Exhibit 10.2

 

SALE AND PURCHASE AGREEMENT

 

THIS SALE AND PURCHASE AGREEMENT (“Agreement”), dated as of the Effective Date,
hereinafter defined, is made by and between NEWTEC SERVICES GROUP, Inc.
(“Seller”), a South Carolina corporation operating in good standing having an
address at 333 Hart Street, Edgefield, South Carolina 29803, and FORCE
PROTECTION TECHNOLOGIES, Inc., a Nevada corporation operating in good standing
in South Carolina, having an address at 9801 Highway 78, Bldg #3, Ladson, South
Carolina 29456 (“Purchaser”).

 

I.

 

Definitions; Sale and Purchase; Inspections

 

1.1          Definitions. For the purpose of this Agreement, the following terms
shall have the meanings indicated:

 

(a)                   Closing shall mean the execution of all documents and the
payment of all funds necessary to transfer title to the Property from Seller to
Purchaser.

 

(b)                   Closing Date shall mean the date specified in Section 7.1.

 

(c)                   Code shall mean the Internal Revenue Code of 1986, as
amended

 

(d)                   Cut-off Time shall mean 11:59 p.m. on the date preceding
the Closing Date.

 

(e)                   Effective Date shall mean the date this Agreement is last
executed by Seller or Purchaser.

 

(f)                    Equipment shall mean all fixtures, furniture,
furnishings, fittings, tools, machinery, apparatus, appliances, vehicles and
other articles of personal property (other than the Expendables) located at the
Property.

 

(g)                   Escrow Agent shall mean Philip H. Woolhiser, Attorney.

 

(h)                   Expendables shall mean all chemicals, explosives, shells
and similar materials.

 

(i)                    Hazardous Substances shall mean any substance or material
of a type which (A) has been or is at any time determined by any state or
federal court in a reported decision to be a waste, pollutant, contaminant,
hazardous waste or hazardous substance, (B) has been or is determined by any
governmental authority to be a waste, pollutant, contaminant, hazardous waste,
hazardous substance or hazardous material capable of posing a risk of injury to
health, safety or property, or (C) is described as, or has been or is determined
to be a waste, pollutant, contaminant, hazardous waste, hazardous substance, or
hazardous material under any Hazardous Waste Law.

 

(j)                    Hazardous Waste Law shall mean any law, statute,
ordinance, code, rule, regulation, decree, resolution or requirement promulgated
by any governmental authority with respect to Hazardous Substance, including,
without limitation, the following: (A) the Resource Conservation and Recovery
Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. Section 6901 et seq.; (B) the Comprehensive Environmental Response;
Compensation and Liability Act of 1980, as amended by the Superfund

 

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Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.; (C)
the Clean Water Act, 33 U.S.C. Section 1251 et seq.; (D) the Safe Drinking Water
Act, 42 U.S.C. Section 300f et seq.; (E) the Toxic Substances Control Act, 15
U.S.C. Sections 2601-2629; (F) the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq.; (G) the Clean Air Act, 42 U.S.C. Section 7401 et
seq.; (H) the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
Section 136 et seq.; and (I) the Occupational Safety and Health Act of 1970, 29
U.S.C. Section 651 et seq.

 

(k)                           Improvements shall mean the buildings, structures
(surface and sub-surface), installations and other improvements, including such
fixtures and appurtenances as shall constitute real property located on the
Range.

 

(l)                            Land shall mean the land and all appurtenances
thereto, located on Highway 25, 12 miles north of Edgefield, SC, and more
particularly described in Exhibit A to this Agreement upon which the Range is
situated together with all appurtenances to the Land.

 

(m)                          NEWTEC shall mean Newtec Services Group, Inc.

 

(n)                           Permits shall mean all licenses, franchises,
permits, leases, authorizations and approvals used in or relating to the
ownership, occupancy, blasting or operation of or on any part of the Range.

 

(o)                           Property shall mean the Land and its Improvements,
Equipment and Expendables.

 

(p)                           Range shall mean the nominal 303.6 Acre parcel of
land known as Lot 1 and the nominal 2.61 Acre parcel of land known as Lot 2
adjoining SC Hwy 25, 12  miles North of Edgefield and all of its facilities
located on the parcel of  land.

 

(q)                           Transferred Property shall have the meaning set
forth in Section1.2.

 

1.2          Sale and Purchase. Seller agrees to sell the Property, the
Equipment, the Expendables, and the assignable Permits, (collectively, the
“Transferred Property”) to Purchaser, and Purchaser agrees to acquire the
Transferred Property from Seller, subject to the terms, covenants, conditions
and provisions set forth in this Agreement.

 

 

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II.

