Document:

LEASE
      AGREEMENT WITH OPTION TO PURCHASE

     

    THIS
      LEASE AGREEMENT WITH OPTION TO PURCHASE (the “Agreement”) is made, entered into
      and effective as of this 1st day of December, 2005, by and between THE BREWER
      FAMILY CHARITABLE REMAINDER ANNUITY TRUST NO. 1, with an address of P.O. Box
      1710, Ponca City, Oklahoma 74602, ATTN: Larry J. Bartlett, Trustee (“Landlord”),
      and SHUMATE MACHINE WORKS, INC., 12060 FM 3083, Conroe, Texas 77301, ATTN:
      Larry
      C. Shumate (“Tenant”).

    

    WITNESSETH:

     

    For
      and
      in consideration of the covenants and agreements hereafter set forth, the
      parties hereto agree as follows:

     

    1. Premises.
      Landlord hereby leases, demises and lets unto Tenant, and Tenant hereby leases
      from Landlord upon the covenants, conditions and terms herein provided, a
      portion of certain real property having a street address of 1011 Beach-Airport
      Road, Conroe, Texas 77301, as more fully described on Exhibit “A” attached
      hereto, together with all buildings and other improvements located thereon,
      hereafter collectively referred to as the “Premises.”

     

    2. Term.
      Unless
      sooner terminated under the provisions of this Agreement, the term of this
      Agreement (the “Term”) shall commence on the date hereof (the “Commencement
      Date”) and shall expire on the day before the third year anniversary of the
      Commencement Date.

     

    3. Condition
      to Occupancy.
      Tenant
      shall, at Tenant’s own expense and as soon as practicable after execution of
      this Agreement, cause the electrical service to the improvements located on
      the
      Premises (the “Building”) to be separately metered in such a manner that the
      portion of the Building being sublet by Tenant back to Landlord under the
      sublease agreement executed contemporaneously herewith shall have its own
      electrical meter and the remainder of the electrical service to the Building
      shall have a separate meter. Tenant agrees and acknowledges that completion
      of
      the separate metering of electrical service shall be a condition precedent
      to
      Tenant’s occupancy of the building for purposes of conducting Tenant’s business
      of manufacturing.

     

    

      

         

      

      

         

        

          

      

      

         

      

    

    4. Rent.
      Tenant
      shall pay Landlord a base monthly rental (the “Rent”) in the amount of
      $14,149.21 per month. Rent shall be payable on the 1st
      day of
      each month during the Term, except that the first installment of Rent shall
      be
      payable (on a prorated basis as provided in the following sentence) on the
      Commencement Date. If this Agreement shall commence on a day other than the
      1st
      day of a
      month, or expire on a day other than the last day of a month, the installment
      of
      Rent for such month shall be prorated based on a ratio, the numerator of which
      shall be the number of days during such month that this Agreement was in effect
      and the denominator of which shall be the total number of days in such month.
      Rent shall be mailed or delivered to Landlord at Landlord’s address stated above
      or to such other place as Landlord may from time to time designate in
      writing.

     

    5. Taxes.
      Tenant
      shall pay all ad valorem taxes levied, assessed or imposed upon or against
      the
      Premises during the term of this Agreement. Ad valorem taxes for which Tenant
      is
      liable and which are levied or assessed for the year in which this Agreement
      commences shall be prorated based on a ratio, the numerator of which shall
      be
      the number of days during such year that this Agreement was in effect and the
      denominator of which shall be the total number of days in such year.
      Additionally, Tenant agrees to pay all taxes and assessments levied, assessed
      or
      imposed upon or against any of the personal property of Tenant now or hereafter
      placed by tenant in or upon the Premises. Tenant shall also pay all use,
      license, sales and permit fees and taxes which may at any time during the term
      of this Agreement be imposed upon or with respect to or as a result of any
      use
      made of the Premises by Tenant. Tenant shall additionally pay any assessments
      for special improvements, including, but not limited to, widening of exterior
      roads, installation or hook-up to sewer lines, sanitary and storm drainage
      systems and other lines and installations.

     

    6. Insurance.
      Tenant
      shall maintain during the term of this Agreement standard “all risk insurance
      coverage” on the Premises in an amount equal to the full replacement cost of all
      improvements located on the Premises. Tenant shall further maintain a policy
      or
      policies of commercial general liability insurance, with the premiums fully
      paid
      on or before the due dates, issued and binding upon a solvent insurance company
      properly authorized to do business in the State of Texas, such insurance to
      afford minimum protection of not less than $1 million for personal injury or
      death in any one occurrence and not less than $1 million for property damage
      in
      any one occurrence. All such policies of insurance mentioned in this paragraph
      6
      of this Agreement shall be issued by a reputable company acceptable to Landlord
      and shall show Landlord as an additional insured/loss payee as Landlord’s
      interest may appear, and such company or companies shall be instructed to notify
      landlord of any lapse or anticipated cancellation or termination of coverage
      within a reasonable time so as to permit Landlord, at its option, to pay such
      premiums to keep such insurance coverage in force and effect.

     

    

      

         

      

      

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    7. Utilities.
      Tenant
      acknowledges that Landlord has provided water, electricity, gas, sewage and
      telephone connections to the Premises. Tenant shall be responsible for payment
      of all charges for electricity, water, sewage and other services billed to
      or on
      account of the Premises, excepting only electricity usage under the separately
      metered portion of the Building subleased by Tenant to Landlord as hereinbefore
      referenced in paragraph 3. No interruption in utility services, whether rending
      the Premises untenantable or otherwise, shall be the basis for abatement of
      Rent
      and Tenant shall remain obligated for Rent notwithstanding any such interruption
      in service.

     

    8. Maintenance,
      Repairs, Replacements and Services.
      Tenant,
      at its own risk and expense, shall maintain and keep in good operational repair
      the walls, roof, foundation and other structural portions of the Premises and
      all water and service lines, sewer, gas, wiring and public utility connections
      and all utility lines and duets which serve the Premises. Tenant shall promptly
      make and complete any such repairs and shall repair any and all damage to the
      Premises which may result from its failure to make or delay in promptly making
      the same. Additionally, Tenant shall, at its own risk and expense, maintain
      and
      keep in good operational repair (reasonable wear and tear and damage by casualty
      excepted) all other portions of the Premises, including, but not limited to,
      plumbing pipes and fixtures, electrical wiring and fixtures, windows, doors
      and
      door locks, walls, floor coverings and carpets, air conditioning, ventilating
      and heating systems and lighting. Tenant, at its own risk and expense, shall
      provide routine care for the lawn and shrubbery. Tenant shall maintain the
      Premises in a clean and orderly condition and shall, at its own cost and
      expense, provide janitorial and cleaning services to the Premises and shall
      not
      permit accumulation of waste or refuse matter on the Premises. Tenant has
      inspected and knows the condition of the Premises and has accepted the Premises
      in good order and condition at the Commencement Date. Tenant warrants that
      the
      Building and improvements on the Premises, as well as the grounds, parking
      areas, fences and adjoining properties have been fully examined by Tenant and
      that Tenant has reviewed the survey map of the Premises and Tenant takes the
      same “AS IS,” with no warranties, express or implied. Tenant further
      acknowledges that it has satisfied itself that the Premises and the Building
      are
      in compliance with all local, state and federal ordinances, laws, statutes
      and
      regulations of every nature whatsoever, and Tenant agrees that Tenant shall
      be
      solely liable for making any improvements, alterations or modifications of
      the
      Premises that may be required by any state, county, city or federal agency
      for
      the safety or convenience of any invitees or employees of Tenant, subject to
      Landlord’s approval in writing of such alterations, modifications or
      improvements. Tenant’s obligations hereunder shall include, without limitation,
      any alterations, modifications or improvements necessary to be or remain in
      compliance with regulations promulgated by the Occupational Safety and Health
      Administration or required under the Americans With Disabilities Act or the
      Texas Health and Safety Code.

     

    

      

         

      

      

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    9. Use
      of
      the Premises.
      Subject
      to the provisions hereof, Tenant shall have the right to occupy and use the
      Premises for all lawful commercial purposes. Tenant shall not permit to be
      conducted on the Premises any business which is contrary to any valid municipal,
      state or federal law as then interpreted and enforced. If there are applicable
      restrictions and/or property owner association rules affecting the Premises,
      Tenant will have been deemed to have reviewed the same and accepted said
      restrictions/rules as part of this Agreement and will have determined that
      said
      restrictions and/or rules do not materially prevent tenant from using the
      Premises as intended under this agreement. No warranty has been made by Landlord
      as to whether or not the business use contemplated herein can be conducted
      or
      can be safely or lawfully conducted on the Premises.

     

    10. Alterations,
      Additions, Changes and Improvements.
      Tenant
      shall not make any structural or non-structural alterations, additions, changes
      or improvements to the Premises without Landlord’s prior written consent, such
      consent not to be unreasonably withheld, conditioned or delayed.

     

    11. Sublease/Assignment.
      Except
      for the sublease of a portion of the Premises by Tenant to Landlord, as
      referenced in paragraph 3 hereof, said sublease to be executed contemporaneously
      herewith, Tenant shall not assign this agreement nor sublet the Premises, in
      whole or in part, during the term hereof.

     

    12. Signs.
      Tenant,
      at its sole risk and expense, shall have the right to install upon the Premises
      signs identifying Tenant’s business. Tenant shall maintain any sign that it
      places on the Premises in good order and condition.

     

    13. Casualty.
      In the
      event the Premises are damaged by fire or other casualty, Tenant shall remain
      fully liable hereunder and shall not be entitled to any abatement or reduction
      of Rent during the period required for repair or replacement of any part of
      the
      Premises.

     

    14. Quiet
      Enjoyment.
      Landlord represents, warrants and covenants that upon paying Rent and performing
      the covenants on its part to be performed hereunder Tenant shall and may
      peaceably and quietly have, hold and enjoy the Premises for the Term
      aforesaid.

