ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this "Agreement"), dated and effective as of July 23, 2003, among Reliability Incorporated, a Texas corporation ("Purchaser"), Helmut Grollitsch, a resident of Houston, Texas ("Inventor"), and Futura International, Inc., a Texas corporation ("Futura").

WITNESSETH:

WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to acquire from Seller, certain assets of Seller; and

WHEREAS, all parties wish to enter into certain agreements;

NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto hereby agree as follows:

1. CERTAIN DEFINITIONS
2. Certain Definitions
3. "Affiliate" shall mean any person or entity controlling, controlled by or under common control with the named party, and any spouse, child (natural or adopted), sibling, parent or in-law of the named party.
4. "Assets" shall mean the assets described in Section 2.01.
5. "Device" shall mean the cargo lifting and loading device described in the Patent Application.
6. "Domain Names" has the meaning set out in Section 2.01(i).
7. "Closing" shall mean the closing of the transactions contemplated by this Agreement.
8. "Closing Date" shall mean the earlierr of August 7, 2003 or the date that all conditions to Closing of Seller and Purchaser are satisfied.
9. "Patent Application" means United States Patent Application Serial No. 10/145,852 filed in the name of Inventor in the United States Patent and Trademark Office on May 14, 2002, as well as any continuation, continuation-in-part, or divisional thereof.
10. "Patent" means any patent that may issue from the Patent Application and any continuation, continuation-in-part, or divisional thereof, and any future patents that may issue for improvements on the Device conceived by Seller.
11. "Person" means an individual, corporation, partnership, limited liability company or any other entity.
12. "Trademark" means the trademark "Ezy-Lift" and any goodwill associated therewith, regardless of the goods and services with which the Trademark may be used, along with any and all trademarks incorporating terms confusingly similar to "Ezy-Lift" and any goodwill associated therewith, and any registration therefor issued by the United States Patent and Trademark Office or any other jurisdiction, foreign or domestic.
13. "Trademark Application" shall have the meaning set out in Section 2.01(c).
14. "Seller" shall mean Inventor and Futura, jointly and severally, collectively.
15. PURCHASE AND SALE
16. Purchase and Sale of Assets from Seller
17. The Patent Application for the Ezy-Lift Device;
18. The trade name and/or trademark "Ezy-Lift" and all derivatives thereof, and any logos using such name or any derivative thereof, and all goodwill associated therewith, such trade name(s) and/or trademark(s) being listed on Schedule 2.01(b) (collectively the "Trade Name");
19. The trademark registration application for the Trademark filed in the United States Patent and Trademark Office by Inventor and any trademark registration application or trade name registration filed with the Texas Secretary of State or any other jurisdiction, foreign domestic (collectively, "Trademark Application"), a list of all filings is included on Schedule 2.01(c);
20. All know-how, whether patentable or not and whether confidential or not, relating to the manufacture, use and sale of the Device;
21. All drawings, engineering writings, specifications, plans, dies, parts lists and specifications, computer programs, designs, technical documentation and molds for the production of the Device;
22. All inventory of completed Devices, all work in progress, all raw materials, supplies and parts used in the manufacture of the Device;
23. All rights to the components on order from Tex-A-Draulics, L.P., as listed on Schedule 2.01(g);
24. All outstanding orders for the Device;
25. Any Interest domain name registration incorporating the term "Ezy-Lift" or any confusingly similar variation thereof in any top level domain, including, without limitation, ".com", ".net", ".org", ".us", ".biz", ".tx", and ".cc") (the "Domain Names") along with any associated web site coding and incorporated designs;
26. All of Seller's books and records relating to the Device, including customer lists, supplier lists, pricing information, customer files, proposals, marketing files, forecasts and contracts relating to purchase of parts, manufacture of the Device and sales;
27. All of Seller's equipment, machines, tools, computers used or useful in the production of the Device;
28. All brochures, catalogues, sales materials, photographs, advertisements, and the like relating to the Device and all copyrights thereon;
29. All rights of action on account of past, present and future unauthorized use, disclosure or misappropriation of the Trademark, the tradename "Ezy-Lift", the Patent Application and the Patent;
30. All other assets (tangible and intangible) of Seller related to the Device; and
31. All good will associated with the Assets and the Device.
32. Assumed Liabilities
33. Non-Assumption
34. Purchase Price and Payment
35. $500,000, payable in cash at Closing;
36. $150,000, payable on the first anniversary of Closing; and
37. $150,000, payable on the second anniversary of Closing.
