**Exhibit10.38****ASSET PURCHASE AGREEMENT**     ThisAsset Purchase Agreement (the “Agreement”) is dated March 14, 2008, by and betweenMetretek, Incorporated, a Florida corporation (“**Seller**”), PowerSecure International, Inc., aDelaware corporation (“**PowerSecure**”), and Mercury Instruments LLC, an Ohio limited liabilitycompany (“**Purchaser**”).**PREAMBLE**     WHEREAS, Seller designs, manufactures, sells and repairs software and electronic systems thatfacilitate the collection, processing, storage and publishing of data generated by remote assets,in addition to remote control of those assets (the “**Business**”); and     WHEREAS, Seller desires to sell certain of the assets and operations of the Business, and thePurchaser desires to acquire such assets and operations of the Business, in each case on the termsand conditions set forth herein; and     WHEREAS, PowerSecure is the ultimate parent of Seller and has joined this Agreement solely forthe limited purposes set forth in Sections 7.3, 7.4 and 14.4 hereof to induce Purchaser to enterinto this Agreement;     THEREFORE, the parties, intending to be legally bound, hereby agree as follows:**AGREEMENT**SECTION 1. DEFINITIONS.     As used in this Agreement, the following terms shall have the following respective meanings:     “**Affiliate” shall mean, with respect to any Person, any Person which directly or indirectly,through stock ownership or through other arrangements, either controls, is controlled by or isunder common control with such Person, with the word “control” (and derivations thereof) having themeaning given to such word under Rule 405 promulgated under the Securities Act of 1933, as amended.     “**Allocation Statement” – See Section 3.2.     “**Ancillary Agreements” shall refer collectively to the Bill of Sale, the Assignment andAssumption Agreement, the Assignment and Assumption of Leases, the Escrow Agreement, the TrademarkAssignment and the Patent Assignment.     “**Assignment and Assumption Agreement” – See Section 2.3(a).     **“Assignment and Assumption of Leases**” – See Section 2.3(a).     “**Assumed Contracts” – See Section 2.1(a)(ii).
 

 
     “**Assumed Liabilities” – See Section 2.3(a).     “**Bill of Sale” – See Section 2.2.     “**Business” – See Preamble.     “**Business Days” shall mean days other than Saturdays, Sundays and days on which banks inCincinnati, Ohio are authorized or obligated by law to be closed.     **“Cash Purchase Price”**– see Section 3.1(a).     “**Closing” – See Section 4.     “**Closing Date” – See Section 4.     “**Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulationspromulgated thereunder.     “**Collection Customers” – See Section 2.1(c).     **“Contingent Purchase Price”**— See Section 3.1(b).     **“Employee Benefit Plan”**– shall mean any Plan, existing at the Closing Date or prior thereto,established, presently or heretofore maintained, or to which contributions have at any time beenmade by Seller or any predecessor of Seller, or under which any employee, former employee,independent contractor or director of Seller or any beneficiary thereof is covered, is eligible forcoverage or has benefit rights.     “**Employees” – See Section 5.17.     “**Environmental Laws” – See Section 5.19(a).     “**Environmental Permits” – See Section 5.19(a).     “**Equipment” – See Section 2.1(a)(i).     “**ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and therules and regulations promulgated thereunder.     **“ERISA Affiliate”**– shall mean any Person who is, or at any time was, a member of a controlledgroup (within the meaning of section 412(n)(6) of the Code) that includes, or at any time included,Seller or any predecessor of Seller.     **“Escrow Agent”**– shall mean LaSalle Bank N.A.     **“Escrow Agreement”**– See Section 3.1(a).     “**Excluded Assets” – See Section 2.1(b).
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     “**Execution Date” shall mean the date of execution of this Agreement.     “**Financial Data” – See Section 5.7.     **“Hazardous Materials”**– See Section 5.19(b).     “**Indemnified Party” – See Section 10.3(a).     “**Indemnifying Party” – See Section 10.3(a).     “**Independent Accountants” shall mean McGladrey & Pullen, LLP.     “**Intellectual Property” shall mean patents, patent applications, and unpatented inventions,discoveries and innovations, trade names, trademarks, service marks and business names and allregistrations thereof, copyrights on both published unpublished work, and all registrationsthereof, specifications, research information, engineering drawings, machinery designs, plans,blueprints, lab notebooks and engineering notes, bills of material, testing procedures, processes,methods, know-how, trade secrets and other technical information, all internet domain names ownedor held for use by or for Seller, and all website contents associated therewith, all computersoftware (including source code, data, design and related documentation) that relate in any mannerto the Business, all licenses or agreements in connection with any of the foregoing, and the rightto sue for past infringement in connection with any of the foregoing.     “**Inventory” – See Section 2.1(a)(v).     **“Key Employees” –**means Joseph Harley and Danny MacDonald.     “**Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory orother) or conditional sale agreement.     **“Leases”**shall mean the Lease Agreements dated May 2, 2005 with Louis Leblanc-Moriniere,Trustee for the premises known as Suite AB, 30 East Drive, Melbourne, Florida and Suite D, 255 EastDrive, Melbourne, Florida, as modified by the Second Addendum to Lease Agreement dated October 17,2007.     “**Losses” – See Section 10.1.     “**Material Adverse Effect” shall mean (i) with reference to Seller, a circumstance, state offacts, event, consequence or result that, individually or in the aggregate, materially andadversely affects the Business, considered as a whole, or prohibits or materially impedes Seller’sability to perform its obligations under this Agreement or any Ancillary Agreement, or (ii) withreference to the Purchaser, a circumstance, state of facts, event, consequence or result that,individually or in the aggregate, prohibits or materially impedes Purchaser’s ability to performits obligations under this Agreement or any Ancillary Agreement; provided, that the term“Material Adverse Effect” shall not include any circumstance, state of facts, event, consequence orresult that constitutes, relates to or arises out of (A) public or industry knowledge relating tothe transactions contemplated by this Agreement (including, without limitation, actions orinactions of employees, customers or vendors) or (B) past, existing or prospective general economicor
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regulatory conditions, or changes in laws, rules or regulations or the interpretation thereof,affecting at any time Seller or the industry or industries in which it operates.     **“Net Sales”**shall mean total revenues as defined under U.S. generally accepted accountingprinciples.     “**Outstanding Receivables” – See Section 2.1(b)(v).     **“Party”**– shall mean a party to this Agreement as identified in the introductory paragraphhereof.     **“Parties”**– shall mean all of the parties identified in the introductory paragraph hereof.     “**Patent Assignment” – See Section 2.2.     “**Patents” – See Section 2.1(a)(iii).     **“PBGC” –**shall mean the Pension Benefit Guaranty Corporation.     “**Permits” – See Section 5.11.     “**Permitted Liens” – shall have the meaning ascribed to such term in Section 5.6.     “**Person” shall mean any individual, corporation, limited liability company, partnership, trustor other entity organization.     **“Plan”**– shall mean any bonus, incentive compensation, deferred compensation, pension, profitsharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights,phantom stock, leave of absence, layoff, vacation, sick pay, sick leave, day or dependent care,legal services, cafeteria, life, health, accident, disability, workers’ compensation or otherinsurance, severance, separation or other employee benefit plan, practice, policy, commitment, orarrangement of any kind, whether written or oral, or whether for the benefit of a single individualor more than one individual including, without limitation, any “employee benefit plan” within themeaning of Section 3(3) of ERISA.     “**Proceeding” – See Section 10.3(a).     “**Purchased Assets” – See Section 2.1(a).     “**Purchaser” – See introductory paragraph.     “**Purchaser Indemnitees” – See Section 10.1.     “**Records” – See Section 2.1(a)(vi).     **“Restricted Period”**– See Section 7.4.     **“Release”**– See Section 5.19(b).
