, and a certified copy of the resolutions
of the shareholders and directors of Seller setting forth such authorization are
attached hereto as Exhibit 4.2. This Agreement and the Related Agreements each
constitute the legal, valid and binding obligation of the Seller, enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement and any of the Related Agreements by Seller do not and will not (i)
constitute a breach or violation of any law, rule, regulation, material
agreement, indenture, deed of trust, mortgage, loan agreement or any material
instrument to which Seller is a party or by which Seller or any of the Purchased
Assets is bound or otherwise affected; (ii) constitute a violation of any order,
judgment or decree by which Seller or any of the Purchased Assets is bound or
affected; (iii) result in the acceleration of any material debt owed by Seller;
or (iv) violate any provision of the statutes of the state of incorporation or
the Articles of Incorporation and Bylaws of the Seller.

4.3

Good Title to Purchased Assets

Except as set forth in Schedule 4.3 attached hereto and incorporated herein by
reference, Seller has good and marketable title to the Purchased Assets free and
clear of all Encumbrances.

4.4

Litigation; Disputes.

Except as otherwise described in Schedule 4.4 attached hereto and incorporated
herein by reference or where any of the following will not have a material
adverse effect on the Purchased Assets, Seller represents that (i) there is no
person holding any claim of any nature against Seller that Seller has knowledge
of, or that Seller has been notified of, or that Seller has been made aware of,
including claims arising out of Seller’s ownership of any of the Purchased
Assets; (ii) Seller does not know or have reasonable grounds to know of any
dispute which adversely affects, or may adversely affect, any of the Purchased
Assets; (iii) Seller is not, and none of the Purchased Assets are, subject to
any pending or threatened litigation, proceeding or administrative
investigation; (iv) Seller has not violated any federal, state or local law,
statute, ordinance, rule, regulation, order or decree (including but not limited
to those pertaining to the environment and the regulation thereof) issued by any
court or by any authority or by any governmental or quasi-governmental authority
or agency having jurisdiction over Seller or any of the Purchased Assets.

4.5

Environmental Matters.

Seller warrants and represents that there are no claimed, alleged, nor,
threatened violations of any federal, state or local law, statute, ordinance,
rule, regulation, order or decree (including but not limited to those pertaining
to the environment and the regulation thereof) issued by any court or by any
authority or by any governmental or quasi-governmental authority or agency
having jurisdiction over Seller or any of the Purchased Assets, nor are there
any present discussions or negotiations with any agency regarding any release of
any hazardous waste, hazardous substance or toxic substance in connection
therewith.

4.6

Licenses, Permits.

Seller warrants and represents that since April 1, 2003 all federal, state and
local permits, licenses, registrations and authorizations required for the use
of the Purchased Assets, have been obtained and further that there have not been
nor are there any currently any violations of such permits, licenses,
registrations or authorizations.

4.7

Legal Compliance.

Seller, is in compliance with each law (including rules and regulations
thereunder) of any federal, state, local or foreign government, or any
governmental entity, which (a) affects or relates to this Agreement or the
transactions contemplated hereby, or (b) is applicable to Seller, except for any
violation or default which will not have a material adverse effect on the
Purchased Assets.

4.8

Contracts.

Schedule 4.8

lists the following written agreements affecting the Purchased Assets entered
into by Seller and which have not been terminated in accordance with their
terms:

(a)

any Contracts or any other written agreements, contracts or documents associated
with Seller’s customers;

(b)

any written agreement under which the consequences of a default or termination
could have a material adverse effect on the Purchased Assets.

4.9

Fees and Brokers.

Except as set forth on Schedule 4.10, Seller does not have any obligation or
liability to pay any fees or commitment to any investment banking firm, finder,
broker or other party with respect to the transactions contemplated by this
Agreement. Any liability or obligation set forth on Schedule 4.10 is the sole
responsibility of Seller

4.10

Third Party Consents

Except as disclosed in Schedule 4.11 hereto, no approval or consent of any
entity or person not a party to this Agreement is necessary for the lawful
consummation of the transactions contemplated hereby.

