Exhibit 10.1                   

 

ASSET PURCHASE AGREEMENT

 AMONG

MAX ENGINEERING LLC

LINCOLN WIND LLC

AND

MATTHEW CUMBERWORTH

Dated June 26, 2008
 
 
 
 
 
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ASSET PURCHASE AGREEMENT
 
ASSET PURCHASE AGREEMENT, dated as of June 26, 2008 (the “Agreement”), between
Max Engineering LLC, a Texas limited liability corporation (the “Purchaser”) and
Lincoln Wind LLC, a Nebraska limited liability corporation (the “Seller”) and
Matthew Cumberworth, the sole owner of the Seller (the “Owner”). Purchaser is a
wholly owned subsidiary of WPCS International Incorporated, a Delaware
corporation (“Parent”).
 
W I T N E S S E T H:
 
WHEREAS, subject to the terms and conditions hereof, Seller desires to sell,
transfer and assign to Purchaser, and Purchaser desires to purchase from Seller,
certain intangible assets, properties, and rights related to the business of
Seller, which is engaged in the installation of scientific equipment related to
wind development (the “Business”).
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:
 

 
ARTICLE I
PURCHASE AND SALE OF ASSETS.
 
    1.1           Sale of Assets.  Seller agrees to sell, assign, transfer and
deliver to Purchaser, and Purchaser agrees to purchase from Seller, all of
Seller’s right, title and interest in certain assets and business of the Seller
identified on Schedule 1.1 (the “Business”), including certain intangible assets
and key personnel, and wherever located, but excluding the Excluded Assets,
including, without limitation, the following:
 
    1.2          Contracts.  All of the rights of Seller under, and interest of
Seller in and to, all customer lists and/or contracts relating to the customers
of the Business, a true, correct and complete list of which customer lists
and/or contracts is attached hereto as Schedule 1.2 (“Contracts”);
 
    1.3          Goodwill.  All of the goodwill of Seller in, and the going
concern value of, the Business, and all of the business and customer lists and
accounts (“Customer Base”), proprietary information, phone numbers, marketing
materials and trade secrets related to the Business;
 
    1.4          Records.  All of Seller’s customer logs, location files and
records, and other business files and records, in each case relating to the
Business.
 
The assets, properties and business of Seller being sold to and purchased by
Purchaser under this Section 1.1 are referred to herein collectively as the
“Assets.”
 
    1.5           Excluded Assets.  There shall be excluded from the Assets and
retained by Seller, (the “Excluded Assets”) all assets identified on Schedule
1.5 attached hereto; and
 
 
 
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    1.6           Assumed Liabilities; Excluded Liabilities; Employees.
 
(a)          Assumed Liabilities.  Purchaser shall accept and assume, and shall
become and be fully liable and responsible for, and other than as expressly set
forth herein Seller shall have no further liability or responsibility for or
with respect to the liabilities identified on Schedule 1.6(a) attached hereto
(collectively, the “Assumed Liabilities”).  The assumption of the Assumed
Liabilities by Purchaser hereunder shall not enlarge any rights of third parties
under contracts or arrangements with Purchaser or Seller or any of their
respective affiliates or subsidiaries.
 
(b)          Excluded Liabilities.  It is expressly understood that, except for
the Assumed Liabilities, Purchaser shall not assume, pay or be liable for any
liability or obligation of Seller of any kind or nature at any time existing or
asserted, whether, known, unknown, fixed, contingent or otherwise, not
specifically assumed herein by Purchaser, and any liability or obligation
relating to, resulting from or arising out of (i) the Excluded Assets, (ii) the
employees of the Business or (iii) any fact existing or event occurring prior
to, or relating to the operation of the Business prior to, the date hereof.
 
(c)          Employees, Wages and Benefits.
 
(i)           Seller shall terminate all of its employees related to the
Business no later than the Closing Date and the Purchaser shall not assume or
have any obligations or liabilities with respect to such employees or such
terminations, including, without limitation, any severance obligation.
 
(ii)           Purchaser specifically reserves the right, on or after the date
hereof, to employ or reject any of Seller’s employees or other applicants in its
sole and absolute discretion, except as otherwise agreed pursuant to Section 6.9
herein.  Nothing in this Agreement shall be construed as a commitment or
obligation of Purchaser to accept for employment, or otherwise continue the
employment of, any of Seller’s employees, other than as expressly set forth
herein, and no employee shall be a third party beneficiary of this Agreement.
 
(iii)           Seller shall pay all wages, salaries, commissions, and the cost
of all fringe benefits provided to its employees which shall have become due for
work performed as of and through the date hereof, and Seller shall collect and
pay all taxes in respect of such wages, salaries, commissions and benefits.
 
(iv)           Seller acknowledges and agrees that Purchaser shall not acquire
any rights or interests of Seller in, or assume or have any obligations or
liabilities of Seller under, any benefit plans maintained by Seller, or for the
benefit of any employees of Seller, including, without limitation, obligations
for severance.
 
    1.10                      Records and Contracts.  Seller shall deliver to
Purchaser all of the Contracts.  Seller shall also deliver to Purchaser all of
Seller’s files and records constituting Assets.
 
    1.11                      Further Assurances.  Seller shall, from time to
time after the consummation of the transactions contemplated herein, at the
request of Purchaser and without further consideration, execute and deliver
further instruments of transfer and assignment and take such other action as
Purchaser may reasonably require to more effectively transfer and assign to, and
vest in, Purchaser the Assets free and clear of all Liens.
 
 
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1.12                      Sales and Transfer Taxes.  All sales, transfer, use,
recordation, documentary, stamp, excise taxes, personal property taxes, fees and
duties under applicable law incurred in connection with this Agreement or the
transactions contemplated hereby will be borne and paid by Purchaser.
 
1.13                      Transfer of Subject Assets.  Seller shall deliver or
cause to be delivered to Purchaser good and sufficient instruments of transfer
transferring to Purchaser title to all of the Assets, together with all required
consents.  Such instruments of transfer (a) shall contain appropriate warranties
and covenants which are usual and customary for transferring the type of
property involved under the laws of the jurisdictions applicable to such
transfers, (b) shall be in form and substance reasonably satisfactory to
Purchaser and its counsel, (c) shall effectively vest in Purchaser good and
marketable title to all of the Assets free and clear of all Liens (as hereafter
defined), and (d) where applicable, shall be accompanied by evidence of the
discharge of all Liens against the Assets.
 

ARTICLE II
PURCHASE PRICE AND ALLOCATION
 
2.1 Amount of Purchase Price.
 
The purchase price for the Assets shall be an amount equal to Four Hundred
Thousand dollars ($400,000.00), less the aggregate amount of all liabilities
which the Purchaser pays or otherwise satisfies on or before the Closing Date
(the “Purchase Price”).
 
2.2 Purchase Price Allocation.  Purchaser and Seller agree to allocate the
Purchase Price among the assets.  Such allocation shall be binding upon
Purchaser and Seller for all purposes (including financial accounting purposes,
financial and regulatory reporting purposes and tax purposes).  Purchaser and
Seller further agrees to file its Federal income tax returns and its other tax
returns reflecting such allocation, Form 8594 and any other reports required by
Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”).
 

ARTICLE III
CLOSING AND TERMINATION
 
3.1 Closing Date.
 
Subject to the satisfaction of the conditions set forth in Sections 6.1 and 6.2
hereof (or the waiver thereof by the party entitled to waive that condition),
the closing of the sale and purchase of the Assets provided for in Section 1.1
hereof (the “Closing”) shall take place at the offices of Sichenzia Ross
Friedman Ference LLP located at 61 Broadway, New York, NY 10006 (or at such
other place as the parties may mutually agree upon) on or before August 1,
2008.  The date on which the Closing shall be held is referred to in this
Agreement as the “Closing Date.”
 
 
 
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3.2 Termination of Agreement.
 
This Agreement may be terminated prior to the Closing as follows:
 
(a) At the election of the Owner or the Purchaser on or after August 2, 2008, if
the Closing shall not have occurred by the close of business on such date,
provided that the terminating party is not in default of any of its obligations
hereunder;
 
(b) by mutual written consent of the Owner and the Purchaser; or
 
(c) by the Owner or the Purchaser if there shall be in effect a final
nonappealable order of a governmental body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence).
 
3.3 Procedure Upon Termination.
 
In the event of termination and abandonment by the Purchaser or the Owner, or
both, pursuant to Section 3.2 hereof, written notice thereof shall forthwith be
given to the other party or parties, and this Agreement shall terminate, and the
purchase of the Assets hereunder shall be abandoned, without further action by
the Purchaser or the Owner.  If this Agreement is terminated as provided herein,
each party shall redeliver all documents, work papers and other material of any
other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the same.
 
3.4 Effect of Termination.
 
In the event that this Agreement is validly terminated as provided herein, then
each of the parties shall be relieved of their duties and obligations arising
under this Agreement after the date of such termination and such termination
shall be without liability to the Purchaser, the Seller or the Owner; provided,
further, however, that nothing in this Section 3.4 shall relieve the Purchaser
or the Owner of any liability for a breach of this Agreement.
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND OWNER
 

The Seller and Owner hereby jointly and severally represent and warrant to the
Purchaser that:
 
4.1.           Organization and Good Standing of the Seller.  The Seller is a
limited liability corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation as set forth
above. Except as otherwise provided herein, the Seller is not required to be
qualified to transact business in any other jurisdiction where the failure to so
qualify would have a material adverse effect on the business or operations of
the Seller (“Material Adverse Effect”).
 
