Document:

Form 64, Agreement for Sale and Purchase of Business Assets

AGREEMENT FOR SALE AND PURCHASE OF BUSINESS ASSETS

OF SOLAR MASTERS, LLC.

This AGREEMENT FOR SALE AND PURCHASE OF BUSINESS ASSETS (this Agreement), dated as of August 13, 2008, is between Solar Masters, LLC (the “Seller”), a California Limited Liability Company, William P. Kaufman, (a Selling Member), Chris Fischer, (a Selling Member), and Solar Masters Inc.(the “Buyer”), a Nevada corporation wholly owned by Probe Manufacturing, Inc.

RECITALS

A.

The Seller operates a distributor of solar powered products throughout North America.    The Seller’s principal place of business is 10935 Hillside Road, Alta Loma, CA  91737. The Seller owns the solar-masters.com website, contract rights and miscellaneous assets used in connection with the operation of its business.

B.

The Buyer desires to acquire substantially all the assets used or useful, or intended to be used, in the operation of the Seller’s business, and the Seller desires to sell such assets to the Buyer.

C.

The Selling Members are the sole Members of the Seller.

AGREEMENT

The parties agree as follows:

SECTION 1.

ASSETS PURCHASED; LIABILITIES ASSUMED

1.1

Assets Purchased. The Seller agrees to sell to the Buyer and the Buyer agrees to purchase from the Seller, on the terms and conditions set forth in this Agreement, the following assets (the Assets):

 (a)

All the products and Seller’s rights under Contracts listed on Schedule 1;

 (b)

The Seller’s name and goodwill; and

 (c)

All inventory.

1.2

Liabilities Assumed. 

 None

SECTION 2.

EXCLUDED ASSETS

2.1

Excluded Assets.  There are no excluded assets from this sale and purchase.

SECTION 3.

ALLOCATION OF PURCHASE PRICE 

The Purchase Price will be allocated among the Assets as follows:  

		
	Consideration Given

	 

	Probe to issue 250,000 shares of its stock valued at .40

	         $100,000.00 

	Probe to assume $80,000 Liability for contents of container Payable To Solarmaster Malaysia

	           $77,280.35 

	Probe to pay to Solarmaster USA

	            $2,719.65 

	 
	 

	Total Consideration

	         $180,000.00 

	 
	 

	 
	 

	Asset Purchase Allocation

	 

	Inventory in Container

	           $90,637.50 

	Inventory at Solar Master

	             $8,000.00 

	Total Tangible Assets

	           $98,637.50 

	 
	 

	Allocated to Goodwill

	           $81,362.50 

*For all tangible and goodwill property pursuant to this Agreement, and the Buyer and the Seller will be bound by that allocation in reporting the transactions contemplated by this Agreement to any governmental authority (including without limitation the Internal Revenue Service).

SECTION 4. 

PURCHASE PRICE

4.1

Purchase Price. The purchase price for the Assets (the Purchase Price) will be:

(a)

$2,719.65 for all Assets, including, but not limited to:  customer list; in-house inventory; company name and website, including domain name; exclusivity rights for North America

(b)

$77,280.35 for inventory currently in a container located in Lake Forest, CA  payable directly to Solar Masters SDN.BHD, the manufacturer/supplier; and

(c)

As further consideration, Buyer agrees to compensate Seller royalty payments as follows:

1.

250,000 shares of Probe common stock valued at $.40 each, and a royalty on gross revenue of 5% for the balance of 2008.

2.

Additional royalty payments of 7% for 2009, 6% for 2010 and 5% for 2011, provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 USD or less for the “barricade light”.  If these conditions are not met, the royalty shall decrease to 5%.

3.

Additional shares of Probe common stock of 100,000 in 2009; 100,000 in 2010; and 50,000 in 2011 provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 USD or less for the “barricade light”.  If the gross revenue number is not met, then the stock that was to be issued will become an option to purchase the shares that would have been issuable if the gross revenue target had been met.  The exercise price of the options will be $0.40.

4.

Additional royalty payment of 5% for 2012, provided that Probe has gross revenue of a minimum of $1 million, and product cost of $10 USD or less for the “barricade light”.  If these conditions are not met, the royalty shall decrease to 1%.

5.

The “barricade light” pricing is to be $10.00 USD and may adjust periodically based on standard industry pricing variations.  This will apply in all sections of this Agreement that refer to the $10.00 USD cost for the barricade light.

6.

Gross Revenue for purposes of calculating all royalty payments is based upon Revenue specifically generated from products acquired pursuant to this Agreement.

SECTION 5.

PAYMENT OF PURCHASE PRICE

The price for the Assets will be paid at the Closing.  The Buyer will pay, by cashier’s check, certified check, or wire transfer to the account specified by the Seller, the sum of $2,719.65.

SECTION 6.

ADJUSTMENTS

The operation of the Seller’s business and related income and expenses up to the close of business on the day before the Closing will be for the account of the Seller and thereafter for the account of the Buyer. Expenses will be prorated between the Seller and the Buyer as of the close of business on the Closing.

SECTION 7.

OTHER AGREEMENTS

At the Closing, the parties will execute the following additional agreement (the Related Agreement):

(a)

Noncompetition Agreement between the Buyer, the Seller, and the Selling Member, substantially in the form attached as Exhibit A..  

SECTION 8.

SELLER’S AND SELLING MEMBER’S REPRESENTATIONS AND WARRANTIES

8.1

Corporate Existence. The Seller is a limited liability company duly organized and legally existing under the laws of the state of California. The Seller has all requisite corporate power and authority and all material licenses, permits, and authorizations necessary to own and operate the Assets and to carry on its business as now conducted. 

8.2

Authorization. The execution, delivery, and performance of this Agreement and all other agreements contemplated by this Agreement to which the Seller or the Selling Member are a party have been duly authorized by the Seller or the Selling Member, as the case may be. This Agreement and the Related Agreements, when executed and delivered by the parties thereto, will constitute the legal, valid, and binding obligation of the Seller or the Selling Member, as the case may be, enforceable against the Seller or the Selling Member,  in accordance with their respective terms except as the enforceability thereof may be limited by the application of bankruptcy, insolvency, moratorium, or similar laws affecting the rights of creditors generally or judicial limits on the right of specific performance. The execution and delivery by the Seller and the Selling Member of this Agreement and the Related Agreements to which the Seller or the Selling Member is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by the Seller or the Selling Member, do not and will not (a) conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any Contract, (b) result in the creation of any lien, security interest, charge, or encumbrance on the Assets, (c) result in a violation of the charter or bylaws of the Seller or any law, statute, rule, or regulation to which the Seller is subject, or any order, judgment, or decree to which the Seller is subject, or (d) require any authorization, consent, approval, exemption, or other action by or notice to any court or administrative or governmental body.

8.3

Brokers and Finders. Neither the Seller nor the Selling Member have employed any broker or finder in connection with the transactions contemplated by this Agreement, or taken action that would give rise to a valid claim against any party for a brokerage commission, finder’s fee, or other like payment.

8.4

Transfer Not Subject to Encumbrances or Third-Party Approval. The execution and delivery of this Agreement and the Related Agreements by the Seller and the Selling Member, and the consummation of the contemplated transactions, will not result in the creation or imposition of any valid lien, charge, or encumbrance on any of the Assets, and will not require the authorization, consent, or approval of any third party, including any governmental subdivision or regulatory agency.

8.5

Contracts. Schedule 1 contains a complete and accurate list of each contract, agreement, instrument, lease, and commitment (including license agreements) to which the Seller is a party. The Seller has delivered a copy of each Contract to the Buyer.

(a)

The Seller is not in default under any Contract, nor, to the Seller’s and the Selling Member’s best knowledge, does there exist any event that, with notice or the passage of time or both, would constitute a default or event of default by the Seller under any Contract.

(b)

No power of attorney or similar authorization given by the Seller is presently in effect or outstanding. No Contract limits the freedom of the Seller to compete in any line of business or with any person. 

(c)

Each of the Contracts is valid, binding, and enforceable by the Seller in accordance with its terms and is in full force and effect.  All other parties to the Contracts have consented or, before the Closing, will have consented (when such consent is necessary) to the consummation of the transaction contemplated by this Agreement without requiring modification of the Seller’s rights or obligations under any Contract. 

(d)

The Seller is not aware of any default by any other party to any Contract or of any event that (whether with or without notice, lapse of time, or both) would constitute a default by any other party with respect to obligations of that party under any Contract, and, to the knowledge of the Seller and the Selling Member’s, there are no facts that exist indicating that any of the Contracts may be totally or partially terminated or suspended by the other parties. 