ARTICLE V

PURCHASER’S REPRESENTATIONS AND WARRANTIES

Purchaser represents and warrants to Seller, that to the best of Purchaser’s
information, knowledge and belief, and without independent investigation, as
follows:

5.1

Organization

.

Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Missouri and has the requisite power and
authority to enter into this Agreement and any Related Agreements and to
consummate the transactions contemplated by this Agreement and such Related
Agreements.

5.2

Authorization of Transaction; Non-contravention.

Subject to the terms and conditions of this Agreement, prior to the Closing,
this Agreement and each Related Agreement will have been duly authorized by all
necessary action on the part of Purchaser and a certified copy of the
resolutions of the shareholders and directors of Purchaser setting forth such
authorization are attached hereto as Exhibit 5.2. The execution, delivery and
performance of this Agreement and any other agreements to be entered into by
Purchaser in connection herewith do not and will not (i) constitute a breach or
violation of any law, rule, regulation, material agreement, indenture, deed of
trust, mortgage, loan agreement or any material instrument to which Purchaser is
a party or by which Purchaser or any of its assets are bound or otherwise
affected; (ii) constitute a violation of any order, judgment or decree by which
Purchaser or its assets are bound or affected; (iii) result in the acceleration
of any material debt owed by Purchaser; or (iv) violate any provision of the
Articles or Certificate of Incorporation or Bylaws of Purchaser.

5.3

Fees and Brokers

Except as set forth on Schedule 5.3, Purchaser has no obligation or liability to
pay any fees or commitment to any investment banking firm, finder, broker or
other party with respect to the transactions contemplated by this Agreement. Any
liability or obligation set forth on Schedule 5.3 is the sole responsibility of
Purchaser.

5.4

Litigation; Disputes

Except as otherwise described in Schedule 5.4 attached hereto and incorporated
herein by this reference (i) there is no person holding any claim of any nature
against Purchaser that Purchaser has knowledge of, or that Purchaser has been
notified of, or that Purchaser has been made aware of, including claims arising
out of or in connection with the operation of or ownership of any assets of
Purchaser; (ii) Purchaser does not know nor does Purchaser have reasonable
grounds to know of any dispute which materially adversely affects, or may
adversely affect, the assets or operations of Purchaser; (iii) neither
Purchaser, nor any of the assets of Purchaser, are subject to any pending or
threatened litigation, proceeding or administrative investigation; (iv)
Purchaser has not violated any federal, state or local law, statute, ordinance,
rule, regulation, order or decree (including but not limited to those pertaining
to the environment and the regulation thereof) issued by any court or by any
authority or by any governmental or quasi-governmental authority or agency
having jurisdiction over Purchaser or any of the assets or the business
operations of Purchaser, the violation of which would have a material adverse
effect on Purchaser; and (v) except for licenses and permits which are
immaterial and not required in order for Purchaser to conduct its business
operations, Purchaser has maintained all material licenses and permits and have
filed all registrations, reports and other documents required by local, state
and federal authorities and regulating bodies in connection with their
respective business activities

5.5

Taxes

.

(a)

Purchaser has (i) filed, when due, with all appropriate governmental agencies,
all tax returns, estimates, reports and statements required to be filed by them,
all of which are true and correct in all material respects; and (ii) paid, or
will pay, when due and payable, all requisite income taxes, sales, use, property
and transfer taxes, levies, duties, licenses and registration fees and charges
of any nature whatsoever, workmen’s compensation payments and unemployment
compensation contributions, including interest and penalties thereon that are
due and payable on or before the Closing Date, except such as are being
contested in good faith by appropriate proceedings (to the extent any such
proceedings are required) and with respect to which Purchaser is maintaining
reserves adequate for their payment.

(b)

Purchaser has withheld, or made provision for the withholding of, all taxes
required to be withheld by it under applicable tax laws and regulations, and
such withholdings have either been paid to the respective governmental agencies
or set aside in accounts for such purpose or accrued, reserved against and
entered upon the books of Purchaser.

5.6

Licenses, Permits.

All material federal, state and local permits, licenses, registrations and
authorizations required for the operations of Purchaser’s business and the use
of Purchaser’s assets, have been obtained and further that there have not been
nor are there any currently any violations of such permits, licenses,
registrations or authorizations.