 

Consideration

 

2.1          Consideration. In consideration of the sale of the Transferred
Property, Purchaser shall pay to Seller cash in the amount of Five Million Five
Hundred Thousand and 00/100 ($5,500,000.00) Dollars (the “Purchase Price”),
payable as follows:

 

$

5,050,000.00

 

at Closing

 

$

150,000.00

 

on January 1, 2008 (non-compete provision)

 

$

150,000.00

 

on January 1, 2009 (non-compete provision)

 

$

150,000.00

 

on January 1, 2010 (non-compete provision)

 

 

2.2          Allocation of Payment. The above $5,050,000.00 payment made at
Closing shall be allocated as follows:

 

$

150,000.00

 

to the non-compete agreement

 

$

2,100,000.00

 

to Land and Improvements

 

$

800,000.00

 

to Furniture/Fixtures and Equipment

 

$

2,000,000.00

 

to Goodwill and other Capital intangible assets where value is derived from:

 

 

a)

 

attainment of various critical Federal/State Permits &
Licenses

 

$

800,000.00

 

b)

 

development of certain critical Standard Operating
Procedures.

 

$

600,000.00

 

c)

 

other special expertise

 

$

400,000.00

 

d)

 

existing customer base

 

$

200,000.00

 

 

III.

 

Title

 

3.1          Title Conveyed. Seller shall, on the Closing Date, convey to
Purchaser fee title to the Property by means of a general warranty deed, and
clear title to the equipment and expendables as shall be demonstrated by Seller
in a UCC 11 to be provided by Seller at Closing and transferred pursuant to a
bill of sale in the form attached hereto as Exhibit H.

 

IV.

 

Representations, Warranties, Covenants
and Conditions Precedent

 

4.1          Seller’s Representations and Warranties. Seller represents and
warrants to Purchaser that:

 

(a)           The execution and delivery of this Agreement has been or will be
at the time of Closing duly authorized by all necessary and appropriate action
of Seller.

 

(b)           No consent or approval of any person, entity, or governmental
authority is required with respect to the execution and delivery of this
Agreement by Seller or the consummation by Seller of the transactions
contemplated hereby or the performance by Seller of its obligations under this
Agreement, or the continued operation of the Land as the Range, except for such
consents as shall be obtained by Seller prior to the Closing.

 

(c)           To the best of Seller’s knowledge, all Permits necessary for the
operation of the Range are set forth in Exhibit E to this Agreement and in full
force and effect. However, not all permits are transferable. Exhibit E will
distinguish the transferable permits. Except as

 

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otherwise disclosed to Purchaser in writing, Seller has received no written
notice of any material violations of any Permit. Copies of the Permits
containing all material provisions thereof will be delivered to Purchaser within
ten (10) days from the Effective Date.

 

(d)           Seller has not received any written notice of, and there are no
material violations of laws, ordinances, orders or regulations (“Laws”) of
governmental or quasi-governmental authorities with respect to the Transferred
Property (including, without limitation, those related to Hazardous Waste Laws,
environmental, zoning, land-use, labor or employment matters).

 

(e)           Seller is not currently a party to any litigation or other
proceedings which, if, adversely determined, would have a material adverse
effect on the ownership or operation of the Transferred Property, or the
financial condition or results of operations of the Transferred Property, nor
has Seller received any written notice that any such litigation or other
proceedings are to be instituted.

 

(f)            Seller has no employees. All personnel needs are met through use
of subcontracts.

 

(g)           Within ten (10) days from the Effective Date, Seller will provide
to Purchaser all existing copies, in Seller’s possession or control, of all
bills for real estate and personal property taxes and assessments for the
current tax year and the two (2) immediately preceding tax years.

 

(h)           Seller is not aware of any Hazardous Substances on the Land or in
the buildings to be leased by Purchaser.

 

(i)            Seller has good, valid and marketable title free to the
Transferred Property which is free and clear of all encumbrances.

 

(j)            Seller has timely filed all material returns and reports, and
paid all taxes with respect to the Transferred Property.

 

(k)           Seller warrants that the Equipment is in good operating condition
and repair.

 

(l)            Seller has not made any arrangement with anyone for a broker or
finder fee arising out of this Agreement.

 

(m)          Seller represents that the Transferred Property includes all the
assets, rights, properties and contracts necessary to the continued conduct of
the Range by Purchaser substantially in the manner as it is currently conducted
by the Seller.

 

(n)           Seller is a duly organized an validly existing corporation, is in
good standing in the State of South Carolina and has full power to enter into
this Agreement and to perform its obligations under this Agreement.

 

(o)           The Permits in Exhibit E are the only permits required for
operation of the Range.

 

4.2          Conditions Precedent to Sellers Obligations. Seller’s obligations
under this Agreement are conditioned upon the satisfaction of the following
conditions as of the Closing Date:

 

(a)           Purchaser’s representations and warranties set forth in this
Agreement shall continue to be materially true and accurate; and

 

(b)           Purchaser shall have performed all of its obligations under this
Agreement.

 

4.3          Purchaser’s Representations and Warranties. Purchaser represents
and warrants to Seller that:

 

 

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(a)           Purchaser is a duly organized and validly existing corporation, is
in good standing in the State of Nevada and is qualified to do business in South
Carolina and has full power to enter into this Agreement and to perform its
obligations under this Agreement.

 

(b)           The execution and delivery of this Agreement has been or will be
duly authorized by all necessary and appropriate corporate action of Purchaser.

 

(c)           No consent or approval of any person, entity, or governmental
authority is required with respect to the execution and delivery of this
Agreement by Purchaser or the consummation by Purchaser of the transactions
contemplated hereby or the performance by Purchaser of its obligations under
this Agreement, except for such consents as shall be obtained by Purchaser prior
to the Closing.