(e)

To the Seller’s knowledge, no Contract will result in any loss to the Seller on the performance thereof (including any liability for penalties or damages, whether liquidated, direct, indirect, incidental, or consequential). 

8.6

Litigation. There are no actions, suits, proceedings, orders, investigations, or claims pending or, to the best of the Seller’s and the Selling Member’s knowledge, threatened against the Seller or its property, at law or in equity, or before or by any governmental department, commission, board, bureau, agency, or instrumentality; the Seller is not subject to any arbitration proceedings under collective bargaining agreements or otherwise or, to the best of the Seller’s and the Selling Member’s knowledge, any governmental investigations or inquiries; and, to the best knowledge of the Seller and the Selling Member’s, there is no basis for any of the foregoing.

8.7

Compliance with Laws. To the best of the Seller’s and the Selling Member’s knowledge, (a) the Seller has at all relevant times conducted its business in compliance with its articles of incorporation and bylaws, and is in compliance with all applicable laws and regulations, and (b) the Seller is not in violation of any applicable laws or regulations, other than violations that singly or in the aggregate do not and, with the passage of time, will not have a Material Adverse Effect. The Seller is not subject to any outstanding order, writ, injunction, or decree, and the Seller has not been charged with, or threatened with a charge of, a violation of any provision of federal, state, or local law or regulation.

8.8

Tangible Assets.  All inventory, all inventory in the container located in Lake Forest, CA and any and all other assets.

8.8.1

Personal Property. Schedule 1 contains a complete and accurate list of all the tangible personal property owned by the Seller (the Tangible Personal Property). The Assets include all the assets, properties, and rights owned or used by the Seller in its business.

8.8.2

Intellectual Property. Schedule 1 contains a complete and accurate list of the Seller’s trademarks, trade names, copyrights, technology and domain names used in the Business (the Intellectual Property). The Seller owns all its Intellectual Property free and clear of all liens, claims, and encumbrances. To the Seller’s knowledge, the Seller’s use of its Intellectual Property does not create any conflict with or infringe on any rights of any other person and no claims of conflict or infringement have been asserted against the Seller. Schedule 1 also describes all agreements, licenses, permits, and other instruments under which the Seller has acquired or been granted or sold or granted a right to use any Intellectual Property, together with a brief description of such Intellectual Property. 

8.9

Title to and Condition of Assets. 

8.9.1

The Seller owns (and at Closing the Buyer will acquire) all the Assets free and clear of all mortgages, pledges, security interests, options, claims, charges, or other encumbrances or restrictions of any kind.

8.9.2

The Seller has (and at Closing the Buyer will acquire) good and marketable title to the Assets.

8.9.3

There are no defects or liabilities affecting any of the Tangible Personal Property that might detract from the value of the property or assets, interfere with any present or intended use of any of the property or assets, or affect the marketability of the property or assets, in each case, other than those that will not have a Material Adverse Effect. 

8.10

Undisclosed Liabilities. The Seller does not have any liability or obligation (whether absolute, accrued, contingent, or other, and whether due or to become due) that is not accrued, reserved against, or disclosed. 

8.11

Accuracy of Representations and Warranties. None of the representations or warranties of the Seller or the Selling Member’s contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make statements in this Agreement not misleading.

SECTION 9.

REPRESENTATIONS OF BUYER

The Buyer represents and warrants to the Seller and the Selling Member’s as follows:

9.1

Corporate Existence. The Buyer is a company duly organized and legally existing under the laws of the state of Nevada. The Buyer has all requisite power and authority to enter into this Agreement and the Related Agreements and to perform its obligations under them.

9.2

Authorization. The execution, delivery, and performance of this Agreement and the related agreements have been duly authorized and approved by the board of directors of the Buyer. This Agreement and the Related Agreements constitute valid and binding agreements of the Buyer, enforceable in accordance with their terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency, or similar laws affecting the enforcement of creditors’ rights or by the application of general principles of equity.

9.3

Brokers and Finders. The Buyer has not employed any broker or finder in connection with the transactions contemplated by this Agreement and has taken no action that would give rise to a valid claim against any party for a brokerage commission, finder’s fee, or other like payment. 

9.4

No Conflict with Other Instruments or Agreements. The execution, delivery, and performance by the Buyer of this Agreement and the Related Agreements will not result in a breach or violation of, or constitute a default under, the Buyer’s Articles of Incorporation or Bylaws or any material agreement to which the Buyer is a party or by which the Buyer is bound.

9.5

Governmental Authorities. The Buyer is not required to submit any notice, report, or other filing with any governmental or regulatory authority in connection with the execution and delivery by the Buyer of this Agreement and the Related Agreements and the consummation of the purchase and (b) no consent, approval, or authorization of any governmental or regulatory authority is required to be obtained by the Buyer in connection with the Buyer’s execution, delivery, and performance of this Agreement and the Related Agreements and the consummation of the purchase of the Assets.

9.6

Accuracy of Representations and Warranties. None of the representations or warranties of the Buyer contain or will contain any untrue statement of a material fact or omit or will omit or misstate a material fact necessary in order to make the statements contained herein not misleading.

SECTION 10.

COVENANTS OF SELLER AND SELLING MEMBER

10.1

Seller’s Operation of Business Before Closing. The Seller and the Selling Member agree that between the date of this Agreement and the Closing, the Seller will:

(a)

Continue to operate the business that is the subject of this Agreement in the usual and ordinary course and in substantial conformity with all applicable laws, ordinances, regulations, rules, or orders, and will use its best efforts to preserve its business organization and to preserve the continued operation of its business with its customers, suppliers, and others having business relations with the Seller;

(b)

Not assign, sell, lease, or otherwise transfer or dispose of any of the Assets used in the performance of its business, whether now owned or hereafter acquired, except in the normal and ordinary course of business and in connection with its normal operation;

(c)

Maintain all the Assets in their present condition, reasonable wear and tear and ordinary usage excepted, and maintain the inventory at levels normally maintained; and

(d)

Notify the Buyer promptly in the event of any material change in the Assets or the Seller’s business before Closing.

10.2

Change of Name. At the Closing, the Seller will take all action necessary or appropriate to permit the Buyer to legally commence using the Seller’s name as of the day after Closing.

10.3 

Change of Domain ownership.  At the closing upon the disbursal of the payment set forth in Section 5, seller shall execute all documents required for the change in ownership of the domain name solar-master.com. 

10.4

Conditions and Best Efforts. The Seller and the Selling Member’s will use their best efforts to effectuate the transactions contemplated by this Agreement and the Related Agreements and to fulfill all the conditions of their obligations under this Agreement and the Related Agreements, and will do all acts and things as may be required to carry out their respective obligations under this Agreement and the Related Agreements.

10.5

No Negotiations with Others. Except as otherwise permitted by this Agreement, or with the Buyer’s prior written consent, the Seller and the Selling Member’s will refrain, and will cause the Seller’s officers, directors, and employees and any investment banker, lawyer, accountant, or other agent retained by the Seller or the Selling Member’s to refrain, from initiating or soliciting any inquiries or making any proposals with respect to, or engaging in negotiations concerning, or providing any confidential information or data to, or having any discussions with any person relating to, any acquisition, business combination or purchase of all or any significant portion of the assets of, or any equity interest in, the Seller. The Seller and the Selling Member’s will immediately cease and cause to be terminated any existing activities, discussions, or negotiations with any parties conducted heretofore with respect to any of the foregoing.

10.6

Press Releases. No press releases, other public announcements, or notices to customers concerning the transactions contemplated by this Agreement will be made by the Seller or the Selling Member’s without the Buyer’s prior written consent, which consent will not be unreasonably withheld; however, nothing in this section will prevent a party from supplying such information or making statements as required by governmental authority or in order for a party to satisfy its legal obligations (prompt notice of which must in any such case be given to the other party or parties).

SECTION 11.

COVENANTS OF BUYER

11.1

Conditions and Best Efforts. The Buyer will use its best efforts to effectuate the transactions contemplated by this Agreement and the Related Agreements and to fulfill all the conditions of the Buyer’s obligations under this Agreement and the Related Agreements, and will do all acts and things as may be required to carry out the Buyer’s obligations and to consummate this Agreement and the Related Agreements.

11.2

Confidential Information. If for any reason the sale of Assets contemplated by this Agreement is not consummated, the Buyer will promptly return to the Seller and will not disclose to third parties any confidential information received from the Seller in the course of investigating, negotiating, and performing the transactions contemplated by this Agreement.

11.3

Press Releases. Buyer plans to release a press releases, other public announcements, or notices to customers concerning the transactions contemplated by this Agreement.  Buyer will provide a copy of such releases to Seller.  Nothing in this section will prevent a party from supplying such information or making statements as required by governmental authority or in order for a party to satisfy its legal obligations (prompt notice of which must in any such case be given to the other party or parties).