5.7

Legal Compliance.

Except as disclosed in Schedule 5.7 hereto, Purchaser, and the conduct and
operations of its business activities, is in substantial compliance with each
law (including rules and regulations thereunder) of any federal, state, local or
foreign government, or any governmental entity, which

(a)

affects or relates to this Agreement or the transactions contemplated hereby, or

(b)

is applicable to Purchaser, except for any violation or default which will not
have a material adverse effect on Purchaser, its assets, financial condition or
results of operations.

5.8

Third Party Consents

Except as disclosed in Schedule 5.8 hereto, no approval or consent of any entity
or person not a party to this Agreement is necessary for the lawful consummation
of the transactions contemplated hereby.

5.9

Capitalization

The authorized capital stock of Purchaser consists, and will consist as of the
Closing Date, of 100,000 shares of common stock, of which 60,000 shares will be
issued and outstanding on the Date of Closing.  Purchaser has outstanding no
warrants, options or other rights to purchase shares of common stock.

5.10

Articles of Incorporation, Bylaws and Corporate Records

.

Copies of the Articles of Incorporation and bylaws of Purchaser, and all
amendments thereof, certified by the Secretary of Purchaser, which will be
delivered to Seller at Closing, are complete and correct and will not be amended
prior to the Closing Date.  The minute book of Purchaser is substantially
complete and correctly reflects all corporate actions of Purchaser requiring
action by the directors or shareholders thereof, and correctly records all
resolutions of the board of directors of Purchaser.  Purchaser will deliver to
Seller copies of minutes of all additional board and shareholder meetings that
occur prior to the Closing Date.

5.11

Appointment of Board Member

. 

Purchaser agrees that as soon as practically possible after the Closing,
Purchaser shall cause to be elected one designee of Seller to serve as a member
of Purchaser’s Board of Directors, without compensation. Such designee, or his
or her successor as may be appointed by Seller, shall continue to serve on the
Board for so long as Seller owns at least five (5%) percent of the outstanding
shares of Purchaser’s common stock; provided that Seller, in its capacity as a
Shareholder of Purchaser, exercises its right to vote and allocates all of its
shares for the election of such designee Board member at each Annual Meeting of
the Shareholders. All expenses associated with such member’s attendance at a
Board Meetings share be borne by such member or by Seller.

ARTICLE VI

CERTAIN COVENANTS OF THE PARTIES

6.1

Approvals and Consents.

Seller and Purchaser will work together to attempt to obtain, in writing and
without penalty, cost or charge to either Purchaser or Seller, all necessary
approvals and consents required in order to authorize and approve this Agreement
and the related agreements and to consummate the sale of the Purchased Assets to
Purchaser.

6.2

Access to Properties and Records; Inspection

.

Purchaser and its counsel, accountants, agents, employees, independent
contractors and other representatives will be given Seller supervised access
during normal business hours to the Purchased Assets.

6.3

Seller’s Operation of the Purchased Assets

.

From the date of this Agreement to and including the Closing Date, Seller shall
(i) not take or permit any action which would result in any representation or
warranty of Seller becoming incorrect or untrue in any respect, and (ii)
maintain, where applicable, all insurance in effect on the Purchased Assets.

6.4

Notices of Legal Claims

.

Purchaser and Seller will promptly notify each other in writing if Purchaser or
Seller receive any notice, or otherwise become(s) aware, of any action or
proceeding instituted or threatening before any court or governmental agency by
any third party to restrain or prohibit, or obtain substantial damages in
respect to this Agreement or any related agreement or the consummation of the
transactions contemplated by such Agreement.

6.5

Further Assurances and Cooperation

.

Each of the Parties will execute and deliver any further instruments or
documents, and take all further action, reasonably requested by the other Party
from time to time to carry out the transactions contemplated by this Agreement
and the Related Agreements. In connection therewith, Seller agrees that after
the Closing hereunder, Seller will give full cooperation to Purchaser
(including, without limitation, giving written notice as requested by Purchaser
and referring all telephone inquiries regarding, relating to or in connection
with the Purchased Assets to Purchaser) in order to effect an orderly transfer
of, and assure Purchaser of the continued benefit and full enjoyment of, the
Purchased Assets.