 

(d)           Purchaser is relying solely upon its own inspections,
investigations, research and analyses of the Closing in entering into this
Agreement and, except for the representations and warranties of Seller set forth
in Section 4.1 above, is not relying in any way upon any representations,
warranties, statements, plans, specifications, cost estimates, studies, reports,
descriptions, guidelines or other information or material furnished by Seller or
its representatives to Purchaser or its representatives, whether oral or written
(all such matters herein referred to as the “Delivered Information”), express or
implied, of any nature whatsoever regarding any such matters. Except as
otherwise provided in Section 4.1 above,  other implied warranties arising out
of state or federal law and Section 5.1, Seller shall have no liability with
respect to the accuracy or completeness of the Delivered Information.

 

(e)           Subject to the representations and warranties of Seller set forth
in Section 4.1 above and the indemnity in Section 5.1, Purchaser agrees that:
(i) Purchaser shall accept the Property in its present state and condition and
“AS-IS WITH ALL FAULTS”, (ii) Seller shall not be obligated to do any
restoration, repairs or other work of any kind or nature whatsoever on the
Property and, specifically, but without derogating from the generality or the
foregoing, Seller shall not be responsible for any work on or improvement of the
property necessary to cause the Property to meet any applicable laws, statutes,
ordinances, rules, regulations, codes, covenants, conditions or restrictions
dealing with the presence, use, transportation or storage of Hazardous
Substances, or to repair, retrofit or support any portion of the Improvements
due to the seismic or structural integrity (or any deficiencies therein) of the
Improvements. Purchaser agrees that no patent or latent condition affecting the
Property in any way, whether or not known or discoverable or discovered after
the Closing Date, shall affect Purchaser’s obligation to purchase the Property
or to perform any other act otherwise to be performed by Purchaser under this
Agreement, nor shall any such condition give rise to any action, proceeding,
claim or right of damage (except for a breach of the representations and
warranties of Seller set forth in Section 4.1 and the indemnity in Section 5.1)
or rescission against Seller.

 

4.4          Conditions Precedent to Purchaser’s Obligations. Purchaser’s
obligations under this Agreement are conditioned upon the satisfaction of the
following conditions as of the Closing Date:

 

(a)           Within ten (10) days from the Effective Date, Seller shall deliver
to Purchaser financial statements for the Range operation (consisting of
un-audited financial statements for the last three (3) years and are in all
material respects true and correct and accurately reflect the financial
condition of the Range as of the dates stated therein and there have been no
material adverse changes in the financial condition of the Range since the date
of such statements. “Financial statements” shall be defined as charts of
account, net sales and revenue;

 

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(b)           Provision of evidence satisfactory to Purchaser that Seller is not
a “foreign person” as defined in the Code;

 

(c)           Seller’s representations and warranties set forth in this
Agreement shall continue to be materially true and accurate; and

 

(d)           Seller shall have performed all of its obligations under this
Agreement.

 

4.5          Remedies Regarding Representations and Warranties. By executing and
delivering the documents listed in Section 7.4(a) below, Seller shall be deemed
to have made all of the foregoing representations and warranties of Seller in
Section 4.1 above, as of the date hereof and as of the Closing. Should any of
such representations and warranties be found to be incorrect in any material
respect prior to the Closing, Seller shall use reasonable efforts to attempt to
cure the same by the Closing. If Seller is unable to cure same by the Closing,
at Purchaser’s option, the Closing shall be postponed until five (5) business
days following Purchaser’s receipt of proof satisfactory to Purchaser that such
matters have been cured, provided, however, if Seller is unable to cure the same
within fifteen (15) days from the scheduled Closing Date, Purchaser shall be
entitled either to waive the same and close this transaction or to terminate
this Agreement. In the event Purchaser elects to terminate this Agreement
pursuant to this Section 4.5 neither party to this Agreement shall thereafter
have any further rights or liabilities under this Agreement.

 

4.6          Covenants. Seller or Purchaser, as applicable, covenant and agree
that prior to the Closing:

 

(a)           Seller will not sell exchange, assign, transfer, convey, lease or
otherwise dispose  of all or any part of the Transferred Property or any
interest therein except for Expendables which are sold or consumed and replaced
or replenished by Seller in the ordinary course of business, without the prior
approval of Purchaser, which approval shall not be unreasonably withheld or
delayed; provided, however, that                in the event Purchaser fails to
respond to Seller within three (3) business days after Purchaser is notified of
such disposition, such failure to respond shall be deemed to constitute
Purchaser’s approval of same.

 

(b)           Seller will not enter into any contracts, licenses, easements or
other agreements relating to the Transferred Property which will obligate
Purchaser or be a charge or lien against the Property, except those necessary to
continue the operation of the Range in the ordinary course of business and which
are terminable without penalty on no more than thirty (30) days notice, without
the prior approval of Purchaser, which approval shall not be unreasonably
withheld or delayed; provided, however, that in the event Purchaser fails to
respond to Seller within three (3) business days after Purchaser is notified of
such matters, such failure to respond shall be deemed to constitute Purchaser’s
approval of same.