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     **“Retained Liabilities**” – See Section 2.3(b).     “**Seller” – See introductory paragraph.     “**Seller Indemnitees” – See Section 10.2.     “**Seller Secured Debt” – shall mean indebtedness of the Seller secured by a Lien on any part ofthe Purchased Assets.     “**Taxes” shall mean for all purposes of this Agreement all taxes however denominated, includingany interest, penalties or additions to tax that may become payable in respect thereof, imposed byany governmental body, which taxes shall include, without limiting the generality of the foregoing,all income taxes, payroll and employee withholding taxes, unemployment insurance, social security,sales and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, realand personal property taxes, stamp taxes, transfer taxes, workmen’s compensation taxes, value addedtaxes and other obligations of the same or a similar nature, whether arising before, on or afterthe Closing; and “**Tax**” shall mean any one of them.     “**Tax Returns” shall mean any return, report, information return or other document (includingany related or supporting information) filed or required to be filed with any governmental body inconnection with the determination, assessment, collection or administration of any Taxes.     “**Trademark Assignment” – See Section 2.2.     “**Trademarks” – Section 2.1(a)(iv).     **“Welfare Benefit Plan”**— has the meaning given to it in Section 5.16.SECTION 2. PURCHASE AND SALE OF THE PURCHASED ASSETS.     Section 2.1. Transfer of Assets.          (a) Subject to the terms and upon the conditions herein set forth, Seller shall sell, convey,transfer, assign and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, onthe Closing Date, all right, title and interest of Seller in and to the following assets (the“**Purchased Assets”), free and clear of any Lien other than Permitted Liens:               (i) all of the equipment, machinery, furniture, tooling and spare parts, and other items oftangible personal property, that are owned by Seller and located (A) at the facilities of theBusiness or (B) elsewhere and used or held for use in the Business, including, without limitation,the assets set forth on Schedule 2.1(a)(i) (the “**Equipment**”);               (ii) (A) the leases listed on Schedule 2.1(a)(ii)(A), (B) the outstanding purchaseorders, contracts or other commitments of Seller to suppliers of goods and services for materials,supplies, services or other items used in the Business as listed on Schedule 2.1(a)(ii)(B),and (C) the sales orders, contracts or other similar commitments of Seller to purchasers of goodsand services exclusively related to the Business as listed on Schedule 
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2.1(a)(ii)(C) (all of the foregoing in this Section 2.1(a)(ii) collectively, the“**Assumed Contracts”), in each case to the extent assignable;               (iii) the patents or applications for patents set forth on Schedule 2.1(a)(iii) (the“**Patents”);               (iv) the trademarks or service marks or applications for trademarks or servicemarks set forthon Schedule 2.1(a)(iv) (the “**Trademarks**”);               (v) all of the finished goods, raw materials, work in progress, stores and supplies of Sellerrelated to the Business (collectively, the “**Inventory**”);               (vi) all financial books, accounting records, files, invoices, customer lists and records,service records, credit files, correspondence, and customer and vendor lists related to theBusiness (the “**Records**”);               (vii) all Permits, to the extent assignable;               (viii) all brochures, art work and other promotional and printed materials, consumables, tradeshow materials (including displays) videos, advertising and/or marketing materials related to theBusiness;               (ix) all rights to the telephone numbers (including fax numbers) used by Seller exclusively inthe Business and set forth or described on Schedule 2.1(a)(ix);               (x) the internet domains set forth on Schedule 2.1(a)(x);               (xi) all software programs, databases and documentation, including the assignment of anypasswords, codes, licenses, rights, or privileges associated or connected therewith;               (xii) all technology, copyrights, licenses, trade names, or other intellectual property orproprietary property rights owned or used by the Seller in the conduct of the Business;               (xiii) all of the Seller’s rights under confidentiality, non-disclosure, non-competition,non-solicitation and other similar agreements;               (xiv) all models, prototypes and/or breadboards; and               (xv) all other assets of Seller relating to the Business and not specifically excludedpursuant to the terms of this Agreement.          (b) Notwithstanding any provision in Section 2.1(a) or elsewhere in this Agreement to thecontrary, the Purchased Assets shall not include, and Seller is not selling and Purchaser is notpurchasing any of Seller’s right, title or interest in or to any of the following assets(collectively, the “**Excluded Assets**”):
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               (i) cash and cash equivalents;               (ii) net operating losses relating to the Seller or the Business, and the federal and statetax benefits related thereto, and any refunds, credits or other assets or rights (includinginterest thereon or claims therefore) with respect to any taxes of Seller, and all of Seller’s taxreturns related to the Business or the Assets for all periods ending on or prior to the Closing,and any notes, worksheets, files and documents relating thereto;               (iii) the corporate franchise of the Seller, including its capital stock, minute books andrelated corporate records;               (iv) Seller’s rights under this Agreement and the Ancillary Agreements; and               (v) accounts receivable and all notes receivable resulting from the sale of goods or servicesby the Business prior to the Closing Date (“**Outstanding Receivables**”).          (c) On or after the Closing Date, Seller shall deliver a notice to all customers withOutstanding Receivables (“**Collection Customers**”) acceptable in form and substance to Purchaserdirecting such customers to remit payments for Outstanding Receivables to an address of Seller, andPurchaser agrees, at the request of Seller, to co-sign such notice. All payments made by, and allamounts collected from, Collection Customers, whether paid to or collected by Seller or Purchaser,shall be applied to Outstanding Receivables unless otherwise related to a specific invoice ordirected by the Collection Customers. Purchaser shall remit and pay over to Seller any and allamounts received from Collection Customers that constitute Outstanding Receivables promptly, and inno event more than ten (10) Business Days after, receipt of such payments. Purchaser agrees toreasonably cooperate with Seller in the collection of any Outstanding Receivables, at the expenseof Seller. Purchaser shall not have the right, and shall not, agree to, approve or ratify anyreductions, rebates, offsets or other deductions to any Outstanding Receivables. Seller shallcollect the Outstanding Receivables using collection efforts consistent with Seller’s past practiceand shall not initiate litigation to collect any such Outstanding Receivables without providingwritten notice to the Purchaser of Seller’s intent to initiate such litigation not less than ten(10) Business Days prior to the initiation of litigation. Seller shall remit and pay over toPurchaser any and all amounts received by Seller resulting from the sale of goods or services bythe Business after the Closing Date promptly, and in no event more than ten (10) Business Daysafter, receipt of such payments.     Section 2.2. Sale at Closing Date. The sale, transfer, assignment and delivery bySeller of the Purchased Assets to the Purchaser, as herein provided, shall be affected on theClosing Date. Seller shall duly execute and deliver a bill of sale (“**Bill of Sale**”) in the formattached hereto as Exhibit A, an assignment of the Trademarks (the “**Trademark Assignment**”)in the form attached hereto as Exhibit B, an assignment of the Patents (the “**PatentAssignment**”) in the form attached hereto as Exhibit C.     Section 2.3. Assumption of Assumed Liabilities; Exclusion of Retained Liabilities.          (a) Assumption of Assumed Liabilities. On the Closing Date and as part of itsconsideration for the Purchased Assets, Purchaser shall assume and agree to pay, perform anddischarge when due the following liabilities of Seller (collectively, the “**Assumed Liabilities**”):
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               (i) the ordinary course trade payables of the Seller as of Closing, not to exceed $182,700***;***               (ii) Seller’s obligations under the Leases, subject to Seller obtaining the necessary consentof the landlord under such Leases; and               (iii) all liabilities and obligations under the Assumed Contracts and Permits.The assumption of the Assumed Liabilities shall be effected on the Closing Date pursuant to anAssignment and Assumption Agreement in the form attached hereto as Exhibit D (the“**Assignment and Assumption Agreement”). The assumption of the Leases shall be effected on theClosing Date pursuant to an Assignment and Assumption of Leases in the form attached hereto asExhibit E (the “**Assignment and Assumption of Leases**”).          (b) Exclusion of Retained Liabilities. Except for the liabilities described inSection 2.3(a), above, Purchaser shall not assume or pay, perform or discharge, and Seller shallretain, any and all other debts, obligations, contracts, or liabilities of Seller (all such debts,obligations, contracts or liabilities being herein referred to as the “**Retained Liabilities**”),including, without limitation, warranty and customer service liabilities (including returns andallowances) of Seller relating to products or services manufactured or sold by the Business priorto the Closing Date, all product liabilities of Seller, Seller’s obligations to its employees andagents, and all obligations of Seller under any applicable laws, including, without limitation,Environmental Laws. Anything contained herein to the contrary notwithstanding, Seller shall not beliable for any debts, liabilities or obligations (i) incurred or caused by Purchaser, (ii) relatingto the Assets or the Business and accruing on or after the Closing Date. Included as part of theRetained Liabilities are the Seller’s obligations to National Grid Company (“National Grid”).Seller agrees to perform Seller’s obligations as set forth in Seller’s agreement with NationalGrid.     Section 2.4. Subsequent Documentation; Further Assurances. Purchaser and Sellershall, at any time and from time to time after the Closing Date, upon the reasonable request of thecounterparty, execute, acknowledge and deliver, or cause to be executed, acknowledged anddelivered, all such further documents and instruments as may be reasonably necessary for thefurther completion or confirmation of any of the transactions contemplated herein. Seller shallcooperate with Purchaser to permit Purchaser to enjoy Seller’s ratings and benefits under workman’scompensation laws and unemployment compensation laws to the extent permitted by such laws.     Section 2.5 Consent to Assignment. To the extent that the assignment of any lease,contract, commitment or right shall require the consent of the other party or parties thereto, thisAgreement shall not constitute an assignment thereof and Seller shall obtain any such necessaryconsents to such assignments prior to the Closing Date, or as otherwise agreed by Purchaser.     Section 2.6 Change of Name. At the Closing, Seller shall deliver to Purchaser forfiling an Amendment to Seller’s Articles of Incorporation changing Seller’s corporate name to“Metretek International, Inc.” and shall be permitted to use this name until the expiration or