6.6

Taxes

.

Seller shall pay when due all taxes, fees, interest, penalties and amounts due
or to become due in connection with the Purchased Assets and which arose or
accrued on or before Closing, including but not limited to, sales taxes,
withholding taxes and all other taxes due and payable, and Seller shall file any
tax returns and all other documents necessary to pay such amounts. Upon the
immediate completion of the Allocation of Purchase Price as referenced in
Section 6.7, Purchaser shall execute and deliver to Seller a completed Missouri
Department of Revenue Sales/Use Tax Exemption Certification (Form149). For those
Purchased Assets which are not tax exempt from Missouri Sales Tax, Seller shall
invoice to Purchaser and Purchaser shall pay to Seller the Missouri sales tax
amounts due on Seller’s sale of the Purchased Assets, such payment to be made by
Purchaser to Seller at Closing. Should the Allocation of Purchase Price be
completed subsequent to Closing, then Purchaser shall pay Seller such sales tax
amounts due within three (3) business days following the completion of the
Allocation of Purchase Price.

6.7

Allocation of Purchase Price

.

The Purchase Price for the Purchased Assets shall be allocated as agreed by the
parties on or prior to the Closing Date among the Purchased Assets in accordance
with their respective fair market values (as defined in Accounting Principles
Board Opinion No. 16 or applicable regulations) as of the Closing Date and
reflected on Exhibit 6.7 attached hereto. In connection with the determination
of such schedule, the parties shall cooperate with each other and provide such
information as any of them shall reasonably request. The parties shall (i) each
report the federal, state and local and other tax consequences of the purchase
and sale contemplated hereby (including the filing of Internal Revenue Service
Form 8594) in a manner consistent with such allocation schedule and (ii) take no
position in any tax filing, return, proceeding, audit, or otherwise which is
inconsistent with such allocation.

6.8

Bulk Transfer Provisions.

Seller and Purchaser hereby waive compliance with the provisions of any
applicable bulk transfer law; provided, however, that Seller agrees, except to
the extent that any of the following arise as a result of Purchaser’s failure to
pay an Assumed Liability, (i) to pay and discharge when due or to contest or
litigate all claims of creditors which are asserted against Seller, the
Purchased Assets by reason of such noncompliance; (ii) to indemnify, defend and
hold harmless Purchaser from and against any and all such claims in the manner
provided in Article IX; and (iii) to promptly take all necessary action to
remove any lien or encumbrance which is placed on the Purchased Assets by reason
of such noncompliance.

6.9

Covenant Not to Disclose; Non-Competition.

(a)

Seller acknowledges and agrees that it and its officers, directors and
shareholders possess certain data and knowledge of the Purchased Assets prior to
the Closing Date, which are proprietary in nature, and confidential (the
"Confidential Information"). Seller covenants and agrees that, except as agreed
between Seller and Purchaser or as may be required by law, Seller and its
officers, directors and shareholders will not during the Restriction Period (as
defined below) reveal, divulge or make known to any person (other than Purchaser
or Seller) or use for their own account or for the account of any person, any
information relating to Seller’s historical customers, or any confidential or
proprietary methods, record, data, trade secret, pricing policy, bid amount, bid
strategy, rate structure, personnel policy, method or practice of soliciting or
obtaining or doing business, or any other confidential or proprietary
information whatsoever relating to the Purchased Assets or Purchaser, whether or
not obtained with the knowledge and permission of Seller or Purchaser
(collectively, the "Confidential Information"). The term "Restriction Period"
for purposes of this Section 6.11 shall mean the period of two (2) years after
the Closing Date.

(b)

In consideration of the Purchase Price and such other benefits provided herein,
Seller hereby agrees that during the Restriction Period, Seller shall not,
directly or indirectly, without Purchaser’s prior written consent, alone or as a
partner or joint venture of any company or business entity, engage, directly or
indirectly, within a one hundred (100) mile radius of any Business Location in
any business which competes with the business activities of a company or
business entity engaged in the contract manufacturing of electronic printed
circuit board assemblies.

6.10

Exclusive Dealing

.