 
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4.2.           Authority.

(a)           The Seller has full power and authority (corporate and otherwise)
to carry on its business and has all permits and licenses that are necessary to
the conduct of its business or to the ownership, lease or operation of its
properties and assets, except where the failure to have such permits and
licenses would not have a Material Adverse Effect.

(b)           The execution of this Agreement and the delivery hereof to the
Purchaser and the sale contemplated herein have been, or will be prior to
Closing, duly authorized by the Seller’s sole Manager and by the Seller’s sole
member having full power and authority to authorize such actions.

(c)           Subject to any consents required under Section 4.7 below, the
Seller and the Owner have the full legal right, power and authority to execute,
deliver and carry out the terms and provisions of this Agreement; and this
Agreement has been duly and validly executed and delivered on behalf of Seller
and the Owner and constitutes a valid and binding obligation of each of the
Seller and the Owner enforceable in accordance with its terms.

(d)           Except as set forth in Schedule 4.2, neither the execution and
delivery of this Agreement, the consummation of the transactions herein
contemplated, nor compliance with the terms of this Agreement will violate,
conflict with, result in a breach of, or constitute a default under any statute,
regulation, indenture, mortgage, loan agreement, or other agreement or
instrument to which the Seller or the Owner  is a party or by which it or any of
them is bound, any charter, regulation, or bylaw provision of the Seller, or any
decree, order, or rule of any court or governmental authority or arbitrator that
is binding on the Seller or the owner in any way, except where such would not
have a Material Adverse Effect.

4.3.           Ownership and Transfer of Assets.  Except as set forth on
Schedule 4.3, Seller has good and marketable title to all of the Assets free and
clear of all mortgages, pledges, security interests, charges, liens,
restrictions and encumbrances of any kind (collectively, “Liens”)
whatsoever.  Upon the sale, assignment, transfer and delivery of the Assets to
the Purchaser hereunder and under the Seller Documents, there will be vested in
the Purchaser good, marketable and indefeasible title to the Assets, free and
clear of all Liens.  The Assets include certain intangible assets and properties
held for use by Seller in connection with the Business as presently
conducted.  All of the intangible assets which Purchaser is acquiring pursuant
to this Agreement comply in all material respects with applicable laws,
ordinances and regulations.

4.4.           Subsidiaries and Affiliates.  Any and all businesses, entities,
enterprises and organizations in which the Seller has any ownership, voting or
profit and loss sharing percentage interest (the “Subsidiaries”) are identified
in Schedule 4.4 hereto, together with the Seller’s interest therein.  Unless the
context requires otherwise or specifically designated to the contrary on
Schedule 4.6 hereto, “Seller” as used in this Agreement shall include all such
Subsidiaries.  Except as set forth in Schedule 4.4, (i) the Seller has made no
advances to, or investments in, nor owns beneficially or of record, any
securities of or other interest in, any business, entity, enterprise or
organization, (ii) there are no arrangements through which the Company has
acquired from, or provided to, the Seller or their affiliates any goods,
properties or services, (iii) there are no rights, privileges or advantages now
enjoyed by the Seller as a result of the ownership of the Company by the Seller
which, to the knowledge of the Owner or the Seller, might be lost as a result of
the consummation of the transactions contemplated by this Agreement.  Each
entity shown on Schedule 4.4 is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has full
corporate power to own all of its property and to carry on its business as it is
now being conducted.  Also set forth on Schedule 4.4 is a list of jurisdictions
in which each Subsidiary is qualified as a foreign corporation.  Such
jurisdictions are the only jurisdictions in which the ownership or leasing of
property by each Subsidiary or the conduct of its business requires it to be so
qualified.  All of the outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, are fully paid and nonassessable,
and, except as set forth on Schedule 4.4, are owned, of record and beneficially,
by the Seller, and on the Closing Date will be owned by the Seller, free and
clear of all liens, encumbrances, equities, options or claims whatsoever.  No
Subsidiary has outstanding any other equity securities or securities options,
warrants or rights of any kind that are convertible into equity securities of
such Subsidiary, except as set forth on Schedule 4.4.
 
 
 
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4.5.           Consents.  Except as set forth in Schedule 4.5, no consents or
approvals of any public body or authority and no consents or waivers from other
parties to leases, licenses, franchises, permits, indentures, agreements or
other instruments are (i) required for the lawful consummation of the
transactions contemplated hereby, or (ii) necessary in order that the business
currently conducted by the Seller can be conducted by the Purchaser in the same
manner after the Closing as heretofore conducted by the Seller, nor will the
consummation of the transactions contemplated hereby result in creating,
accelerating or increasing any liability of the Seller, except where the failure
of any of the foregoing would not have a Material Adverse Effect.

4.6.           Financial Statements.  The Seller has delivered, or will deliver
prior to Closing, to the Purchaser copies of the following financial statements
(which include all notes and schedules attached thereto), all of which are true,
complete and correct, have been prepared from the books and records of the
Seller in accordance with a cash basis method of accounting consistently applied
with past practice and fairly present the financial condition, assets,
liabilities and results of operations of the Seller as of the dates thereof and
for the periods covered thereby:

 
the compiled balance sheet of the Seller at December 31, 2006 and 2007, and the
related statements of operations, of the Seller for the period then ended
and  the compiled balance sheet at April 30, 2008 (such statements, , are
referred to herein as the “Financial Statements.”)

In such Financial Statements, the statements of operations do not contain any
items of special or nonrecurring income or any other income not earned in the
ordinary course of business except as set forth in Schedule 4.6, and the
financial statements for the interim periods indicated include all adjustments,
which consist of only normal recurring accruals, necessary for such fair
presentation.  There are no facts, to the best of Seller’s or Owner’s knowledge,
that under a cash basis method of accounting  would alter the information
contained in the foregoing Financial Statements in any material way.

For the purposes hereof, the balance sheet of the Seller as of April 30, 2008 is
referred to as the “Balance Sheet” and April 30, 2008 is referred to as the
“Balance Sheet Date”.

4.7.           Records and Books of Account.  The records and books of account
of the Seller reflect all material items of income and expense and all material
assets, liabilities and accruals, have been, and to the Closing Date will be,
regularly kept and maintained in conformity with a cash basis method of
accounting applied on a consistent basis with preceding years.
 
 
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4.8.           Absence of Undisclosed Liabilities.  Except as and to the extent
reflected or reserved against in the Seller’s Financial Statements or disclosed
in Schedule 4.8, there are no liabilities or obligations of the Seller of any
kind whatsoever, whether accrued, fixed, absolute, contingent, determined or
determinable, and including without limitation (i) liabilities to former,
retired or active employees of the Seller under any pension, health and welfare
benefit plan, vacation plan or other plan of the Seller, (ii) tax liabilities
incurred in respect of or measured by income for any period prior to the close
of business on the Balance Sheet Date, or arising out of transactions entered
into, or any state of facts existing, on or prior to said date, and
(iii) contingent liabilities in the nature of an endorsement, guarantee,
indemnity or warranty, and there is no condition, situation or circumstance
existing or which has existed that could reasonably be expected to result in any
liability of the Seller which is of a nature that would be required to be
disclosed on its Financial Statements in accordance with a cash basis method of
accounting, other than liabilities and contingent liabilities incurred in the
ordinary course of business since the Balance Sheet Date consistent with the
Seller’s recent customary business practice, none of which is materially adverse
to the Seller.

4.9           Taxes.

(a)           For purposes of this Agreement, “Tax” or “Taxes” refers to:  (i)
any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes and
escheatment payments, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity; (ii) any liability for the
payment of any amounts of the type described in clause (i) as a result of being
or ceasing to be a member of an affiliated, consolidated, combined or unitary
group for any period (including, without limitation, any liability under Treas.
Reg. Section 1.1502-6 or any comparable provision of foreign, state or local
law); and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other person or as a result of any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor entity.

(b)           (i)           The Seller has timely filed all federal, state,
local and foreign returns, estimates, information statements and reports
(“Returns”) relating to Taxes required to be filed by the Seller with any Tax
authority effective through the Closing Date, except as disclosed on Schedule
4.9 hereto.  All such Returns are true, correct and complete in all respects,
except for immaterial amounts where such would not have a Material Adverse
Effect.  The Seller has paid all Taxes shown to be due on such Returns.  Except
as listed on Schedule 4.9 hereto, the Seller is not currently the beneficiary of
any extensions of time within which to file any Returns. The Owner and the
Seller have furnished and made available to the Purchaser complete and accurate
copies of all income and other Tax Returns and any amendments thereto filed by
the Seller in the last three (3) years.
 
 
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(ii) The Seller, as of the Closing Date, will have withheld and accrued or paid
to the proper authority all Taxes required to have been withheld and accrued or
paid, except for immaterial amounts where such would not have a Material Adverse
Effect, except as disclosed on Schedule 4.9 hereto.