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termination of Seller’s agreement with National Grid. After the expiration or termination ofSeller’s agreement with National Grid, Seller shall deliver to Purchaser for filing an Amendment toSeller’s Articles of Incorporation changing Seller’s corporate name to a name not based on, derivedfrom, or confusingly similar to “Metretek”. In addition, at the Closing, Seller shall deliver toPurchaser all amendments to Certificates of Authority or other authorizations of Seller to dobusiness in jurisdictions other than its state of incorporation, suitable for filing and recordingin the appropriate offices, to evidence a change of name to a name not confusingly similar to“Metretek”. In addition, Seller shall deliver to Purchaser any consents from Seller which may benecessary for Purchaser to adopt the name of Seller or any trade name used by Seller prior to or asof Closing as a trade name. Notwithstanding any provision of this Section 2.6 to the contrary,Seller shall have the right, after the Closing, to continue to use the name “Metretek” in its bankaccounts for the purposes of collecting the Outstanding Receivables under Section 2.1 hereof.     Section 2.7 Warranty Obligations. After the Closing, Purchaser shall, upon request ofSeller, perform the warranty obligations of Seller relating to products or services of Seller soldprior to the Closing, in accordance with its standard quality practices for the same or similarwork, at a cost to Seller equal to Purchaser’s standard rate for such work, payable in accordancewith Purchaser’s standard terms and conditions.SECTION 3. PURCHASE PRICE.     Section 3.1. Purchase Price.          (a) The cash purchase price for the sale and transfer of the Purchased Assets shall be TwoMillion Two Hundred Fifty Thousand U.S. Dollars ($2,250,000US), (the **“Cash Purchase Price**”). TheCash Purchase Price shall be payable by federal funds wire transfers on the Closing Date asfollows:               (i) The amount necessary, if any, to the holders of the Seller Secured Debt, to cause suchholders to release any Lien on the Purchased Assets;               (ii) Four Hundred Fifty Thousand U.S. Dollars ($450,000US) to the Escrow Agent to be heldpursuant to the terms of the Escrow Agreement attached in form hereto as Exhibit F; and               (iii) The difference between the Cash Purchase Price and the amounts set forth in Sections3.1(a)(i) and (ii) above, to be paid by federal funds wire transfer to an account designated by theSeller prior to Closing.          (b) An amount equal to thirty percent (30%) of the amount by which Net Sales of the productsand services identified on Schedule 3.1(b) exceed Five Million U.S. Dollars ($5,000,000US)during the twelve (12) month period immediately following the Closing Date (the “**ContingentPurchase Price**”). Within thirty (30) days of the end of such twelve (12) month period, thePurchaser shall deliver to the Seller Purchaser’s calculation of the Contingent Purchase Price.The Seller shall have fifteen (15) Business Days to review Purchaser’s calculation of theContingent Purchase Price and shall have access to Purchaser’s financial and other records relatingto the determination of such Net Sales during Purchaser’s normal business
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hours. If Seller does not dispute, in writing, Purchaser’s calculation within such timeperiod, Purchaser’s calculation shall be deemed to be final. If Seller disputes Purchaser’scalculation within such time period, Purchaser and Seller shall, for a period of ten (10) BusinessDays from Purchaser’s receipt of such dispute, attempt to resolve any differences regarding thecalculation of the Contingent Purchase Price. If Purchaser and Seller are not able to resolve suchdifferences within such time period, the dispute shall be submitted to the Independent Accountants,whose determination shall be final and binding on all parties. The fees and expenses of theIndependent Accountants shall be equally split between the Purchaser and the Seller. TheContingent Purchase Price, if any, shall be due and payable within three (3) Business Days afterthe final determination of the Contingent Purchase Price pursuant to this Section, by federal fundswire transfer to an account designated by Seller.     Section 3.2. Allocation of Purchase Price. Purchaser and Seller agree to allocate thePurchase Price for all Tax purposes in accordance with the allocation statement attached hereto asSchedule 3.2 (the “**Allocation Statement**”) and in accordance with Section 1060 of the Code,including the regulations promulgated thereunder. All Tax Returns, including IRS Form 8594, shallbe filed consistent with such Allocation Statement. Neither Purchaser nor Seller shall voluntarilytake a position on any Tax Return or before any governmental agency charged with the collection ofany such Tax that is any manner inconsistent with the terms of such Allocation Statement.SECTION 4. CLOSING.     Subject to the terms and conditions of this Agreement, the closing of the sale and purchase ofthe Purchased Assets and of the other transactions contemplated hereby (the “**Closing**”) shall takeplace on March ___, 2008, at 10:00 a.m., or at such other time and date as may be mutually agreed toby the parties hereto. Unless otherwise agreed, the Closing shall take place at the offices ofKegler, Brown, Hill & Ritter Co., L.P.A. The term “**Closing Date**,” as used in this Agreement, shallmean the date on which such Closing actually occurs. The Closing shall be effective 12:01 a.m.Eastern Standard Time on the Closing Date.SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER.     Seller hereby represents and warrants to Purchaser as follows:     Section 5.1. Corporate Organization. Seller is a corporation duly organized, validlyexisting and in good standing under the laws of the State of Florida and has all requisitecorporate power and authority to own its properties and assets and to conduct the Business ascurrently conducted.     Section 5.2. Qualification to Do Business. Seller is duly qualified to do business asa foreign corporation in all jurisdictions where such qualification is required by Seller inconnection with the Business, except where the failure to be so qualified would not have a MaterialAdverse Effect. Schedule 5.2 sets forth a list of all jurisdictions in which the Seller isqualified to do business as a foreign corporation.     Section 5.3. Authorization and Validity of Agreement. Seller has all requisitecorporate power and authority to enter into this Agreement and each of the Ancillary Agreements towhich
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it is a party and to carry out its obligations hereunder and thereunder. The execution anddelivery of this Agreement and the Ancillary Agreements to which Seller is a party and theperformance of its obligations hereunder and thereunder have been duly authorized by all necessarycorporate action of Seller, and no other corporate proceeding on the part of Seller is necessary toauthorize such execution, delivery and performance. This Agreement has been, and as of the ClosingDate each Ancillary Agreement to which Seller is a party will be, duly executed by Seller andconstitutes, or as of the Closing Date will constitute, the valid and binding obligation of Seller,enforceable against it in accordance with its terms subject to the effect of any applicablebankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rightsgenerally and to the effect of general principles of equity, whether considered in a proceeding atlaw or in equity.     Section 5.4. No Conflict or Violation. Except as set forth on Schedule 5.4,the execution, delivery and performance by Seller of this Agreement and of the Ancillary Agreementsto which it is a party (a) do not and will not violate or conflict with any provision of theArticles of Incorporation or By-laws of Seller, (b) do not and will not violate any provision oflaw or any order, judgment or decree of any court or other governmental or regulatory authority,and (c) do not and will not violate or result in a breach of or constitute (with due notice orlapse of time or both) a default under any material Assumed Contract, and (d) will not result inthe creation or imposition of any Lien (other than Permitted Liens) upon any of the PurchasedAssets, except for such violations, conflicts, breaches or defaults that would not have a MaterialAdverse Effect.     Section 5.5. Consents and Approvals. No consent, waiver, authorization or approvalof any governmental or regulatory authority, and no declaration to or filing or registration withany such governmental or regulatory authority, is required in connection with the execution anddelivery of this Agreement by Seller or the performance by Seller of its obligations hereunder,other than consents, waivers, authorizations or approvals for the transfers of Permits to Sellercontemplated by this Agreement, that will be obtained prior to the Closing.     Section 5.6. Title. Seller has, and at Closing Seller will convey to Purchaser, goodand exclusive title, or a valid leasehold interest, in and to the Purchased Assets owned by Seller(other than the Real Property, which is addressed in Section 5.21) free and clear of any Liensother than (i) Permitted Liens, (ii) the Assumed Liabilities and (iii) Liens that will be removedat or prior to the Closing. As used in this Agreement, the term “**Permitted Liens**” means Liens thatdo not materially affect the value or transferability of any of the Purchased Assets or theBusiness.     Section 5.7. Financial Information. Schedule 5.7 sets forth the (i) balancesheets for the periods ending December 31, 2005, 2006, 2007 and January 31, 2008, (ii) incomestatements for the periods ending December 31, 2007 and January 31, 2008, and (iii) general ledgertrial balance for the months ending December 31, 2007 and January 31, 2008 (collectively, the"**Financial Data**”). The Financial Data has been derived from the books and records of Seller andPowerSecure, is accurate in all material respects, and fairly presents in all material respects thefinancial condition and results of operation of the Business as of the dates and for the periodsindicated in accordance with accounting policies and procedures of Seller consistently applied.
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     Section 5.8. Absence of Certain Changes or Events.          (a) Since January 1, 2008, there has not occurred any Material Adverse Effect.          (b) Since January 1, 2008, Seller has operated the Business in the ordinary course of businessconsistent with past practice.     Section 5.9. Tax Matters.          (a) Seller has paid or made provisions for all Taxes now payable that could, if unpaid, resultin Liens or impositions upon the Purchased Assets after the Closing or that could otherwise affectPurchaser or the Purchased Assets after the consummation of the transactions contemplated hereby.          (b) Seller has withheld all withholding and employment Taxes which it has been required towithhold relating to salaries, compensation and other amounts heretofore paid to the Employees orother persons in connection with the Business and all Forms W-2 and 1099 required to be filed withrespect thereto have been timely and properly filed.     Section 5.10. Warranties. Schedule 5.10 sets forth a description of thestandard product and service warranties given by Seller in connection with the Business.     Section 5.11. Permits. Schedule 5.11 sets forth a true and complete list ofall material licenses, permits, franchises, authorizations and approvals issued or granted toSeller with respect to the Business by the federal government or any state or local government (the“**Permits**”).     Section 5.12. Compliance with Law. Except as disclosed on Schedule 5.12, theoperations of the Business are being conducted in all material respects in accordance with allapplicable laws, regulations, orders and other requirements of all courts and other governmental orregulatory authorities having jurisdiction over Seller and/or the Purchased Assets. Except asdisclosed on Schedule 5.12, Seller has received no written notice of any violation of anysuch law, regulation, order or other legal requirement.     Section 5.13. Litigation. There are no claims, actions, suits, or proceedingspending or, to the knowledge of Seller, threatened, before any national, state or localgovernmental or regulatory authority, against Seller involving, affecting or relating to theBusiness or the Purchased Assets.     Section 5.14. Assumed Contracts. Seller has delivered or made available to Purchasera correct and complete copy of each Assumed Contract. Except as set forth in Schedule5.14, Seller is not required under the terms of any material Assumed Contract to give notice toor obtain consent from any party thereto to consummate the transactions contemplated hereby.Seller has performed in all material respects the obligations required to be performed by it todate under any Assumed Contract. To the knowledge of Seller, no other party to any AssumedContract is in default in respect thereof.