 

(c)           Seller will cause the Transferred Property to be operated and
maintained in the manner in which it is being operated and maintained as of the
date of this Agreement which undertaking includes, but is not limited to,
maintaining Expendables, of such quantities and quality as are consistent with
Seller’s current practices.

 

(d)           Seller will promptly notify Purchaser of any matter arising prior
to the Closing and known to Seller which might materially and adversely affect
the operation of the  Range including, without limitation, the commencement of
any litigation or proceeding or any written notice of a violation of Laws issued
by any governmental or quasi-governmental authority.

 

(e)           Seller will maintain until the Closing Date the Range’s existing
insurance coverage. Seller will maintain insurance on the Property for its full
insurable value and/or assume all risk of loss, until the Closing Date.

 

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(f)            Seller will not take any actions that will (i) materially
adversely affect title to the Transferred Property, and/or (ii) cause any of the
representations or warranties of Seller set forth in Section 4.1 above to be
materially untrue as of the Closing Date.

 

(g)           It is agreed that the Purchaser is NOT acquiring any ownership
interest in Seller or its existing “armaments” business, provided however that
Purchaser shall have the right of first refusal to undertake the commercial
development of any new products or technology developed by Seller upon mutually
acceptable terms and conditions. Seller agrees not to compete with the
Purchaser’s commercial operation of the Range by operating a Competitive
Business in the Territory as the terms are defined in  Exhibit D during the
period of Seller’s employment by Purchaser, and for two (2) years thereafter as
set forth in Exhibit D. This Section shall survive Closing.

 

(h)           It is agreed that the Purchaser is entering into this transaction
in reliance on its expectation this it will be able to acquire the necessary
permits and permissions to carry out blasting and ballistic research at the
blast range. In the event that for reasons outside the Purchaser’s control, all
permits, presently in the name of Seller and required for the present operation
of the Range, have not been obtained in the name of the Purchaser by March 1,
2007, the Purchaser shall have the option of voiding this Agreement.

 

V.

 

Indemnity

 

5.1          Seller’s Indemnification Obligations:  Seller shall indemnify,
defend and hold harmless     Purchaser for any litigation, claims, property
damage, personal injury, environmental issues, insurance claims, prior contract
matters, employee claims, contract claims, tax returns and any other matter
related to the Range, the Transferred Property arising or occurring prior to
Closing. Seller shall also indemnify, defend and hold harmless Purchaser from
any claims of contamination from Hazardous Substances existing or occurring at
the Range prior to Closing or any violations of Hazardous Waste Laws associated
with the Transferred Property prior to Closing.

 

5.2          Purchaser’s Indemnification Obligations:  Purchaser shall
indemnify, defend and hold harmless Seller for any litigation, claims, property
damage, personal injury, environmental issues, insurance claims, contract
matters, employee’s claims, contract claims, tax returns and any other matters
related to the Range, the Transferred Property, arising or occurring after
Closing. Purchaser shall also indemnify defend and hold harmless Seller from any
claims of contamination from Hazardous Substances introduced by Purchaser at the
Range after Closing but only to the extent such Hazardous Substances were not
preexisting or any violations of Hazardous Waste Laws associated with the
Transferred Property after Closing but only to the extent such violations were
not caused or contributed to by Seller.

 

5.3          This Article V. shall survive Closing.

 

Vl.

 

Remedies

 

6.1          Sellers Remedies. If Purchaser fails to perform its obligations
under this Agreement, and such failure is admitted by Purchaser or conformed by
a court of competent jurisdiction, arising prior to the Closing Date for any
reason, except the failure of any condition precedent to Purchaser’s obligations
under this Agreement, the Seller shall have the right to exercise any of the
following as its sole and exclusive remedy:  (a) to terminate this Agreement by
giving Purchaser written notice of such election prior to or at the Closing; (b)
to waive the default and close; or (c) to enforce

 

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specific performance of this Agreement.

 

6.2          Purchaser’s Remedies. If Seller fails to perform its obligations
under this Agreement, and such failure is admitted by Seller or conformed by a
court of competent jurisdiction, arising prior to the Closing Date for any
reason, except the failure of any condition precedent to Seller’s obligations
under this Agreement, then Purchaser shall have the right to exercise any one of
the following as its sole and exclusive remedy: (a) to terminate this Agreement
by giving Seller written notice of such election prior to or at the Closing,;
(b) to waive the default and close; or (c) to enforce specific performance of
this Agreement.

 

6.3          Attorneys’ Fees. If any litigation or other enforcement proceeding
is commenced in connection with this Agreement, then the prevailing party shall
be entitled to receive payment of its reasonable attorneys’ fees and expenses
and court costs from the other party.

 

Vll.

 

Closing Matters

 

7.1          Closing Date. The Closing shall be held on or before March 16,
2007.

 

7.2          Adjustment and Prorations. The matters and items set forth below
shall be apportioned between Seller and Purchaser or, where applicable, credited
in total to a particular party:

 

(a)           Taxes. All real and personal property taxes and special
assessments, if any, whether payable in installments or not, shall be prorated
as of the Cut-Off Time. If such taxes for the tax year in which the Closing
occurs have not been finally determined on the Closing Date, then such taxes
shall be prorated on an estimated basis using the most current information
available.