     

    15. Right
      of Access.
      Landlord and its representatives may enter the Premises after reasonable notice
      to Tenant, at any reasonable time and in a manner which does not interfere
      with
      Tenant’s ability to conduct its business in the ordinary course for the purpose
      of inspecting the Premises and ensuring that Tenant is in compliance with its
      obligations hereunder.

     

    16. Holding
      Over.
      In the
      event Tenant does not exercise its option to purchase as hereinafter provided,
      this Agreement shall expire at the end of the Term hereof and absent further
      written agreement to the contrary, Tenant shall not hold over and shall vacate
      the Premises at the expiration of the Term.

     

    

      

         

      

      

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    17. Condemnation.
      If the
      whole of the Premises or such portion thereof as will make the Premises unusable
      for Tenant’s purposes be condemned by any legally constituted authority for any
      public use or purpose, then, in either of said events, the Term shall cease
      from
      the time when possession thereof is taken by public authorities and Rent and
      other charges due under this Agreement shall be accounted for as between
      Landlord and Tenant as of that date. Any awards from a condemning authority
      attributable to the Premises shall be awarded to Landlord.

     

    18. Default.
      It is
      mutually agreed that: (i) in the event Tenant shall default in the payment
      of
      any monetary amount herein reserved when due and shall fail to cure said default
      within five (5) days after written notice thereof from Landlord; or, (ii) if
      Tenant shall be in default of performing any of the non-monetary terms or
      provisions of this Agreement on its part to be performed, and such default
      continues after notice from Landlord for more than fifteen (15) days, then
      and
      in either such even Landlord may exercise any and all legal or equitable
      remedies afforded Landlord under Texas law, including, but not limited to,
      the
      right to terminate this Agreement or the Tenant’s right of possession of the
      Premises and/or bring an action against Tenant for damages. It is further
      mutually agreed that in the event Landlord shall be in default in performing
      any
      of the terms or provisions of this Agreement on its part to be performed and
      such default continues after notice from Tenant for more than thirty (30) days,
      then and in such event Tenant may exercise any and all legal or equitable
      remedies afforded Tenant under Texas law, including, but not limited to, the
      right to bring an action against Landlord for damages. In any action or
      proceeding brought by either party against the other under this Agreement or
      relating to the Premises, the prevailing party shall be entitled to recover
      from
      the other party investigation costs and attorneys’ fees, court costs and other
      legal expenses incurred by such party in such action or proceeding as the court
      may find to be reasonable.

     

    19. Landlord’s
      Lien.
      Except
      as restricted by law, Tenant grants unto Landlord a contractual landlord’s lien
      against all of Tenant’s effects, inventory, fixtures, appliances, goods, wears,
      trademarks and equipment located on said Premises to secure Tenant’s performance
      hereunder and Landlord shall not be liable to Tenant for any damage arising
      out
      of the attempt to perfect and enforce this lien. This contractual Landlord’s
      lien is in addition to and not in lieu of any other statutory and/or
      constitutional landlord’s liens.

     

    

      

         

      

      

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    20. Indemnification.
      Tenant
      agrees to indemnify and hold Landlord harmless from any and all claims and/or
      liability arising out of the operation of Tenant’s business and arising out of
      Tenant’s use of the Premises, and agrees to indemnify Landlord against all
      costs, expenses, lost time, attorneys’ fees, expert fees, court reporter fees,
      court costs, interest and penalties arising out of any claim involving Tenant’s
      use of the Premises and/or Tenant’s business. Any and all such expenses incurred
      by Landlord hereby shall bear interest at 18% per annum from the date said
      cost,
      expense or loss is incurred or paid. Landlord shall be entitled, but not
      obligated, at Landlord’s sole option, to perform any obligation or expend any
      sums required to be performed or expended by tenant hereunder and shall be
      entitled to be reimbursed by Tenant upon written demand, together with interest
      as hereinbefore specified.

     

    21. Notice.
      Any
      notice, communication, request, reply or advice, herein severally and
      collectively for convenience called “Notice,” in this Agreement provided or
      permitted to be given, made or accepted by either party to the other must be
      in
      writing and may be given or served by depositing the same in the Untied States
      Mail, postage prepaid, certified and addressed to the party to be notified
      with
      return receipt requested or by reputable overnight courier service or by
      facsimile. Notice deposited in the mail in the manner hereinabove described
      shall be effective unless otherwise stated herein on the 3rd
      day,
      exclusive of Saturdays, Sundays and postal holidays, after it is so deposited.
      Notice given in any manner other than for herein shall be effective only if
      and
      when received by the party to be notified. Rejection or other refusal to accept
      or the inability to deliver because of changed address of which no Notice was
      given pursuant to this paragraph shall be deemed to be receipt of the Notice
      sent. For purposes of Notice, the addresses of the parties shall, until changed
      as herein provided, be as set forth on the cover page of this Agreement.
      However, the parties hereto and their respective successors and assigns shall
      have the right from time to time and at any time to change their respective
      addresses and each shall have the right to specify as its address any other
      address within the continental United States by at least fifteen (15) days
      written notice to the other party; provided, however, no party may designate
      more than one such place and address to receive Notices pursuant to the terms
      hereof.

     

    

      

         

      

      

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    22. Grant
      of Option.
      For and
      in consideration of the sum of $10.00 and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, Landlord does
      hereby grant, bargain and sell to Tenant the exclusive right and option for
      and
      during the Option Period as defined hereinbelow to purchase the Premises in
      accordance with the terms and provisions herein contained.

     

    23. Exercise
      of Options.
      Provided that Tenant is not in default under this Agreement, the option to
      purchase herein granted may be exercised by Tenant at any time within the Option
      Period by written notice from Tenant to Landlord, given in strict accordance
      with the provisions of paragraph 20 hereof. For purposes of this agreement,
      the
      Option Period shall mean that period of time from the Commencement Date to
      and
      ending on the 90th
      day
      preceding the expiration of the Term hereof. In the event of termination of
      this
      Agreement prior to expiration of the Term, the Option Period shall immediately
      and simultaneously thereupon terminate.

     

    24. Failure
      or Refusal to Exercise Option.
      In the
      event Tenant does not exercise the option to purchase within the Option Period
      and in the manner provided herein, then Tenant shall have no further right
      or
      option to purchase the Premises and the consideration for this option shall
      be
      retained by Landlord.

     

    25. Agreement
      to Sell and Purchase.
      Upon
      the timely and proper exercise of the option herein granted, Landlord agrees
      to
      sell and convey the Premises to Tenant, and Tenant hereby agrees to purchase
      and
      pay Landlord for the Premises.

     

    26. Purchase
      Price.
      The
      Purchase Price to be paid by Tenant to Landlord for the Premises shall be
      $1,825,000.00, subject to the following amount to be credited for Rent paid
      hereunder. The Rent is based upon the amount necessary to amortize the Purchase
      Price of $1,825,000.00, at 7% interest over a period of 240 months, thereby
      producing the Rent amount of $14,149.21. Utilizing an amortization schedule,
      with the variables expressed in the preceding sentence, Tenant shall be entitled
      to credit against the Purchase Price in an amount equal to the cumulative
      principal reduction as reflected by such amortization schedule as of the last
      rent payment by Tenant prior to closing of such purchase and sale of the
      Premises. As hereinafter used, the term “Purchase Price” shall refer to the
      Purchase Price of $1,825,000.00, and adjusted as set forth in this paragraph
      26.
      By way of example, in the event Tenant exercises its option to purchase as
      of
      the termination of this Agreement (i.e.,
      Tenant
      has made 36 full installments of Rent), Tenant shall be entitled to credit
      for
      Rent paid hereunder in the total amount of $139,890.18, thereby making the
      Purchase Price $1,685,109.82.

     

    

      

         

      

      

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    27. Payment
      of Purchase Price.
      The
      Purchase Price shall be payable to Landlord by Tenant at closing, in cash or
      by
      cashier’s check or wire transfer of funds.

     

    28. Title
      Policy.
      Landlord shall furnish to Tenant, at Tenant’s expense, an owner policy of title
      insurance issued by a reputable title insurance company acceptable to Tenant,
      licensed to do business in the State of Texas, in an amount not less than the
      Purchase Price, dated at or after closing, insuring Tenant against loss under
      the provisions of the title policy subject to the promulgated exclusions
      including existing building and zoning ordinances and the following
      exceptions;

     

    

      	 	(i)	restrictive covenants, if any;

      	 	(ii)	standard printed exception for standby fees, taxes
              and
              assessments;

      	 	(iii) 	liens created as part of any financing by Tenant
              of the
              Purchase Price;

      	 	(iv) 	easements of record;

      	 	

              (v)

            	

              reservations
                or exceptions otherwise permitted by this Agreement or as may be
                approved
                by Tenant in writing;

            

      	 	(vi)	standard printed exception as to marital
              right;

    

      	 	

              (vii)

            	

              standard
                printed exception as to waters, tide lands, beaches, streams and
                related
                matters;

            

    

    

      	 	

              (viii)

            	

              standard
                printed exception as to discrepancies, conflicts, shortages in area
                for
                boundary lines, encroachments or protrusions or overlapping
                improvements.

            

    

     

    

      

         

      

      

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    29. Commitment.
      Within
      twenty (20) days after the title company receives a copy of this Agreement,
      along with Tenant’s written notice of exercise of the option to purchase,
      Landlord shall furnish to Tenant a commitment for title insurance (the
“Commitment”), at Tenant’s expense, along with legible copies of restrictive
      covenants and documents, if any, evidencing exceptions in the Commitment
      (“Exception Documents”) other than standard printed exceptions. Landlord
      authorizes the title to mail or to hand-deliver the Commitment and Exception
      Documents to Tenant at Tenant’s address set forth herein. If the Commitment and
      Exception Documents are not delivered to Tenant within the specified tie, the
      time for delivery will automatically be extended up to fifteen (15) days or
      to
      the closing date, whichever is earlier.