SECTION 12.

CONDITIONS PRECEDENT TO BUYER’S OBLIGATIONS

The obligation of the Buyer to purchase the Assets is subject to the fulfillment, before or at the Closing, of each of the following conditions, any one or portion of which may be waived in writing by the Buyer:

12.1

Representations, Warranties, and Covenants of Seller and Selling Member. All representations and warranties made in this Agreement by the Seller and the Selling Member’s will be true in all material respects as of the Closing and neither the Seller nor the Selling Member’s will have violated or will have failed to perform in accordance with any covenant contained in this Agreement or the Related Agreements.

12.2

Licenses and Permits. The Buyer will have obtained all licenses and permits from public authorities necessary to authorize the ownership and operation of a business using the Assets.

12.3

Consents. The Seller will have obtained the third-party consents required under the terms of the Contracts to be assigned by it under this Agreement, and such consents will not have required any change to the terms and conditions of the Contracts other than changes consented to in writing by the Buyer.

12.4

No Suits or Actions. No action, suit, or proceeding before any court or any governmental or regulatory authority will have been commenced and be continuing, and no investigation by any governmental or regulatory authority will have been commenced and be continuing, and no action, investigation, suit, or proceeding will be threatened at the time of the Closing, against the Seller or the Buyer or any of their affiliates, associates, officers, or directors, seeking to restrain or prevent or questioning the validity of the transactions contemplated by this Agreement or the Related Agreements.

12.5

Material Adverse Change. From the date of this Agreement to the Closing, the Seller will not have suffered any Material Adverse Change (whether or not such change is referred to or described in any supplement to any Schedule to this Agreement) in its business prospects, financial condition, working capital, assets, liabilities (absolute, accrued, contingent, or otherwise), or operations.

SECTION 13.

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND SELLING MEMBER’S

The obligations of the Seller and the Selling Member’s to consummate the transactions contemplated by this Agreement and the Related Agreements are subject to the fulfillment, before or at the Closing, of each of the following conditions, any one or a portion of which may be waived in writing by the Seller:

13.1

Representation, Warranties, and Covenants of Buyer. All representations and warranties made in this Agreement by the Buyer will be true in all material respects as of the Closing, and the Buyer will have neither violated nor failed to perform in accordance with any covenant contained in this Agreement or the Related Agreements.

13.2

No Proceeding or Litigation. No action, suit, or proceeding before any court or any governmental or regulatory authority will have been commenced and be continuing, and no investigation by any governmental or regulatory authority will have been commenced and be continuing, and no action, investigation, suit, or proceeding will be threatened at the time of the Closing, against the Seller or the Buyer or any of their affiliates, associates, officers, or directors, seeking to restrain or prevent questioning the validity of the transactions contemplated by this Agreement or the Related Agreements.

SECTION 14.

RISK OF LOSS

The risk of loss, damage, or destruction to any of the Assets will be the Seller’s responsibility before the Closing. In the event of such loss, damage, or destruction, the Seller, to the extent reasonable, will replace the lost property or will repair or cause to repair the damaged property to its condition before the damage. If replacement, repairs, or restorations are not completed before the Closing, then the purchase price will be adjusted by an amount agreed on by the Buyer and the Seller that will be required to complete the replacement, repair, or restoration after the Closing. If the Buyer and the Seller are unable to agree, then the Buyer, at its sole option and notwithstanding any other provision of this Agreement, and on notice to the Seller, may rescind this Agreement and declare it to be of no further force and effect, in which event there will be no closing of this Agreement and all the terms and provisions of this Agreement will be deemed null and void.

SECTION 15.

INDEMNIFICATION AND SURVIVAL

15.1

Survival of Representations and Warranties. All representations and warranties made in this Agreement will survive the Closing of this Agreement, except that any party to whom a representation or warranty has been made in this Agreement will be deemed to have waived any misrepresentation or breach of the representation or warranty if the party had knowledge of such breach before the Closing. The representations and warranties in this Agreement will terminate one (1) year after the Closing Date, and such representations or warranties will thereafter be without force or effect, except for any claim with respect to which notice has been given to the potentially indemnifying party before such expiration date. 

15.2

Seller’s and Selling Member’s Indemnification. 

15.2.1

The Seller and the Selling Member’s hereby agrees to indemnify, defend, and hold the Buyer, its successors, and assigns harmless from and against any and all claims, liabilities, obligations, costs, and expenses, including reasonable attorney fees, (collectively, Damages) arising out of or related to:

(a)

Any breach or inaccuracy of any representation or warranty of the Seller or the Selling Member’s made in this Agreement or any Related Agreement;

(b)

Any failure by the Seller or the Selling Member’s to perform any covenant required to be performed by it pursuant to this Agreement or any Related Agreement; and

(c)

Any liability or obligation of the Seller or arising out of or in connection with the ownership, use, condition, maintenance, or operation of the Seller’s business or the Assets by the Seller or its shareholders on or before the Closing, in either case not expressly assumed by the Buyer in accordance with the terms of this Agreement. 

15.2.2

If any claim is asserted against the Buyer that would give rise to a claim by the Buyer against the Seller or the Selling Member’s for indemnification under Section 15.2, then the Buyer will promptly give written notice to the Seller concerning such claim and the Seller and the Selling Member’s will, at no expense to the Buyer, defend the claim.

15.3

Buyer’s Indemnification. The Buyer agrees to defend, indemnify, and hold harmless the Seller and the Selling Member’s from and against all Damages arising out of or related to: 

(a)

Any breach or inaccuracy of any representation or warranty of the Buyer made in this Agreement or any Related Document; 

(b)

Any failure by the Buyer to perform any covenant required to be performed by it pursuant to this Agreement or any Related Document; and

(c)

Any liability or obligation of the Seller to any third party expressly assumed by the Buyer in accordance with the terms of this Agreement.

15.4

Rights Not Exclusive. An indemnified party’s rights to indemnification under Section 15 are in addition to, and not in lieu of, any other rights to which the indemnified party may be entitled at law or in equity.

SECTION 16.

INTENTIONALLY LEFT BLANK.

SECTION 17.

CLOSING

17.1

Time and Place. This Agreement will be closed at the offices of Probe Manufacturing, Inc., on August 13, 2008, or at such other time as the parties may agree in writing (the Closing). 

17.2

Obligations of Seller and Selling Member’s at Closing. At the Closing, the Seller and the Selling Member’s will deliver to Buyer the following:

(a)

Assignments and other instruments of transfer, in form and substance reasonably satisfactory to counsel for the Buyer, necessary to transfer and convey all of the Assets to the Buyer; and

(b)

The Noncompetition Agreement attached as Exhibit A.

17.3 

Buyer’s Obligations at Closing. At the Closing, the Buyer will deliver to seller the following:

(a)

A cashier’s check, certified check, or wire transfer in the amount of $2,719.65; and

(b)

stock issuance of 250,000 shares of Probe stock.

SECTION 18.

DEFAULT 

18.1

Remedies. If the Buyer fails to perform any of the terms, covenants, conditions, or obligations of this Agreement, time of payment and performance being of the essence, then the Seller, subject to the requirements of the notice provided in Section 17.2, may have any or all of the following remedies:

(a)

The right to exercise each and all of the remedies granted to the Seller by the California Uniform Commercial Code; and

(b)

The right to exercise any other remedy available to the Seller.

18.2

Notice of Default. The Buyer will not be deemed in default for failure to perform the terms, covenants, and conditions of this Agreement, other than failure to make payments on the Note, until notice of the default has been given to the Buyer and the Buyer has failed to remedy the default within 20 business days after the notice.

18.3

Cross-Default Provision. A default in this Agreement will constitute a default in the Related Agreements described in Section 7 and a default in any one or more of the Related Agreements described in Section 7 will constitute a default in this Agreement.

SECTION 19.

TERMINATION OF AGREEMENT

19.1

Right of Parties to Terminate. 

19.1.1

This Agreement may be terminated by the Buyer if:

(a)

Any of the licenses, permits, or consents have been denied, not permitted to go into effect, or obtained on terms not reasonably satisfactory to the Buyer and all reasonable final appeals have been exhausted; or

(b)

The Seller breaches any of its obligations under this Agreement in any material respect.

19.1.2

This Agreement may be terminated by the Seller if:

(a)

Any of the consents required have not been obtained on terms satisfactory to the Seller; or

(b)

The Buyer breaches any of its obligations under this Agreement in any material respect.