(iii) The Seller has not been delinquent in the payment of any Tax nor is there
any Tax deficiency outstanding or assessed against the Seller, except as
disclosed on Schedule 4.9 hereto.  The Seller has not executed any unexpired
waiver of any statute of limitations on or extending the period for the
assessment or collection of any Tax.

(iv) Except as disclosed on Schedule 4.9 hereto, there is no dispute, claim, or
proposed adjustment concerning any Tax liability of the Seller either
(A) claimed or raised by any Tax authority in writing or (B)  based upon
personal contact with any agent of such Tax authority, and there is no claim for
assessment, deficiency, or collection of Taxes, or proposed assessment,
deficiency or collection from the Internal Revenue Service or any other
governmental authority against the Seller which has not been satisfied.  Except
as disclosed on Schedule 4.9 hereto, the Seller is not a party to nor has it
been notified in writing that it is the subject of any pending, proposed, or
threatened action, investigation, proceeding, audit, claim or assessment by or
before the Internal Revenue Service or any other governmental authority, nor
does the Seller have any reason to believe that any such notice will be received
in the future. Except as set forth on Schedule 4.9, neither the Internal Revenue
Service nor any state or local taxation authority has ever audited any income
tax return of the Seller.  The Seller has not filed any requests for rulings
with the Internal Revenue Service.  Except as provided to the Seller’s
accountants, no power of attorney has been granted by the Seller or its
Affiliates with respect to any matter relating to Taxes of the Seller.  There
are no Tax liens of any kind upon any property or assets of the Seller, except
for inchoate liens for Taxes not yet due and payable.

(v) Except as disclosed on Schedule 4.9 hereto and except for immaterial amounts
which would not have a Material Adverse Effect, the Seller has no liability for
any unpaid Taxes which has not been paid or accrued for or reserved on the
Financial Statements in accordance with a cash basis method of accounting,
whether asserted or unasserted, contingent or otherwise.

(vi) There is no contract, agreement, plan or arrangement to which the Seller is
a party as of the date of this Agreement, including but not limited to the
provisions of this Agreement, covering any employee or former employee of the
Seller that, individually or collectively, would reasonably be expected to give
rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”). There is no contract, agreement, plan or arrangement to which the
Seller is a party or by which it is bound to compensate any individual for
excise taxes paid pursuant to Section 4999 of the Code.

(vii) The Seller has not filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
the Seller.

(viii) The Seller is not a party to, nor has any obligation under any
tax-sharing, tax indemnity or tax allocation agreement or arrangement.

(ix) None of the Seller’s assets are tax exempt use property within the meaning
of Section 168(h) of the Code.

(x) With regard to the tax liability disclosed on Schedule 4.9 hereto, the
liability is attributable to a former owner of Seller.  Seller agrees to enter
into an Escrow Agreement in the form attached hereto as Exhibit 4.9(x ), and
escrow a portion of the Purchase Price sufficient to cover the liability.
 
 
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4.10.                      Accounts Receivable.  The accounts receivable of the
Seller shown on the Balance Sheet Date, and those to be shown in the Financial
Statements, were, as of the Balance Sheet Date, actual bona fide receivables
from transactions in the ordinary course of business representing valid and
binding obligations of others for the total dollar amount shown thereon, and as
of the Balance Sheet Date were not (and presently are not) subject to any
recoupments, set-offs, or counterclaims. To the best of Seller’s knowledge,
except as set forth on Schedule 4.10, all such accounts receivable are, and will
be collectible in amounts not less than the amounts (net of reserves) carried on
the books of the Seller, including the  Financial Statements, and will be paid
in accordance with their terms.  Except as listed on Schedule 4.10 hereto, all
such accounts receivable were, as of the Balance Sheet Date,  actual bona fide
receivables from transactions in the ordinary course of business.

4.11.                      Inventory.  The inventories of the Seller are located
at the locations listed on Schedule 4.11 attached hereto. Except as disclosed in
Schedule 4.11, the inventories of the Seller shown on its Balance Sheet (net of
reserves) are carried at values which reflect the normal inventory valuation
policy of the Seller of stating the items of inventory at average cost in
accordance with a cash basis method of accounting.  Inventory acquired since the
Balance Sheet Date has been acquired in the ordinary course of business and
valued as set forth above.  The Seller will maintain the inventory in the normal
and ordinary course of business from the date hereof through the Closing Date.

4.12.                      Machinery and Equipment.  Except for items disposed
of in the ordinary course of business, all machinery, tools, furniture,
fixtures, equipment, vehicles, leasehold improvements and all other tangible
personal property (hereinafter “Fixed Assets”) of the Seller currently being
used in the conduct of its business (the “Business”), or included in determining
the net book value of the Seller on the Balance Sheet Date, together with any
machinery or equipment that is leased or operated by the Seller, are in fully
serviceable working condition and repair.  Said Fixed Assets shall be maintained
in such condition from the date hereof through the Closing Date.  Except as
described on Schedule 4.12 hereto, all Fixed Assets owned, used or held by the
Seller are situated at its business premises and are currently used in its
Business.  Schedule 4.12 describes all Fixed Assets owned by or an interest in
which is claimed by any other person (whether a customer, supplier or other
person) for which the Seller is responsible (copies of all agreements relating
thereto being attached to said Schedule 4.12), and all such property is in the
Seller’s actual possession and is in such condition that upon the return of such
property in its present condition to its owner, the Seller will not be liable in
any amount to such owner.  There are no outstanding requirements or
recommendations by any insurance company that has issued a policy covering
either (i) such Fixed Assets or (ii) any liabilities of the Seller relating to
operation of the Business, or by any board of fire underwriters or other body
exercising similar functions, requiring or recommending any repairs or work to
be done on any Fixed Assets or any changes in the operations of the Business,
any equipment or machinery used therein, or any procedures relating to such
operations, equipment or machinery.  All Fixed Assets of the Seller are set
forth on Schedule 4.12 hereto.

4.13.                      Real Property Matters.  The Seller does not own any
real property as of the date hereof and has not owned any real property during
the three years preceding the date hereof.

4.14.                      Leases.  All leases of real and personal property of
the Seller are described in Schedule 4.14, are in full force and effect and
constitute legal, valid and binding obligations of the respective parties
thereto enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting generally the enforcement of creditor’s rights, and have not been
assigned or encumbered.  The Seller has performed in all material respects the
obligations required to be performed by it under all such leases to date and it
is not in default in any material respect under any of said leases, except as
set forth in Schedule 4.14, nor has it made any leasehold improvements required
to be removed at the termination of any lease, except signs.  No other party to
any such lease is in material default thereunder.  Except as noted on Schedule
4.14, none of the leases listed thereon require the consent of a third party in
connection with the transfer of the Assets.
 
 
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4.15.                      Patents, Software, Trademarks, Etc.  The Seller does
not own any registered patents, software, trademarks, service marks, trade names
and/or copyrights.

4.16.                      Insurance Policies.  There is set forth in Schedule
4.16 a list and brief description of all insurance policies on the date hereof
held by the Seller or on which it pays premiums, including, without limitation,
life insurance and title insurance policies, which description includes the
premiums payable by it thereunder.  Schedule 4.16 also sets forth, in the case
of any life insurance policy held by the Seller, the name of the insured under
such policy, the cash surrender value thereof and any loans thereunder.  All
such insurance premiums in respect of such coverage have been, and to the
Closing Date will be, paid in full, if due and owing.  All claims, if any, made
against the Seller which are covered by such policies have been, or are being,
settled or defended by the insurance companies that have issued such
policies.  Up to the Closing Date, such insurance coverage will be maintained in
full force and effect and will not be cancelled, modified or changed without the
express written consent of the Purchaser, except to the extent the maturity
dates of any such insurance policies expiring prior to the Closing Date.  No
such policy has been, or to the Closing Date will be, cancelled by the issuer
thereof, and, to the knowledge of the Owner and the Seller, between the date
hereof and the Closing Date, there shall be no increase in the premiums with
respect to any such insurance policy caused by any action or omission of the
Owner or of the Seller.  Upon the Closing Date, all life insurance policies
maintained by the Seller shall be assigned to each respective Seller.

4.17.                      Banking and Personnel Lists.  The Owner and the
Seller will deliver to the Purchaser prior to the Closing Date the following
accurate lists and summary descriptions relating to the Seller:

(i)           The name of each bank in which the Seller has an account or safe
deposit box and the names of all persons authorized to draw thereon or have
access thereto.

(ii)           The names, current annual salary rates and total compensation for
the preceding fiscal year of all of the present directors and officers of the
Seller, and any other employees whose current base accrual salary or annualized
hourly rate equivalent is $20,000 or more, together with a summary of the
bonuses, percentage compensation and other like benefits, if any, paid or
payable to such persons for the last full fiscal year completed, together with a
schedule of changes since that date, if any.

(iii)           A schedule of workers’ compensation payments of the Seller over
the past five full fiscal years and the fiscal year to date, a schedule of
claims by employees of the Seller against the workers’ compensation fund for any
reason over such period, identification of all compensation and medical benefits
paid to date on each such claim and the estimated amount of compensation and
medical benefits to be paid in the future on each such claim.

(iv)           The name of all pensioned employees of the Seller whose pensions
are unfunded and are not paid or payable pursuant to any formalized pension
arrangements, their agent and annual unfunded pension rates.