 

(b)           Utility Charges. Utility charges for telephone, gas, electricity,
water and other services shall not be prorated to the extent that Seller can
make arrangements for the rendering of final bills based on meter readings as of
the Cut-Off Time. Seller shall be responsible for the payment at the Closing of
all bills for utility charges up to and including the Cut-Off Time. To the
extent that utility bills cannot be rendered as of the Closing Date, such
charges for the period through the Cut-Off Time shall be prorated as of the
Cut-Off Time based upon the most recent available bills and readjusted on the
basis of the actual bills as and when received. Any utility deposits shall be
transferred to Purchaser and credited to Seller at the Closing.

 

(c)           Operating Expenses and Trade Accounts. Seller shall be responsible
for all operating expenses and trade accounts of the Transferred Property up to
and including the Cut-Off Time; provided, however, that Purchaser shall be
responsible for all purchase orders (“Purchase Orders”) made by Seller in the
ordinary course of business for Expendables not delivered to the Range as of the
Closing Date. To the extent the amounts of such items are then known, Seller
shall pay such items at the Closing and shall pay the balance of such items in
the ordinary course of business, but in no event later than the date which is
forty-five (45) days after the date on which Seller receives written invoices
for such items. Notwithstanding the foregoing, Purchaser acknowledges and agrees
that Seller may postpone and/or contest payment of any operating expense or
trade account which is the subject of a bona fide dispute. Seller agrees to
indemnify and hold Purchaser harmless from and against any claims or other
matters relating to such operating expenses and trade accounts. All operating
expenses and trade accounts accruing after the Cut-Off Time (“Post Closing
Expenses”) shall be the responsibility of Purchaser. Purchaser agrees to
indemnify and hold Seller harmless from and against any claims or other matters
relating to (i) the Purchase Orders, or (ii) the Post-Closing Expenses. This
Section shall survive the Closing.

 

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(d)           Subcontract Employees. Seller shall pay to Subcontractors, as
provided in Section 7.7, all wages (including accrued but unused vacation pay,
if any) that any Range Subcontractor is owed, as of the Closing Date, pursuant
to statute, or contract.

 

7.3          Intentionally left blank

 

7.4          Closing Documents.

 

(a)           On or before the Closing Date, Seller shall deliver into Escrow or
to Purchaser, as appropriate:

 

(i)            a general warranty grant deed conveying the fee estate in the
Land to Purchaser, duly authorized, executed and acknowledged by Seller, in the
form commonly used in the state where the Land is located (“General Warranty
Deed”);

 

(ii)           a bill of sale transferring to Purchaser all of the Furnishings,
Expendables (other than those items leased or loaned to Seller as described in
Exhibits C and D), duly authorized and executed by Seller, in Exhibit B in a 
form mutually agreeable to the parties, together with original certificates of
title for all vehicles that are part of the Transferred Property, endorsed to
transfer same to Purchaser (and any necessary governmental forms to effect the
transfer);

 

(iii)          possession of the Property;

 

(iv)          a certified copy of such corporate and partnership authorizations,
approvals and incumbencies of Seller as the Title Company shall reasonably
require;

 

(v)           any and all plans and specifications for the Improvements on the
Property in Seller’s possession.

 

(vi)          transfer/assignment of the hunting lease if owner of the land
consents, and

 

(vii)         office lease for the items in Exhibit B in a form mutually
agreeable to the parties and consistent with this Agreement.

 

(b)           On or before the Closing Date, Purchaser shall deliver into Escrow
or to Seller, as appropriate:

 

(i)            the portion of Purchase Price to be paid at Closing pursuant to
Section 2.1 hereof and any other funds needed to satisfy Purchaser’s obligations
hereunder;

 

(ii)           such corporate or partnership authorizations, approvals and
incumbencies as Seller or the Title Company shall reasonably require.

 

7.5          Closing Costs. Seller shall pay for all documentary transfer taxes,
and deed preparation costs. Purchaser shall pay all costs associated with its
due diligence investigations, all recording costs, and the premium attributable
to the title insurance policy. Each party shall pay its own attorneys’ fees

 

7.6          Real Estate Commissions. Not Applicable. No real estate transaction
entities are involved.

 

7.7          Staff. Seller shall terminate or arrange for the termination of all
subcontractors as of the Closing Date and shall pay to the subcontractors all
wages (including accrued but unused vacation pay, if any) that any subcontractor
is owed, as of the Closing Date, pursuant to statute, or contract. Any

 

 

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required adjustment in such credits or payments shall be made within thirty (30)
days after the Closing Date. Seller will indemnify and hold Purchaser harmless
from and against any loss, damage, liability, claim, cost or expense (including,
without limitation, reasonable attorneys’ fees) that may be incurred by, or
asserted against, Purchaser after the Closing which involves any matter relating
to a past or present subcontractor concerning acts or omissions occurring prior
to the Closing Date (including, without limitation, any claims which have not
yet been asserted by the Closing Date). This indemnity applies, without
limitation, to all forms of labor and/or contract claims under state, federal or
local law, whether brought in judicial, administrative or other proceedings,
private or public. This Section 7.7 shall survive the Closing.