19.1.3

This Agreement may be terminated by either the Seller or the Buyer, by written notice to the other party, if the Closing fails to occur on or before August 15, 2008; however, the right to terminate this Agreement under this Section 19.1.3 will not be available to any party whose failure to fulfill or perform any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date.

19.2

Effect of Termination. If the Buyer decides to terminate this Agreement pursuant to Section 19.1, such party will promptly give written notice to the other party to this Agreement of such decision. In the event of a termination of this Agreement, the parties to this Agreement will be released from all liabilities and obligations arising under this Agreement with respect to the matters contemplated by this Agreement, other than for damages arising from a breach of this Agreement.

SECTION 20.

MISCELLANEOUS PROVISIONS

20.1  

Binding Arbitration.  Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in the County of Orange in the State of California, before an arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. 

20.2 

Allocation of Fees and Costs. The arbitrator may, in the Award, allocate all or part of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party. 

SOLAR MASTERS, LLC, a California Limited Liability Company

By:

/s/ William P. Kaufman

William P. Kaufman, its Selling Member

/s/ Chris Fischer

____________________________________

Chris Fischer, its Selling Member

SOLAR MASTERS Inc.,

 a Nevada Corporation

By:

/s/ Reza Zarif

Reza Zarif, CEO Probe Manufacturing, Inc. 

CEO Solar Masters, Inc.

Attached documents:

Schedule 1 listing of contracts

Exhibit A Non-competition agreement

Page 

SOLAR MASTERS, LLC

Agreement for Sale and Purchase of Business Assetsex10-1.htm

     

    
EXHIBIT 10.1

     

    AMENDED AND
RESTATED

    EMPLOYMENT
AGREEMENT

    This
Amended and Restated Employment Agreement (“Agreement”) is made by and between
Analysts International Corporation (the “Company”) with headquarters at 3601 W.
76th Street, Minneapolis, MN 55435 and Elmer Baldwin
(“Executive”).

     

    RECITALS

    WHEREAS,
the Company desires to retain Executive as an Employee of the Company, and
Executive desires to be so employed; and

     

    WHEREAS,
the Company and Executive previously executed an Employment Agreement on
November 1, 2007, which the parties wish to restate and amend as set forth
herein;

     

    NOW,
THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:

     

    AGREEMENT

    
      	
              1.  

            	
              Terms
      of Employment.

            

    

     

    
      	
              1.1  

            	
              Relation to Prior
      Agreement.  As this is an Amended and Restated Agreement,
      it replaces the prior Employment Agreement between the parities (dated
      November 1, 2007) (the “Prior Agreement”) in its entirety.  For
      the avoidance of doubt, the parties expressly acknowledge that any and all
      stock options granted to Executive in connection with the Prior Agreement,
      together with the agreements granting such options, shall remain in full
      force and effect notwithstanding execution of this Amended and Restated
      Employment Agreement.  As provided in Section 3.4 below,
      however, the applicable agreement granting such options to Executive shall
      be amended as soon as reasonably practicable after the execution of
      this Agreement to reflect the changes reflected in said Section
      3.4.

            

    

     

    
      	
              1.2  

            	
              Commencement
      Date.  This Agreement is effective as of November 1, 2007
      (the “Commencement Date”).

            

    

     

    
      	
              1.3  

            	
              Position.  The Company will
      employ Executive in the capacity of President and Chief Executive Officer.  The
      Company’s Board of
      Directors (“Board”) will also appoint or cause Executive to be appointed
      as a member of the Board upon his commencement of
      employment.  Executive will continue to be a member of the Board
      until the earlier of: (A) termination of Executive’s employment by the
      Company; (B) Executive’s resignation from employment with the Company; (C)
      Executive’s resignation as a member of the Board; (D) the Board’s failure
      to nominate Executive for re-election and the subsequent completion of
      Executive’s term; (E) Executive’s removal as a member of the Board
      pursuant to Minnesota Statute § 302A.223; or (F) failure of the Company’s
      shareholders to re-elect Executive to the
Board.

            

    

     

    
      	
              1.4  

            	
              Effective as of the date on which
      Executive is no longer a member of the Board, Executive will be deemed to
      have resigned from any of its committees and from all boards or other
      governing bodies (and committees) of each Company subsidiary, if and as
      applicable, without need of any further action by Executive, the Company,
      or any Company subsidiary.  Notwithstanding the foregoing,
      Executive agrees to take any action deemed necessary or desirable by the
      Company or any Company subsidiary to evidence his departure from the Board
      and such governing bodies and
committees.

            

    

     

    
      	
              1.5  

            	
              Best
      Efforts.  During Executive’s employment by the Company,
      Executive agrees to devote his full time and best efforts to the interests
      of the Company and to refrain from engaging in other employment or in any
      activities that may be in conflict with the best interests of the
      Company.  Executive agrees to perform his duties to a level
      consistent with the highest standards of one holding such position in
      similar businesses or enterprises.  Executive agrees not to
      render services to anyone other than the Company (or its parent or
      subsidiaries) for compensation as an employee, consultant, or otherwise during the
      term of this Agreement.

            

    

     

    
      	
              1.6  

            	
              Personal
      Activities;
      Boards of Directors.  The provisions of Sections 1.2 and
      1.3 of this Agreement will not be deemed to prohibit Executive from
      devoting reasonable time to personal matters, or from serving on the boards
      of directors of other companies, with or without compensation, including
      but not limited to Benilde St. Margaret’s School, Video Guidance, and
      Transport Security Boards of Directors, provided that such personal
      activities do not interfere with Executive’s primary duties to the
      Company, present a conflict with or divergence from the interests of the
      Company or violate the Board’s policies relating to service as a board
      member to publicly-held companies or codes of conduct for its employees.
      After the date of this agreement, Executive will accept an appointment or
      election to the board of another company only with the prior consent of
      the Company’s Board of
Directors.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              2.  

            	
              Term of
      Employment.

            

    

     

    
      	
              2.1  

            	
              Duration.  Subject
      to the provisions for termination set forth in Sections 6, 7 and 8 below,
      the Original Term of this Agreement (“Original Term”) will commence upon
      the 1st day of November, 2007 and will
      continue to and include the 31st day of October,
    2010.

            

    

     

    
      	
              2.2  

            	
              Extension of
      Provisions.  At the end of the Original Term, the
      provisions of the Agreement will automatically renew for an additional one
      (1) year term (“Additional Term”) commencing November 1, 2010, unless either party
      gives notice of non-­renewal at least
      ninety (90) days before the scheduled expiration of the
      term.  At the end of any Additional Term, the provisions of the
      Agreement will automatically renew for an Additional Term, unless either
      party gives notice of non-renewal at least ninety
      (90) days before the scheduled expiration of the
  term.

            

    

     

    
      	
              3.  

            	
              Compensation and
      Benefits.

            

    

     

    
      	
              3.1  

            	
              Salary.  For
      all services rendered by Executive pursuant to this Agreement, the Company
      will pay Executive an annual base salary (“Base Compensation”) equal to
      $450,000.  Payment
      will occur at regular payroll intervals in accordance with the Company’s
      standard payroll practices.  The compensation committee of the
      Board or the Board itself will review the Executive’s compensation
      annually and, in its sole discretion, may determine to increase such base
      salary for the following year but cannot decrease the annual salary below
      $450,000.

            

    

     

    
      	
              3.2  

            	
              Incentive
      Compensation.  In addition to Executive’s Base
      Compensation, Executive will be eligible to earn additional cash incentive
      compensation of between 30% and 70% of Base
      Compensation in each year of employment during the Original Term or any
      Additional Term (“Incentive Compensation”).  The potential Incentive
      Compensation will be determined annually by the compensation committee of
      the Board and shall be
      contingent upon the Company and Executive meeting company and individual performance objectives
      (“Performance Objectives”) determined by the compensation
      committee.  The compensation committee will consider Executive’s input in
      setting the annual Performance
  Objectives.

            

    

     

    
      	
              3.3  

            	
              Long-term Incentive
      Compensation.  In addition, Executive shall be eligible
      to be awarded stock options or restricted shares from the Company’s stock
      option and equity incentive plans at the sole discretion of the
      compensation committee.

            

    

     

    
      	
              3.4  

            	
              Stock
      Options.  In connection with the Prior Agreement and on
      or about November 1,
      2007, Executive was granted options to purchase 500,000 shares of the
      Company’s common stock with one-quarter being vested immediately and the
      remainder vesting in even increments over three years from the date of the
      grant.

            

    

     

     

    Such
options were incentive stock options to the extent that such options qualify as
incentive stock options as defined in Internal Revenue Code Section
422.  The Company may issue such options from the plans as it deems
appropriate but to the extent possible shall issue the options as incentive
stock options.