4.18.                      Lists of Contracts, Etc.  There is included in
Schedule 4.18 a list of the following items (whether written or oral) relating
to the Seller, which list identifies and fairly summarizes each item
(collectively “Contracts”):

(i)           All collective bargaining and other labor union agreements (if
any); all employment agreements with any officer, director, employee or
consultant; and all employee pension, health and welfare benefit plans, group
insurance, bonus, profit sharing, severance, vacation, hospitalization, and
retirement plans, post-retirement medical benefit plans, and any other plans,
arrangements or custom requiring payments or benefits to current or retiring
employees;
 
 
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(ii)           All joint venture contracts of the Seller or affiliates relating
to the Business;

(iii)           All contracts of the Seller relating to (a) obligations for
borrowed money, (b) obligations evidenced by bonds, debentures, notes or other
similar instruments, (c) obligations to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (d) obligations under capital leases, (e) debt of others
secured by a lien on any asset of the Seller, and (f) debts of others guaranteed
by the Seller;

(iv)           All agreements of the Seller relating to the supply of raw
materials for and the distribution of the products of its business, including
without limitation all sales agreements, manufacturer’s representative
agreements and distribution agreements of whatever magnitude and nature, and any
commitments therefor;

(v)           All contracts that individually provide for aggregate future
payments to or from the Seller of $25,000 or more, to the extent not included in
(i) through (iv) above;

(vi)           All contracts of the Seller that have a term exceeding one year
and that may not be cancelled without any liability, penalty or premium, to the
extent not included in (i) through (v) above;

(vii)           A complete list of all outstanding powers of attorney granted by
the Seller; and

(viii)          All other contracts of the Seller material to the business,
assets, liabilities, financial condition, results of operations or prospects of
the Business taken as a whole to the extent not included above.

Except as set forth in Schedule 4.18, (i) all contracts, agreements and
commitments of the Seller set forth in Schedule 4.18 are valid, binding and in
full force and effect, and (ii) neither the Seller nor, to the best of Owner’s
knowledge, any other party to any such contract, agreement, or commitment has
materially breached any provision thereof or is in default thereunder.  Except
as set forth in Schedule 4.18, the sale of the Assets by the Seller in
accordance with this Agreement will not result in the termination of any
contract, agreement or commitment of the Seller set forth in Schedule 4.18, and
immediately after the Closing, each such contract, agreement or commitment will
continue in full force and effect without the imposition or acceleration of any
burdensome condition or other obligation on the Seller resulting from the sale
of the Assets by the Seller.  True and complete copies of the contracts, leases,
licenses and other documents referred to in this Schedule 4.18 will be delivered
to the Purchaser, certified by the Secretary or Assistant Secretary of the
Seller as true, correct and complete copies, not later than four weeks from the
date hereof or ten business days before the Closing Date, whichever is sooner.

There are no pending disputes with customers or vendors of the Seller regarding
quality or return of goods involving amounts in dispute with any one customer or
vendor, whether for related or unrelated claims, in excess of $5,000 except as
described on Schedule 4.18 hereto, all of which will be resolved to the
reasonable satisfaction of Purchaser prior to the Closing Date.  To the best
knowledge of Owner and the Seller, there has not been any event, happening,
threat or fact that would lead them to believe that any of said customers or
vendors will terminate or materially alter their business relationship with the
Seller after completion of the transactions contemplated by this Agreement.
 
 
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4.19.                      Compliance With the Law.  The Seller is not in
violation of any applicable federal, state, local or foreign law, regulation or
order or any other, decree or requirement of any governmental, regulatory or
administrative agency or authority or court or other tribunal (including, but
not limited to, any law, regulation order or requirement relating to securities,
properties, business, products, manufacturing processes, advertising, sales or
employment practices, terms and conditions of employment, occupational safety,
health and welfare, conditions of occupied premises, product safety and
liability, civil rights, or environmental protection, including, but not limited
to, those related to waste management, air pollution control, waste water
treatment or noise abatement), except where such would not have a Material
Adverse Effect.  Except as set forth in Schedule 4.19, the Seller has not been
and is not now charged with, or to the best knowledge of the Owner or the Seller
under investigation with respect to, any violation of any applicable law,
regulation, order or requirement relating to any of the foregoing, nor, to the
best knowledge of the Seller after due inquiry, are there any circumstances that
would or might give rise to any such violation.  The Seller has filed all
reports required to be filed with any governmental, regulatory or administrative
agency or authority.

4.20.                      Litigation; Pending Labor Disputes.  Except as
specifically identified on the Balance Sheet or footnotes thereto or set forth
in Schedule 4.20:

(i)           There are no legal, administrative, arbitration or other
proceedings or governmental investigations pending or, to the best knowledge of
Owner or the Seller, threatened, against the Seller or the Owner, relating to
the Business or the Seller’s properties (including leased property), or the
transactions contemplated by this Agreement, nor is there any basis known to the
Seller for any such action.

(ii)           There are no judgments, decrees or orders of any court, or any
governmental department, commission, board, agency or instrumentality binding
upon Seller or the Owner  relating to the Business the effect of which is to
prohibit any business practice or the acquisition of any property or the conduct
of any business by the Seller or which limit or control or otherwise adversely
affect its method or manner of doing business.

(iii)           No work stoppage has occurred and is continuing or, to the
knowledge of the Seller, is threatened affecting the Business, and to the best
of Owner’s knowledge, no question involving recognition of a collective
bargaining agent exists in respect of any employees of the Seller.

(iv)           There are no pending labor negotiations or, to the best of
Owner’s knowledge, union organization efforts relating to employees of the
Seller.

(v)           There are no charges of discrimination (relating to sex, age,
race, national origin, handicap or veteran status) or unfair labor practices
pending or, to the best knowledge of the Seller, threatened before any
governmental or regulatory agency or authority or any court relating to
employees of the Seller.

4.21.                      Absence of Certain Changes or Events.  The Seller has
not, since the Balance Sheet Date, and except in the ordinary course of business
consistent with past practice and/or except as described on Schedule 4.21:

(i)           Incurred any material obligation or liability (absolute, accrued,
contingent or otherwise), except in the ordinary course of its business
consistent with past practice  or in connection with the performance of this
Agreement, and any such obligation or liability incurred in the ordinary course
is not materially adverse, except for claims, if any, that are adequately
covered by insurance;
 
 
 
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(ii)           Discharged or satisfied any lien or encumbrance, or paid or
satisfied any obligations or liability (absolute, accrued, contingent or
otherwise) other than (a) liabilities shown or reflected on the Balance Sheet,
and (b) liabilities incurred since the Balance Sheet Date in the ordinary course
of business that were not materially adverse;

(iii)          Increased or established any reserve or accrual for taxes or
other liability on its books or otherwise provided therefor, except (a) as
disclosed on the Balance Sheet, or (b) as may have been required under the cash
basis method of accounting due to income earned or expense accrued since the
Balance Sheet Date and as disclosed to the Purchaser in writing;

(iv)          Mortgaged, pledged or subjected to any lien, charge or other
encumbrance any of its assets, tangible or intangible;

(v)           Sold or transferred any of its assets or cancelled any debts or
claims or waived any rights, except in the ordinary course of business and which
has not been materially adverse;

(vi)          Disposed of or permitted to lapse any patents or trademarks or any
patent or trademark applications material to the operation of its Business;

(vii)         Incurred any significant labor trouble or granted any general or
uniform increase in salary or wages payable or to become payable by it to any
director, officer, employee or agent, or by means of any bonus or pension plan,
contract or other commitment increased the compensation of any director,
officer, employee or agent;

(viii)        Authorized any capital expenditure for real estate or leasehold
improvements, machinery, equipment or molds in excess of $5,000.00 in the
aggregate;

(ix)          Except for this Agreement or as otherwise disclosed herein or in
any schedule to this Agreement, entered into any material transaction;

(x)           Issued any stocks, bonds, or other corporate securities, or made
any declaration or payment of any dividend or any distribution in respect of its
capital stock; or

(xi)          Experienced damage, destruction or loss (whether or not covered by
insurance) individually or in the aggregate materially and adversely affecting
any of its properties, assets or business, or experienced any other material
adverse change or changes individually or in the aggregate affecting its
financial condition, assets, liabilities or Business.

4.22.                      Employee Benefit Plans.

(a)           Schedule 4.22 lists a description of the only Employee Programs
(as defined below) that have been maintained (as such term is further defined
below) by the Seller at any time during the five (5) years prior to the date
hereof.

(b)           There has not been any failure of any party to comply with any
laws applicable with respect to any Employee Program that has been maintained by
the Seller, except where such would not have a Material Adverse Effect.  With
respect to any Employee Programs now or heretofore maintained by the Seller,
there has occurred no breach of any duty under the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or other applicable law which could
result, directly or indirectly in any taxes, penalties or other liability to the
Purchaser, the Seller or any affiliate (as defined below), except for immaterial
exceptions which would not have a Material Adverse Effect.  No litigation,
arbitration, or governmental administrative proceeding (or investigation) or
other proceeding (other than those relating to routine claims for benefits) is
pending or, to the best knowledge of the Seller, threatened with respect to any
such Employee Program.
 