Seller hereby agrees that during the period beginning with the date of execution
of this Agreement by the Parties and continuing until the Closing Date, Seller
shall not, directly or indirectly, through any representative or otherwise,
solicit or entertain offers from, negotiate with, or in any manner encourage,
discuss, accept, or consider any proposal from any other person or entity for
the acquisition of the Purchased Assets, in whole or in part, whether directly
or indirectly, through purchase, lease, merger, consolidation, reorganization,
or in any other manner (each a "Prohibited Transaction").

6.11

Post-Closing Inspection Rights.

Purchaser agrees that all books and records delivered to Purchaser by Seller and
retained by Purchaser shall be open for inspection by representatives of Seller
at any time during regular business hours on or prior to the fifth anniversary
of the Closing, and that Seller may during such period at its expense make such
excerpts therefrom as it may deem desirable. Seller agrees that such documents
and materials retained by Seller and that are related to the Purchased Assets
shall be open for inspection by representatives of Purchaser at any time during
regular business hours on or prior to the fifth anniversary of the Closing and
that Purchaser may during such period at its expense make such excerpts
therefrom as it may deem desirable.

   

ARTICLE VII

 

CONDITIONS PRECEDENT TO CLOSING

 

7.1

Conditions to Purchaser’s Obligations.

Purchaser’s obligations under this Agreement are subject to the satisfaction or
removal on the Closing Date of each of the following conditions, any or all of
which may be removed only in writing by Purchaser.

(a)

Purchaser will have obtained the necessary financing from a bank or other third
party, including Seller, to consummate the transactions contemplated herein upon
terms reasonably satisfactory to Purchaser.

(b)

Seller will have fully complied with this Agreement and will have performed all
of Seller’s obligations under this Agreement and the Related Agreements, and all
representations of Seller in this Agreement or the Related Agreements will be
true and complete as of the date when given and on the Closing Date.

(c)

All consents, approvals and waivers, including, but not limited to those
specified in Articles IV, V and VI hereof, required by any regulatory or
governmental agency, taxing authority or other third party to consummate the
transactions contemplated by this Agreement and the Related Agreements will have
been obtained by Seller and Purchaser and provided to Purchaser without any
penalty or condition which is adverse to Purchaser.

(d)

Purchaser will have received evidence of the due authorization and execution of
this Agreement by Seller in form and substance satisfactory to Purchaser.

(e)

There will not have been any material adverse change in the condition of the
Purchased Assets, or any event, which may, in the future, cause such a change,
or any pending or threatened material litigation or other proceeding against the
Purchased Assets.

(f)

Purchaser will have received from Seller, the executed Bill of Sale and
Assignment and all other documents required to be provided by Seller under this
Agreement.

7.2

Condition to Seller’s Obligations.

Seller’s obligations under this Agreement are subject to the satisfaction or
removal, on the Closing Date, of the condition, which may be removed only in
writing by Seller, that:

(a)

Purchaser will have fully complied with and performed all of its obligations
under this Agreement and the Related Agreements, and all representations of
Purchaser in this Agreement or the Related Agreements will be true and complete
as of the date when given and on the Closing Date.

(b)

All consents, approvals and waivers, including, but not limited to those
specified in Articles IV, V and VI hereof, required by any regulatory or
governmental agency, taxing authority or other third party to consummate the
transactions contemplated by this Agreement and the Related Agreements will have
been obtained by Seller and Purchaser and provided to Seller without any penalty
or condition which is adverse to Seller.

(c)

Seller will have received evidence of the due authorization and execution of
this Agreement by Purchaser in form and substance satisfactory to Seller

(d)

There will not have been any material adverse change in the condition (financial
or otherwise) of Purchaser, or any event which may, in the future, cause such a
change, or any pending or threatened material litigation or other proceeding
against Purchaser.

(e)

Seller will have received from Purchaser, as the case may be, the executed Bill
of Sale and Assignment and all other documents required to be provided by
Purchaser under this Agreement.

ARTICLE VIII

TERMINATION OF AGREEMENT; EFFECT OF TERMINATION

8.1

Termination

.

This Agreement may be terminated at any time before the Closing as follows:

(a)

By Purchaser

, by notice to Seller, if any of the conditions precedent to Closing set forth
in Section 7.1 hereof have not been satisfied as of the Closing Date or have
become incapable of being satisfied by the Closing Date.