    

    30. Survey.
      Within
      twenty (20) days after receipt of the exercise of the option to purchase, Tenant
      shall cause the Premises to be surveyed, at Tenant’s expense, in order to obtain
      an accurate legal description of the Premises.

     

    31. Objections.
      Within
      ten (10) days after Buyer receives the Commitment, Exception Documents and
      the
      survey, Tenant may object in writing to defects, exceptions or encumbrances
      to
      the title other than those items set forth in paragraph 28 hereof. Tenant’s
      failure to object within the time allowed will constitute a waiver of Tenant’s
      right to object. Landlord shall timely cure objections of Tenant or any third
      party lender within a reasonable time after Landlord receives the objections
      and
      the closing date will be extended as necessary.

     

    32. Date
      and Place of Closing.
      The
      closing hereunder shall occur at such place as to which Landlord and Tenant
      may
      agree. Except as herein provided, the closing date shall be on or before sixty
      (60) days following Landlord’s receipt of Tenant’s exercise of the option to
      purchase. In the event the closing date occurs after expiration of the Term
      of
      the Agreement hereunder, Tenant shall continue to pay Rent from the expiration
      of the term until the closing date.

     

    

      

         

      

      

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    33. Closing
      Deliveries.
      At
      closing Landlord shall execute and deliver a General Warranty deed conveying
      title to the Premises to Tenant and showing no additional exceptions to those
      permitted in paragraph 28 hereof. Tenant shall deliver to Landlord the Purchase
      Price in a form as hereinbefore set forth. 

     

    34. Settlement
      and Other Expenses.
      At
      closing, Landlord shall be responsible for payment of all expenses relating
      to
      releases of existing liens, tax statements or certificates, preparation of
      the
      General Warranty Deed and one-half of the escrow fee. Tenant shall be
      responsible for all other expenses, including but not limited to, loan expenses,
      appraisal fees, loan application fees, credit report, preparation of loan
      documents, interest on notes from date of disbursement to date of first payment,
      recording fees, copies of easements and restrictions, mortgagee title policy
      with endorsements required by lender, owner’s policy of title insurance and
      commitment therefor, loan-related inspection fees, photos, amortization
      schedules, one-half of escrow fee, transfer fees for cooperative or associate
      membership for utility services and any prepaid items which may be required
      by
      Tenant’s lender.

     

    35. Waiver
      of Warranty.
      Sale of
      the Premises hereunder shall be “AS IS.” ALL IMPLIED WARRANTIES OF FITNESS,
      SUITABILITY OR HABITABILITY REGARDING THE PREMISES ARE EXPRESSLY WAIVED BY
      TENANT TO THE EXTENT PERMITTED BY LAW. ALL IMPLIED WARRANTIES OF
      MERCHANTABILITY, GOOD WORKMANSHIP AND/OR GOOD FAITH AND FAIR DEALINGS PRESENTLY
      EXISTING OR TO COME INTO EFFECT BECAUSE OF ANY OF THE DUTY CREATED HEREUNDER
      ARE
      SPECIFICALLY WAIVED BY THE PARTIES HERETO.

     

    36. Entire
      Agreement.
      This
      Agreement shall constitute the entire agreement of the parties hereto with
      respect to the subject matter hereof. All prior agreements between the parties
      with respect to the subject matter hereof, whether written or oral, are
      superseded by this agreement and shall be of no force and effect. This Agreement
      cannot be changed, modified or discharged orally, but only by an agreement
      in
      writing signed by the parties hereto.

     

    

      

         

      

      

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    37. Severability.
      If any
      term, covenant, condition or provision of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the provisions hereof shall remain in full force and effect and shall in no
      way
      be affected, impaired or invalidated thereby.

     

    38. Construction.
      In
      construing this Agreement, feminine or neuter pronouns shall be substituted
      for
      those masculine in form and vice versa, and plural terms shall be substituted
      for singular and singular for plural in any place in which the context so
      requires. This Agreement shall be construed without regard to the identify
      of
      the party who drafted the various provisions hereof. Moreover, each and every
      provision of this Agreement shall be construed as though all parties hereto
      participated equally in the drafting thereof. As a result of the foregoing,
      any
      rule or construction that a document is to be construed against the drafting
      party shall not be applicable hereto.

     

    39. Paragraph
      Headings.
      The
      paragraph headings are inserted only for convenience and in no way define,
      limit
      or describe the scope or intent of this Agreement, nor in any way affect this
      Agreement.

     

    40. Relationship
      of Parties.
      Nothing
      contained herein shall be deemed or construed as creating a relationship of
      principal and agent or of partnership or a joint venture between the parties
      hereto, it being agreed that no provision herein contained nor any acts of
      the
      parties herein shall be deemed to create any relationship between the parties
      hereto, other than the relationship of Landlord and Tenant.

     

    41. Cumulative
      Effect.
      Unless
      expressly provided to the contrary in this Agreement, each and every one of
      the
      rights, remedies and benefits provided by this Agreement shall be cumulative
      and
      shall not be exclusive of any other such rights, remedies or benefits allowed
      by
      law. The failure of Landlord or Tenant to enforce against the other any
      provision, covenant or condition herein by reason of either of them committing
      any breach of or default under this Agreement shall not be deemed a waiver
      thereof, nor void or affect the right of the agreed party to enforce the same
      covenant or condition on the occasion of any subsequent breach or default;
      nor
      shall the failure of either party to exercise any option in this Agreement
      upon
      any occasion arising therefor be deemed or construed to be a waiver of the
      right
      to exercise that same kind of option upon any subsequent occasion, except as
      expressly provided to the contrary herein.

     

    

      

         

      

      

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    42. Binding
      Effect.
      The
      provisions of this Agreement shall bind and inure to the benefit of the parties
      hereto and their respective successors and assigns.

     

    43. Governing
      Law.
      This
      Agreement shall be governed by, construed and enforced in accordance with the
      laws of the State of Texas.

     

    44. Memorandum
      of Lease Agreement.
      A
      memorandum of this Agreement in the form attached hereto as Exhibit “B” shall be
      executed and recorded by Landlord and Tenant as soon as practicable after the
      Commencement Date.

    

    IN
      WITNESS WHEREOF, this
      Agreement is executed in multiple originals as of the date first above
      written.

     

    

      	 	THE BREWER FAMILY CHARITABLE
	 	REMAINDER ANNUITY TRUST NO. 1
	 	 
	 	By:  /s/
              Larry J. Bartlett, Trustee
	 	   Larry
              J.
              Bartlett, Trustee
	 	 
	 	 
	 	SHUMATE MACHINE WORKS, INC.
	 	 
	 	By: /s/
              Larry C. Shumate
	 	     Larry C. Shumate,
              President

    

     

    

      

         

      

      

        12

        

          

      

      

         

      

    

    

    Exhibit
      “A”

     

    PREMISES
      DESCRIPTION

    

    The
      buildings occupied as a shop or warehouse, excepting approximately the West
      250
      feet of the shop building presently occupied by Modco Industries Incorporated,
      as a closure, manufacturing and warehouse facility, and in addition thereto
      approximately 600 square feet of office space presently occupied by Modco
      Industries Incorporated, said building being located on a tract of land
      beginning at a 1⁄2” Iron Rod for the Southwest corner of the herein described
      tract at the SW corner of Block 3 of a division of the Baseke Survey, and the
      NW
      corner of Airport Heights Subdivision, map or which is recorded in Volume 7,
      Page 377, Map Records of Montgomery County, Texas; thence N 14 ̊
      38’ 25”
W a distance of 640.86 feet to an axle at the NW corner of Block 4 of the
      Subdivision of the Baseke Survey in the S Line of that certain 20-acre tract
      described in Volume 233, Page 235, Deed Records of Montgomery County, Texas;
      thence N 75 ̊
      19’ 28”
E with a S Line and the S Line of that certain 17.97-acre tract described in
      Volume 613, Page 260, Deed Records of Montgomery County, Texas, a distance
      of
      1142.00 feet to a 1⁄2” Iron Rod in the W Line of the Airport Beach County Highway;
      thence S 28 ̊
      45’ 52”
E with a W Line a distance of 659.77 feet to a 1⁄2” iron Rod for the SE corner of
      the herein described tract; thence S 75 ̊
      17’ 00”
W with a N Line of Airport Heights Subdivision a distance of 1303.00 feet to
      the
      place of beginning, containing 17.973 acres of land, more or less.

    

    LESS
      AND
      EXCEPT all of that portion of the above-described tract lying N of the Center
      Line of a 60’ right-of-way which intersects with Airport Beach County Highway
      and runs approximately through the center of the tract to its Westerly boundary.
      

    

    

      

         

      

      

         

        

          

      

      

         

      

    

    Exhibit
      “B”

     

    MEMORANDUM
      OF LEASE AGREEMENT

    

    STATE
      OF
      TEXAS          
      )

                         )
      ss:

    COUNTY
      OF
      MONTGOMERY      )

    

    The
      Brewer Family Charitable Remainder Annuity Trust No. 1, Larry J. Bartlett,
      Trustee “Landlord,” and Shumate Machine Works, Inc., “Tenant,” do hereby declare
      this Memorandum of Lease Agreement s of the 1st day of December,
      2005.

     

    1. Pursuant
      to a Lease Agreement dated December 1, 2005 (the “Lease”), Landlord has leased
      to Tenant and Tenant has leased from Landlord the real property described in
      Exhibit “A” attached hereto, and by this reference incorporated herein, and all
      improvements located on such real property (the “Premises”) pursuant and subject
      to the terms, covenants and conditions contained in the Lease.