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     Section 5.15. Inventories. The Inventory is of a quality saleable (as to finishedgoods) and useable (as to raw material and supply) in the conduct of the Business. All Inventorywas acquired and has been maintained in the ordinary course of the Business, is of good andmerchantable quality, and is not subject to any write-down or write-off, subject to the reserve setforth in Seller’s most recent balance sheet, if used in the ordinary course of business. AllInventory is either located at the Leased Property, at a customer location, or in transit theretoor therefrom, or is located at the site of a contract manufacturer. Schedule 5.15 setsforth a true and complete list of the Inventory as of February 22, 2008. Schedule 5.15shall be updated as of Closing.     Section 5.16. Seller Plans. For the purposes of this Section 5.16, “Seller” shallinclude all persons who are members of a controlled group, a group of trades or businesses undercommon control, or an affiliated service group (within the meanings of Sections 414(b), (c) or (m)of the Code), of which the Seller is a member and any ERISA Affiliate of the Seller.          (a) The Employee Benefit Plans presently maintained by the Seller or to which the Seller hascontributed within the past six (6) years, including any terminated or frozen plans which have notyet distributed all plan assets, are fully set forth in Schedule 5.16. For purposes ofthis provision, the term “Employee Benefit Plan” shall mean:               (i) A Welfare Benefit Plan as defined in Section 3(1) of the Employee Retirement IncomeSecurity Act of 1974, as amended (“ERISA”) established for the purpose of providing for itsparticipants or their beneficiaries, through the purchase of insurance or otherwise, medical,surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability,death or unemployment (including any plan or program of severance pay), or vacation benefits,apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legalservices, or any benefit described in Section 302I of the Labor Management Relations Act of 1947;               (ii) An Employee Pension Benefit Plan as defined in Section 3(2) of ERISA established ormaintained by the Seller for the purpose of providing retirement income to employees or for thepurpose of providing deferral of income by employees for periods extending to the termination ofcovered employment or beyond; and               (iii) Any other plan or arrangement not covered by ERISA but which provides benefits toemployees or former employees and results in an accrued liability on the part of the Seller eitherby contract or by operation of law.          (b) With respect to any such Employee Benefit Plans, the Seller represents and warrants:               (i) The Seller has not engaged in any prohibited transaction, as such term is defined inSection 4975 of the Code or Section 406 of ERISA.               (ii) The Seller has complied with all reporting and disclosure requirements required by TitleI, Subtitle B, Part 1 of ERISA.
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               (iii) There was no accumulated funding deficiency (as defined in Section 302 of ERISA andSection 412 of the Code) with respect to any Plan which is a defined benefit pension plan, whetheror not waived, as of the last day of the most recent fiscal year of the plans ended prior to thedate of this agreement.               (iv) There are no contributions due to any Employee Pension Benefit Plan for the most recentfiscal year of the plans ending prior to the date of this Agreement and the Seller’s FinancialStatements reflect any liability of the Company to make contributions to the Employee PensionBenefit Plans.               (v) No material liability to the PBGC has been or is expected to be asserted with respect toany Employee Pension Benefit Plan which is a defined benefit pension plan.               (vi) There has been no reportable event as described in Section 4043(b) of ERISA since theeffective date of Section 4043 of ERISA with respect to any Employee Pension Benefit Plan which isa defined benefit pension plan.               (vii) The current value of the assets of each Employee Pension Benefit Plan exceeds theactuarially determined present value of all nonforfeitable, accrued benefits (as defined in Section3 of ERISA) of each such plan on an ongoing basis.               (viii) Except for claims for benefits by participants and beneficiaries in the normal courseof events, to the knowledge of the Seller, there are no claims, pending or threatened, by anyindividual or Governmental Entity, which, if decided adversely, would have a material adverseeffect upon the financial condition of any Employee Benefit Plan, the plan administrator of anyEmployee Benefit Plan, or the Seller.               (ix) The Seller has made available for inspection all annual reports for the Seller filed onInternal Revenue Service (“IRS”) Form 5500 or 5500C, all reports for the Seller prepared by anactuary for the last three plan years, the plan and trust documents and the Summary PlanDescription, as amended, for each Employee Benefit Plan and the last filed PBGC 1 Form (ifapplicable) for each Employee Benefit Plan, with respect to any Employee Benefit Plans other thanmulti-employer plans (within the meaning of Section 3(37) of ERISA), and other reports filed withthe PBGC during the last three plan years.               (x) All Employee Pension Benefit Plans are intended to be qualified retirement plans under theCode. The IRS has issued, and the Seller has made available for inspection, one or more favorabledetermination letters with respect to the qualification of all Employee Pension Benefit Plansstating that from the inception of each such plan, such plan has been qualified under Section401(a) of the Code and each trust maintained in connection with such plan has been and is exemptunder Section 501(a) of the Code. The time for adoption of any amendments required by changes inthe Code since such determination letters were issued, or changes required by IRS as a conditionfor continued qualification of such plans has not expired, or did not expire without suchamendments being made. Such plans are now, and
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always have been, established in writing and maintained and operated in accordance with the plandocuments, ERISA, the Code, and all other applicable laws.               (xi) There is no liability arising from the termination or partial termination of any EmployeeBenefit Plan, except for liabilities as to which adequate reserves are reflected on the FinancialStatements, and there exists no condition presenting a material risk of such liability.               (xii) The Seller has timely made any contributions it is obligated to make to anymulti-employer plan within the meaning of Section 3(37) of ERISA. The Seller has no liabilityarising as the result of withdrawal from any multi-employer plan, no such withdrawal liability hasbeen asserted and no such withdrawal liability will be asserted with regard to any withdrawal orpartial withdrawal on or before the date of this Agreement.          (c) The current value of the assets of each Welfare Benefit Plan which is a funded plan equalsor exceeds the value of all accrued claims and liabilities and the Seller’s Financial Statementsreflect any liability of the Seller with regard to any Welfare Benefit Plan which is an unfundedplan.     Section 5.17. Employees and Compensation. Schedule 5.17 sets forth anaccurate list of all of the employees of Seller whose employment is exclusively related to theBusiness (the “**Employees**”). Seller has made available to Purchaser a separate list of the basesalaries or rates of pay as of such date for the Employees, and the aggregate bonus paid to eachsuch Employee in respect of the most recently completed bonus measuring period for such Employee.     Section 5.18. Labor Matters. Seller is not a party to any union or collectivebargaining agreement covering any of the Employees nor, to the knowledge of Seller, are therecurrently any union organizing efforts by or with respect to any Employees.     Section 5.19. Environmental Matters.          (a) Except as set forth in Schedule 5.19, (i) Seller is in compliance in all materialrespects with all Environmental Laws (as defined below) with respect to its operation of theBusiness; (ii) Seller has obtained all material Environmental Permits (as defined below); (iii) allsuch permits are in full force and effect; and (iv) Seller is in compliance in all materialrespects with all such Environmental Permits. As used herein, “**Environmental Laws**” shall mean allapplicable federal, state and local laws, ordinances, rules, regulations, judgments, orders, ordecrees relating to the protection or regulation of the environment, including without limitation,to the extent applicable, the Comprehensive Environmental Response, Compensation, and Liability Actof 1980, as amended (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act(42 U.S.C. §§ 6901 et seq.), the Clean Water Act (33 U.S.C. §§ 1251 et seq.), theAtomic Energy Act (42 U.S.C*.*§ 2201 et seq.), and similar state and local laws.“**Environmental Permits**” shall mean all applicable licenses and permits or other approvals requiredunder applicable Environmental Laws in connection with the ownership or operation of the Business.Schedule 5.11 lists all of the material Environmental Permits held by Seller with respectto the Business.