(b)

By Seller

, by notice to Purchaser, if any of the conditions precedent to Closing set
forth in Section 7.2 hereof have not been satisfied as of the Closing Date or
have become incapable of being satisfied by the Closing Date.

(c)

By any Party

, by notice to the others, if the Closing does not take place on or before May
17, 2004, unless otherwise mutually agreed to in writing by Seller and
Purchaser; provided that a Party will not be entitled to terminate this
Agreement pursuant to this Section 8.1(c) if such Party’s willful breach of this
Agreement or any Related Agreement or intentional misrepresentation under this
Agreement or any related agreement has prevented the Closing from taking place
before such date.

8.2

Effect of Termination

.

If this Agreement terminates in accordance with this Article VIII, said
Agreement will have no further force or effect and the Parties shall have no
further rights or obligations to each other hereunder, except such rights or
remedies which may be available to a party under this Agreement, or which may be
provided under applicable law, in the event of a breach of this Agreement by
either party.

ARTICLE IX

SURVIVAL OF COVENANTS, REPRESENTATIONS AND

WARRANTIES; INDEMNITY

9.1

Survival of Covenants, Representations and Warranties

.

The covenants, representations and warranties set forth herein are made as of
the date of execution of this Agreement, however, Seller and Purchaser agree
that by the act of closing the sale and purchase hereunder, said covenants,
representations and warranties shall be deemed confirmed as of the date of
Closing, and shall survive the making of this Agreement and the Closing -for a
period of thirty-one (31) months.

9.2

Indemnification by Seller.

Seller shall indemnify, defend, and hold harmless Purchaser, and its officers,
directors, shareholders, employees, agents, successors and assigns with respect
to any and all demands, claims, actions, suits, proceedings, assessments,
judgments, costs, losses, damages, obligations, liabilities, recoveries,
deficiencies and expenses (including interest, penalties and reasonable
attorney’s fees) of every kind and description (collectively "Claim") relating
to or arising out of:

(a)

Any breach or non-performance by Seller of any of its representations,
warranties, covenants or agreements set forth in this Agreement or any Related
Agreement; or

(b)

Any debt, claim, liability or obligation of Seller that arises or results from
or is attributable to the Purchased Assets prior to the Closing Date, excluding
any Assumed Liabilities.

9.3

Indemnification by Purchaser.

Purchaser shall indemnify, defend, and hold harmless Seller and its officers,
directors, shareholders, employees, agents, successors and assigns with respect
to any and all demands, claims, actions, suits, proceedings, assessments,
judgments, costs, losses, damages, obligations, liabilities, recoveries,
deficiencies and expenses (including interest, penalties and reasonable
attorney’s fees) of every kind and description (collectively "Claim") relating
to or arising out of:

(a)

Any breach or non-performance by Purchaser of any of its representations,
warranties, covenants or agreements set forth in this Agreement or any Related
Agreement; or

(b)

Any debt, claim, liability or obligation of Purchaser that arises or results
from or is attributable to the operations of its business on or after the
Closing Date or any Assumed Liabilities

9.4

General Indemnification Provisions

.

(a)

For the purposes of this Section 9.4, the term "Indemnitee" shall refer to the
Person indemnified, or entitled, or claiming to be entitled to be indemnified,
pursuant to the provisions hereof; the term "Indemnitor" shall refer to the
Person having the obligation to indemnify pursuant to such provisions.

(b)

An Indemnitee shall give written notice (a "Notice of Claim") to the Indemnitor
within ten (10) business days after the Indemnitee has knowledge of any claim
(including a Third Party Claim, as hereinafter defined) which an Indemnitee has
determined has given or could give rise to a right of indemnification under this
Agreement. No failure to give such Notice of Claim shall affect the
indemnification obligations of the Indemnitor hereunder except to the extent
Indemnitor can demonstrate such failure materially prejudiced such Indemnitor’s
ability to successfully defend the matter giving rise to the claim. The Notice
of Claim shall state the nature of the claim, the amount of the loss, if known,
and the method of computation thereof, all with reasonable particularity and
containing a reference to the provisions of this Agreement in respect of which
such right of indemnification is claimed or arises.