     

    2. The
      term
      of the Lease commenced on the date of the Lease (“Commencement Date”) and unless
      extended or earlier terminated in accordance with the terms and provisions
      of
      the Lease continues until the day before the third year anniversary of the
      Commencement Date.

     

    3. In
      the
      Lease, Landlord granted to Tenant an option to purchase the Premises (the
“Option”) pursuant to all terms and conditions contained therein and further
      providing that if not exercise prior to the end of the term of the Lease, the
      Option would expire and Tenant would have no further right to purchase the
      Premises.

     

    4. This
      memorandum is intended only as notice of the Lease and the Option and is not
      to
      be construed as a summary thereof and in no way modifies any of the terms of
      the
      Lease. In the event the terms contained herein should conflict with the terms
      and conditions of the Lease, the Lease shall control.

    

       

      

        	 	THE BREWER FAMILY CHARITABLE
	 	REMAINDER ANNUITY TRUST NO. 1
	 	 
	 	By:  /s/
                Larry J. Bartlett, Trustee
	 	   Larry
                J.
                Bartlett, Trustee
	 	 
	 	 
	 	SHUMATE MACHINE WORKS, INC.
	 	 
	 	By: /s/
                Larry C. Shumate
	 	     Larry C. Shumate,
                President

      

       

    

    

      

         

      

      

         

        

          

      

      

         

      

    

    ACKNOWLEDGMENT

    

    STATE
      OF
      OKLAHOMA           
)

                                                            
      )
      ss:

    COUNTY
      OF
      KAY                      
)

    

    Before
      me, the undersigned, a Notary Public in and for said County and State, on this
      22nd
      day of
      November, 2005, personally appeared Larry J. Bartlett, to me known to be the
      identical person who signed the name of the maker thereof to the within and
      foregoing instrument as Trustee of The Brewer Family Charitable Remainder
      Annuity Trust No. 1, and acknowledged to me that he executed the same as his
      free and voluntary act and deed, and as the free and voluntary act and deed
      of
      said Trust, for the uses and purposes therein set forth.

     

    Given
      under my hand and seal the day and year last above written.

     

    

      	 My Commission Expires:	 /s/ Cynthia Ann
              Holmes
	 Aug. 26, 2006 	  Notary
              Public # 02014533 

    

           

       

    

    ACKNOWLEDGMENT

    

    

      STATE
        OF
        OKLAHOMA           
)

                                                              
        )
        ss:

      COUNTY
        OF
        KAY                      
)

    Before
      me, the undersigned, a Notary Public in and for said County and State, on this
      22nd
      day of
      November, 2005, personally appeared Larry C. Shumate, to me known to be the
      identical person who signed the name of the maker thereof to the within and
      foregoing instrument as President of Shumate Machine Works, Inc., and
      acknowledged to me that he executed the same as his free and voluntary act
      and
      deed, and as the free and voluntary act and deed of said corporation, for the
      uses and purposes therein set forth.

     

                  
      Given under my hand and seal the day and year last above written.

     

    

       

      

        	 My Commission Expires:	 /s/ Debra Schalabra
	 Aug. 4, 2007	  Notary
                Public #__________  

      

    

    
 

    

      

         

      

      

        2ASSET PURCHASE AGREEMENT

      ASSET PURCHASE AGREEMENT, dated as of March 24, 2006 (this "Agreement"),
among National Investment Managers Inc., a Florida corporation ("NIM"), ABR
Advisors, Inc. (formerly known as IB Resources, Inc.), a Delaware corporation
("Advisors"), Benefit Management, Inc., a Massachusetts corporation ("BMI"),
Kerns Asset Management, LLC, a Texas limited liability company ("KAM") and M.
Lane Kerns and Billie Kerns (jointly referred to as "Kerns", and together with
KAM, the "Buyers"). NIM, BMI and Advisors are sometimes each referred to herein
as a "Seller" and, collectively, as the "Sellers."

                                    RECITALS:

      A. Advisors is the owner of all of the issued and outstanding shares of
common stock, par value $0.01 per share (the "Capital Shares"), of MLK Capital
Management, Inc., a Texas corporation ("Capital").

      B. NIM is the owner of 100% of the issued and outstanding capital stock of
Advisors.

      C. BMI is the owner of certain assets to be acquired by KAM hereunder.

      D. Sellers desire to sell and transfer to Kerns, and Kerns desires to
purchase and acquire, all of the Sellers' right, title and interest in and to
the Capital Shares, and KAM desires to purchase certain other assets owned by
NIM described herein, all on the terms and provisions and subject to the
conditions set forth herein.

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
legal adequacy of which is acknowledged, the parties agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

      The terms defined in this Article I, whenever used in this Agreement
(including, without limitation, the exhibits and schedules attached hereto),
shall have the following meanings:

      1.1 "Acquired Assets" has the meaning given such term in Section 2.1 of
this Agreement.

      1.2 "Action" means any action, suit, litigation, arbitration, proceeding
or hearing conducted or heard by or before, or otherwise involving, any court or
other Governmental Body or authority or any arbitrator or arbitration panel.

      1.3 [INTENTIONALLY OMITTED]
<PAGE>

      1.4 "Advisors" has the meaning given such term in the first paragraph of
this Agreement.

      1.5 "Affiliate" of any Person (as such term is hereinafter defined) means
any stockholder, member, Person or entity controlling, controlled by or under
common control with such Person, or any director or officer of such Person. For
purposes of this definition, the term "control", when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

      1.6 [INTENTIONALLY OMITTED]

      1.7 "Assigned Contracts" means the Contracts being assigned by Sellers to
KAM hereunder for administration of the plans set forth on Schedule 1.7 annexed
hereto.

      1.8 "Associates" means M.L. Kerns & Associates, Inc., an Oklahoma
corporation that merged with and into BMI in May 2004.

      1.9 "Associates Business" means the assets, client relationships and
liabilities related to the third party administrator business that was formerly
operated by Associates and is currently operated by BMI, as such business is
presently conducted, as more specifically described in Exhibit 1.9 annexed
hereto.

      1.10 "Assumed Liabilities" has the meaning given such term in Section 2.2
of this Agreement

      1.11 "Authorizations" means all licenses, permits, franchises, approvals,
authorizations, qualifications, concessions or the like, issued or granted by
any federal, state, local or foreign Governmental Body, or by any
nongovernmental entity to any Person or which in any way relate to the business,
operations, activities, properties and assets of such Person.

      1.12 "BMI" has the meaning given such term in the first paragraph of this
Agreement.

      1.13 "Business Day" means a day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.

      1.14 "Business" means, collectively, the business, activities and
operations of Capital and the Associates Business, as presently conducted.

      1.15 "Buyer Indemnified Person" has the meaning given such term in Section
7.2 of this Agreement.

      1.16 "Buyers" has the meaning given such term in the first paragraph of
this Agreement.

      1.17 "Cafeteria Plan Clients" means the client relationships under the
cafeteria plans to be assigned to KAM hereunder as a portion of the Associates
Business, as more specifically set forth on Exhibit 1.17 annexed hereto.

                                       2
<PAGE>

      1.18 "Capital" has the meaning given such term in the Recitals to this
Agreement.

      1.19 "Capital Balance Sheet" means the balance sheet of Capital as of
February 28, 2006, attached hereto as Exhibit 1.19.

      1.20 "Capital Shares" has the meaning given such term in the Recitals to
this Agreement.

      1.21 [INTENTIONALLY OMITTED]

      1.22 "Closing" has the meaning given such term in Section 3.1 of this
Agreement.

      1.23 "Closing Date" has the meaning given such term in Section 3.1 of this
Agreement.

      1.24 "Code" means the Internal Revenue Code of 1986, as amended.

      1.25 "Contract" means any contract, lease, license, agreement or other
binding commitment.

      1.26 "Disclosure Schedule" shall mean the Disclosure Schedules delivered
by the Sellers to Buyers contemporaneously with this Agreement.

      1.27 [INTENTIONALLY OMITTED]

      1.28 "GAAP" means generally accepted accounting principles in effect in
the United States of America at the time of any determination, and which are
applied on a consistent basis. All accounting terms used in this Agreement which
are not expressly defined in this Agreement shall have the meanings given to
those terms by GAAP, unless the context of this Agreement otherwise requires.

      1.29 "Governmental Body" means any court, tribunal, arbitrator, executive
or regulatory authority, tax authority, agency, commission, official or other
instrumentality of the United States of America, any foreign country or any
domestic or foreign state, county, city, municipality or other political
subdivision.

      1.30 "Indemnification Acknowledgment" has the meaning given such term in
Section 7.4(a)(ii) of this Agreement.

      1.31 "Indemnitee" has the meaning given such term in Section 7.4(a) of
this Agreement.

      1.32 "Indemnitor" has the meaning given such term in Section 7.4(a) of
this Agreement.

      1.33 "Kerns" has the meaning given such term in the first paragraph of
this Agreement.

      1.34 "knowledge", "known", "best of knowledge", shall mean those matters
of which the applicable Person is "aware" and language of similar import shall
include all matters actually or constructively known or which should be known by
such Person after due diligence and reasonable investigation.

                                       3
<PAGE>

      1.35 "Laws" means any law, statute, rule, regulation or code issued,
enacted, promulgated or implemented by any Governmental Body.

      1.36 "Legal Requirement" of a Person means any Law, or any order, judgment
or other direction of a court, arbitration panel or other tribunal resolution or
any Governmental Body, or any other Authorization applicable to such Person, or
to any of its properties, assets or business.

      1.37 "Liens" means any lien, pledge, mortgage, security interest, charge,
option, transfer restriction or other restriction or encumbrance, whether or not
relating to the extension of credit or the borrowing of money.

      1.38 "Losses" has the meaning given such term in Section 7.2 of this
Agreement.

      1.39 "KAM" has the meaning given such term in the first paragraph of this
Agreement.