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          (b) Except as set forth in Schedule 5.19, Seller has not, in the operation of theBusiness, permitted any Hazardous Materials (as defined below) to be used, generated, stored, orReleased (as defined below) on or from the Leased Property in violation of applicable EnvironmentalLaw that has had or could be reasonably expected to have a Material Adverse Effect. **“Release”**means to discharge, spill, emit, leak, leach, deposit or otherwise release any substance to theoutdoor or indoor environment or into or out of any property, including by the movement of anysubstance through or in the air, soil, surface water, ground water or property. **“HazardousMaterials”**mean any substance, pollutant, contaminant, chemical, product or by-product, material orwaste which is regulated under any Environmental Law or which is regulated or defined as a“hazardous substance,” “hazardous waste,” “hazardous materials,” “toxic pollutant,” or words ofsimilar import under any Environmental Law.          (c) To the knowledge of Seller, there is no pending or threatened claim, litigation oradministrative proceeding, arising under any Environmental Law involving the Leased Property. TheSeller is not a party to or bound by any court order, administrative order, consent order or otheragreement with any governmental authority entered into in connection with any legal obligation orliability arising under any Environmental Law with respect to the Leased Property.     Section 5.20. Leased Property. The Leased Property is the only real property that isused exclusively in the conduct of the Business.     Section 5.21. Intellectual Property. Schedules 2.1(a)(iii) and 2.1(a)(iv) setforth a true and complete list of all Patents and Trademarks used by Seller in the conduct of theBusiness. Seller has the lawful right to use all Seller’s Intellectual Property as it is currentlybeing used and, to Seller’s knowledge, no such use infringes upon the lawful rights of any otherPerson. To Seller’s knowledge, no Person is infringing upon the lawful rights of Seller withrespect to Seller’s Intellectual Property.     Section 5.22. Condition of Tangible Assets. All material items of tangible personalproperty included in the Purchased Assets are in good operating condition and repair, subject toordinary wear and maintenance requirements, are usable in the regular and ordinary course ofbusiness as currently conducted and conform, in all material respects, to all applicable laws andregulations relating to their construction, use and operation.     Section 5.23. Customers. Schedule 5.23.1 lists the twenty (20) largestcustomers of the Seller for calendar years 2006 and 2007 and for the period from January 1, 2008through February 29, 2008 and the dollar amount of business done by the Seller with each suchcustomer for such period. To the knowledge of the Seller, since December 31, 2007, there has beenno (i) material claim or demand from any customer to return merchandise supplied by the Seller; or(ii) customer that has expressed its intention to terminate any material purchase order or toreduce materially either its purchases or the purchase price from those as to which it hadexpressed its intentions to Seller.     Section 5.24 Accounts Payable. All accounts payable of Seller are within terms andare not in default.
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     Section 5.25 Product Liability Claims. There are no product liability claims againstSeller, either potential or existing, which are not fully covered by product liability insurancecovered with a responsible company. Schedule 5.25 is a copy of Seller’s current productliability insurance policy.     Section 5.26 Absence of Certain Payments. Neither the Seller, nor any director,officer, agent, Affiliate, employee or other person associated with or acting on behalf of any ofthem, have used any corporate funds for unlawful contributions, gifts, entertainment or otherunlawful expenses relating to political activity, or made any direct or indirect unlawful paymentsto foreign or domestic government officials or employees from corporate funds, or made or receivedany payment, whether direct or indirect, to or from any supplier or customer of the Seller, forpurposes other than the satisfaction of lawful obligations, or established or maintained anyunlawful or unrecorded funds.     Section 5.27 Full Disclosure. None of the representations and warranties made by theSeller herein, including any disclosures made in the Schedules attached hereto, contains or willcontain any untrue statement of material fact or omits or will omit any material fact, an omissionof which would be misleading.     Section 5.28 Limitations on Seller’s Representations, Warranties and Knowledge.          (a) No Other Representations or Warranties. Except for the representations andwarranties of Seller expressly and specifically made in this Agreement, neither Seller nor anyother Person on behalf of Seller makes any express or implied representation or warranty on behalfof Seller, and Seller hereby disclaims any such representation or warranty, whether by Seller orany of its Affiliates, trustees, officers, employees, agents or representatives or any otherPerson.          (b) Disclaimer of Memorandum and Projections. Purchaser acknowledges and agrees thatSeller has not made and does not make and representation or warranty with respect to: (i) theinformation set forth in the Confidential Information Memorandum dated October 15, 2007 distributedin connection with the transactions contemplated hereby, (ii) any projections, estimates or budgetsdelivered to or made available to Purchaser regarding projected or forecast future financialresults or financial condition of the Purchased Assets, the Business or Seller, whether in theConfidential Information Memorandum or otherwise, or (iii) any other information or documents madeavailable to Purchaser or its representatives and agents with respect to the Business, thePurchased Assets or Seller, except as specifically and expressly set forth in this Agreement.          (c) Limitation on Seller’s Representations and Warranties. THE REPRESENTATIONS ANDWARRANTIES OF SELLER TO PURCHASER SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ANY ANDALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE WHATSOEVER BY SELLER, AND, EXCEPT ASSET FORTH IN THIS AGREEMENT, NEITHER SELLER NOR ANY PERSON ON BEHALF OF SELLER HAS MADE OR SHALL BEDEEMED TO HAVE MADE ANY OTHER REPRESENTATION OR WARRANTY, INCLUDING ANY IMPLIED WARRANTY OFMERCHANTABILITY, SUITABILITY, ORIGINALITY OR
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FITNESS FOR A PARTICULAR USE OR PURPOSE OR RESULTS TO BE DERIVED FROM USE. EXCEPT ASEXPRESSLY AND SPECIFICALLY SET FORTH IN THIS AGREEMENT, (A) THE TRANSFER OF THE ASSETS BY SELLER TOPURCHASER PURSUANT TO THIS AGREEMENT SHALL BE WITHOUT EXPRESS OR IMPLIED REPRESENTATION OR WARRANTYBY SELLER, AND (B) PURCHASER SHALL UNCONDITIONALLY ACCEPT THE ASSETS “AS IS,” “WHERE IS” AND “WITHALL FAULTS.”          (d) Knowledge. Each representation or warranty that is made to the “knowledge” or“awareness” of Seller means and shall be deemed to be based upon the actual knowledge or awarenessof the directors and officers of Seller and the knowledge such persons would have obtained aftermaking reasonable inquiry of Seller’s employees and reasonable diligence of Seller’s records withrespect to the matter in question after appropriate inquiry.SECTION 6. REPRESENTATIONS AND WARRANTIES OF PURCHASER     Purchaser hereby represents and warrants to Seller as follows:     Section 6.1. Company Organization. Purchaser is a limited liability company dulyorganized, validly existing and in good standing under the laws of Ohio, and Purchaser has allrequisite company power and authority to own its properties and assets and to conduct itsbusinesses as now conducted.     Section 6.2. Authorization and Validity of Agreement. Purchaser has all requisitecompany power and authority to enter into this Agreement and each of the Ancillary Agreements towhich it is a party and to carry out its obligations hereunder and thereunder. The execution anddelivery of this Agreement and each of the Ancillary Agreements to which Purchaser is a party andthe performance of its obligations hereunder and thereunder have been duly authorized by allnecessary corporate action by its Board of Managers, and no other corporate proceeding on the partof Purchaser is necessary to authorize such execution, delivery and performance. This Agreementhas been, and as of the Closing Date each Ancillary Agreement to which Purchaser is a party willbe, duly executed by Purchaser and constitutes (or as of the Closing Date will constitute)Purchaser’s valid and binding obligation, enforceable against Purchaser in accordance with itsterms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratoriumor similar laws affecting creditor’s rights generally and to the effect of general principles ofequity, whether considered in a proceeding at law or in equity.     Section 6.3. No Conflict or Violation. The execution, delivery and performance byPurchaser of this Agreement and each Ancillary Agreement to which it is a party (a) do not and willnot violate or conflict with any provision of its Articles of Organization or Operating Agreement,(b) do not and will not violate any provision of law, or any order, judgment or decree of any courtor other governmental or regulatory authority, and (c) do not and will not violate or result in abreach of or constitute (with due notice or lapse of time or both) a default under any contract,lease, loan agreement, mortgage, security agreement, trust indenture or other agreement orinstrument to which Purchaser is a party or by which it is bound or to which its properties orassets is subject except, in the case of foregoing clause (c), for such violations, breaches and
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defaults that, individually or in the aggregate, would not reasonably be expected to have aMaterial Adverse Effect.     Section 6.4. Consents and Approvals. No consent, waiver, authorization or approvalof any governmental or regulatory authority, and no declaration to or filing or registration withany such governmental or regulatory authority, is required in connection with the execution anddelivery of this Agreement by Purchaser or the performance by Purchaser of its obligationshereunder.     Section 6.5. Litigation. There are no claims, actions, suits, or proceedings pendingor, to the knowledge of Purchaser, threatened, before any national, state or local governmental orregulatory authority, against Purchaser (a) in which any Person is seeking to restrain or prohibit,or to obtain damages or other relief in connection with, or to challenge the validity or legalityof, this Agreement or the transactions contemplated hereby, or (b) which, if determined adverselyto Purchaser, would be reasonably likely to have a material adverse effect on the ability ofPurchaser to perform its obligations hereunder or to consummate the transactions contemplatedhereby.     Section 6.6 Sufficiency of Funds. Purchaser has sufficient funds or access to fundsavailable to satisfy, among other things, its obligations to pay the Purchase Price at the Closingand to timely pay, perform and discharge the Assumed Liabilities after the Closing.     Section 6.7 Knowledge and Experience. Purchaser is a knowledgeable investor familiarwith energy and data collection operations and has the expertise and capability to evaluate thePurchased Assets and the Business and the risks associated with purchasing the same, and has reliedon the representations and warranties of the Seller contained herein and its own investigation andevaluation of the Purchased Assets and business in making its decision to purchase the PurchasedAssets and to enter into this Agreement. With respect to any financial or business projections orforecast delivered by or on behalf of Seller to Purchaser, Purchaser hereby acknowledges that (i)there are uncertainties inherent in attempting to make such projections and forecasts, (ii)Purchaser is familiar with such uncertainties, (iii) Purchaser is taking full responsibility formaking its own evaluation of the adequacy and accuracy of all such projections and forecasts sofurnished to it, and (iv) Purchaser shall have no claim against Seller with respect thereto.SECTION 7. COVENANTS OF SELLER.     Section 7.1. Conduct of the Business Before the Closing Date.          (a) Without the prior written consent of Purchaser (which shall not be unreasonably withheld),between the date hereof and the Closing Date, Seller shall not, except as otherwise required orpermitted pursuant to the terms hereof:               (i) make any material change in the conduct of the Business or enter into any transaction withrespect to the Business other than in the ordinary course of business consistent with pastpractice;