 

7.8          Disbursements and Other Actions by Escrow Agent. At the Closing,
Escrow Agent shall promptly undertake all of the following in a manner
hereinbelow indicated:

 

(a)           Disburse all funds deposited with Escrow Agent by Purchaser as
follows:

 

(i)            If, as a result of the prorations and credits pursuant to Section
7.2 above, amounts are to be charged to the account of Seller, deduct the total
amount of such charges;

 

(ii)           Deduct and pay to the appropriate party all items chargeable to
the account of Seller pursuant to Section 7.5 above;

 

(iii)          Pay to the appropriate party from funds deposited by Purchaser
all items chargeable to the account of Purchaser pursuant to Section 7.5 above;

 

(iv)          Disburse the balance of the funds due to Seller, to or as directed
by Seller; and

 

(v)           Disburse any remaining funds to, or a, directed by Purchaser.

 

All amounts and payees with respect to the items listed above shall be shown on
settlement statements executed at the Closing.

 

(b)           Cause the General Warranty Deed to be recorded in the Edgefield
County Clerk of Court’s Office and to return the General Warranty Deed to
Purchaser after recordation.

 

(c)           Take such other actions as Seller and Purchaser may deem necessary
or convenient for the consummation of the Closing.

 

7.9          Survival. The provisions of this Article VII shall survive the
Closing.

 

VIII.

 

Condemnation and Risk of Loss

 

8.1          Condemnation and Casualty. Seller shall promptly notify Purchaser
of any condemnation proceeding filed or any casualty to the Property occurring
prior to the Closing.

 

(a)           Condemnation. If any condemnation proceeding filed prior to the
Closing may result in the loss of all or any portion of the Property, then this
Agreement shall, at Purchaser’s sole election, either (i) continue in effect
without modification of the terms thereof, in which event, upon the Closing,
Purchaser shall be entitled to any compensation, awards, or other payments or
relief resulting from such condemnation proceeding, or (ii) terminate by
Purchaser’s written notice to Seller and Escrow Agent, delivered within five (5)
days after receipt by Purchaser of notice of such condemnation, and all
obligations,

 

 

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duties, rights and entitlements of Seller and Purchaser shall terminate, and
the  parties  shall continue to be obligated under the confidentiality
provisions set forth in Section 9.13 below.

 

(b)           Casualty. In the event of fire, casualty or any other damage of
any kind whatsoever (insured or uninsured) to the Property which costs Fifty
Thousand and No/100 Dollars ($50,000.00) or more to repair, replace or
rededicate, Purchaser may terminate this Agreement and all obligations, duties,
rights and entitlements of Seller and Purchaser shall terminate, except the
parties shall continue to be obligated under the confidentiality provisions set
forth in Section 9.13 below. If any such occurrence costs less than Fifty
Thousand and No/100 Dollars ($50,000.00) to repair, replace or rededicate, or if
Purchaser does not elect to terminate this Agreement, then Seller shall assign
all available insurance proceeds to Purchaser (and Purchaser shall receive a
credit against the Purchase Price for any such proceeds that are received and
retained by any creditor of Seller), and the parties shall proceed to the
Closing pursuant to the terms and conditions hereof, without modification of the
terms of this Agreement and without any reduction in the Purchase Price.

 

IX.

 

Miscellaneous

 

9.1          Entire Agreement. This Agreement (including the Exhibits attached
hereto) constitutes the complete and final expression of the agreement of the
parties relating to the Property and supersedes all previous contracts,
agreements, and understandings of the parties, either oral or written, relating
to the Property. This Agreement cannot be modified, or any of the terms hereof
waived, except by an instrument in writing (referring specifically to this
Agreement) executed by the party against whom enforcement of the modification or
waiver is sought.

 

9.2          Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties to this
Agreement; provided, however, the same is not intended nor shall it be construed
as creating any rights in or for the benefit of any person or entity other than
the parties to this Agreement and their respective successors and assigns.

 

9.3          Notices. Any notice, communication, request, reply or advice
(collectively, “Notice”) provided for or permitted by this Agreement to be made
or accepted by either party must be in writing. Notice may, unless otherwise
provided herein, be given or served by depositing the same in the United States
mail, postage paid, registered or certified, and addressed to the party to be
notified, with return receipt requested; or by delivery by overnight courier; or
by facsimile transmission. Notice deposited in the mail in the manner herein
above described shall be effective two (2) business days after such deposit.
Notice by overnight courier shall be effective one business day after deposit
with the courier service. Notice given by facsimile transmission shall be
effective on the business date delivered as evidenced by the printed delivery
confirmation receipt retained by the sender. For the purposes of Notice, the
addresses of the parties shall be:

 

 

Seller:

NEWTEC Services Group, Inc.

 

 

Keith T. Williams

 

 

PO Box 643

 

 

Edgefield, SC 29824

 

 

 

 

Purchaser:

Force Protection Technologies, Inc.

 

 

Ray W. Pollard

 

 

9801 Highway 78 Building 1

 

 

Ladson, SC 29456

 

 

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The parties shall have the right from time to time to change their respective
addresses for notice by at least five (5) days written notice to the other
party.