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(c)           Except as set forth in Schedule 4.22 attached hereto, neither the
Seller nor any affiliate has ever (i) provided health care or any other
non-pension benefits to any employees after their employment was terminated
(other than as required by Part 6 of Subtitle B of Title I of ERISA) or has ever
promised to provide such post-termination benefits or (ii) maintained an
Employee Program provided to such employees subject to Title IV of ERISA,
Section 401(a) or Section 412 of Code, including, without limitation, any
Multiemployer Plan.

(d)           For purposes of this Section 4.22:
 
(i)           “Employee Program” means (A) all employee benefit plans within the
meaning of ERISA Section 3(3), including, but not limited to, multiple employer
welfare arrangements (within the meaning of ERISA Section 3(40)), plans to which
more than one unaffiliated employer contributes and employee benefit plans (such
as foreign or excess benefit plans) which are not subject to ERISA; and (B) all
stock option plans, bonus or incentive award plans, severance pay policies or
agreements, deferred compensation agreements, supplemental income arrangements,
vacation plans, and all other employee benefit plans, agreements, and
arrangements not described in (A) above.  In the case of an Employee Program
funded through an organization described in Code Section 501(c)(9), each
reference to such Employee Program shall include a reference to such
organization;

(ii)           An entity “maintains” an Employee Program if such entity
sponsors, contributes to, or provides (or has promised to provide) benefits
under such Employee Program, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise covers
employees of such entity (or their spouses, dependents, or beneficiaries);

(iii)           An entity is an “affiliate” of the Seller for purposes of this
Section 4.22 if it would have ever been considered a single employer with the
Seller under ERISA Section 4001(b) or part of the same “controlled group” as the
Seller for purposes of ERISA Section 302(d)(8)(C); and

(iv)           “Multiemployer Plan” means a (pension or non-pension) employee
benefit plan to which more than one employer contributes and which is maintained
pursuant to one or more collective bargaining agreements.

4.23.                    Service Warranties and Service Liabilities.  The
service warranties  of the Seller in effect on the date hereof and the types of
products to which they apply are described on Schedule 4.23 hereto.  Schedule
4.23 also sets forth all service liability claims involving amounts in
controversy in excess of $5,000 that are currently either pending or, to the
best of the Seller’s knowledge, threatened against the Seller.    The Seller is
not aware of any reason why the future cost of performing all such obligations
and paying all such service liability claims prior to the Closing Date will not
exceed the average annual cost thereof for said past three year period.

4.24.                    Assets.   The Assets of the Seller are located at the
locations listed on Schedule 4.24 attached hereto. Except as described in
Schedule 4.24, the Assets of the Seller are, and together with the additional
assets to be acquired or otherwise received by the Seller prior to the Closing,
will at the Closing Date be, sufficient in all material respects to carry on the
operations of the Business as now conducted by the Seller.  The Seller is the
only business organization through which the Business is conducted.  Except as
set forth in Schedule 4.24, all Assets used by the Seller to conduct the
Business are, and will on the Closing Date be, owned by the Seller.
 
 
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4.25.                      Absence of Certain Commercial Practices.  Except as
described on Schedule 4.25, neither the Seller, to the best of Owner’s
knowledge, nor the Owner has made any payment (directly or by secret
commissions, discounts, compensation or other payments) or given any gifts to
another business concern, to an agent or employee of another business concern or
of any governmental entity (domestic or foreign) or to a political party or
candidate for political office (domestic or foreign), to obtain or retain
business for the Seller or to receive favorable or preferential treatment,
except for gifts and entertainment given to representatives of customers or
potential customers of sufficiently limited value and in a form (other than
cash) that would not be construed as a bribe or payoff.

4.26.                      Licenses, Permits, Consents and Approvals.  The
Seller has, and at the Closing Date will have, all licenses, permits or other
authorizations of governmental, regulatory or administrative agencies or
authorities (collectively, “Licenses”) required to conduct the Business, except
for any failures of such which would not have a Material Adverse Effect. All
Licenses of the Seller are listed on Schedule 4.26 hereto.  At the Closing, the
Seller will have all such Licenses which are material to the conduct of the
Business and will have renewed all Licenses which would have expired in the
interim.  Except as listed in Schedule 4.26, no registration, filing,
application, notice, transfer, consent, approval, order, qualification, waiver
or other action of any kind (collectively, a “Filing”) will be required as a
result of the sale of the Assets by Seller in accordance with this Agreement
(a) to avoid the loss of any License or the violation, breach or termination of,
or any default under, or the creation of any lien on any Asset of the Seller
pursuant to the terms of, any law, regulation, order or other requirement or any
contract binding upon the Seller or to which any such asset may be subject, or
(b) to enable Purchaser (directly or through any designee) to continue the
operation of the Seller and the Business substantially as conducted prior to the
Closing Date.  All such Filings will be duly filed, given, obtained or taken on
or prior to the Closing Date and will be in full force and effect on the Closing
Date.

4.27.                      Environmental Matters. Except as set forth on
Schedule 4.27 hereto:
 
(a) The operations of the Seller, to the best knowledge of Seller and the Owner,
are in compliance with all applicable laws promulgated by any governmental
entity which prohibit, regulate or control any hazardous material or any
hazardous material activity (“Environmental Laws”) and all permits issued
pursuant to Environmental Laws or otherwise except for where noncompliance or
the absence of such permits would not, individually or in the aggregate, have a
Material Adverse Effect;
 
(b)  The Seller has obtained all permits required under all applicable
Environmental Laws necessary to operate its business, except for any failures of
such which would not have a Material Adverse Effect;
 
(c) The Seller is not the subject of any outstanding written order or Contract
with any governmental authority or person respecting Environmental Laws or any
violation or potential violations thereof; and
 
(d)          The Seller has not received any written communication alleging
either or both that the Seller may be in violation of any Environmental Law, or
any permit issued pursuant to Environmental Law, or may have any liability under
any Environmental Law.

4.28                      Broker.  Except as specified in Schedule 4.28, neither
the Seller nor the Owner has retained any broker in connection with any
transaction contemplated by this Agreement.  Purchaser and the Seller shall not
be obligated to pay any fee or commission associated with the retention or
engagement by the Seller or the Owner of any broker in connection with any
transaction contemplated by this Agreement.

4.29.                      Related Party Transactions.  Except as described in
Schedule 4.29, to the best of Owner’s knowledge, all transactions during the
past five years between the Seller and any current or former member or any
entity in which the Seller or any current or former member had or has a direct
or indirect interest have been fair to the Seller as determined by the Board of
Managers.  No portion of the sales or other on-going business relationships of
the Seller is dependent upon the friendship or the personal relationships (other
than those customary within business generally) of the Owner, except as
described in Schedule 4.31.  During the past five years, the Seller has not
forgiven or cancelled, without receiving full consideration, any indebtedness
owing to it by the Owner.

4.30                      Patriot Act.  The Seller and the Owner certify that
the Seller has not been designated, and is not owned or controlled, by a
“suspected terrorist” as defined in Executive Order 13224.  The Seller and the
Owner hereby acknowledge that the Purchaser seeks to comply with all applicable
laws concerning money laundering and related activities.  In furtherance of
those efforts, the Seller and the Owner hereby represent, warrant and agree
that:  (i) none of the cash or property that the Owner have contributed or paid
or will contribute and pay to the Seller has been or shall be derived from, or
related to, any activity that is deemed criminal under United States law; and
(ii) no contribution or payment by the Seller to the Purchaser, to the extent
that they are within the Seller’s control shall cause the Purchaser to be in
violation of the United States Bank Secrecy Act, the United States International
Money Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001.  The Owner shall
promptly notify the Purchaser if any of these representations ceases to be true
and accurate regarding the Owner or the Seller.  The Owner agrees to provide the
Purchaser any additional information regarding the Seller that the Purchaser
reasonably requests to ensure compliance with all applicable laws concerning
money laundering and similar activities.
 
 
 
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4.31.                     Disclosure.  All statements contained in any schedule,
certificate, opinion, instrument, or other document delivered by or on behalf of
the Owner or the Seller pursuant hereto shall be deemed representations and
warranties by each Seller and the Seller herein.  No statement, representation
or warranty by the Owner or the Seller in this Agreement or in any schedule,
certificate, opinion, instrument, or other document furnished or to be furnished
to the Purchaser pursuant hereto contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading or necessary in order to provide a prospective purchaser of the
Business of the Seller with full and fair disclosure concerning the Seller, its
business, and the Seller’s affairs.
 

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
5.1 Organization and Good Standing.
 
The Purchaser is a limited liability corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
 
5.2 Authority.
 
(a)           The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein have been, or will prior to Closing be,
duly and validly approved and acknowledged by all necessary corporate action on
the part of the Purchaser.

(b)           The execution of this Agreement and the delivery hereof to the
Seller and the purchase contemplated herein have been, or will be prior to
Closing, duly authorized by the Purchaser’s Board of Managers having full power
and authority to authorize such actions.

5.3 Conflicts; Consents of Third Parties.
 
(a) The execution and delivery of this Agreement, the acquisition of the Assets
by Purchaser and the consummation of the transactions herein contemplated, and
the compliance with the provisions and terms of this Agreement, are not
prohibited by the Certificate of Formation or Operating Agreement of the
Purchaser and will not violate, conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any court order,
indenture, mortgage, loan agreement, or other agreement or instrument to which
the Purchaser is a party or by which it is bound.
 