     

     

    The stock
option agreement between the parties shall be amended to provide that in the
event of a Change of Control (as
defined in Exhibit A hereto) occurring on or after the effective date of
this Agreement, any and all options remaining unvested at the time of the Change
of Control shall vest immediately.  Such amendment shall be prepared
and executed as soon as reasonably practicable after the execution of this
Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              3.5  

            	
              Deferred Compensation
      Plan.  Executive will be entitled to participate in the
      Company’s deferred compensation plan (known as the “Restated Special
      Executive Retirement Plan” or “Restated SERP”) at a participation rate of
      fifteen percent (15%) of Base
      Compensation.

            

    

     

    
      	
              3.6  

            	
              Fringe
      Benefits.  Executive will be entitled to participate in
      the Company’s standard benefit programs, on the same terms as other senior
      executives of the Company.  Notwithstanding the foregoing, the
      Company will also provide Executive the
  following:

            

    

     

    
      	
              3.6.1  

            	
              Medical
      Insurance
      Costs.  The Company will pay the full cost for family
      health insurance coverage, including co-pays and deductibles, if any, for
      Executive, Executive’s spouse, and Executive’s children (up to the maximum
      age allowed by the Company’s plan, provided they meet the terms of
      eligibility for participation in the plan).  In addition, the
      Company will reimburse Executive for the unreimbursed cost of bi-annual
      physicals for Executive and his spouse at the clinic of Executive’s
      choice.  If the payments contemplated by this Section 3.6.1
      create income tax liability for Executive, the Company shall withhold all
      required taxes from such payments.

            

    

     

    
      	
              3.6.2  

            	
              Paid Time
      Off.  Executive shall be entitled to paid time off at his
      discretion and as business conditions warrant.  If necessary due
      to business conditions of the Company, Executive agrees to obtain
      concurrence from the Chairman of the Board
      prior to taking the paid time off.

            

    

     

    
      	
              3.6.3  

            	
              Paid
      Parking.  The Company will provide Executive with a paid
      indoor, underground parking spot, if available, at the Company’s office
      building presently located at 3601 West 76th
      Street, Minneapolis, Minnesota
55435.

            

    

     

    
      	
              3.6.4  

            	
              Paid Legal
      Fees.  The Company will reimburse Executive (or pay
      directly if it prefers) Executive’s legal fees relating to services
      rendered in connection with the preparation, negotiation and final review
      of this Agreement.

            

    

     

    
      	
              3.6.5  

            	
              Business
      Expenses.  Executive will be entitled to reimbursement of
      all reasonable, business-related travel and other expenses (including spousal travel in
      promotion of the Company) incurred by Executive in the ordinary
      course of business on behalf of the Company, so long as such expenses are
      incurred, documented and authorized pursuant to the Company’s expense
      reimbursement policies.

            

    

     

    
      	
              4.  

            	
              Insurance
      Policies.

            

    

     

    The
Company will keep all Directors and Officers insurance policies current and will
identify Executive, if appropriate, on all such policies.

     

    
      	
              5.  

            	
              Location.

            

    

     

    Executive
will provide his services in the Minneapolis, Minnesota
area.  Notwithstanding the foregoing, the parties recognize and
acknowledge that Executive may be required to spend considerable business time
in locations other than the Minneapolis, Minnesota area.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              6.  

            	
              Termination of
      Employment by the Company.

            

    

     

    
      	
              6.1  

            	
              For
      Cause.  For purposes of this Agreement, the Company will
      have the right to terminate Executive’s employment for
      Cause.  For purposes of this Agreement, “Cause” shall
      mean:

            

    

     

    
      	
              6.1.1  

            	
              Executive’s
      substantial failure or neglect, or refusal to perform, the duties and
      responsibilities of Executive’s position and/or the reasonable direction
      of the Board of
      Directors;

            

    

     

    
      	
              6.1.2  

            	
              The
      commission by Executive of any willful, intentional or wrongful act that
      has the effect of materially injuring the reputation, business or
      performance of the Company;

            

    

     

    
      	
              6.1.3  

            	
              Executive’s
      conviction of, or Executive’s guilty or nolo contendere plea with respect
      to, any crime punishable as a
felony;

            

    

     

    
      	
              6.1.4  

            	
              Executive’s
      conviction of, or Executive’s guilty or nolo contendere plea with respect
      to, any crime involving moral turpitude;
or

            

    

     

    
      	
              6.1.5  

            	
              Any
      bar against Executive from serving as a director, officer or executive of
      any firm the securities of which are publicly
  traded.

            

    

     

    For
purposes of this Section 6.1, an act or failure to act by Executive shall not be
“willful” unless it is done, or omitted to be done, in bad faith and without any
reasonable belief that Executive’s action or omission was in the best interests
of the Company.

     

    
      	
              6.2  

            	
              Inability to
      Perform.  For purposes of this Agreement, the Company
      will have the right to terminate Executive’s employment upon the
      occurrence of any of the following events (“Inability to
      Perform”):

            

    

     

    
      	
              6.2.1  

            	
              Executive
      becomes disabled for
      a period of at least ninety (90) days to the extent that, in the
      determination of the Board
      of Directors, he is no longer able to report to work and to carry
      on his duties on behalf of the Company;
or

            

    

     

    
      	
              6.2.2  

            	
              Executive
      dies.

            

    

     

    
      	
              6.3  

            	
              Notice.  In
      the event that the Board determines that
      Cause for termination exists, the Board shall deliver to
      Executive written notice that an event of Cause has occurred after which
      Executive shall have fifteen (15) days to cure such event of Cause to the
      reasonable satisfaction of the Board.

            

    

     

    
      	
              6.4  

            	
              Termination for
      Cause/Inability to Perform.  The Company may terminate
      Executive’s employment at any time for Cause as defined within this
      Agreement after giving Executive the notice and Executive’s failure to
      cure pursuant to Section 6.3 above and in any such case will have no
      further obligation or liability to Executive.  Likewise, if the
      Company terminates Executive for Inability to Perform, the Company will
      have no further obligation or liability to Executive except for offering
      continuation of benefits as required by the Consolidated Omnibus Budget
      Reconciliation Act (“COBRA”) and the regulations promulgated
      thereunder.

            

    

     

    
      	
              6.5  

            	
              Termination Without
      Cause.  Executive’s employment during the Original Term
      or any Additional Term may be terminated by the Company without Cause upon
      thirty (30) days’ notice.  If the Company terminates Executive’s
      employment without Cause during the Original Term or during any Additional
      Term, Executive will continue to receive Base Compensation for a period of
      twelve (12) months, provided that Executive signs all appropriate
      paperwork, including providing a full release
      of all claims to the Company, in a form acceptable to the
      Company.  The Company will also reimburse Executive for medical
      insurance premium payments made under the Consolidated Omnibus
      Reconciliation Act (“COBRA”), for a period of up to
      six (6) months following the date of termination, provided that the
      Company receives sufficient evidence of proof of such payments during the
      COBRA period.  For purposes of this Section 6.5, termination of
      Executive’s employment due to nonrenewal of Executive’s employment
      agreement at the end of the Original Term or any Additional Term, shall be
      deemed a termination without Cause and entitle Executive to the payments
      and benefits set forth in this Section
6.5.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              7.  

            	
              Termination of
      Employment by Executive.

            

    

     

    
      	
              7.1  

            	
              Resignation for Good
      Reason.  If Executive believes Good Reason to resign
      exists, before resigning, he must first give the Company written notice of
      the alleged Good Reason and an opportunity to cure within fifteen (15)
      days of notice.  If Executive resigns from his employment for
      Good Reason, he will continue to receive Base Compensation for a period of
      twelve (12) months, provided that Executive signs all appropriate
      paperwork, including providing a full release
      of all claims to the Company, in a form reasonably acceptable to the
      Company.  The Company will also reimburse Executive for all
      medical insurance premium payments, made under COBRA, for a period of up
      to six (6) months following the date of resignation for Good Reason,
      provided that the Company receives sufficient evidence of proof of such
      payments during the COBRA period.