 

9.4          Governing Law. This Agreement shall be construed in accordance with
the laws of the State of South Carolina.

 

9.5          Article and Section Headings. The article and section headings
contained in this Agreement are for convenience only and shall in no way enlarge
or limit the scope or meaning of the various and several provisions of this
Agreement.

 

9.6          Obligations  Subject to any limitations set forth in this
Agreement, the terms, conditions, warranties, representations, obligations,
agreements, indemnities and rights set forth in this Agreement shall survive the
Closing, but upon expiration of the respective period of survivability for each,
they shall merge into the various documents executed and delivered at the time
of the Closing.

 

9.7          Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

9.8          Nonrecordation. Neither this Agreement nor any memorandum thereof
shall be recorded.

 

9.9          Time of the Essence. Time is of the essence of this Agreement and
of the obligations of the parties to purchase and sell the Property, it being
acknowledged and agreed by and between the parties that any delay in effecting a
closing pursuant to this Agreement may result in loss or damage to this party in
full compliance with its obligations hereunder.

 

9.10        Invalid Provisions. If any one or more of the provisions of this
Agreement, or the applicability of any such provision to a specific situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Agreement
and all other applications of any such provision shall not be affected thereby.

 

9.11        Computation of Time. The time in which any act under this Agreement
is to be done shall be computed by excluding the first day and including the
last day. If the last day of any time period stated herein shall fall on a
Saturday, Sunday, or legal holiday, then the duration of such time period shall
be extended so that it shall end on the next succeeding day which is not a
Saturday, Sunday or legal holiday. Unless preceded by the word “business,” the
word “day” shall mean a calendar day. The phrase “business day” or “business
days” shall mean those days on which the Superior Court of the County in which
the Property is located in is open for business.

 

9.12        Seller’s Knowledge. Wherever the phrase “to the best of the Seller’s
knowledge” or any similar phrase stating or implying a limitation on the basis
of knowledge appears in this Agreement, such phrase shall mean the present
actual knowledge of the President  of NEWTEC, without any duty of inquiry or
independent investigation of the relevant matter by such individual.

 

9.13        Confidentiality. Neither Seller nor Purchaser shall release or cause
or permit to be released any press notices or releases or publicity (oral or
written) or advertising promotion relating to, or otherwise announce or disclose
or cause or permit to be announced or disclosed, in any manner whatsoever, the
terms, conditions or substance of the purchase and sale of the Property or the
transactions contemplated hereunder, nor shall Purchaser or its agents or
representatives disclose, in any manner whatsoever, (i) the information provided
to Purchaser by Seller or its representatives, or (ii) any analyses,
compilations, studies or other documents or records prepared by or on behalf of
Purchaser, in connection with Purchaser’s due diligence investigation of the
Property, without first obtaining the written consent of the other party
(collectively, “Propriety Information”). The foregoing shall not preclude either
party from discussing the Proprietary Information with any person who is
employed by such party or who, on behalf of such party, is actively and directly
participating in the purchase and sale of the Property, including, without

 

 

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limitation, to such party’s shareholders, partners, existing or prospective
lenders, attorneys, accountants and other consultants and advisors, or from
complying with all laws, rules, regulations and court orders, including without
limitation, governmental regulatory, disclosure, tax and reporting requirements;
provided, however, that if any party is required by applicable law to legal
process to disclose any Proprietary Information, such party agrees to furnish
only that portion of the Proprietary Information which such party is legally
compelled to disclose and to use its best efforts to obtain assurance that, if
possible, confidential treatment will be accorded to the Proprietary
Information. Seller and Purchaser shall inform their respective representatives
of the confidential nature of the Proprietary Information and shall direct them
to be bound by the terms of this Section 9.13. In addition to any other remedies
available to a party, each party shall have the right to seek equitable relief,
including without limitation, injunctive relief or specific performance, against
the other party in order to enforce the provisions of this Section 9.13. The
provisions of this Section 9.13 shall survive the Closing and any termination of
this Agreement.

 

9.14        Amendment to the Agreement/Waiver of Matters or Conditions. No term
or condition of this Agreement will be deemed to have been amended or waived
unless expressed in writing, and the waiver of any condition of the breach of
any term will not be a waiver of any subsequent breach of the same or any other
term or condition.

 

IN WITNESS WHEREOF, this Agreement has been duly executed in multiple
counterparts by the parties hereto on the date and year first above written.

 

SELLER:

 

Date:

 

 

 

By:

/s/ Keith Williams

 

NEWTEC Services Group, Inc.

 

 

Its:

 

 

 

 

 

PURCHASER:

 

 

Date:

 

 

 

By:

/s/ Michael Durski

 

Force Protection Technologies, Inc.

 

 

 

 

Its:

 

 

 

 

 

 

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EXHIBIT A

 

Land, Materials and Fixtures

 

Land (303.6 acres) – as described in Plat Book 13, Page 100 and parcel ID
#065-00-00-014-000

Land (2.61 acres) -    as described in Plat Book 13, Page 100 and parcel ID
#065-00-00-005-000

Transfer/assignment of Hunting Lease (184 acres) subject to owner’s approval

 

Operational Directives:

 

NEWTEC Explosive Range Standard Operating Procedures;

NEWTEC Ballistic Range Standard Operating Procedures;

NEWTEC Explosive Operations Safety Plan;

NEWTEC Defense Safeguards and Security Plan;

DOD/ATF Approved Explosive Inventory and Maintenance Logs

Hazardous Materials Review Course

 

These are Standard Operating Procedures (SOP’s) and logs developed by NEWTEC
that will be reviewed, updated and re-established by Company  within (30) days
after the Closing Date.