      1.40 "material adverse effect" means, with respect to any Person, any
material adverse effect on the business, operations, assets (including levels of
working capital and components thereof), condition (financial or otherwise),
operating results, liabilities, relations with employees, customers or suppliers
or business prospects of such Person or any material casualty loss or damage to
the assets of such Person, whether or not covered by insurance.

      1.41 "NIM" has the meaning given such term in the first paragraph of this
Agreement.

      1.42 "Notice of Claim" has the meaning given such term in Section
7.4(a)(i) of this Agreement.

      1.43 "Order" means any order, judgment, injunction, award, decree or writ
handed down, adopted or imposed by any Governmental Body.

      1.44 "Organizational Documents" means, with respect to any entity, the
certificate of incorporation, operating agreement, by-laws, certificate(s) of
designation or other constitutional documents of such entity.

      1.45 "Person" means any natural individual, corporation, partnership,
joint venture, trust, limited liability company, association, organization, firm
or other entity.

      1.46 "Prior Agreements Release" has the meaning given to that term in
Section 6.2 of this Agreement.

      1.47 "Purchase Price" has the meaning given to that term in Section 2.4 of
this Agreement.

      1.48 "Related Agreements" means the agreements the execution of which are
contemplated in this Agreement.

                                       4
<PAGE>

      1.49 "Seller Indemnified Person" has the meaning given such term in
Section 7.3 of this Agreement.

      1.50 "Seller" or "Sellers" has the meaning given such term in the first
paragraph of this Agreement.

      1.51 "Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

      1.52 "Taxes" means, with respect to any Person, (i) all income taxes
(including any tax on or based upon net income, gross income, income as
specially defined, earnings, profits or selected items of income, earnings or
profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, alternative or add-on minimum
taxes, customs duties and other taxes, fees, assessments or charges of any kind
whatsoever, together with all interest and penalties, additions to tax and other
additional amounts imposed by any taxing authority (domestic or foreign) on such
Person (if any), and (ii) any liability for the payment of any amount of the
type described in clause (i) above as a result of (A) being a "transferee"
(within the meaning of Section 6901 of the Code or any other applicable Law) of
another Person, (B) being a member of an affiliated, combined or consolidated
group, or (C) a contractual arrangement or otherwise.

      1.53 "Third Party Claim" means a claim or demand made by any Person who is
not a party to this Agreement against an Indemnitee.

                                   ARTICLE II

                      SALE AND PURCHASE OF ACQUIRED ASSETS

      2.1 Sale and Purchase of Acquired Assets. Upon the terms and provisions
and subject to the conditions hereof, at the Closing, Sellers shall sell,
transfer, assign, convey and deliver to KAM and Kerns, and KAM and Kerns shall
purchase and acquire from Sellers, the following respective properties, rights
and assets:

            (a) Advisors shall sell, assign, convey and deliver to M. Lane Kerns
and Billie Kerns jointly, the Capital Shares.

            (b) BMI shall assign, convey and deliver to KAM those properties,
rights and assets of NIM specific to the Associates Business that are listed on
Schedules 1.7, 1.17 and 2.1(b) annexed hereto (the "Associates Business
Assets").

The Capital Shares and the Associates Business Assets are collectively referred
to herein as the "Acquired Assets".

      2.2 Assumption of Liabilities. Subject to the terms and conditions set
forth in this Agreement, at the Closing, KAM shall assume and thereafter pay,
perform and discharge when due, the following liabilities of NIM relating to the
Associates Business (the "Assumed Liabilities"):

                                       5
<PAGE>

            (a) the liabilities of NIM listed on Schedule 2.2(a) annexed hereto;
and

            (b) all liabilities to perform the Assigned Contracts (to the extent
not included in Schedule 2.2(a)) following the Closing.

The Assumed Liabilities shall be the sole responsibility of, and shall be paid,
performed and discharged solely by, KAM.

      2.3 Limitation of Liability. KAM shall not assume or take title to the
Associates Business Assets subject to, or in any way be liable or responsible
for, any liabilities or obligations of Sellers (whether or not referred to in
any Schedule or Exhibit hereto) or any Affiliate of Sellers, except as
specifically provided in Section 2.2, it being expressly acknowledged that it is
the intention of the parties hereto that all liabilities and obligations that
Sellers or any Affiliate of Sellers has or may have currently or in the future
with respect to the Associates Business Assets (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to Sellers, and
whether due or to become due), other than the Assumed Liabilities, shall be and
remain the liabilities and obligations of Sellers or its Affiliates.

      2.4 Purchase Price; Allocation. The full and complete purchase price for
the Acquired Assets ("Purchase Price") shall consist of the following:

            (a) cash in the amount of $900,000, and

            (b) the assumption by KAM of the Assumed Liabilities.

      The Purchase Price shall be allocated by NIM, for itself and on behalf of
Advisors, and KAM in the manner set forth on Exhibit 2.4. Each of NIM, KAM and
Kerns agrees to prepare and file their own state, local and foreign income Tax
Returns and other filings reflecting the transactions contemplated in this
Agreement on a basis consistent with such allocation. In any action or
proceeding related to the determination of any Tax, neither NIM nor Buyers shall
contend or represent that such allocation is not a correct allocation.

      2.5 Termination of Intercompany Obligations. Effective as of the Closing,
all obligations of NIM and its Affiliates to Capital and of Capital to NIM and
its Affiliates on account of cash withdrawals, loans or advances (including all
amounts reflected as "due to" or "due from" on the Capital Balance Sheet) shall
be terminated and shall be of no further force and effect.

                                  ARTICLE III

                                     CLOSING

      3.1 The Closing. The closing of the purchase and sale of the Acquired
Assets hereunder and the other transactions contemplated herein (the "Closing")
shall take place at 10:00 a.m. local time on the date hereof (the "Closing
Date"), at the offices of Buyers' counsel, Thompson & Knight LLP or such other
location as may be agreed to in writing by Buyers and Sellers. All transactions
contemplated hereunder to occur on the Closing Date shall be deemed to have
occurred simultaneously at 12:01 a.m. (local time) on the Closing Date.

                                       6
<PAGE>

      3.2 Obligations of the Sellers. At the Closing and subject to the terms,
provisions and conditions contained herein, the Sellers shall take all actions
and do all things necessary to sell, transfer, assign, convey and deliver the
Capital Shares to Kerns and the Associates Business Assets to KAM, free and
clear of any and all Liens, and to consummate the transactions contemplated
herein, including, without limitation, delivering or causing to be delivered to
Buyer the following:

            (a) a bill of sale or other appropriate document evidencing the
transfer to KAM of the Associates Business Assets;

            (b) a stock power duly executed in blank, sufficient to transfer the
Capital Shares to Kerns on the books of the Capital (it being acknowledged and
agreed that the stock certificate evidencing the Capital Shares is held in
escrow by counsel to Kerns);

            (c) executed originals of all consents and Authorizations necessary
or required to be obtained in order to consummate the transactions contemplated
herein;

            (d) resignations of the existing directors and officers of Capital
set forth on Schedule 3.2(d) annexed hereto;

            (e) evidence that each of Messrs. Neuhaus and Salzman have been
removed from any bank accounts or lockboxes maintained by Capital to which they
are an authorized signatory;

            (f) the Prior Agreements Release, duly executed by NIM;

            (g) the original minute books and stock record books of Capital and
all files and records of KAM and Capital, including, without limitation, Tax
information of Capital incorporated into consolidated Tax returns of Capital's
parent company; and

            (h) such instruments of assignment and consents of third parties and
Governmental Bodies as shall be required to vest in the respective Buyers good
and marketable title to the Acquired Assets being purchased by them, including,
without limitation, assignments of the Assigned Contracts to KAM.

      3.3 Obligations of Buyers. At the Closing and subject to the terms,
provisions and conditions contained herein, Buyers shall deliver to NIM, as
agent for the Sellers, the following:

            (a) Buyers shall deliver the cash consideration for the Acquired
Assets;

            (b) KAM shall deliver an agreement evidencing the assumption by KAM
of the Assumed Liabilities; and

                                       7
<PAGE>

            (c) Kerns shall deliver the Prior Agreements Release, duly executed
by Billie and M. Lane Kerns.

                                   ARTICLE IV

                      REPRESENTATIONS AND WARRANTIES OF NIM

            NIM hereby represents and warrants to Buyers as follows:

      4.1 Status and Authority. Each Seller is a corporation organized and
validly existing and in good standing under the laws of the state of its
incorporation and has the power to own its respective Acquired Assets. Capital
is a corporation organized and validly existing under the laws of the State of
Texas. Each Seller has the power and authority to execute and deliver this
Agreement and to perform its respective obligations hereunder. The execution,
delivery and performance of this Agreement and each Related Agreement have been
duly authorized by the respective Board of Directors of each Seller. This
Agreement and each Related Agreement is, or upon the execution and delivery
thereof will be, duly and validly executed and delivered by each Seller and
constitutes, or upon its execution and delivery will constitute, a valid and
binding obligation of such Seller enforceable against such Seller in accordance
with its terms. No Seller is the subject of any bankruptcy, reorganization or
similar proceeding.

      4.2 No Conflicts.

            (a) The execution, delivery and performance of this Agreement by the
Sellers will not (i) conflict with the Organizational Documents of either Seller
or Capital, or (ii) breach or violate any Laws or Order applicable to either
Seller, or constitute a default under, or give rise to any right of contingent
payment, termination, cancellation, acceleration, non-renewal or any other
contingent right, or result in the creation of any Lien upon any of the Acquired
Assets under any mortgage, agreement, deed of trust, indenture or any other
instrument to which either Seller or, to NIM's knowledge, Capital is a party or
by which either Seller or any of the Acquired Assets are bound.

            (b) Except for a consent of Laurus Master Fund, Ltd., which consent
has been provided to NIM, no consent, approval or authorization of or filing
with any third party or Governmental Body is required on the part of either
Seller in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated herein.