            

    

     

    For
purposes of this Section 7.1, “Good Reason” will mean a good faith determination
by Executive, communicated in writing to the Board of Directors, that any one
or more of the following events has occurred:

     

    
      	
              7.1.1  

            	
              a
      reduction in Executive’s Base Salary below $450,000;

            

    

     

    
      	
              7.1.2  

            	
              a
      requirement imposed on Executive that results in Executive being based at
      a location that is outside of a fifty (50) mile radius of Executive’s job
      location immediately prior to the change in
  location;

            

    

     

    
      	
              7.1.3  

            	
              any material breach or unilateral
      and material change in assignment or job title, but not including a change
      in Executive’s reporting structure in the event of a Change in
      Control; or

            

    

     

    
      	
              7.1.4  

            	
              Executive’s discontinuance as a
      member of the Board due to the events defined in Sections 1.2(D) and
      1.2(E) except if: (i) the Board’s failure to nominate Executive for
      re-election is due to the requirements of the rules or regulations of the
      Securities and Exchange Commission or The NASDAQ Stock Market; (ii)
      Executive’s removal under Minnesota Statute Section 302A.223 is pursuant
      to an act of the Company’s shareholders; or (iii) the parties to this
      Agreement mutually agree that Executive should no longer serve on the
      Board.

            

    

     

    
      	
              7.2  

            	
              Notice.  If
      Executive terminates his employment for Good Reason, he must provide
      thirty (30) days’ prior written notice to the
  Company.

            

    

     

    
      	
              7.3  

            	
              Resignation without
      Good Reason.  If Executive resigns from his employment
      [or elects not to
      renew the Agreement upon its expiration] without Good Reason, the
      Company will have no further obligation or liability to
      Executive.

            

    

     

    
      	
              8.  

            	
              Change of Control
      Obligations; Deferred Compensation
  Payments.

            

    

     

    
      	
              8.1  

            	
              Change of Control
      Obligations.  In the event of a change in control in the
      ownership of the Company, the Company’s and Executive’s obligations, and
      Executive’s benefits, shall be governed by the Change of Control Agreement
      attached hereto as Exhibit A.  Notwithstanding the foregoing, in
      the event of a change in control (as the term “Change of Control” is
      defined in Exhibit A), Executive shall have the additional right at the
      six (6) month anniversary date after the Change of Control to resign and
      receive the payments outlined in Section 7.1, provided that Executive
      signs all appropriate paperwork, including providing a full release of all
      claims to the Company in a form acceptable to the Company.  To
      exercise this right to resign and receive severance, Executive must give
      written notice of intent to resign no sooner than four (4) months after a
      Change of Control, and no later than five (5) months after a Change of
      Control.

            

    

     

    
      	
              8.2  

            	
              Deferred Compensation
      Payments.  Deferred compensation covered by the Company’s
      nonqualified deferred compensation plan (Restated SERP) will be treated
      and distributed in accordance with terms and conditions of the Restated
      SERP.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              9.  

            	
              Delay of
      Payment.

            

    

     

    Notwithstanding
anything to the contrary, to the extent that Executive is a “key employee”
pursuant to the provisions of Section 409A of the Internal Revenue Code as of
the date that any severance benefits or other deferred compensation becomes
payable to the Executive hereunder, and such severance benefits are required to
be delayed until the date six months following Executive’s termination of
employment in order to avoid additional tax under Section 409A of the Code (taking account of all applicable
authorities thereunder), payment and provision of such severance benefits
shall be delayed until the date six months after Executive’s termination of
employment.

     

    
      	
              10.  

            	
              Intellectual Property
      Rights.

            

    

     

    
      	
              10.1  

            	
              Non-infringement.  Executive
      agrees that all work products created or produced by Executive during the
      course of his employment with the Company will be Executive’s original work and will not
      infringe upon or violate any patent, copyright, trade secret, contractual
      or other proprietary right of any third
party.

            

    

     

    
      	
              10.2  

            	
              Disclosure.  Executive
      agrees to disclose and describe to the Company, on a timely basis, all
      works of authorship, inventions and all other intellectual property that
      Executive may solely or jointly discover, conceive, create, develop,
      produce or reduce to practice while employed by the Company (“Company
      Inventions”).

            

    

     

    
      	
              10.3  

            	
              Assignment.  Executive
      hereby assigns and agrees to assign to the Company, or its designee,
      Executive’s entire right, title, and interest in and to all Company
      Inventions.  Executive represents that the Company’s rights in
      all such Company Inventions will be free and clear of any encumbrances,
      liens, claims, judgments, causes of action or other legal rights or
      impediments.

            

    

     

    
      	
              10.4  

            	
              Independent
      development.  NOTICE:
      Pursuant to Minnesota Statutes § 181.78, Executive is hereby notified that
      the foregoing agreement does not apply to an invention for which no
      equipment, supplies, facility or trade secret information of the Company
      was used and which was developed entirely on the employee’s own time, and
      (1) which does not relate (a) directly to the business of the Company (or
      its Client) or (b) to the Company’s (or its Client’s) actual or
      demonstrably anticipated research or development, or (2) which does not
      result from any work performed by the employee for the Company or its
      Clients.  For purposes of this Section 10.4, the term “Client”
      shall have the same meaning as set forth in Section 14.2 of this
      Agreement.

            

    

     

    
      	
              10.5  

            	
              Works for
      Hire.  Executive acknowledges and agrees that all
      original works of authorship which are made by Executive (solely or
      jointly with others) within the scope of his employment and which are
      protectable by copyrights, are “works made for hire” as that term is
      defined in the United States Copyright Act (17 U.S.C. § 101) and that, as
      such, all rights comprising copyright under the United States Copyright
      laws will vest solely and exclusively in his employer, the
      Company.  Executive hereby irrevocably and unconditionally
      waives all so-called moral rights that may vest in Executive (whether
      before, on or after the date hereof) in connection with Executive’s
      authorship of any copyright works in the course of his employment with the
      Company, wherever in the world enforceable, including without limitation
      the right to be identified as the author of any such works and the right
      of integrity (i.e., not to have any
      such works subjected to derogatory treatment), and Executive agrees never
      to assert any such moral rights with respect to any Company
      Invention.

            

    

     

    
      	
              10.6  

            	
              Enforcement;
      Cooperation.  Executive agrees to perform, during and
      after his employment, all acts deemed necessary or desirable by the
      Company to permit and assist it, at its expense, in obtaining and
      enforcing the full benefits, enjoyment, rights and title throughout the
      world in the Company Inventions hereby assigned to the
      Company.  Such acts may include, but are not limited to,
      execution of documents and assistance or cooperation in the registration
      and enforcement of applicable patents, copyrights, maskworks or other
      legal proceedings.

            

    

     

    
      	
              10.7  

            	
              Attorney in
      Fact.  In the event that the Company is unable for any
      reason, whether during or after Executive’s employment by the Company, to
      secure Executive’s signature to any document required to apply for or
      execute any patent, design rights, registered designs, trademarks,
      copyright, maskwork or other applications with respect to any Company
      Inventions (including improvements, renewals, extensions, continuations,
      divisions or continuations in part thereof), Executive hereby irrevocably
      designates and appoints the Company and its duly authorized officers and
      agents as Executive’s agents and attorneys-in-fact to act for and on his
      behalf and instead of Executive, to execute and file any such application
      and to do all other lawfully permitted acts to further the prosecution and
      issuance of patents, copyrights, maskworks or other rights thereon with
      the same legal force and effect as if executed by
    Executive.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              11.  

            	
              Confidentiality.

            

    

     

    
      	
              11.1  

            	
              Confidential
      nature of relationship.  Executive
      acknowledges that his employment by the Company creates a relationship of
      confidence and trust with respect to Confidential Information (as
      hereinafter defined).  During the course of his employment with
      the Company, the Company agrees to provide Executive with access to
      Confidential Information.  Executive expressly undertakes to
      retain in strict confidence all Confidential Information transmitted or
      disclosed to Executive by the Company or the Company’s clients, and will
      never make any use of such information except as (and then, only to the
      extent) required to perform Executive’s employment duties for the
      Company.  Executive will take such protective measures as may be
      reasonably necessary to preserve the secrecy and interest of the Company
      in the Confidential Information.  If Executive becomes aware of
      any unauthorized use or disclosure of Confidential Information by any
      person or entity, Executive will promptly and fully advise the Company of
      all facts known to Executive concerning such unauthorized use or
      disclosure.

            

    

     

    
      	
              11.2  

            	
              Definition.  “Confidential
      Information” means all commercially sensitive information and data, in
      their broadest context, originated by, on behalf of or within the
      knowledge or possession of the Company or its clients (including any
      subsidiary, division or legal affiliate thereof).  Without in
      any way limiting the foregoing, Confidential Information includes, but is
      not limited to: information that has been designated as proprietary and/or
      confidential; information constituting trade secrets; information of a
      confidential nature that, by the nature of the circumstances surrounding
      the disclosure, should in good faith be treated as proprietary and/or
      confidential; and information and data conceived, discovered or developed
      in whole or in part by Executive while employed by the Company.
      Confidential Information also includes information of a confidential
      nature relating to the Company’s clients, prospective clients, strategic
      business relationships, products, services, suppliers, personnel, pricing,
      recruiting strategies, job candidate information, employee information,
      sales strategies, technology, methods, processes, research, development,
      systems, techniques, finances, accounting, purchasing and business
      plans.