38. Closing
39. Royalty
40. During the Royalty Period (as hereinafter defined), Purchaser will pay Seller a royalty of 4% on the first $25,000,000 of Purchaser's Net Sales (as hereinafter defined) and thereafter a royalty of 2% on Purchaser's Net Sales for the Royalty Period, whether the Patent is issued or not. From and after the later of the quarter which contains the month which is one month following the issuance of the Patent or the quarter which contains the first anniversary of Closing, the royalty shall be the higher of the royalty due based on Net Sales or $15,000 per quarter (the "Minimum Payment"); prior to such time or if the Patent does not issue, the royalty shall be based only on Net Sales, with no Minimum Payment.
41. Royalties accrue from the Closing Date, with the first royalty payment being due for Net Sales, if any, during the calendar quarter ended September 30, 2003. Payments of royalty shall be due for Net Sales from the Closing Date to the fifteenth anniversary date of the Closing Date (the "Royalty Period").
42. Net Sales shall mean Purchaser's gross receipts from the sale of the Device for pick-up trucks, trucks and vans, where the Device includes a U-shaped lifting arm, as described in the Patent Application, less all returns; allowances; cash discounts; any sales, use or excise taxes; import duties or similar charges; shipping, handling, freight and/or transportation expenses; insurance charges; and installation fees or charges.
43. Royalties shall be paid quarterly on April 30, July 31, October 31 and January 31 (the "Payment Dates") for the preceding calendar quarter's Net Sales, except for the first payment which shall include all Net Sales from the Closing Date to the end of the calendar quarter preceding the payment of the first royalty payment.
44. In conjunction with the payment of royalties, Purchaser shall submit to Seller a statement in writing setting forth for the preceding quarter the total amount of Net Sales, the applicable percentage of royalty, and the total royalty due, accompanied by Purchaser's check for the royalty due. Purchaser agrees to keep true and accurate records and separate books of account in accordance with its usual accounting procedures with respect to sales of the Device for the calculation of royalties. Seller shall have the right, at its expense, to examine such books to verify the amount of royalty due, provided however, that Seller may only examine such books once in any twelve month period and may only examine such records during Purchaser's normal business hours on at least five days notice.
45. Purchaser shall have the right to offset against any royalty payment due to Seller any amounts owed to Purchaser by Seller under this Agreement or otherwise.
46. Termination
47. REPRESENTATIONS AND WARRANTIES OF SELLER
48. Corporate
49. Authorization
50. Shareholders of Futura
51. Liabilities
52. Seller's Title to Assets
53. Taxes and Tax Returns
54. Brokers
55. Solvency
56. Patentability
57. Trademark
58. No Infringement
59. REPRESENTATIONS AND WARRANTIES OF PURCHASER
60. Organization and Good Standing
61. Authorization and Validity
62. No Violation
63. Brokers
64. COVENANTS OF SELLER AND PURCHASER
65. Consummation of Agreement
66. Access
67. Documentation Provided
68. True, complete and accurate copies of the Patent Application, as filed with the United States Patent and Trademark Office, and all filings and correspondence with the United States Patent and Trademark Office with respect thereto;
69. True, complete and accurate copies of the Trademark, as filed with the United States Patent and Trademark Office, and all filings and correspondence with the United States Patent and Trademark Office with respect thereto;
70. All patent and prior art identified in connection with searches conducted by or on behalf of Seller and any opinions with respect to patentability of the Device;
71. Searches reflecting liens, or the absence thereof, on the Patent Application and the Trademark Application on file with the United States Patent and Trademark Office.
72. No Stock Transfers
73. ADDITIONAL AGREEMENTS
74. Assistance
75. Prompt execution of all papers that are deemed necessary or desirable by Purchaser to protest the right, title and interest conveyed hereunder;
76. Prompt execution of all petitions, oaths, specifications, declarations and like items to prosecute all patent and trademark applications and any substitute, divisional, continuing or additional application in the Unites States and/or foreign countries;
77. Prompt assistance where reasonably necessary to assure the manufacture of the Device and that it functions properly;
78. Prompt assistance and cooperation, including but not limited to execution of documents and testifying in the prosecution of legal proceedings involving the Device, including but not limited to patent prosecution, interference proceedings, infringement actions, opposition proceedings, priority contents, cancellation proceedings, public use proceedings and any other legal proceedings.
79. Future Developments
80. Prosecution
81. Future Inventions
82. Sales and Marketing
83. Stock Option
84. Accessories.
85. CONDITIONS PRECEDENT OF PURCHASER