      4.3 Title to Acquired Assets. Each Seller has, and, at the Closing, will
transfer and deliver to the Buyers, good and marketable title to the Acquired
Assets being acquired by each Buyer, free and clear of all Liens.

      4.4 Capital Shares. The authorized capital stock of Capital consists of
100,000 shares of common stock, par value $0.01 per share, of which 1,000 shares
are issued and outstanding, all of which are held beneficially and of record by
Advisors, free and clear of all Liens. All such issued and outstanding Capital
Shares are duly authorized, validly issued, fully paid and nonassessable. There
are no shares of capital stock or other equity securities of Capital issued,
reserved for issuance or outstanding and no outstanding options, warrants,
convertible or exchangeable securities, subscriptions, rights (including any
preemptive rights), stock appreciation rights, calls or commitments of any
character whatsoever to which Capital is a party or may be bound requiring the
issuance or sale of shares of any capital stock of Capital, the voting of any
capital stock of Capital or otherwise restricting or limiting in any way any
rights relating thereto.

                                       8
<PAGE>

      4.5 Contracts. Schedule 1.7 to the Sellers' Disclosure Schedule lists the
plans to be administered under the Assigned Contracts, copies which have been
made available to the Buyer for review. Except as set forth on Schedule 1.7 to
the Sellers' Disclosure Schedule, each Assigned Contract: (i) is in full force
and effect; and (ii) is a valid and binding obligation of the Seller party
thereto, enforceable in accordance with its terms. Except as set forth on
Schedule 1.7 to the Sellers' Disclosure Schedule, no consent is required for the
assignment of any Assigned Contract to Buyer, and the transactions contemplated
herein will not result in a breach of, default under or termination of any
Assigned Contract, whether on account of a change of control or otherwise.
Except as set forth on Schedule 1.7 to the Sellers' Disclosure Schedule, there
is no default under or material breach by either Seller that, with or without
the giving of notice or lapse of time or both, would constitute a default under
any Assigned Contract.

      4.6 Financial Information. The Capital Balance Sheet fairly presents the
financial position of Capital as of February 28, 2006, and has been prepared in
accordance with GAAP consistently applied.

      4.7 Absence of Undisclosed Liabilities. To the knowledge of NIM, Capital
does not have any liability, except (i) those expressly reflected or reserved
against on Capital Balance Sheet, (ii) liabilities incurred by Capital in the
ordinary course of its business consistent with its past practice since the date
of the Capital Balance Sheet (other than any such liability arising from breach
of Contract, breach of warranty, tort, infringement, violation of any Law, Order
or Legal Requirement) and not in violation of the requirements of this
Agreement.

      4.8 Tax Matters. With respect to any period commencing on or after
November 14, 2003:

            (a) Capital, Advisors or their Affiliates have duly filed all
federal, state, local, and foreign Tax Returns required to be filed by or with
respect to Capital with the IRS or other applicable Taxing authority, all
information provided in each such Tax Return is true, correct and complete and
no extensions with respect to such Tax Returns have been requested or granted;

            (b) Capital, Advisors or their Affiliates have paid, or have
adequately reserved against on the Capital Balance Sheet, all Taxes due, or
claimed by any Taxing authority to be due, from or with respect to Capital;

            (c) there has been no issue raised or adjustment proposed (and none
is pending) by the IRS or any other Taxing authority in connection with any of
the Tax Returns;

            (d) Capital, Advisors or their Affiliates have made all deposits
required with respect to Taxes payable by Capital; and

            (e) no waiver or extension of any statute of limitations as to any
federal, state, local, or foreign Tax matter has been given by or requested from
or on behalf of Capital.

                                       9
<PAGE>

      4.9 Litigation; Compliance with Laws. There are no judicial or
administrative Actions or investigations pending or, to NIM's knowledge,
threatened in writing before any Governmental Body, and there is no Order
outstanding against the Acquired Assets which question the validity of this
Agreement or any action taken or to be taken by the Sellers in connection
herewith. Neither the Sellers nor, to NIM's knowledge, Capital, is in violation
of, nor has it violated (i) any Law applicable to the Acquired Assets, or (ii)
any Order or similar action of any Governmental Body applicable to the Acquired
Assets.

      4.10 Absence of Changes. Since February 28, 2006, except as otherwise set
forth in this Agreement or reflected in Schedule 4.10 to the Sellers' Disclosure
Schedule, the Sellers have not:

            (a) purchased or redeemed any shares of capital stock of Capital or
declared or made any dividend or other distribution in respect of the capital
stock of Capital or otherwise transferred whether by loan or other means amounts
earned by, belonging to or attributable to Capital or the Associates Business;

            (b) incurred any liabilities or obligations for or on behalf of
Capital, except current liabilities and obligations incurred in the ordinary
course of the business of Capital and the Associates Business;

            (c) mortgaged, pledged or subjected to any Lien any of Capital's
properties or assets;

            (d) disposed or agreed to dispose of any properties or assets of
Capital;

            (e) cancelled, waived or forgiven any debts or claims of Capital; or

            (f) repaid any debt of Capital or prepaid any debt of Capital prior
to the due date for any such payment.

      4.11 Brokers. All negotiations relating to this Agreement and the
transactions contemplated herein have been carried out without the intervention
of any Person acting on behalf of the Sellers in such manner as to give rise to
any valid claim against the Buyer or the Sellers for any brokerage or finder's
commission, fee or similar compensation.

      4.12 Additional Information Regarding Banking Matters. Schedule 4.12 of
the Sellers' Disclosure Schedule lists all bank accounts and lockboxes
maintained by Capital and for Associates and all authorized signatories thereon.

                                   ARTICLE V

                     REPRESENTATIONS AND WARRANTIES OF BUYER

           The Buyers represent and warrant to each Seller as follows:

                                       10
<PAGE>

      5.1 Corporate Status and Authority. KAM is a limited liability company
organized and validly existing under the laws of the state of Texas, with the
power and authority to conduct its business, to own or lease its properties as
now conducted, owned or leased, to execute and deliver this Agreement and to
perform its obligations hereunder. KAM has heretofore made available to the
Seller complete and correct copies of its Organizational Documents as currently
in effect. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of KAM. This Agreement and
each Related Agreement is, or upon the execution and delivery thereof will be,
duly and validly executed and delivered by each Buyer and constitutes, or upon
its execution and delivery will constitute, a valid and binding obligation of
such Buyer enforceable against such Buyer in accordance with its terms.

      5.2 No Conflicts.

            (a) Except as otherwise set forth in this Agreement, the execution,
delivery and performance of this Agreement by the Buyers will not result in (i)
any conflict with the Organizational Documents of KAM, (ii) any breach or
violation of or default under any Order, Law or Legal Requirement or any
mortgage, agreement, deed of trust, indenture or any other instrument by which
any of the Buyers or any of their respective properties or assets are bound or
(iii) the creation or imposition of any Lien thereon.

            (b) Except as otherwise set forth in this Agreement or as required
under the Investment Advisers Act and the regulations promulgated thereunder, no
consent, approval or authorization of or filing with any third party or
Governmental Body is required on the part of the Buyers in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated herein. In connection with the foregoing, Buyers hereby represent
that, following the Closing, neither NIM nor any Affiliate of NIM will have any
obligations or liabilities of any nature whatsoever under the Lease Agreement,
dated November 19, 2001, as amended by a First Amendment dated as of September
1, 2004, as the same may have been further amended through the date hereof,
between Walton Houston Galleria Office, L.P., as landlord, and Capital, as
successor-in-interest to Associates, as tenant thereunder.

      5.3 Brokers. All negotiations relating to this Agreement and the
transactions contemplated hereby have been carried out without the intervention
of any Person acting on behalf of the Buyers in such manner as to give rise to
any valid claim against the Buyers or the Sellers for any brokerage or finder's
commission, fee or similar compensation.

                                   ARTICLE VI

                                    COVENANTS

      6.1 BPI California Operations. KAM shall provide certain technical and
software support for NIM's Benefits Planning, Inc. operations in California for
the administration of retirement plans on Relius, as more particularly set forth
on Exhibit 6.1 annexed hereto, through December 31, 2006, to the extent
reasonably required to transition those plans to NIM's own systems. NIM shall
provide written notice ninety (90) days in advance of any earlier termination of
such services. Such technical and software support shall be provided to NIM at
KAM's cost, and NIM shall reimburse KAM for any additional costs or expenses
incurred by KAM in connection with the provision of such services to NIM.

                                       11
<PAGE>

      6.2 Termination of Prior Agreements. Effective as of the date hereof, the
agreements and ancillary documents executed by M. Lane Kerns, Billie Kerns and
Investment & Benefit Services, Inc. ("IBS") on or about November 14, 2003,
pursuant to which IBS purchased the capital stock of Capital and Associates, and
any liabilities or obligations of NIM (if any) under the Employment Agreement,
dated as of October 1, 2003, between Capital and M. Lane Kerns, are hereby
terminated. Contemporaneously herewith, Billie Kerns, M. Lane Kerns and NIM are
entering into a release with respect to the foregoing in the form of Exhibit 6.2
annexed hereto (the "Prior Agreements Release").

      6.3 Cafeteria Plan Records. Promptly following the date hereof, NIM shall
forward to KAM all records relating to the Cafeteria Plan Clients, which records
were previously administered by Associates and transferred to BMI at the end of
2005, and NIM shall continue to provide support to KAM through December 31,
2006, to the extent reasonably required to transition such clients to KAM's
system.