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               (ii) make any sale, assignment, lease, license, transfer, abandonment or other conveyance ofthe Purchased Assets or any part thereof, except for transactions contemplated by the AssumedContracts and dispositions of Inventory in the ordinary course of business consistent with pastpractice;               (iii) subject any of the Purchased Assets, or any part thereof, to any Lien other thanPermitted Liens;               (iv) acquire any assets, raw materials or properties related exclusively to the Business otherthan in the ordinary course of business consistent with past practice;               (v) enter into any new (or amend any existing) employee benefit plan, program or arrangementaffecting the Employees or any new (or amend any existing) employment, severance or consultingagreement relating to any Employee, grant any general increase in the compensation of the Employees(including any such increase pursuant to any bonus, pension, profit-sharing or other plan orcommitment) or grant any increase in the compensation payable or to become payable to anyindividual Employee, except in accordance with pre-existing contractual provisions or in a mannerconsistent with past practice;               (vi) make capital expenditures related to the Business;               (vii) take any other action that would cause any of the representations and warranties made bySeller in this Agreement not to remain true and correct in any material respect;               (viii) make, enter into, modify, amend in any material respect or terminate any AssumedContract, except in the ordinary course of business consistent with past practice;               (ix) make a material change in the credit policies extended to customers of the Business; or               (x) commit to do any of the foregoing.          (b) Unless consented to in writing by Purchaser, from and after the date hereof and until theClosing Date, Seller shall:               (i) continue to maintain, in all material respects, the Purchased Assets in accordance withpresent practice in a condition reasonably suitable for their current use, ordinary wear and tearexcepted;               (ii) file, when due, all Tax Returns and other reports related to the Business and required tobe filed and pay when due all Taxes, assessments, fees and other charges lawfully levied orassessed against them in respect of the Business, unless the validity thereof is contested in goodfaith;               (iii) continue to conduct the Business in the ordinary course consistent with past practice;and
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               (iv) exercise reasonable commercial efforts to maintain existing business relationships withsuppliers and customers of the Business.     Section 7.2. Access to Properties and Records. Seller shall afford to Purchaser, andto Purchaser’s accountants, counsel and representatives, upon reasonable notice and withoutsignificant disruption to Seller, the Business or the Purchased Assets, reasonable access duringnormal business hours throughout the period prior to the Closing Date (or the earlier terminationof this Agreement pursuant to Section 13) to all properties, books, contracts, commitments andrecords relating exclusively to the Business and, during such period, shall furnish to Purchaserall other information to the extent concerning the Business as Purchaser may reasonably request.     Section 7.3. No Shop. From and after the date hereof until the Closing Date or theearlier termination of this Agreement pursuant to Section 13, neither PowerSecure nor Seller shall,directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provideany information to, any Person or group (other than Purchaser or its representatives) concerningthe sale of the shares of Seller or all or any substantial portion of the assets of the Business orany similar transaction involving the Business.     Section 7.4. Agreement Not to Compete.          (a) For a period of five (5) years after the Closing Date (the “**Restricted Period**”), neitherPowerSecure nor Seller shall (either directly or through one or more subsidiaries or controlledAffiliates) engage in or carry on anywhere in the world the Business as conducted by Seller at orprior to the Closing. In addition, during the Restricted Period, neither PowerSecure nor Sellershall (either directly or through one or more subsidiaries or controlled Affiliates): (i) recruit,solicit or hire, or attempt to recruit, solicit or hire, any employee of Seller who is offeredemployment by Purchaser at the Closing or encourage any person to recruit, solicit or hire any suchemployee of the Seller or otherwise encourage any employee of Purchaser to discontinue his or heremployment with the Purchaser; (ii) solicit any customer of the Seller who is or has been acustomer on or within the twenty-four (24) month period prior to the Closing for the purpose ofproviding, distributing or selling products or services with respect to the Business as conductedby Seller at or prior to the Closing; or (iii) persuade or attempt to persuade any customer orsupplier of the Seller to terminate or modify such customer or supplier’s relationship with thePurchaser. Notwithstanding any provision in this Section 7.4 to the contrary, Seller shall havethe right, after the Closing, to exercise its rights and to perform its duties under any contract,purchase or sales order or similar commitment of Seller in effect as of the date hereof thatPurchaser has not accepted as an Assumed Contract or an Assumed Liability.          (b) Each of PowerSecure and Seller acknowledges that if it should violate any term orprovision of this Section, Purchaser will suffer irreparable harm for which monetary damages alonewould not constitute an adequate remedy. Each of PowerSecure and Seller agrees that the terms andconditions hereof shall be specifically enforceable in equity under any jurisdiction without regardto the conflict of laws provision under such jurisdiction and that injunctive or other equitablerelief shall not constitute any hardship upon either PowerSecure or Seller.
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SECTION 8. EMPLOYEES.     Nothing in this Agreement shall obligate Purchaser to offer employment to any employees ofSeller, other than the Key Employees. As a condition to the Closing, the Key Employees shall enterinto Employment Agreements with the Purchaser in the forms attached hereto as Exhibit G.SECTION 9. BULK SALES LAW.     Subject to Section 10.1(d), Purchaser hereby waives compliance by Seller with the provisionsof any so-called bulk transfer law of any jurisdiction in connection with the transactionscontemplated hereby.SECTION 10. INDEMNIFICATION.     Section 10.1. Indemnification by Seller. Seller shall indemnify and defend, save andhold Purchaser, its Affiliates, and their respective managers, officers and employees (the“**Purchaser Indemnitees**”) harmless from and against any claim, damage, liability, loss, judgment,cost, expense (including all reasonable attorneys’ fees and court costs), deficiency, interest,penalty, impositions, assessments or fines (collectively, “**Losses**”) arising out of or resultingfrom:          (a) the breach of any representation or warranty made by Seller in this Agreement or in any ofthe Ancillary Agreements;          (b) any failure of Seller to perform or observe any covenant or agreement on the part ofSeller to be performed or observed hereunder or under any of the Ancillary Agreements;          (c) the Excluded Liabilities; or          (d) any non-compliance by Seller with “bulk transfer laws” of the type described in Section 9with respect to the transactions contemplated hereby.     Section 10.2. Indemnification by Purchaser. Purchaser shall indemnify and defend,save and hold Seller, its Affiliates, and their respective directors, officers and employees (the“**Seller Indemnitees**”) harmless from and against any Losses arising out of or resulting from:          (a) the breach of any representation or warranty made by Purchaser in this Agreement or in anyof the Ancillary Agreements;          (b) any failure of Purchaser to perform or observe any covenant or agreement on the part ofPurchaser to be performed or observed hereunder or under any of the Ancillary Agreements; or          (c) the Assumed Liabilities.
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     Section 10.3. Conduct of Proceedings.          (a) In the event that any Person not a party to this Agreement (including a governmentalauthority) shall levy an assessment or commence or file or threaten to commence or file any lawsuitor proceeding, which pending or threatened lawsuit or proceeding or assessment may result in anyLosses subject to indemnification under this Agreement (each, a “**Proceeding**”), then the indemnifiedparty (the “**Indemnified Party**”) shall provide written notice of such Proceeding to the indemnifyingparty (the “**Indemnifying Party**”) as soon as is reasonably practicable but in any event withinthirty (30) days after discovery or receipt of notice of such Proceeding (provided,however, that failure to notify within such time period shall not rescind or revoke theIndemnifying Party’s obligation to indemnify but shall only reduce the amount of theindemnification to the extent that the Indemnifying Party is damaged by such delay).          (b) The Indemnifying Party shall have the option, at its own cost and expense, to assume thedefense of any such Proceeding by retaining counsel for and reasonably acceptable to theIndemnified Party to defend the same. If the Indemnifying Party elects to assume control of thedefense of any proceeding, the assumption of control of the defense by the Indemnifying Party shallmean the Indemnifying Party recognizes its obligations to indemnify the Indemnified Party. TheIndemnifying Party shall give prompt written notice to the Indemnified Party of such election andthe Indemnified Party shall have the right to participate in the defense of such assessment or suchpending or threatened Proceeding at its own expense.          (c) In the event that the defense of any Proceeding is tendered to the Indemnifying Party andthe Indemnifying Party assumes control of such defense, the Indemnified Party shall cooperate andassist the Indemnifying Party in conducting such defense.          (d) If the Indemnifying Party receives a monetary settlement offer (the terms of which provideonly for a monetary settlement in exchange for a complete release and dismissal with prejudice)with respect to any Proceeding that such party desires to accept, it shall request the IndemnifiedParty’s consent. If the Indemnified Party has failed to consent to such settlement within ten (10)Business Days of its receipt of the settlement offer (or such shorter period as is provided in thesettlement offer), the Indemnifying Party shall have the right to pay the amount of settlement tothe Indemnified Party, in which event the Indemnifying Party shall be relieved of any furtherliability or obligation arising out of such Proceeding and the Indemnified Party shall be entitledto proceed with the defense of such Proceeding.     Section 10.4. Limitations.          (a) No claim for indemnification may be made under hereunder unless the Indemnifying Party hasreceived reasonably detailed written notice of such claim from the Indemnified Party before theexpiration of the survival period (as set forth in Section 14.6) applicable to such claim.          (b) Seller shall not be liable under Section 10.1(a) for Losses to the extent such Lossesexceed Seven Hundred Fifty Thousand U.S. Dollars ($750,000US), unless such Losses are attributableto the representations and warranties set forth in Section 14.6(a) or fraud.