86. Representations and Warranties
87. Covenants and Conditions
88. Proceedings
89. Due Diligence Review
90. Closing Deliveries
91. Legal Opinion
92. CONDITIONS PRECEDENT OF SELLER
93. Representations and Warranties
94. Covenants and Conditions
95. Proceedings
96. Closing Deliveries
97. CLOSING DELIVERIES
98. Seller Documents
99. executed bills of sale conveying the Assets to Purchaser;
100. appropriate assignments of the Patent Application and the application for the Trademark;
101. a copy of resolutions of the Board of Directors and shareholders of Futura authorizing the execution, delivery and performance of this Agreement and all related documents and agreements, certified by the Secretary of Futura as being true and correct copies of the originals thereof subject to no modifications or amendments;
102. a certificate of the President of Futura, dated the Closing Date, (i) as to the truth and correctness in all material respects of the representations and warranties of Seller contained herein on and as of the Closing Date, (ii) as to the performance of and compliance by Futura with all covenants contained herein on and as of the Closing Date and (iii) certifying that all conditions precedent of Futura to the Closing have been satisfied;
103. certificates of the Secretary of Futura certifying as to the incumbency of the officers of Futura and as to the signatures of such officers who have executed documents delivered at the Closing on behalf of Futura;
104. certificates, dated within five (5) days of the Closing Date, of the proper state officials of Texas establishing that Futura is in existence and has paid all franchise taxes and sales and otherwise is in good standing to transact business in the State of Texas;
105. UCC and other certificates of no liens on the Assets;
106. the opinion required by Section 7.6; and
107. the books, records and documents included in the Assets.
108. Deliveries of Purchaser
109. At the Closing, Purchaser shall deliver to Seller:
110. $500,000 of the Purchase Price, in immediately available funds;
111. a copy of the resolutions of the Board of Directors of Purchaser authorizing the execution, delivery and performance of this Agreement and all related documents and agreements, certified by Purchaser's Secretary as being true and correct copies of the originals thereof subject to no modifications or amendments;
112. a certificate of the President or any Vice President of Purchaser, dated the Closing Date, (i) as to the truth and correctness of the representations and warranties of Purchaser contained herein on and as of the Closing Date, (ii) as to the performance of and compliance by Purchaser with all covenants contained herein on and as of the Closing Date and (iii) certifying that all conditions precedent of Purchaser to the Closing have been satisfied;
113. a certificate of the Secretary of Purchaser certifying as to the incumbency of the officers of Purchaser and as to the signatures of such officers who have executed documents delivered at the Closing on behalf of Purchaser; and
114. the Stock Option required by Section 6.04.
115. POST CLOSING MATTERS
116. Further Instruments of Transfer
117. Cessation of Business
118. INDEMNIFICATION
119. By Seller
120. Successful Defense
121. Offset
122. NONCOMPETITION
123. Noncompetition
124. Interpretation of Restrictions
125. Remedies
126. TERMINATION
127. Termination
128. at any time before Closing, by Purchaser if the due diligence review by Purchaser and its advisors shall have revealed to Purchaser any fact or situation that Purchaser believes to be unsatisfactory;
129. at any time prior to the Closing Date, by mutual agreement of all parties;
130. at any time prior to the Closing Date, by Seller if any representation or warranty of Purchaser contained in this Agreement is or becomes untrue or breached in any material respect or if Purchaser fails to comply in any material respect with any covenant contained herein;
131. at any time after August 30, 2003, by Purchaser if the conditions stated in Article VII have not been satisfied or if the transactions for any other reason other than the fault of Purchaser have not closed by such date; and
132. at any time after August 30, 2003, by Seller if the conditions stated in Article VIII have not been satisfied or if the transactions for any other reason other than the fault of Seller have not closed by such date.
133. Effect of Termination
134. MISCELLANEOUS
135. Amendment
136. Assignment
137. Parties in Interest; No Third Party Beneficiaries
138. Entire Agreement
139. Waiver
140. Remedies Not Exclusive
141. Severability
142. Survival of Representations and Warranties
143. Governing Law
144. Captions
145. Gender and Number
146. Reference to Agreement
147. Confidentiality; Publicity and Disclosures
148. Costs, Expenses and Legal Fees
149. Notice
150. Counterparts
151. Construction



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EXECUTED as of the date and year first above written.

RELIABILITY INCORPORATED
By: /s/Larry Edwards
	Larry Edwards, President
FUTURA INTERNATIONAL, INC.
By: /s/Helmut Grollitsch
	Helmut Grollitsch, President

/s/ Helmut Grollitsch
Helmut Grollitsch, individually