      6.4 Liability for Taxes, Filing Returns.

            (a) NIM, the common parent of the affiliated group of corporations
(the "Seller Group"), of which Capital is a member, shall cause to be prepared
and duly filed all Tax Returns required to be filed by or with respect to
Capital for all Taxable years and periods ending on or before the Closing Date.
NIM shall be solely liable for and shall pay all Taxes due on such Tax Returns
for all periods covered by such Tax Returns. NIM will include, or cause to be
included, the income of Capital (including any deferred income triggered into
income by Treas. Reg. ss.ss. 1.1502-13 and 1.1502-14 and any excess loss
accounts taken into income under Treas. Reg. ss. 1.1502-19) on the consolidated
federal and consolidated, unitary or combined state and local income Tax Returns
of NIM and the Seller Group for all periods through the Closing Date and will
pay or cause to be paid any federal and state income Taxes attributable to such
income. Capital will furnish Tax information to NIM for inclusion in the
consolidated federal and state consolidated, unitary or combined income Tax
Returns for NIM and the Seller Group for the period ending on the Closing Date
in accordance with the past custom and practice of Capital. Capital's income
will be apportioned to the period up to and including the Closing Date and to
the period after the Closing Date by closing the books of Capital as of the end
of the Closing Date.

            (b) Capital shall be solely liable for all of its Taxes for all
Taxable years and periods commencing after the Closing Date. Capital shall cause
to be prepared and duly file all of its Tax Returns for Taxable periods
commencing after the Closing Date. Capital shall pay all Taxes shown to be due
on such Tax Returns for all periods covered by such Tax Returns.

      6.5 Audits. NIM will allow Capital to participate at Capital's expense in
any audits of the consolidated federal and consolidated, unitary or combined
income Tax Returns of NIM and the Seller Group to the extent that such audits
relate to Capital. NIM will not settle, or cause to be settled, any such audit
in a manner which would materially adversely affect Capital after the Closing
Date unless NIM obtains the prior written consent of Capital, which consent
shall not unreasonably be withheld.

                                       12
<PAGE>

                                  ARTICLE VII

                                 INDEMNIFICATION

      7.1 Survival of Representations and Warranties. All representations and
warranties of NIM in Article IV and of the Buyers in Article V hereof shall
survive the Closing for a period of eighteen (18) months following the Closing
Date; provided however, that the representations and warranties of NIM in
Sections 4.1 through 4.4 and Section 4.8 and the first sentence of Section 4.9
shall survive the Closing until the expiration of the applicable statute of
limitations. The covenants and other agreements of the parties contained in this
Agreement shall survive the Closing Date until they are otherwise terminated,
whether by their terms or as a matter of applicable Law.

      7.2 Indemnification by the Sellers. On the condition that the Closing is
effected, the Sellers shall indemnify and hold harmless Buyers and their
Affiliates (including Capital), and each of their respective directors,
officers, employees, agents, representatives, stockholders and controlling
parties and all of their successors and assigns (each a "Buyer Indemnified
Person") from and defend each of them from and against and will pay each Buyer
Indemnified Person for any and all demands, claims, actions, liabilities,
losses, damages (including, without limitation, special, consequential and
punitive damages), costs, penalties and expenses (including, without limitation,
interest, costs of investigation and defense and the reasonable fees and
expenses of attorneys and other professionals and experts), whether or not
involving a Third Party Claim (after taking into account any insurance recovery
from any of such Buyer's insurance policies that insures against the foregoing,
but without regard to any Tax benefit that may be obtained as a result thereof)
(collectively, "Losses") asserted against, imposed upon or incurred by any such
Buyer Indemnified Person, directly or indirectly, resulting from or arising out
of or in connection with or relating to any of the following:

            (a) any inaccuracy or breach of any representation or warranty of
NIM contained herein that survives the Closing; and

            (b) any breach of any agreement, covenant or obligation of NIM
contained herein; and

      7.2A Tax Indemnification by the Sellers.

            (a) Sellers shall indemnify Capital and the Buyers and hold them
harmless from and against (i) any liability for Taxes of Capital due in respect
of any Tax periods ending during the period commencing on November 14, 2003 and
ending on or before the Closing Date (other than Taxes specifically and fully
reserved on the Capital Balance Sheet, but excluding any reserve for deferred
Taxes to reflect timing differences between book and Tax income), and (ii) any
liability that may be imposed on Capital pursuant to Section 1.1502-6 of the
Treasury Regulations promulgated under the Code or pursuant to any analogous
provision of state or local law, as a result of the affiliation of Capital with
Sellers or an Affiliate of Sellers.

            (b) Sellers also agree to indemnify, defend and hold harmless
Capital and the Buyers from and against any and all costs sustained in a Tax
period of Capital ending after the Closing Date arising out of the settlement or
other resolution (without the consent of Buyers) of a proposed Tax adjustment
which relates to a Tax period during the period commencing on November 14, 2003
and ending on or before the Closing Date. For example, if Sellers agree in an
income Tax audit to reduce the depreciable basis of property acquired by Capital
during the period following November 14, 2003 and before the Closing Date,
Sellers shall be liable for any additional Taxes due from Capital by reason of
reduced depreciation deductions.

                                       13
<PAGE>

            (c) In the case of any representation, warranty and agreement of
Sellers in Section 4.8 and any other representation or warranty relating to or
affecting Capital's liability for Taxes, whether Capital's own Taxes or its
liability, if any (for example, by reason of transferee liability or application
of Treas. Reg. Section 1.1502-6) for the Taxes of Sellers or any former or
present Affiliate or subsidiary of Sellers, the same shall survive until the
later of the final resolution of any judicial or administrative proceeding
involving any such Tax or expiration of any statute of limitations (including
any suspensions, tollings or extensions thereof.)

      7.3 Indemnification by Buyers. On the condition that the Closing is
effected, Buyers shall indemnify and hold harmless the Sellers and the Sellers'
legal representatives, if any (each a "Seller Indemnified Person"), from and
defend each of them from and against and will pay each Seller Indemnified Person
for any and all Losses asserted against, imposed upon or incurred by any such
Seller Indemnified Person, directly or indirectly, resulting from or arising out
of or in connection with or relating to any of the following:

            (a) any inaccuracy or breach of any representation or warranty of
Buyers contained herein that survives the Closing; and

            (b) any breach of any agreement, covenant or obligation of Buyers
contained herein.

      7.4 Indemnification Procedures - Third-Party Claims.

            (a) The rights and obligations of a party claiming a right to
indemnification under this Article VII (each an "Indemnitee") from another party
hereto (each an "Indemnitor") in any way relating to a Third Party Claim shall
be governed by the following procedures of this Section 7.4:

                  (i) The Indemnitee shall give prompt written notice to the
Indemnitor of the commencement of any action, suit or proceeding, or any written
threat thereof, or any state of facts which the Indemnitee reasonably determines
will give rise to a claim by the Indemnitee against the Indemnitor based on the
indemnity agreements contained in this Article VII, which notice shall set forth
the nature and basis of the claim and the amount thereof (or a reasonable
estimate of such amount), to the extent known and any other reasonably relevant
information in the possession of the Indemnitee (a "Notice of Claim"). No
failure to give a Notice of Claim shall affect the indemnification obligations
of an Indemnitor hereunder, except to the extent such failure materially
prejudices such Indemnitor's ability to successfully defend the matter giving
rise to the indemnification claim. If notice of any claim for indemnification
under Section 7.2 or Section 7.3 hereof shall have been given within the
applicable survival period set forth in Section 7.1, the representations and
warranties that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved.

                                       14
<PAGE>

                  (ii) In the event that an Indemnitee furnishes an Indemnitor
with a Notice of Claim, then upon the written acknowledgment by the Indemnitor
given to the Indemnitee within thirty (30) days after the Indemnitor's receipt
of the Notice of Claim, that the Indemnitor is undertaking and will prosecute
the defense of the claim under the indemnity agreements contained in this
Article VII and confirming that as between the Indemnitor and the Indemnitee,
the claim covered by the Notice of Claim is the obligation of the Indemnitor,
with respect to which the Indemnitor is obligated to indemnify and hold harmless
the Indemnitee hereunder and that the Indemnitor will be able to pay the full
amount of potential liability in connection with such claim (including, without
limitation, any action, suit or proceeding and all proceedings on appeal which
legal counsel for the Indemnitee shall deem appropriate) (an "Indemnification
Acknowledgment"), then the claim covered by the Notice of Claim may be defended
by the Indemnitor; provided, however, that the Indemnitee is authorized to file
any motion, answer or other pleading that may be reasonably necessary or
appropriate to protect its interests during such thirty (30) day period. In the
event the Indemnitor does not furnish an Indemnification Acknowledgment to the
Indemnitee within such time period, or does not offer reasonable assurances to
the Indemnitee as to Indemnitor's financial capacity to satisfy any final
judgment or settlement, the Indemnitee may, upon written notice to the
Indemnitor, assume control of the defense (with legal counsel chosen by the
Indemnitee) and defend, settle or dispose of the claim, at the sole cost and
expense of the Indemnitor. Notwithstanding receipt of an Indemnification
Acknowledgment, the Indemnitee shall have the right to employ its own legal
counsel in respect of any such claim, action, suit or proceeding, but the fees
and expenses of such legal counsel shall be at the Indemnitee's own cost and
expense, unless (A) the employment of such legal counsel and the payment of such
fees and expenses both shall have been specifically authorized by the Indemnitor
or (B) the Indemnitee shall have reasonably concluded, based upon a written
opinion of legal counsel to the Indemnitee, a copy of which shall be furnished
to the Indemnitor, that there may be conflicts in the defenses available to the
Indemnitee which are different from or additional to those available to the
Indemnitor (if the Indemnitor is also a party or potential party to the claim)
or the claim is one which could have a material adverse effect on the business,
operations, assets, properties or prospects of the Indemnitee in which case the
costs and expenses incurred by the Indemnitee shall be borne by the Indemnitor.