            

    

     

    
      	
              11.3  

            	
              Exclusions.  Confidential
      Information does not include information which: (A) is generic; (B) is or
      becomes part of the public domain through no act or omission of Executive;
      (C) was in Executive’s lawful possession prior to the disclosure and was
      not obtained by Executive in breach, either directly or indirectly, of any
      obligation to the Company or any client of the Company’s; (D) is lawfully
      disclosed to Executive by a third party without restriction on disclosure;
      or (E) is independently developed by Executive using his own resources,
      entirely on his own time, and without the use of any Confidential
      Information.

            

    

     

    
      	
              11.4  

            	
              Protected Health
      Information.  If during the course of his employment with
      the Company, Executive receives any “protected health information,” as
      that term is defined in 45 CFR, Part 164, Subpart E (“Privacy of
      Individually Identifiable Health Information”): (A) Executive agrees to
      maintain all such information in strict confidence with the Health
      Insurance Portability and Accountability Act of 1996 (HIPAA); (B)
      Executive agrees that he will make no use whatsoever of any such
      information except as required to perform Executive’s employment duties;
      and (C) Executive agrees that he will never record, store, file or
      otherwise maintain, in any computer or other storage device owned by the
      Company or by Executive, any “protected health information.” Executive
      agrees to alert the Company promptly if he becomes aware of any misuse or
      unauthorized disclosure of any such
information.

            

    

     

    
      	
              11.5  

            	
              Additional
      Confidentiality Agreements.  Executive agrees to execute
      such additional non-disclosure and confidentiality agreements as the
      Company or its clients may from time to time
  request.

            

    

     

    
      	
              12.  

            	
              Use
      of Confidential or Material Non-Public Information;
      Codes of Conduct.

            

    

     

    
      	
              12.1  

            	
              Confidential or
      Material, Non-Public Information.  Executive acknowledges
      that he is prohibited from using or sharing any Confidential Information
      for personal gain or advantage (in securities transactions or otherwise),
      or for the personal gain or advantage of anyone with whom Executive
      improperly shares such information.  Specifically as to
      material, non-public information of the Company, Executive agrees to
      comply with the Company’s insider trading policy in effect at the
      commencement of employment and as amended from time to
    time.

            

    

     

    
      	
              12.2  

            	
              Codes of
      Conduct.  Executive agrees to carefully review, sign and
      fully comply with any Code of Conduct (or similar policy) of the Company
      either having general applicability to its employees or specifically to
      Executive.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              13.  

            	
              Restrictions
      against Solicitation;
      Non-Interference. 

            

    

     

    During
his employment by the Company and for a period of eighteen (18) months after
termination of such employment for any reason, Executive agrees that he will not
engage in the following conduct.

     

    
      	
              13.1  

            	
              Restrictions against
      Solicitation.  Executive will not, directly or
      indirectly, hire or initiate any solicitation or recruitment effort for
      the purpose of attempting to hire any employee of the Company or to induce
      any employee of the Company to leave his employment with the
      Company.

            

    

     

    With
respect to job candidates with or about whom Executive, while employed by the
Company, had actual contact or knowledge, Executive will not, directly or
indirectly, initiate any solicitation or recruitment effort for the purpose of
attempting to hire any such candidate for or on behalf of his new employer or
any company in which Executive owns, directly or indirectly, an
interest.

     

    
      	
              13.2  

            	
              Non-interference.  Executive
      will not, directly or indirectly, disrupt, damage, impair, impede or
      interfere with the contractual relationship between the Company and any of
      its clients.

            

    

     

    
      	
              14.  

            	
              Restrictions Against
      Competition.

            

    

     

    
      	
              14.1  

            	
              Restricted
      Period.  During his employment by the Company and for a
      period of eighteen
      (18) months after termination of such employment for any reason,
      Executive agrees not to
      engage in any Competitive Acts with any Client or prospective Client of
      the Company within the
      prior 24 months prior to termination of Executive’s
      employment.

            

    

     

     

    
      	
              1.1  

            	
              Definitions.  For purposes of this
      Section 14, the following terms shall be defined as
      follows.

            

    

     

     

    “Competitive
Acts” means soliciting, selling, marketing, brokering, providing or managing any
Services for any Client, whether directly as an employee of a Client or
indirectly as an employee, subcontractor, partner or owner of a
Competitor.

     

     

    “Client”
means: (A) any Company client for whom Executive provided Services at any time
during the previous two years of Executive’s employment with the Company; or (B)
any Company client or prospective client to whom Executive solicited, proposed,
marketed or sold Services at any time during the previous two years of
Executive’s employment with the Company; (C) any third party having a written
partnership, alliance or teaming agreement or similar strategic business
relationship with the Company, for whom Executive provided Services at any time
during the previous two years of Executive’s employment with the
Company.

     

    
      	
              14.2  

            	
              “Competitor”
      means any third party offering technical consulting
      services within the United States that compete with the Company or are
      similar in kind or nature to the services provided by the
      Company.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              15.  

            	
              Reasonableness
      of Restrictions;
      Representations of Executive; Extension of Restrictions;
      Enforcement.

            

    

     

    
      	
              15.1  

            	
              Reasonableness of
      Restrictions.  Executive acknowledges that the
      restrictions set forth in this Agreement are reasonable in terms of both
      the Company’s need to protect its legitimate business interests and
      Executive’s ability to pursue alternative employment opportunities in the
      event his employment with the Company
  terminates.

            

    

     

    
      	
              15.2  

            	
              Representations of
      Executive.  Executive represents that his performance of
      all the terms of this Employment Agreement and his performance as an
      employee of the Company does not and will not breach any agreement to keep
      in confidence proprietary information, knowledge or data acquired by
      Executive prior to his employment with the Company.  Executive
      will not disclose to the Company, or induce the Company to use, any
      confidential or proprietary information or material belonging to any
      previous employer of Executive or others.  Executive is not a
      party to any other agreement that would interfere with his full compliance
      with this Executive Agreement.  Executive agrees not to enter
      into any agreement, whether written or oral, in conflict with the
      provisions of this Agreement.

            

    

     

    
      	
              15.3  

            	
              Extension of
      Restrictions.  The period of all restrictions under this
      Agreement will automatically be extended by a period equal in length to
      any period in which Executive violates his obligations under this
      Agreement.

            

    

     

    
      	
              15.4  

            	
              Enforcement.  In
      addition to any other relief or remedies afforded by law or in equity, if
      Executive breaches Sections 13 or 14 of this Agreement, Executive agrees
      that the Company shall be entitled, as a matter of right, to injunctive
      relief in any court of competent jurisdiction.  Executive
      recognizes and hereby admits that irreparable damage will result to the
      Company if he violates or threatens to violate the terms of Section 13 or
      14 of this Agreement.  This Section 15.4 shall not preclude the
      granting of any other appropriate relief including, without limitation,
      money damages against Executive for breach of Section 13 or 14 of this
      Agreement.

            

    

     

    
      	
              16.  

            	
              Return
      of Property;
      Exit Interview.

            

    

     

    
      	
              16.1  

            	
              Return of property, Upon any termination of
      his employment with the Company, Executive agrees to promptly return to
      the Company: (A) all materials of any kind in Executive’s possession (or
      under Executive’s control) incorporating Confidential Information or
      otherwise relating to the Company’s business (including but not limited to
      all such materials and/or information stored on any computer or other
      storage device owned or used by Executive); and (B) all Company property
      in Executive’s possession, including (but not limited to) computers,
      cellular telephones, pagers, credit cards, keys, records, files, manuals,
      books, forms, documents, letters, memoranda, data, tables, photographs,
      video tapes, audio tapes, computer disks and other computer storage media,
      all materials that include trade secrets, and all copies, summaries or
      notes of any of the foregoing.

            

    

     

    
      	
              16.2  

            	
              Exit interview.  Upon
      any termination of his employment with the Company and upon request,
      Executive agrees to participate in an exit interview conducted by
      designated personnel and to provide a signed statement that all Company
      materials and property have been returned to the
  Company.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
              17.  

            	
              Assignment.

            

    

     

    This
Agreement sets forth personal obligations of Executive, which may not be
transferred or assigned by Executive.  The Company may assign this
Agreement to any successor or affiliate.

     

    
      	
              18.  

            	
              Non-Disparagement.