(b) No consent, waiver, approval, order, permit or authorization of, or
declaration or filing with, or notification to, any person or governmental body
is required on the part of the Purchaser in connection with the execution and
delivery of this Agreement or any other agreement referenced herein or the
compliance by Purchaser with any of the provisions hereof or thereof.
 
5.4 Litigation.
 
There are no legal proceedings pending or, to the best knowledge of the
Purchaser, threatened that are reasonably likely to prohibit or restrain the
ability of the Purchaser to enter into this Agreement or consummate the
transactions contemplated hereby.
 
5.5 Broker.
 
The Purchaser has not retained any broker in connection with any transaction
contemplated by this Agreement.  Neither Seller nor Owner shall not be obligated
to pay any fee or commission associated with the retention or engagement by the
Purchaser of any broker in connection with any transaction contemplated by this
Agreement.
 
 
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5.6 Patriot Act.  The Purchaser certifies that neither the Purchaser nor any of
its subsidiaries has been designated, and is not owned or controlled, by a
“suspected terrorist” as defined in Executive Order 13224.  The Purchaser hereby
acknowledges that the Seller and the Owner seek to comply with all applicable
laws concerning money laundering and related activities.  In furtherance of
those efforts, the Purchaser hereby represent, warrant and agree that:  (i) none
of the cash or property that the Purchaser has contributed or paid or will
contribute and pay to the Seller has been or shall be derived from, or related
to, any activity that is deemed criminal under United States law; and (ii) no
contribution or payment by the Purchaser or any of its subsidiaries to the
Seller, to the extent that they are within the Purchaser’s control shall cause
the Owner or the Seller to be in violation of the United States Bank Secrecy
Act, the United States International Money Laundering Control Act of 1986 or the
United States International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001.  The Purchaser shall promptly notify the Owner if any of
these representations ceases to be true and accurate regarding the Purchaser or
any of its subsidiaries.  The Purchaser agrees to provide the Owner any
additional information regarding the Purchaser or any of its subsidiaries that
the Owner reasonably requests to ensure compliance with all applicable laws
concerning money laundering and similar activities.
 

ARTICLE VI
COVENANTS
 
6.1 Access to Information.
 
The Owner and the Seller agree that, prior to the Closing Date, the Purchaser
shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to make
such investigation of the properties, businesses and operations of the Seller
and its Subsidiaries and such examination of the books, records and financial
condition of the Seller and its Subsidiaries as it reasonably requests and to
make extracts and copies of such books and records.  Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances, and the Owner shall cooperate, and shall cause the
Seller and its Subsidiaries to cooperate, fully therein.  No investigation by
the Purchaser prior to or after the date of this Agreement shall diminish or
obviate any of the representations, warranties, covenants or agreements of the
Owner contained in this Agreement or the Seller Documents.  In order that the
Purchaser may have full opportunity to make such physical, business, accounting
and legal review, examination or investigation as it may reasonably request of
the affairs of the Seller and its Subsidiaries, the Owner shall cause the
officers, employees, consultants, agents, accountants, attorneys and other
representatives of the Seller and its Subsidiaries to cooperate fully with such
representatives in connection with such review and examination.  It is agreed
and understood that all information provided pursuant to this Section 6.1 is
subject to the terms and conditions of the Confidentiality/Standstill Agreement
executed by the parties as of May 30, 2008.
 
6.2 Conduct of the Business Pending the Closing.
 
(a) Except as otherwise expressly contemplated by this Agreement or with the
prior written consent of the Purchaser, prior to the Closing the Owner shall,
and shall cause the Seller to:
 
(i) Conduct the Business of the Seller only in the ordinary course consistent
with past practice;
 
(ii) Use its best efforts to (A) preserve its present business operations,
organization (including, without limitation, management and the sales force) and
goodwill of the Seller and (B) preserve its present relationship with Persons
having business dealings with the Seller;
 
 
 
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(iii) Maintain (A) all of the Assets and properties of the Seller in their
current condition, ordinary wear and tear excepted and (B) insurance upon all of
the properties and assets of the Seller in such amounts and of such kinds
comparable to that in effect on the date of this Agreement;
 
(iv) (A) maintain the books, accounts and records of the Seller  in the ordinary
course of business consistent with past practices, (B) continue to collect
accounts receivable and pay accounts payable utilizing normal procedures and
without discounting or accelerating payment of such accounts, and (C) comply
with all contractual and other obligations applicable to the operation of the
Seller; and
 
(v) Comply in all material respects with applicable laws.
 
(b) Except as otherwise expressly contemplated by this Agreement or with the
prior written consent of the Purchaser, prior to the Closing the Owner shall
not, and shall cause the Seller not to:
 
(i) Declare, set aside, make or pay any dividend or other distribution in
respect of the membership interests of the Seller or repurchase, redeem or
otherwise acquire any outstanding membership interests or other securities of,
or other ownership interests in, the Seller;
 
(ii) Transfer, issue, sell or dispose of any membership interests or other
securities of the Seller or grant options, warrants, calls or other rights to
purchase or otherwise acquire membership interests of the capital stock or other
securities of the Seller;
 
(iii) Effect any recapitalization, reclassification, or like change in the
capitalization of the Seller;
 
(iv) Amend the certificate of formation or operating agreement of the Seller;
 
(v) (A) materially increase the annual level of compensation of any employee of
the Seller, (B) increase the annual level of compensation payable or to become
payable by the Seller to any of its executive officers, (C) grant any unusual or
extraordinary bonus, benefit or other direct or indirect compensation to any
employee, director or consultant, (D) increase the coverage or benefits
available under any (or create any new) severance pay, termination pay, vacation
pay, company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan or arrangement made to, for, or with any of the directors,
officers, employees, agents or representatives of the Seller or otherwise modify
or amend or terminate any such plan or arrangement or (E) enter into any
employment, deferred compensation, severance, consulting, non-competition or
similar agreement (or amend any such agreement) to which the Seller is a party
or involving a director, officer or employee of the Seller in his or her
capacity as a director, officer or employee of the Seller;
 
(vi) Except for trade payables and for indebtedness for borrowed money incurred
in the ordinary course of business and consistent with past practice, borrow
monies for any reason or draw down on any line of credit or debt obligation, or
become the guarantor, surety, endorser or otherwise liable for any debt,
obligation or liability (contingent or otherwise) of any other person, or change
the terms of payables or receivables;
 
(vii) Subject to any lien (except for leases that do not materially impair the
use of the property subject thereto in their respective businesses as presently
conducted), any of the properties or Assets (whether tangible or intangible) of
the Seller;
 
(viii) Acquire any material properties or assets or sell, assign, transfer,
convey, lease or otherwise dispose of any of the material properties or assets
(except for fair consideration in the ordinary course of business consistent
with past practice) of the Seller except, with respect to the items listed on
Schedule 6.2(b)(viii) hereto, as previously consented to by the Purchaser;
 
 
 
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(ix) Cancel or compromise any debt or claim or waive or release any material
right of the Seller except in the ordinary course of business consistent with
past practice;
 
(x) Enter into any commitment for capital expenditures out of the ordinary
course;
 
(xi) Permit the Seller to enter into any transaction or to make or enter into
any Contract which by reason of its size or otherwise is not in the ordinary
course of business consistent with past practice;
 
(xii) Permit the Seller to enter into or agree to enter into any merger or
consolidation with, any corporation or other entity, and not engage in any new
business or invest in, make a loan, advance or capital contribution to, or
otherwise acquire the securities of any other person;
 
(xiii) Except for transfers of cash pursuant to normal cash management
practices, permit the Seller  to make any investments in or loans to, or pay any
fees or expenses to, or enter into or modify any Contract with, the Owner or any
affiliate of the Owner; or
 
(xiv) Agree to do anything prohibited by this Section 6.2 or anything which
would make any of the representations and warranties of the Seller in this
Agreement or the Seller Documents untrue or incorrect in any material respect as
of any time through and including the Closing Date.
 
6.3 Consents.
 
The Seller shall use its best efforts, and the Purchaser shall cooperate with
the Owner, to obtain at the earliest practicable date all consents and approvals
required to consummate the transactions contemplated by this Agreement,
including, without limitation, the consents and approvals referred to in Section
4.7 hereof; provided, however, that neither the Seller nor the Purchaser shall
be obligated to pay any consideration therefor to any third party from whom
consent or approval is requested.
 
6.4 Other Actions.
 
Each of the Owner, the Seller and the Purchaser shall use its best efforts to
(i) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement, and (ii) cause the fulfillment at the earliest
practicable date of all of the conditions to their respective obligations to
consummate the transactions contemplated by this Agreement.
 