 

Range Equipment:

 

•      D5M Caterpillar high track bulldozer

•      JCB Backhoe

•      John Deere 5500

•      Implements include:  Box blade, harrow, ripper, scraper blade, bush hog
and  seeder/spreader

•      Polaris (6) wheel drive range vehicle

•      Miller Bobcat Generator, welder, ESAB plasma cutter, air tank systems

 

Range Structures:

 

•

Permanent Type 1 – ATF/State Approved Explosives Magazine (bulk explosives
storage)

 

•

 Mobil Type 11 – ATF/State Approved Explosive Magazine (inside building) for
detonator storage

 

•

Hardened Concrete Explosives Pressing and Fabrication Building with press

 

•

Hardened Concrete Remote Press Control Building with protective roof

 

•

4 – Hardened Concrete Barricades with backstops for explosive test shots

 

•

Hardened concrete barricades

 

•

Main control bunker

 

•

Shoot house with target bunker, camera/data house – Includes shooting platforms,
velocity chronographs, reloading benches and stations

 

•

12 x 20 storage/utility building – assortment of range tools

 

•

Ballistics shooting range and backstop (600 meters)

 

•

Explosive panel testing station for precision explosive scale workups

 

•

35 ft. Camper Trailer

 

•

Related Intangible Assets

 

EXHIBIT B

 

Lease of  Building, Lab And Workshop Spaces

 

Purchaser shall lease the buildings and other facilities in town from the date
of Closing through December 31, 2008 pursuant to a standard commercial lease for
$3,000 per month. See Exhibit B-1 attached, which in the event of conflict
between Exhibit B and Exhibit B-1, Exhibit B-1 shall prevail.

 

Office & workshop in town:  Main Office – 3300 sq. ft.

 

 

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Assets acquired in the purchase, but utilized at leased facilities:

 

Ballistics Lab (1 set of dies for each caliber, timing chronographs, 1 set of
.50, 7.62 and 5.56 caliber ballistic platforms):

Ballistics lab and complete set of reloading equipment for armor testing, ammo
workups and production operations

Armor testing weapons platforms:  .50 Cal, .30 Cal (7.62mm), .223 Cal. (5.56mm)

Extensive inventory of .50, .30 (7.62) and .223 Cal (5.56) Armor Piercing and
regular ammo reloading equipment, cases, bullets, powders, primers

 

Office Space

 

•      DOD SECRET Facility w/steel cipher lock doors & office space

•      General admission front office space and bathroom area

•      General admission front lobby entry area

•      Classroom and lab space

 

Workspace and warehouse:

 

•      Delta HD drill press

•      Medium size 36 inch Jet machine lathe

•      Full assortment of hand tools (screwdrivers, pliers, hammers, saws, etc)

•      Full complement of hand power tools – hand drills, skill and demolition
saws, router, dremel tool, sanders

•      Tool accessories, bits and supplies

•      Assortment of framing lumber, PVC pipe, drain pipe, steel and metal for
frame systems

•      Pressure washer, 2 ea – range generators – Coleman 5000 watt and a Honda
5000 watt

 

EXHIBIT B-1  attached

 

EXHIBIT C

 

Newtec Retained equipment and other material

 

Since FPI does not desire to purchase the main building in town, NEWTEC will
retain the desk, tables, chairs and furniture in the main office, including
built in countertops and appliance items in the kitchen/classroom and lab space.
NEWTEC will also retain its operational equipment in the workshop to include the
inert gas chamber, the hydraulic bullet and fragment production presses, 1 set
of the ballistic lab reloading equipment and dies, and the work benches and
table tops in the shop area. Other items retained will be personal journals,
reference publications, awards, plaques including computers and printers.

 

EXHIBIT D

 

Employment Agreement Between Purchaser and Keith Williams

 

The Purchaser and Keith Williams will execute Purchaser’s standard employment
agreement to hire Keith Williams as a full time, at will employee of Purchasers
for the period from Closing through December 31, 2008 at an annual salary of
$150,000 (plus customary benefits) to undertake the following specific
activities:

 

Manage the use of the blast range for the Company’s Research and Development
activities; and Develop and operate the blast range as a commercial test
facility for use by third parties, to include soliciting contracts and managing
the commercial operations on behalf of the Company on a similar basis

 

 

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as the Range was previously operated for Newtec. Promptly upon Closing the
parties shall undertake to contact Newtec’s customers and advise them of the
change of ownership of the range and encourage their continued use of the
facility.

 

EXHIBIT E

 

(Operations Permits)

 

EXHIBIT F

 

(Violation of Laws, Ordinances, Orders of Regulations)

 

EXHIBIT G

 

(Pending Litigation)

 

EXHIBIT H

 

(Bill of Sale)

 

 

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