(c)

The obligations and liabilities of an Indemnitor under this Article IX with
respect to losses arising from claims of any third party that are subject to the
indemnification provisions provided for in this Article IX ("Third Party
Claims") shall be governed by and contingent upon the following additional terms
and conditions:

(i)

The Indemnitee at the time it gives a Notice of Claim to the Indemnitor of the
Third Party Claim shall advise the Indemnitor that Indemnitor shall be
permitted, at Indemnitor’s option, to assume the control and defense of such
Third Party Claim at its expense and through counsel of its choice if it gives
prompt notice of its intention to do so to the Indemnitee;

(ii)

In the event the Indemnitor exercises its right to undertake the defense against
any such Third Party Claim as provided above, the Indemnitee shall cooperate
with the Indemnitor in such defense and make available to the Indemnitor,
without cost to Indemnitor, all witnesses, pertinent records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor; and

(iii)

Except for the settlement of a Third Party Claim which involves the payment of
money only and for which the Indemnitee is totally indemnified by the
Indemnitor, no Third Party Claim may be settled by the Indemnitor without the
written consent of the Indemnitee, which consent shall not be unreasonably
withheld. Similarly, no Third Party Claim may be settled by the Indemnitee
without the written consent of the Indemnitor, which consent shall not be
unreasonably withheld.

(d)

An Indemnified party shall take all reasonable steps within its control to
mitigate any losses upon becoming aware of any event that could reasonably be
expected to give rise thereto.

(e)

Any amount due to an Indemnified Party in connection with a loss suffered or
incurred under this Agreement shall be reduced by netting from such loss the
amount of any indemnification receivable by the Indemnified Party from a third
party (including an insurance claim) with respect to such loss.

(f)

The representations and warranties provided for in this Agreement shall
terminate as provided for in 9.1 above and no party shall suffer liability under
this Article IX for a breach thereof subsequent to such date. There shall be no
termination of representations and warranties relating to Seller’s fraud,
intentional misrepresentation or criminal activities.

(g)

A Party may only bring claims for indemnification during the thirty-one (31)
month period commencing on the Closing Date. No Party shall have any right to
indemnification for any matter of which the party had knowledge at Closing).

(h)

All amounts for which a Party claims indemnity shall be offset by any tax,
insurance or other benefit received by the non-breaching Party as a result of
the event giving rise to an indemnity claim.

(i)

The remedies expressly provided for in this Article IX are the Parties’
exclusive remedies with respect to the matters covered by this Agreement,
excluding the adjustment described in Section 2.5, and no Party shall be liable
to any other Party under this Agreement or any Related Agreement, at law or in
equity, with respect to any matter not initiated within the time limits
specified in this Article IX.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1

No Waiver.

No waiver of any breach of any provision of this Agreement will be deemed a
waiver of any breach of any other provision of this Agreement. No extension of
time for performance of any act will be deemed an extension of the time for
performance of any other act.

10.2

Severability.

The provisions of this Agreement shall be deemed severable, and if any provision
of this Agreement is held illegal, void or invalid under applicable law, such
provision may be changed to the extent reasonably necessary to make the
provision legal, valid and binding. If any provision of this Agreement is held
illegal, void or invalid in its entirety, the remaining provisions of this
Agreement will not be affected but will remain binding in accordance with their
terms

10.3

Entire Agreement; Amendment. This Agreement, the Related Agreements and the
Schedules, Exhibits and attachments to such Agreements contain the entire
agreement of the Parties with respect to the purchase and sale of the Purchased
Assets and the other transactions contemplated by such Agreements. This
Agreement may be amended only by an instrument in writing signed by Purchaser
and Seller. The headings in this Agreement are solely for convenience of
reference and will not affect the interpretation of any provision of this
Agreement. The Exhibits and Schedules to this Agreement are incorporated as a
part of this Agreement.

10.4

Applicable Law; Jurisdiction. This Agreement will be construed in accordance
with and governed by the laws of the State of Missouri without regard to
conflicts of law principles. Any action or proceeding which either party may
seek to enforce any provision of, or based on any rights arising out of this
Agreement must be brought against such other party in the courts of the State of
Missouri only (and, if jurisdiction may be obtained, the U. S. District Court
for the Eastern District of Missouri), and each party consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.