6.5 No Solicitation.
 
The Owner will not, and will not cause or permit the Seller or any of the
Seller's directors, officers, employees, representatives or agents
(collectively, the "Representatives") to, directly or indirectly, (i) discuss,
negotiate, undertake, authorize, recommend, propose or enter into, either as the
proposed surviving, merged, acquiring or acquired corporation, any transaction
involving a merger, consolidation, business combination, purchase or disposition
of any amount of the assets or capital stock or other equity interest in the
Seller other than the transactions contemplated by this Agreement (an
"Acquisition Transaction"), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers in respect of an
Acquisition Transaction, (iii) furnish or cause to be furnished, to any person,
any information concerning the business, operations, properties or assets of the
Seller in connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person to do or seek any of the
foregoing.  The Owner will inform the Purchaser in writing immediately following
the receipt by the Owner, the Seller or any Representative of any proposal or
inquiry in respect of any Acquisition Transaction.
 
 
 
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6.6 Preservation of Records.
 
The Owner and the Purchaser agree that each of them shall preserve and keep the
records held by it relating to the business of the Seller (including but not
limited to books, records and accounts, financial information, correspondence,
production records, employment records and other similar information) for a
period of six years from the Closing Date and shall make such records and
personnel available to the other as may be reasonably requested by such party in
connection with, among other things, any insurance claims by, legal proceedings
against or governmental investigations of the Owner or the Purchaser or any of
their affiliates or in order to enable the Owner or the Purchaser to comply with
their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby.  
 
6.7 Publicity.
 
Neither the Seller, the Owner or the Purchaser shall issue any press release or
public announcement concerning this Agreement or the transactions contemplated
hereby without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless, in the sole
judgment of the Purchaser or the Seller, disclosure is otherwise required by
applicable law, provided that, to the extent required by applicable law, the
party intending to make such release shall use its best efforts consistent with
such applicable law to consult with the other party with respect to the text
thereof.
 
6.8 Use of Name.
 
The Seller hereby agrees that upon the consummation of the transactions
contemplated hereby, the Purchaser shall have the sole right to the use of the
name "Lincoln Wind" and the Seller shall not, and shall not cause or permit any
affiliate to, use such name or any variation or simulation thereof.
 
6.9 Employment Agreement.
 
On or prior to the Closing Date, the Owner shall enter into an employment
agreement with the Purchaser, substantially in the form of agreement attached
hereto as Exhibit 6.9 (the “Employment Agreement”).
 
6.10 Fiscal Projection; Confirmation of Financial Information.
 
On or prior to the Closing Date, the Seller will provide (i) a fiscal projection
for the twelve month period ending April 30, 2009, which projection shall be
mutually acceptable to the Seller and the Purchaser, and (ii) confirmation to
the Purchaser of information related to backlog, add-backs, key client
relationships and the tangibility of assets.

6.11 Financial Statements.
 
If required for Securities and Exchange Commission purposes, the Owner shall
cooperate with the Purchaser, to provide all information required for the
completion of audited financial statements of the Seller for the years ended
December 31, 2006 and 2007 and reviewed statements for the three month period
ended April 30, 2007 and 2008, and delivered no later than 60 days from the
Closing Date.  The costs of such financial statements shall be borne by the
Purchaser.
 
 
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6.12 Non-Competition. For a period of two years after the later of the Closing
Date, Seller agrees not to engage in any of the following competitive
activities: (a) engaging directly or indirectly in any business or activity
substantially similar to any business or activity engaged in (or scheduled to be
engaged) by the Seller or the Purchaser in any areas where the Seller or the
Purchaser engage in business; (b) engaging directly or indirectly in any
business or activity competitive with any business or activity engaged in (or
scheduled to be engaged) by the Seller or the Purchaser in any areas where the
Seller or the Purchaser engage in business; (c) soliciting or taking away any
employee, agent, representative, contractor, supplier, vendor, customer,
franchisee, lender or investor of the Seller or the Purchaser, or attempting to
so solicit or take away; (d) interfering with any contractual or other
relationship between the Seller or the Purchaser and any employee, agent,
representative, contractor, supplier, vendor, customer, franchisee, lender or
investor; or (e) using, for the benefit of any person or entity other than the
Seller, any confidential information of the Seller or the Purchaser. Nothing in
this Section 6.15 shall be deemed, however, to prevent a Seller from owning
securities of any publicly-owned corporation engaged in any such business,
provided that the total amount of securities of each class owned by such Seller
in such publicly-owned corporation (other than Purchaser) does not exceed two
percent (2%) of the outstanding securities of such class.    In addition, no
Seller shall make any negative statement of any kind concerning the Seller, the
Purchaser or their affiliates, or their directors, officers or agents, except as
such may be compelled by legal proceeding or governmental action or authority.
 

ARTICLE VII
CONDITIONS TO CLOSING
 
7.1 Conditions Precedent to Obligations of Purchaser.
 
The obligation of the Purchaser to consummate the transactions contemplated by
this Agreement is subject to the fulfillment, on or prior to the Closing Date,
of each of the following conditions (any or all of which may be waived by the
Purchaser in whole or in part to the extent permitted by applicable law):
 
(a) all representations and warranties of the Seller and the Owner contained
herein shall be true and correct as of the date hereof;
 
(b) all representations and warranties of the Seller and the Owner contained
herein qualified as to materiality shall be true and correct, and the
representations and warranties of the Seller and the Owner contained herein not
qualified as to materiality shall be true and correct in all material respects,
at and as of the Closing Date with the same effect as though those
representations and warranties had been made again at and as of that time;
 
(c) the Seller and the Owner shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement to be
performed or complied with by  them on or prior to the Closing Date;
 
(d) the Purchaser shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to the Purchaser)
executed by each Seller certifying as to the fulfillment of the conditions
specified in Sections 7.1(a), 7.1(b) and 7.1(c) hereof;
 
(e) the Seller shall have delivered a bill of sale to the Purchaser in form
reasonably satisfactory to the Purchaser (the “Bill of Sale”);
 
(f) there shall not have been or occurred any Material Adverse Change;
 
(g) the Seller shall have obtained all consents and waivers referred to in
Section 4.7 hereof, in a form reasonably satisfactory to the Purchaser, with
respect to the transactions contemplated by this Agreement;
 
(h) no legal proceedings shall have been instituted or threatened or claim or
demand made against the Owner, the Seller, or the Purchaser seeking to restrain
or prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any order
by a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
 
(i) the Employment Agreement shall have been executed by the Owner; and
 
(j) the Purchaser shall have received information satisfactory in its sole
discretion to verify the accuracy of the backlog, add-backs, key client
relationships and the tangibility of assets.
 
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7.2 Conditions Precedent to Obligations of the Seller.
 
The obligations of the Seller to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, prior to or on the Closing Date,
of each of the following conditions (any or all of which may be waived by the
Seller in whole or in part to the extent permitted by applicable law):
 
(a) all representations and warranties of the Purchaser contained herein shall
be true and correct as of the date hereof;
 
(b) all representations and warranties of the Purchaser contained herein
qualified as to materiality shall be true and correct, and all representations
and warranties of the Purchaser contained herein not qualified as to materiality
shall be true and correct in all material respects, at and as of the Closing
Date with the same effect as though those representations and warranties had
been made again at and as of that date;
 
(c) the Purchaser shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date;
 
(d) the Seller shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to the Seller) executed
by the Chief Executive Officer and Chief Financial Officer of the Purchaser
certifying as to the fulfillment of the conditions specified in Sections 7.2(a),
7.2(b) and 7.2(c);
 
(e) no legal proceedings shall have been instituted or threatened or claim or
demand made against the Owner, the Seller, or the Purchaser seeking to restrain
or prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any order
by a governmental body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
and
 
(f) the Employment Agreement shall have been executed by the Owner and the
Purchaser.
 

ARTICLE VIII
DOCUMENTS TO BE DELIVERED
 
8.1 Documents to be Delivered by the Seller.
 
At the Closing, the Seller shall deliver, or cause to be delivered, to the
Purchaser the following:
 
(a) the Bill of Sale;
 
(b) the certificates referred to in Section 7.1(d) and 7.1(e) hereof;
 
(c) copies of all consents and waivers referred to in Section 7.1(g) hereof;
 
(d) Employment Agreement, substantially in the form of Exhibit 6.9 hereto, duly
executed by the Owner;
 
(e) certificate of good standing with respect to the Seller issued by the
Secretary of State of the State of incorporation, and for each state in which
the Seller is qualified to do business as a foreign corporation; and
 
 
 
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(f) such other documents as the Purchaser shall reasonably request.
 
8.2 Documents to be Delivered by the Purchaser.
 
At the Closing, the Purchaser shall deliver to the Seller the following:
 
(a) The Purchase Price;
 
(b) the certificates referred to in Section 7.2(d) hereof; and
 
(c) such other documents as the Seller shall reasonably request.
 