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          (c) No Indemnified Party shall be entitled to be indemnified for, and no Indemnifying Partyshall have any liability for or be required to indemnify, defend or hold harmless Indemnified Partyhereunder for, any Losses arising under this Section 10, unless and until the aggregate amount ofall Losses exceeds $25,000.     Section 10.5 Exclusive Remedy. Purchaser acknowledges and agrees that its sole andexclusive remedy against Seller for Losses or any other claims arising under this Agreement orother matter arising out of the transactions contemplated hereby shall be the indemnificationprovisions set forth in this Section 10, except with respect to Losses attributable to fraud.SECTION 11. CONDITIONS PRECEDENT TO PERFORMANCE BY SELLER.     The obligations of Seller to consummate the transactions contemplated by this Agreement aresubject to the fulfillment, at or before the Closing Date, of the following conditions, any one ormore of which may be waived by Seller in its sole discretion:     Section 11.1. Representations and Warranties of Purchaser. The representations andwarranties made by Purchaser in this Agreement shall be true and correct in all material respectson and as of the Closing Date (other than such representations and warranties that speak as of aspecific date or time other than the Closing Date, which need only be true and correct in allmaterial respects as of such date or time), and Seller shall have received a certificate dated theClosing Date and signed by the Purchaser to such effect.     Section 11.2. Performance of the Obligations of Purchaser. Purchaser shall haveperformed in all material respects all obligations required under this Agreement to be performed byPurchaser on or before the Closing Date and Seller shall have received a certificate dated theClosing Date and signed by the Purchaser to such effect.     Section 11.3. Consents and Approvals. All consents, waivers, authorizations andapprovals of, or declarations and registrations with, any governmental authority that are requiredin connection with the execution, delivery and performance of this Agreement shall have been dulyobtained or made and shall be in full force and effect on the Closing Date.     Section 11.4. No Violation of Orders. No preliminary or permanent injunction orother order issued by any court or other governmental or regulatory authority, domestic or foreign,nor any statute, rule, regulation, decree or executive order promulgated or enacted by anygovernment or governmental or regulatory authority, that declares this Agreement invalid orunenforceable in any material respect or which prevents the consummation of the transactionscontemplated hereby shall be in effect.     Section 11.5. Delivery of Ancillary Agreements. Purchaser shall have executed anddelivered to Seller each of the Ancillary Agreements to which it is a party.     Section 11.6. Secretary’s Certificate. Seller shall have received a copy ofresolutions adopted by the Board of Managers of Purchaser authorizing the execution, delivery andperformance by Purchaser of this Agreement and each Ancillary Agreement to which it is a party, anda certificate of the Secretary of Purchaser, dated the Closing Date, certifying that suchresolutions were duly adopted and are in full force and effect at such date and setting forth the
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incumbency of each Person executing this Agreement and each Ancillary Agreement to which Purchaseris a party on behalf of Purchaser.SECTION 12. CONDITIONS PRECEDENT TO PERFORMANCE BY PURCHASER.     The obligations of Purchaser to consummate the transactions contemplated by this Agreement aresubject to the fulfillment, on or before the Closing Date, of the following conditions, any one ormore of which may be waived by Purchaser in its sole discretion:     Section 12.1. Representations and Warranties of Seller. The representations andwarranties made by Seller in this Agreement shall be true and correct in all material respects onand as of the Closing Date (other than such representations and warranties that speak as of aspecific date or time other than the Closing Date, which need only be true and correct in allmaterial respects as of such date or time), and Purchaser shall have received a certificate to thateffect dated the Closing Date and signed by Seller.     Section 12.2. Performance of the Obligations of Seller. Seller shall have performedin all material respects all obligations required under this Agreement to be performed by Seller onor before the Closing Date, and Purchaser shall have received a certificate dated the Closing Dateand signed by Seller to that effect.     Section 12.3. Consents and Approvals. All consents, waivers, authorizations andapprovals of, or declarations and registrations with, any governmental authority that are requiredin connection with the execution, delivery and performance of this Agreement shall have been dulyobtained or made and shall be in full force and effect on the Closing Date.     Section 12.4. No Violation of Orders. No preliminary or permanent injunction orother order issued by any court or governmental or regulatory authority, domestic or foreign, norany statute, rule, regulation, decree or executive order promulgated or enacted by any governmentor governmental or regulatory authority, domestic or foreign, that declares this Agreement invalidin any material respect or prevents the consummation of the transactions contemplated hereby shallbe in effect.     Section 12.5. Delivery of Ancillary Agreements. Seller shall have executed anddelivered to Purchaser each of the Ancillary Agreements to which it is a party.     Section 12.6. Employment Agreements. Purchaser shall have received the EmploymentAgreements executed by the Key Employees.     Section 12.7. Secretary’s Certificate. Purchaser shall have received a copy ofresolutions adopted by the Board of Directors of Seller authorizing the execution, delivery andperformance of this Agreement and each of the Ancillary Agreements to which Seller is a party, anda certificate of the Secretary of Seller, dated the Closing Date, certifying that such resolutionswere duly adopted are in full force and effect at such date and setting forth the incumbency ofeach person executing this Agreement on behalf of Seller.
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SECTION 13. TERMINATION.     Section 13.1. Conditions of Termination. Notwithstanding anything to the contrarycontained herein, this Agreement may be terminated at any time before the Closing:          (a) by mutual written consent of Seller and Purchaser;          (b) by Seller if, as of April 30**,**2008, any of the conditions set forth in Section 11 shallnot have been met or waived (unless the failure of such conditions results primarily from Sellerbreaching any of its representations, warranties or covenants contained in this Agreement); or          (c) by Purchaser if, as of April 30**,**2008**,**any of the conditions set forth in Section 12 shallnot have been met or waived (unless the failure of such conditions results primarily from Purchaserbreaching any of its representations, warranties or covenants contained in this Agreement).     Section 13.2. Effect of Termination. In the event of termination pursuant to Section13.1, this Agreement shall become null and void and have no effect, with no liability on the partof Seller or Purchaser, or their respective Affiliates, directors, officers, agents orstockholders, with respect to this Agreement except that any liability resulting from a willfulfailure by a party to comply with or perform any covenant or agreement set forth herein prior tothe date of such termination shall survive.     Section 13.3. Confidentiality. Notwithstanding the provisions of this Section 13, iffor any reason the transactions contemplated by this Agreement are not consummated, each of theparties hereto shall keep confidential any information obtained from any other party (exceptinformation publicly available or in such party’s domain prior to the date hereof, and except asrequired by court order) in accordance with the Non-Disclosure Agreement dated October 18, 2007.SECTION 14. MISCELLANEOUS.     Section 14.1. Successors and Assigns. Except as otherwise provided in thisAgreement, no party hereto shall assign this Agreement or any rights or obligations hereunderwithout the prior written consent of the other party hereto, and any such attempted assignmentwithout such prior written consent shall be void and of no force or effect; provided, thatPurchaser may assign its rights hereunder to an Affiliate, and providedfurther,that no such assignment shall reduce or otherwise vitiate any of the obligations of Purchaserhereunder. This Agreement shall inure to the benefit of and shall be binding upon the successorsand permitted assigns of the parties hereto.     Section 14.2. Governing Law. This Agreement shall be construed, performed andenforced in accordance with, and governed by, the internal laws of the State of Ohio without givingeffect to the principles of conflicts of laws thereof.     Section 14.3. Expenses; Proration. Except as otherwise provided herein, each of theparties hereto shall pay its own expenses in connection with this Agreement and the transactions
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contemplated hereby, including without limitation any legal and accounting fees, whether ornot the transactions contemplated hereby are consummated. Seller shall pay any and all transferTaxes payable in connection with the transfer of the Purchased Assets. All expenses associatedwith the Purchased Assets, such as electricity, gas, water, sewer, telephone, real and personalproperty Taxes, security services and similar items, shall be prorated between Seller and Purchaseras of the Closing Date (in accordance with local custom, in the case of real and personal propertytaxes). In furtherance of the foregoing, Seller and Purchaser shall take all reasonable steps to(i) have all of Seller’s accounts for utilities terminated effective as of the Closing, and (ii)create new accounts for Purchaser for all of such utilities, such new accounts being effective asof the day after the Closing Date. To the extent practicable, Seller shall cause final meterreadings to be made on the Closing Date with respect to all utilities.     Section 14.4. Broker’s and Finder’s Fees. Except as set forth in Schedule14.4, each of the parties represents and warrants that it has dealt with no broker or finder inconnection with any of the transactions contemplated by this Agreement, and, insofar as it knows,no broker or other Person is entitled to any commission or finder’s fee in connection with any ofthese transactions. Seller and PowerSecure shall be responsible for the fees and expenses owed toStephens Inc. in connection with its representation of Seller with respect to the transactionsprovided for in this Agreement.     Section 14.5. Access to Records. For a period of five (5) years after the ClosingDate:          (a) Seller shall have reasonable access to all of the books and records of the Business withrespect to periods prior to the Closing Date that are held or controlled by Purchaser to the extentthat such access may be reasonably requested by Seller. Purchaser shall afford such access uponreceipt of reasonable advance notice and during normal business hours. Purchaser shall permitSeller to make copies of such books and records at Seller’s expense. Seller shall be solelyresponsible for any costs or expenses incurred by it pursuant to this Section 14.5(a). IfPurchaser shall desire to dispose of any of such books and records prior to the expiration of suchfive-year period, Purchaser shall, prior to such disposition, give Seller a reasonable opportunity,at Seller’s expense, to segregate and remove such books and records as Seller may elect.          (b) Subject to all applicable laws, Purchaser shall have reasonable access to the relevantportions of all of books and records of the Business that are controlled by Seller, if any, notincluded in the Records to the extent that such are reasonably required by Purchaser in connectionwith a legitimate and lawful business purpose such as the payment of taxes or defense of threatenedor pending litigation. Seller shall afford such access upon receipt of reasonable advance noticeand during normal business hours. Seller shall permit Purchaser to make copies of such relevantportions of such books and records at Purchaser’s expense. Purchaser shall be solely responsiblefor any costs or expenses incurred by it pursuant to this Section 14.5(b). If Seller shall desireto dispose of any of such books and records prior to the expiration of such five-year period,Seller shall, prior to such disposition, give Purchaser a reasonable opportunity, at Purchaser’sexpense, to segregate and remove such relevant portions of such books and records as Purchaser mayelect, subject to all applicable laws.
