ex101.htm


    


    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.

     

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (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

     

     

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    
 

    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; 

     

     

     

     

    [intentionally
blank]

     

     

     

     

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    


     

    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