10.5

Time is of the Essence.

The Parties acknowledge and agree that time is of the essence with respect to
the consummation of the transactions contemplated by this Agreement and each
Related Agreement.

 

 

 

 

 

10.6

Assignment.

Purchaser has the right without the consent of Seller to assign all of the
rights, title and interests of Purchaser under this Agreement to a corporation
or other business entity to be organized and wholly owned by Purchaser before
the Closing; provided, however, that Purchaser shall remain liable and guarantee
all obligations of such assignee or subsidiary. Except as otherwise provided in
the preceding sentence, no Party has the right to assign said Party’s rights,
title and interests under this Agreement without the prior written consent of
the other Parties. The rights and benefits of the Parties to this Agreement
shall be binding upon and shall inure to the benefit of the Parties hereto and
their successors or assigns

10.7

Notices.

Any and all notices required and/or desired to be sent to a Party pursuant to
the terms of this Agreement shall be in writing and delivered either in person,
by facsimile transmission, overnight courier or United States registered or
certified mail, return receipt requested, postage fully prepaid, and addressed
as follows:

To Purchaser:

William Alexander 11692 Lilburn Park Road St. Louis, MO 63146

To Seller:      

UQM Technologies, Inc. 7501 Miller Drive Frederick, CO 80530 Attn: Donald
French, Treasurer Fax: 303-215-3493

All notices shall be deemed delivered (i) on the date of delivery if delivered
in person; (ii) on the date received if sent by facsimile transmission unless
such day is on weekend or holiday, in which case delivery shall be deemed to
occur on the next business day; or (iii) on the next business day if sent by
overnight courier or (iv) on the fifth business day if sent by United States
mail. The addresses and parties to receive notice may be changed from time to
time by notice pursuant to this Section. Notice given by an attorney for a Party
shall be deemed to have been given by such Party

10.8

Counterparts

.

This Agreement may be executed in counterparts by any of the Parties, and upon
each of the Parties having executed a counterpart copy of this Agreement, this
Agreement shall be legally binding and enforceable, and any copy of this
Agreement which is executed in counterpart by any of the Parties shall
constitute a legally binding and enforceable Agreement among the Parties.

10.9

Costs of Transaction

.

Seller and Purchaser shall each pay their own costs and expenses, including
attoney fees, incurred in connection with the negotiation and preparation of
this Agreement and the Closing of the transaction contemplated herein.

10.10

Confidentiality

.

Except for the "Permitted Disclosures" (herein defined), Seller and Purchaser
agree not to disclose the terms of this Agreement or the transactions
contemplated herein. For purposes of this Agreement, the term "Permitted
Disclosures" shall mean the following

(a)

Any disclosures to the attorneys, accountants, engineers, insurance agents,
title insurance companies, surveyors, or other professionals or contractors of
Seller or Purchaser as the case may be;

(b)

Any joint disclosures by Seller and Purchaser;

(c)

Any disclosures necessary in order to carry out and implement the transactions
contemplated by this Agreement, including, but not limited to, local, state and
federal governments or governmental authorities, customers, suppliers and
vendors; and

(d)

Any disclosures of information which is in the public domain.

(e)

Any disclosures of information which are usual and customary disclosure
requirements of a publicly-held company to its shareholders, investors, the
investor community, and government regulators of publicly-held companies.

If the sale and purchase contemplated by this Agreement is closed, this Section
10.10 shall be no further force or effect; and if not closed, the provisions of
Section 10.10 shall continue to be legally binding upon Purchaser and Seller.

IN WITNESS WHEREOF

, he parties hereto have executed and delivered this Agreement on the date first
above entered.

SELLER

:

UQM ELECTRONICS, INC.,a

Missouri corporation

By:

/s/ Richard L. Hugen

Richard L. Hugen,

Vice President, UQM Technologies, Inc

PURCHASER

:

CD&M-Electronics, Inc., a

Missouri corporation

By:

/s/ V. Ronn Foster,

V. Ronn Foster,

President