ARTICLE IX
INDEMNIFICATION
 
9.1 Indemnification.
 
(a) Subject to Section 9.2 hereof, the Seller and Owner hereby agrees to jointly
and severally indemnify and hold the Purchaser, the Parent, and their respective
directors, officers, employees, Affiliates, agents, successors and assigns
(collectively, the "Purchaser Indemnified Parties") harmless from and against:
 
(i) any and all liabilities of the Seller of every kind, nature and description,
absolute or contingent, existing as against the Seller prior to and including
the Closing Date or thereafter coming into being or arising by reason of any
state of facts existing, or any transaction entered into, on or prior to the
Closing Date, except to the extent that the same have been fully provided for in
the Balance Sheet, or disclosed in the notes thereto or were incurred in the
ordinary course of business between the Balance Sheet date and the Closing Date;
 
(ii) subject to Section 10.3, any and all losses, liabilities, obligations,
damages, costs and expenses based upon, attributable to or resulting from the
failure of any representation or warranty of the Seller or Owner set forth in
Section 4 hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of the Seller or Owner pursuant to this Agreement, to
be true and correct in all respects as of the date made;
 
(iii) any and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the breach of any covenant or
other agreement on the part of the Seller under this Agreement;
 
(iv) any and all notices, actions, suits, proceedings, claims, demands,
assessments, judgments, costs, penalties and expenses, including reasonable
attorneys' and other professionals' fees and disbursements (collectively,
"Expenses") incident to any and all losses, liabilities, obligations, damages,
costs and expenses with respect to which indemnification is provided hereunder
(collectively, "Losses").
 
 
 
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(b) Subject to Section 9.2, Purchaser hereby agrees to indemnify and hold the
Seller, Owner and their respective Affiliates, agents, successors and assigns
(collectively, the "Seller Indemnified Parties") harmless from and against:
 
(i) any and all Losses based upon, attributable to or resulting from the failure
of any representation or warranty of the Purchaser set forth in Section 5
hereof, or any representation or warranty contained in any certificate delivered
by or on behalf of the Purchaser pursuant to this Agreement, to be true and
correct as of the date made;
 
(ii) any and all Losses based upon, attributable to or resulting from the breach
of any covenant or other agreement on the part of the Purchaser under this
Agreement or arising from the ownership or operation of the Seller from and
after the Closing Date, unless such claim is for a pre-Closing matter; and
 
(iii) any and all Expenses incident to the foregoing.
 

9.2 Limitations on Indemnification for Breaches of Representations and
Warranties.
 
An indemnifying party shall not have any liability under Section 9.1(a)(ii) or
Section 9.1(b)(i) hereof unless the aggregate amount of Losses and Expenses to
the indemnified parties finally determined to arise thereunder based upon,
attributable to or resulting from the failure of any representation or warranty
to be true and correct, other than the representations and warranties set forth
in Sections 4.3, 4.11, 4.24 and 4.29 hereof, exceeds $10,000 (the “Basket”) and,
in such event, the indemnifying party shall be required to pay the entire amount
of such Losses and Expenses.
 
9.3 Indemnification Procedures.
 
(a) In the event that any legal proceedings shall be instituted or that any
claim or demand ("Claim") shall be asserted by any person or entity in respect
of which payment may be sought under Section 9.1 hereof (regardless of the
Basket or the Deductible referred to above), the indemnified party shall
reasonably and promptly cause written notice of the assertion of any Claim of
which it has knowledge which is covered by this indemnity to be forwarded to the
indemnifying party.  The indemnifying party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the indemnified party, and to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder.  If the indemnifying party elects to defend
against, negotiate, settle or otherwise deal with any Claim which relates to any
Losses indemnified against hereunder, it shall within five (5) days (or sooner,
if the nature of the Claim so requires) notify the indemnified party of its
intent to do so.  If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder, fails to notify the indemnified party of its
election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Claim.  If the
indemnified party defends any Claim, then the indemnifying party shall reimburse
the indemnified party for the Expenses of defending such Claim upon submission
of periodic bills.  If the indemnifying party shall assume the defense of any
Claim, the indemnified party may participate, at his or its own expense, in the
defense of such Claim; provided, however, that such indemnified party shall be
entitled to participate in any such defense with separate counsel at the expense
of the indemnifying party if, (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the indemnified
party, a conflict or potential conflict exists between the indemnified party and
the indemnifying party that would make such separate representation advisable;
and provided, further, that the indemnifying party shall not be required to pay
for more than one such counsel for all indemnified parties in connection with
any Claim.  The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Claim.
 
(b) After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay all of the sums
so due and owing to the indemnified party by wire transfer of immediately
available funds within 10 business days after the date of such notice.
 
(c) The failure of the indemnified party to give reasonably prompt notice of any
Claim shall not release, waive or otherwise affect the indemnifying party's
obligations with respect thereto except to the extent that the indemnifying
party can demonstrate actual loss and prejudice as a result of such failure.
 
9.4 Tax Treatment of Indemnity Payments.
 
The Seller and the Purchaser agree to treat any indemnity payment made pursuant
to this Article 9 as an adjustment to the Purchase Price for federal, state,
local and foreign income tax purposes.
 

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ARTICLE X
MISCELLANEOUS
 
10.1 Payment of Sales, Use or Similar Taxes.
 
All sales, use, transfer, intangible, recordation, documentary stamp or similar
Taxes or charges, of any nature whatsoever, applicable to, or resulting from,
the transactions contemplated by this Agreement shall be borne by the Seller.
 
10.2 Survival of Representations and Warranties.
 
The parties hereto hereby agree that the representations and warranties
contained in this Agreement or in any certificate, document or instrument
delivered in connection herewith, shall survive the execution and delivery of
this Agreement, and the Closing hereunder, regardless of any investigation made
by the parties hereto; provided, however, that any claims or actions with
respect thereto (other than claims for indemnifications with respect to the
representation and warranties contained in Sections 4.9, 4.22 and 4.27, which
shall survive for periods coterminous with any applicable statutes of
limitation) shall terminate unless within twenty four (24) months after the
Closing Date written notice of such claims is given to the Seller or such
actions are commenced.
 
10.3 Expenses.
 
Except as otherwise provided in this Agreement, the Seller, Owner and the
Purchaser shall each bear its own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby, it being understood that in no
event shall the Seller or Owner bear any of such costs and expenses.
 
10.4 Specific Performance.
 
The Seller and Owner acknowledge and agree that the breach of this Agreement
would cause irreparable damage to the Purchaser and that the Purchaser will not
have an adequate remedy at law.  Therefore, the obligations of the Seller and
Owner under this Agreement, including, without limitation, the Seller’s and
Owner’s obligation to sell the Assets to the Purchaser, shall be enforceable by
a decree of specific performance issued by any court of competent jurisdiction,
and appropriate injunctive relief may be applied for and granted in connection
therewith.  Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
 
10.5 Further Assurances.
 
The Seller and the Purchaser each agrees to execute and deliver such other
documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
 
10.6 Submission to Jurisdiction; Consent to Service of Process.
 
(a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of Texas
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect of such dispute or any suit, action proceeding related
thereto may be heard and determined in such courts.  The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute.  Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
 
(b) Each of the parties hereto hereby consents to process being served by any
party to this Agreement in any suit, action or proceeding by the mailing of a
copy thereof in accordance with the provisions of Section 10.10.
 
 
 
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(c) If any legal action or any arbitration or other proceeding is brought for
the enforcement or interpretation of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with or related to
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs in connection with that action or
proceeding, in addition to any other relief to which it or they may be entitled.

10.7 Entire Agreement; Amendments and Waivers.
 
This Agreement (including the schedules and exhibits hereto, together with the
Confidentiality/Standstill Agreement executed by the parties as of May 30, 2008)
represents the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is
sought.  No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein.  The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach.  No failure on the part of any party
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.  All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
 
10.8 Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
 
10.9 Headings.
 
The section headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this Agreement.
 
10.10 Notices.
 
All notices and other communications under this Agreement shall be in writing
and shall be deemed given when delivered personally, mailed by certified mail,
return receipt requested, or via recognized overnight courier service with all
charges prepaid or billed to the account of the sender to the parties (and shall
also be transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
 

(a)  
Purchaser:

Max Engineering LLC
c/o WPCS International Incorporated
One East Uwchlan Avenue, Suite 301
Exton, Pennsylvania 19341
Attn:  Andrew Hidalgo, Director
Phone:  (610) 903-0400
Facsimile: (610) 903-0401
 
 
 
 
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Copy to:

Thomas A. Rose, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
Phone:  (212) 930-9700
Facsimile: (212) 930-9725

(b)  
Seller and Owner:
 
Lincoln Wind LLC
3872 26th Avenue
Moline, IL 61265
Attn:  Matthew Cumberworth, President
Phone: (309)-797-5986
Facsimile:
 
Copy to:
 
Angela N. Reier, Esq.
Stanley, Lande & Hunter, a Professional Corporation
900 U.S. Bank Center
201 W. 2nd Street
Davenport, Iowa 52801
Phone: (563)324-1000
Facsimile: (563)326-6266

10.11 Severability.
 
If any provision of this Agreement is invalid or unenforceable, the balance of
this Agreement shall remain in effect.
 
10.12 Binding Effect; Assignment.
 
This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.  Nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
person or entity not a party to this Agreement except as provided below.  No
assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Seller or the Purchaser (by operation of law or otherwise)
without the prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be void;
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be duly
executed this Asset Purchase Agreement as of the date first set forth above.

  MAX ENGINEERING LLC          
 
By:
/s/ ANDREW HIDALGO       Andrew Hidalgo,       Director          

  LINCOLN WIND LLC          
 
By:
/s/ MATTHEW CUMBERWORTH       Matthew Cumberworth,        Manager          

  Owner:          
 
By:
/s/ MATTHEW CUMBERWORTH       Matthew Cumberworth                  

 
 
29