            

    

     

    Executive
agrees not to engage in any form of conduct or make any statements or
representations to current or
prospective customers of the Company, media outlets, employees or management of
a corporation or business in direct competition with the Company, or otherwise
publish statements or representations to the public at large which may be
actionable, that disparage, characterize in demeaning manner or question the Company’s
business practices, products, advice, quality of employees and staff, or
otherwise harm the public reputation or good will of the Company, its employees,
or management.

     

    
      	
              19.  

            	
              Indemnity; Cooperation
      in Legal Actions.

            

    

     

    
      	
              19.1  

            	
              Indemnity.  The
      Company will indemnify Executive against any claims arising from or
      related to his good faith performance of his duties and obligations
      hereunder to the fullest extent allowed by Company By-laws and Minnesota
      law.

            

    

     

    
      	
              19.2  

            	
              Cooperation in Legal
      Actions.  In connection with any action or proceeding
      against Executive, whether pending or threatened, for which the Company is
      obliged to indemnify Executive, the Company will pay or reimburse
      Executive in advance of the final disposition for reasonable expenses,
      including reasonable attorneys’ fees, necessarily incurred by
      Executive.  Executive will cooperate fully with the Company, at
      no expense to Executive, in the defense of any action, suit, claim, or
      proceeding commenced or threatened against the Company in conjunction with
      any action, suit, claim or proceeding commenced or threatened against
      him.  In addition to the foregoing, Executive further agrees to
      provide assistance to the Company, at the Company’s expense, as may be
      reasonably requested by the Company or its attorneys in connection with
      the litigation of any action, suit, claim, or proceeding involving the
      Company, whether not pending or to be commenced, which arises out of or is
      related to any matters in which Executive was involved or for which he was
      responsible during the term of his employment with the
      Company.

            

    

     

    
      	
              20.  

            	
              Survival.

            

    

     

     

    The rights and obligations set forth in
Sections 6.5, 7.1, 8-11, 13-19 and 24 shall survive the termination or
expiration of this Agreement.  The provisions of this Agreement
shall survive termination of Executive’s employment regardless of whether
Executive resigns or is involuntarily discharged.

     

    Such
provisions of this Agreement shall survive termination of Executive’s employment
regardless of whether Executive resigns or is involuntarily
discharged.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              21.  

            	
              Miscellaneous.

            

    

     

    
      	
              21.1  

            	
              Headings;
      Construction.  The headings of Sections and paragraphs
      herein are included solely for convenience of reference and shall not
      control the meaning or interpretation of any of the provisions of this
      Agreement.  This Agreement shall be construed without regard to
      any presumption or other rule requiring construction hereof against the
      party causing this Agreement to be
drafted.

            

    

     

    
      	
              21.2  

            	
              Benefit.  Subject
      to Section 17, nothing in this Agreement, expressed or implied, is
      intended to confer on any person other than the parties hereto, any
      rights, remedies, obligations or liabilities under or by reason of this
      Agreement.

            

    

     

    
      	
              21.3  

            	
              Waiver.  Any
      delay by either party in asserting a right under this Agreement or any
      failure by either party to assert a right under this Agreement will not
      constitute a waiver by the asserting party of any right hereunder, and the
      asserting party may subsequently assert any or all of its rights hereunder
      as if the delay or failure to assert rights had not
    occurred.

            

    

     

    
      	
              21.4  

            	
              Severability.  If
      the final determination of a court of competent jurisdiction declares,
      after the expiration of the time within which judicial review (if
      permitted) of such determination may be perfected, that any term of
      provision hereof is invalid or unenforceable, (a) the remaining terms and
      provisions hereof shall be unimpaired, and (b) the invalid or
      unenforceable term or provision shall be deemed replaced by a term or
      provision that is valid and enforceable and that comes closest to
      expressing the intention of the invalid or unenforceable term or
      provision.

            

    

     

    
      	
              22.  

            	
              Entire
      Agreement;
      Amendment.

            

    

     

    
      	
              22.1  

            	
              Entire Agreement.  Both
      Executive and the Company agree that this Agreement, Exhibit A to this
      Agreement and the
      Executive’s stock option agreement constitute the entire agreement
      between them with respect to the subject matter thereof.  There
      were no inducements or representations leading to the execution of this
      Agreement except as stated in this Agreement.  Accordingly, this
      Agreement (together with Exhibit A to this Agreement and any
      contemporaneous stock option agreement between the Company and Executive)
      expressly supersedes any and all prior oral and written agreements,
      representations and promises between the parties relating to Executive’s
      employment with the Company.  As noted in Section 1.1 above,
      this is an
      Amended and Restated Agreement which, with the attached Exhibit A ( Change
      of Control Agreement), replaces the prior Employment Agreement between the
      parities (dated November 1, 2007) (the “Prior Agreement”) in its
      entirety.  For the avoidance of doubt, however, the parties
      expressly acknowledge that any and all stock options granted to Executive
      in connection with the Prior Agreement, together with the agreements
      granting such options, shall remain in full force and effect
      notwithstanding execution of this Amended and Restated Employment
      Agreement.

            

    

     

    
      	
              22.2  

            	
              Amendment.  This
      Agreement may be amended or modified only with the written consent of both
      Executive and the Company.  No oral waiver, amendment or
      modification will be effective under any circumstances
      whatsoever.

            

    

     

    
      	
              23.  

            	
              Notices.

            

    

     

    Any
notice hereunder by either party to the other shall be given in writing by
personal delivery or certified mail, return receipt requested.  If
addressed to Executive, the notice shall be delivered or mailed to Executive at
the address most recently communicated in writing by Executive to the Company,
or if addressed to the company, the notice shall be delivered or mailed to the
Company at its executive offices to the attention of the Board of Directors of the Company with a copy to
the attention of the
General Counsel.  A notice shall be deemed given, if by
personal delivery, on the date of such delivery or, if by certified mail, on the
date shown on the applicable return receipt.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
              24.  

            	
              Governing Law;
      Disputes; Arbitration of Termination of Employment for
      Cause.

            

    

     

    
      	
              24.1  

            	
              Governing Law;
      Disputes.  This Agreement will be
      governed by and construed in accordance with the laws of the State of
      Minnesota, as such laws are applied to agreements entered into and to be
      performed entirely within Minnesota between Minnesota
      residents.  Except as set forth in Section 24.2 below, the
      undersigned each irrevocably consent to the jurisdiction of the United
      States District Court for the District of Minnesota and the courts of the
      State of Minnesota in any suit, action, or proceeding brought
      under, based on or related to or in connection with this Agreement, and
      each of the undersigned agrees that either of the aforesaid courts will be
      the exclusive original forum for any such
  action.

            

    

     

    
      	
              24.2  

            	
              Arbitration of
      Termination of Employment for Cause.  Any dispute arising
      out of or relating to termination of Executive’s employment for Cause
      pursuant to Section 6 of this Agreement, shall be discussed between the
      disputing parties in a good faith effort to arrive at a mutual settlement
      of any such controversy.  If, notwithstanding, such dispute
      cannot be resolved, such dispute shall be settled by binding
      arbitration.  Judgment upon the award rendered by the arbitrator
      may be entered in any court having jurisdiction thereof.  The
      arbitrator shall be a retired state or federal judge or an attorney who
      has practiced securities or
      business law or business litigation for at least 10
      years.  If the parties cannot agree on an arbitrator within 20
      days, any party may request that the chief judge of the District Court for
      Hennepin County, Minnesota, select an arbitrator.  Arbitration
      will be conducted pursuant to the provisions of this Agreement, and the
      commercial arbitration rules of the American Arbitration Association,
      unless such rules are inconsistent with the provisions of this
      Agreement.  Limited civil discovery shall be permitted for the
      production of documents and taking of depositions.  Unresolved
      discovery disputes may be brought to the attention of the arbitrator who
      may dispose of such dispute.  The arbitrator shall have the
      authority to award any remedy or relief that a court of this state could
      order or grant; provided, however, that punitive or exemplary damages
      shall not be awarded.  The Company shall pay the fees and
      expenses of the arbitrator.  Unless otherwise agreed by the
      parties, the exclusive location of any arbitration proceedings shall be
      Hennepin County, Minnesota.

            

    

     

    IN WITNESS WHEREOF,
the parties have
executed this Amended and Restated Agreement by their signatures below, to be
effective as of November 1, 2007:

     

    
      	
              Analysts
      International Corporation

            	
              Elmer N. Baldwin
      (“Executive”)

            
	
              By: /s/ Krzysztof K.
      Burhardt

              Title:  Chairman of
      the Board of Directors

            	
              By:  /s/ Elmer N.
Baldwin

              Date signed: August 19,
  2008

            
	
              Date signed: 
      August 19, 2008

            	 
      

    

    

     

    
      
        
        

      

      
        12

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