                  (iii) The Indemnitee or the Indemnitor, as the case may be,
depending upon who is controlling the defense of the action, suit or proceeding,
shall keep the other fully informed of such claim, action, suit or proceeding at
all stages thereof, whether or not the other is represented by legal counsel.
Subject to the Indemnitor furnishing the Indemnitee with an Indemnification
Acknowledgment in accordance with Section 7.4(ii) hereof, the Indemnitee shall
cooperate with the Indemnitor and provide such assistance, at the sole cost and
expense of the Indemnitor, as the Indemnitor may reasonably request in
connection with the defense of any such claim, action, suit or proceeding,
including, but not limited to, providing the Indemnitor with access to and use
of all relevant corporate records and making available its officers and
employees for depositions, pre-trial discovery and as witnesses at trial, if
required. In requesting any such cooperation, the Indemnitor shall have due
regard for, and attempt to not be disruptive of, the business and day-to-day
operations of the Indemnitee and shall follow the requests of the Indemnitee
regarding any documents or instruments which the Indemnitee reasonably believes
should be given confidential treatment or is subject to a privilege.

                                       15
<PAGE>

            (b) The Indemnitor shall not settle any claim, action, suit or
proceeding which Indemnitor has undertaken to defend, in accordance with the
procedures set forth in this Article VII, without the Indemnitee's prior written
consent (which consent shall not be unreasonably withheld or delayed), unless
there is no obligation on the part of the Indemnitee to contribute to any
payment made to settlement of the claim, action, suit or proceeding, the
Indemnitee receives a general and unconditional release with respect to the
claim (which shall be in form, substance and scope reasonably acceptable to the
Indemnitee), there is no finding or admission of violation of any Legal
Requirement by, or effect on any other claims that may be made against the
Indemnitee and the relief granted in connection therewith requires no action on
the part of and has no effect on the Indemnitee or its business or reputation.
If the Indemnitee is controlling the defense of the claim, action, suit or
proceeding, the Indemnitee shall not settle the claim, action, suit, or
proceeding without the Indemnitor's prior written consent (which consent shall
not be unreasonably withheld or delayed).

            (c) Any claim made by a Buyer Indemnified Person or a Seller
Indemnified Person that may be made under more than one subsection under Section
7.2 or Section 7.3, as applicable, may be made under the subsection that the
claiming party may elect in its sole discretion, notwithstanding that such claim
may be made under more than one subsection.

      7.5 Procedure for Indemnification -- Direct Indemnification Claims. A
claim for indemnification for any matter not relating to a Third Party Claim may
be asserted by notice directly by the Indemnitee to the Indemnitor.

                                  ARTICLE VIII

                                  MISCELLANEOUS

      8.1 Expenses. Except as otherwise expressly provided in this Agreement,
each party hereto shall pay its own costs and expenses incurred in connection
with or incidental to the preparation and negotiations of this Agreement, the
carrying out of the provisions of this Agreement and the consummation of the
transactions contemplated herein (including, without limitation, attorneys' fees
and expenses).

      8.2 Amendment. This Agreement may not be modified, amended, altered or
supplemented, except by a written agreement executed by each of the parties
hereto.

      8.3 Entire Agreement. This Agreement, including the Disclosure Schedule
schedules and exhibits hereto, and the instruments and other documents delivered
pursuant to this Agreement, contain the entire understanding and agreement of
the parties relating to the subject matter hereof and supersedes all prior
and/or contemporaneous understandings and agreements of any kind and nature
(whether written or oral) among the parties with respect to such subject matter,
all of which are merged herein.

      8.4 Waiver. Any waiver by Buyers, on the one hand, and the Sellers, on the
other hand, of any breach of or failure to comply with any provision or
condition of this Agreement by the other party shall not be construed as, or
constitute, a continuing waiver of such provision or condition, or a waiver of
any other breach of, or failure to comply with, any other provision or condition
of this Agreement, any such waiver to be limited to the specific matter and
instance for which it is given. No waiver of any such breach or failure or of
any provision or condition of this Agreement shall be effective unless in a
written instrument signed by the party granting the waiver and delivered to the
other party hereto in the manner provided for hereunder in Section 8.5. No
failure or delay by either party to enforce or exercise its rights hereunder
shall be deemed a waiver hereof, nor shall any single or partial exercise of any
such right or any abandonment or discontinuance of steps to enforce such rights,
preclude any other or further exercise thereof or the exercise of any other
right.

                                       16
<PAGE>

      8.5 Notices. All notices, demands, consents, requests, instructions and
other communications to be given or delivered or permitted under or by reason of
the provisions of this Agreement or in connection with the transactions
contemplated hereby shall be in writing and shall be deemed to be delivered and
received by the intended recipient as follows: (a) if personally delivered, on
the Business Day of such delivery (as evidenced by the receipt of the personal
delivery service), (b) if mailed certified or registered mail return receipt
requested, five (5) Business Days after being mailed, (c) if delivered by
overnight courier (with all charges having been prepaid), on the Business Day of
such delivery (as evidenced by the receipt of the overnight courier service of
recognized standing), or (d) if delivered by facsimile transmission, on the
Business Day of such delivery if sent by 6:00 p.m. in the time zone of the
recipient, or if sent after that time, on the next succeeding Business Day (as
evidenced by the printed confirmation of delivery generated by the sending
party's fax machine). All such notices, demands, consents, requests,
instructions and other communications will be sent to the following addresses or
facsimile numbers as applicable:

                  If to a Seller, to:

                  National Investment Managers Inc.
                  830 Third Avenue
                  New York, NY 10022
                  Fax No.: 212-581-7010
                  Attention:  Mr. Leonard A. Neuhaus

                  With a copy to:

                  Cohen Tauber Spievack & Wagner, LLP
                  420 Lexington Avenue, Suite 2400
                  New York, New York 10170
                  Fax No.: 212-586-5095
                  Attention: Adam Stein, Esq.

                  If to Buyer, to:

                  Mr. M. Lane Kerns
                  9097 Briar Forest
                  Houston, Texas 77024
                  Fax No. 713-993-0950

                  With a copy to:

                                       17
<PAGE>

                  Thompson & Knight LLP
                  333 Clay Street, Suite 3300
                  Houston, Texas 77002
                  Fax No.: 832-397-8071
                  Attention:  William T. Heller IV

or to such other address as any party may specify by notice given to the other
party in accordance with this Section.

      8.6 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO ANY OF ITS
PRINCIPLES OF CONFLICTS OF LAWS OR OTHER LAWS WHICH WOULD RESULT IN THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY
CAUSING THIS AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS
LOCATED IN THE HARRIS COUNTY, TEXAS AND THE FEDERAL DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF TEXAS LOCATED IN HARRIS COUNTY, TEXAS WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, AND EACH OF THE PARTIES HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN ANY SUCH COURT.

      8.7 Information and Confidentiality. Each party hereto agrees that such
party shall hold in strict confidence all information and documents received
from any other party hereto, and if the Closing does not occur, each such party
agrees to promptly return to the other parties hereto all such documents then in
such receiving party's possession without retaining copies; provided, however,
that each party's obligations under this Section shall not apply to (a) any
information or document in the public domain other than because of the wrongful
actions of the disclosing party; (b) information known by or documents in the
possession of the receiving party prior to the date of disclosure by the
disclosing party; (c) information independently developed by the receiving party
without the use or assistance of the disclosing party's information.

      8.8 Further Assurances. At all times after the Closing, each party hereto,
at the reasonable request of another party hereto, shall execute and deliver
such other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated in this Agreement.

      8.9 Severability. The parties agree that should any provision of this
Agreement be held to be invalid, illegal or unenforceable in any jurisdiction,
that holding shall be effective only to the extent of such invalidity, illegally
or unenforceability without invalidating or rendering illegal or unenforceable
the remaining provisions hereof, and any such invalidity, illegally or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. It is the intent of the
parties that this Agreement be fully enforced to the fullest extent permitted by
applicable law.

                                       18
<PAGE>

      8.10 Binding Effect; Assignment. This Agreement and the rights and
obligations hereunder may not be assigned by any party hereto without the prior
written consent of the other parties hereto. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

      8.11 Headings. The section headings contained in this Agreement
(including, without limitation, section headings and headings in the exhibits
and Disclosure Schedule schedules) are inserted for reference purposes only and
shall not affect in any way the meaning, construction or interpretation of this
Agreement. Any reference to the masculine, feminine, or neuter gender shall be a
reference to such other gender as is appropriate. References to the singular
shall include the plural and vice versa.

      8.12 Third Parties. Except as expressly permitted by Section 8.9 hereof,
nothing herein is intended or shall be construed to confer upon or give to any
Person, other than the parties hereto and the Indemnified Persons, any rights,
privileges or remedies under or by reason of this Agreement.

      8.13 Counterparts. This Agreement may be executed in counterparts, each of
which when executed shall be deemed to be an original, and all of which, when
taken together, shall constitute one and the same document.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       19
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.

                                            SELLERS:

                                            NATIONAL INVESTMENT MANAGERS
                                            INC.

                                            By: /s/Leonard Neuhaus
                                                ------------------
                                            Name: Leonard Neuhaus
                                            Title: CFO

                                            ABR ADVISORS, INC.

                                            By: /s/Leonard Neuhaus
                                                ------------------
                                            Name: Leonard Neuhaus
                                            Title: CFO

                                            BENEFIT MANAGEMENT, INC.

                                            By: /s/Leonard Neuhaus
                                                ------------------
                                            Name: Leonard Neuhaus
                                            Title: CFO

                                            BUYERS:

                                            KERNS ASSET MANAGEMENT, LLC

                                            By: /s/ M. Lane Kerns
                                                ------------------
                                                    M. Lane Kerns, President

                                            M. LANE KERNS and BILLIE KERNS,
                                            tenants in common

                                            /s/M. Lane Kerns
                                            ----------------
                                            M. Lane Kerns

                                            /s/Billie Kerns
                                            ---------------
                                            Billie Kerns

                   [SIGNATURE PAGE - ASSET PURCHASE AGREEMENT]

                                       20

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