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     Section 14.6. Survival. The representations and warranties made by the partieshereto in this Agreement or pursuant hereto shall survive the Closing hereunder for the followingperiods:          (a) the representations and warranties set forth in Sections 5.3, 5.6, 6.2 and 14.4 shallsurvive indefinitely; and          (b) all other representations and warranties contained in this Agreement shall survive untilthe date that is twelve (12) months after the Closing Date.     Section 14.7. Severability. In the event that any part of this Agreement is declaredby any court or other judicial or administrative body to be null, void or unenforceable, saidprovision shall survive to the extent it is not so declared, and all of the other provisions ofthis Agreement shall remain in full force and effect.     Section 14.8. Notices. All notices, requests, demands and other communications underthis Agreement shall be in writing and shall be deemed to have been duly given (i) on the date ofservice if served personally on the Party to whom notice is to be given; (ii) on the day oftransmission if sent via facsimile or email transmission to the facsimile number or address givenbelow, and written or electronic confirmation of receipt is obtained promptly after completion oftransmission; (iii) on the Business Day after deposit thereof with Federal Express or similarovernight courier or the Express Mail service maintained by the United States Postal Service; or(iv) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by firstclass mail, registered or certified, postage prepaid and properly addressed, to the party asfollows:   If to Seller: With a copy to:   Metretek, Incorporated Kegler, Brown, Hill & Ritter Co., L.P.A.c/o PowerSecure International, Inc. 65 East State Street, Suite 18001609 Heritage Commerce Court Columbus, OH 43215Wake Forest, North Carolina 27587 Attn: Paul R. HessAttn: Sidney Hinton, President Facsimile No. (614) 464-2634Facsimile No. (919) 453-1768 Email: phess@keglerbrown.comEmail:shinton@powersecure.com   If to Purchaser: With a copy to:   Mercury Instruments LLC Katz, Teller, Brant & Hild3940 Virginia Avenue 255 East Fifth Street, Suite 2400Cincinnati, OH 45227 Cincinnati, OH 45202Attn: Gareth Y. Hudson, President Attention: Mark J. JahnkeFacsimile No. (513) 272-0211 Facsimile No.: (513) 762-0035Email: ghudson@mercuryinstruments.com Email: mjahnke@katzteller.com     Any party may change its address for the purpose of this Section by giving the other partywritten notice of its new address in the manner set forth above.
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     Section 14.9. Amendments; Waivers. This Agreement may be amended or modified, andany of the terms, covenants, representations, warranties or conditions hereof may be waived, onlyby a written instrument executed by the parties hereto, or in the case of a waiver, by the partywaiving compliance. Any waiver by any party of any condition, or of the breach of any provision,term, covenant, representation or warranty contained in this Agreement, in any one or moreinstances, shall not be deemed to be nor construed as further or continuing waiver of any suchcondition, or of the breach of any other provision, term, covenant, representation or warranty ofthis Agreement.     Section 14.10. Public Announcements. The parties agree that neither party shall makeany press release or public announcement concerning this Agreement or the transactions contemplatedhereby without the prior consent of the other party, except as required by applicable securitieslaws or stock exchange rules and regulations. If any such announcement or other disclosure isdetermined to be so required, the disclosing party shall give the nondisclosing party prior noticeand an opportunity to comment on the proposed disclosure, provided that nothing shall prohibit aparty from satisfying its disclosure obligations under applicable securities laws or stock exchangerules and regulations, and provided further that to the extent any information is disclosed inaccordance herewith, such information shall not be subject to further limitation hereunder forfuture disclosures.     Section 14.11. Entire Agreement. This Agreement and the Ancillary Agreements containthe entire understanding between the parties hereto with respect to the transactions contemplatedhereby and supersede and replace all prior and contemporaneous agreements and understandings, oralor written, with regard to such transactions. All schedules hereto and any documents andinstruments delivered pursuant to any provision hereof are expressly made a part of this Agreementas fully as though completely set forth herein.     Section 14.12. Parties in Interest. Nothing in this Agreement is intended to conferany rights or remedies under or by reason of this Agreement on any Persons other than Seller,Purchaser and its respective successors and permitted assigns. Nothing in this Agreement isintended to relieve or discharge the obligations or liability of any third Persons to Seller orPurchaser.     Section 14.13. Section and Paragraph Headings; Disclosure. The section and paragraphheadings in this Agreement are for reference purposes only and shall not affect the meaning orinterpretation of this Agreement. Any matter disclosed on a particular Schedule shall be deemed tobe disclosed on all other applicable Schedules without the need for an express cross-reference solong as the applicability of such disclosure to such other Schedule is reasonably apparent.     Section 14.14. Payments Received. Seller and Purchaser each agree that after theClosing they will hold and will promptly transfer and deliver to the other, from time to time asand when received by them, any cash, checks with appropriate endorsements (using their best effortsnot to convert such checks into cash), or other property that they may receive on or after theClosing which properly belongs to the other party and will account to the other for all suchreceipts.
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     Section 14.15. Counterparts. This Agreement may be executed by facsimile and/or inone or more counterparts, each of which shall be deemed an original, but all of which shallconstitute the same instrument. This Agreement shall become binding upon the parties hereto whenSeller and Purchaser have executed one or more counterparts of this Agreement, by facsimile orotherwise.[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE PAGE TO ASSET SALE AND PURCHASE AGREEMENT       METRETEK, INCORPORATED   By: /s/ Sidney Hinton       Name: Sidney Hinton        Title: Chairman             POWERSECURE INTERNATIONAL, INC.       By: /s/ Sidney Hinton       Name: Sidney Hinton        Title: President             MERCURY INSTRUMENTS LLC       By: /s/ Gareth Y. Hudson         Gareth Y. Hudson, President/CEO       By: /s/ Dr. Henning Bähren         Dr. Henning Bähren, Chairman

 
LIST OF EXHIBITS:   Exhibit A: Bill of SaleExhibit B: Trademark AssignmentExhibit C: Patent AssignmentExhibit D: Assignment and Assumption AgreementExhibit E: Assignment and Assumption of LeasesExhibit F: Escrow AgreementExhibit G: Employment AgreementsLIST OF SCHEDULES:   Schedule 2.1(a)(i) EquipmentSchedule 2.1(a)(ii)(A) LeasesSchedule 2.1(a)(ii)(B) Purchase Orders, etc.Schedule 2.1(a)(ii)(C) Assumed ContractsSchedule 2.1(a)(iii) PatentsSchedule 2.1(a)(iv) TrademarksSchedule 2.1(a)(ix) Telephone/Fax NumbersSchedule 2.1(a)(x) Domain NamesSchedule 3.1(b) Products and Services for Contingent PaymentSchedule 3.2 Allocation StatementSchedule 5.2 Foreign Jurisdiction QualificationsSchedule 5.4 No Conflict or ViolationSchedule 5.7 Financial DataSchedule 5.10 WarrantiesSchedule 5.11 Permits, Licenses, etc.Schedule 5.12 Violations of Laws, RegulationsSchedule 5.14 Assumed Contracts; Required ConsentsSchedule 5.15 InventorySchedule 5.16 Employee Benefit PlansSchedule 5.17 EmployeesSchedule 5.19 Environmental ExceptionsSchedule 5.23 20 Largest CustomersSchedule 5.25 Product Liability InsuranceSchedule 14.4 Broker’s and Finder’s Fees******************************************************************************************************