ASSET PURCHASE AGREEMENT

Exhibit 10.1

Execution Version

This ASSET PURCHASE AGREEMENT (this “Contract”) is made and entered into this 22nd day of March, 2007 (the “Contract Date”), by and between LATI USA, INC. , a South Carolina corporation, formerly known as LATI INDUSTRIES, INC. (“LATI”) and FORCE PROTECTION TECHNOLOGIES, INC. , a Nevada corporation (“FPT”).

RECITALS :

WHEREAS, LATI operates or has operated a facility manufacturing high performance thermoplastics located at 257 Deming Way, Summerville, South Carolina (the “Facility”);

WHEREAS, the Facility is located on that certain tract of land located in Dorchester County, South Carolina consisting of approximately 24 acres, as more particularly described on Exhibit A attached hereto (the “Land”);

WHEREAS, the Property (hereinafter defined) and the Equipment (hereinafter defined) which are used by LATI in connection with the operation of the Facility are subject to that certain Lease Agreement dated December 7, 1998 between LATI and Dorchester County, South Carolina (the “County”), as amended by that certain First Amendment of Lease Agreement dated July 25, 2005 (the “FILOT Lease”);

WHEREAS, Section 9.01 of the FILOT Lease provides that LATI may assign its interest in the FILOT Lease with the County;

WHEREAS, FPT desires to acquire and assume the FILOT Lease from LATI on the terms and conditions set forth in this Contract; and

WHEREAS, LATI desires to sell and assign the FILOT Lease to FPT on the terms and conditions set forth in this Contract.

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NOW, THEREFORE, for and in consideration of the terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, LATI and FPT do hereby agree as follows:

1.             Description of Property .  The property which is the subject to the FILOT Lease is as follows:

(a)           The Land;

(b)           All rights and easements appurtenant to the Land, including all rights of view, light and air, mineral and subsurface rights, development rights, zoning rights, water rights, sewer and drainage rights, rights of way, rights of ingress and egress, roadways, parking areas, roadbeds, alleyways and reversions or other appurtenances used in connection with the ownership of the Land (collectively, the “Appurtenances”); and

(c)           All improvements and fixtures located on the Land and all buildings, structures and amenities currently located on the Land, if any, (collectively, the “Improvements”).

The Land, the Appurtenances and the Improvements are hereinafter sometimes collectively called the “Property.”

2.             Description of Equipment .  The equipment which is the subject to the FILOT Lease and which is to be assumed by FPT are those items of equipment, machinery and other tangible personal property described in Exhibit B attached hereto (the “Equipment”).

3.             Purchase Price .  The purchase price (the “Purchase Price”) to be paid by FPT for the assignment of the FILOT Lease shall be FOUR MILLION ONE HUNDRED THOUSAND and No/100 Dollars ($4,100,000.00).  The Purchase Price shall be allocated as follows:

4.             Payment of Purchase Price .  The Purchase Price shall be payable as follows:

(i)            Binder .  A good faith binder and partial down payment of FORTY-ONE THOUSAND and No/100 Dollars ($41,000.00) (the “Binder”) has been paid by FPT to Coppedge & Tisson/Cushman & Wakefield (the “Escrow Agent”) and is subject to the provisions set forth in Section 22 below.

(ii)           Payment at Closing .  The Binder will be applied to the Purchase Price at Closing.  The remaining balance of the Purchase Price shall be paid in cash or other immediately available funds at Closing.

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5.             Due Diligence Period and Investigations by FPT .

(i)             For a thirty (30) day period from the Contract Date (the “Due Diligence Period”), FPT may conduct due diligence as set forth herein.  The Due Diligence Period may be extended by FPT for up to thirty (30) days to conduct a Phase II Environmental Site Assessment.  The parties acknowledge that FPT has not had the opportunity to perform due diligence prior to its execution of this Contract, and that the due diligence contemplated in this Section 5 is intended to give FPT a period within which to conduct due diligence and elect, if it chooses, to terminate this Contract without forfeiting the Binder.  Accordingly, FPT may terminate this Contract in its absolute discretion at any time within (i) the Due Diligence Period or (ii) five (5) business days of the expiration of the Due Diligence Period.  In the event of such termination, FPT shall receive a refund of the entirety of the Binder.

(ii)            Within five (5) business days of the Contract Date, LATI shall furnish to FPT copies of all documents, plats, studies, test results, reports, appraisals and all other materials relating to the Property in LATI’s possession, including but not limited to plats, plans, surveys, environmental reports, title materials, soil reports, zoning notices or approvals, any restrictions affecting the Property and copies of all leases or contracts affecting any portion of the Property.  LAIT shall allow FPT’s environmental consultant to interview LATI’s employees or have said employees fill out environmental questionnaires as required to conduct a Phase I Environmental Site Assessment in accordance with ASTM E-1527-05.  During the Due Diligence Period, FPT shall have the right to determine whether the Property is acceptable to FPT at its sole discretion.  FPT acknowledges and agrees that LATI bears no liability for any inadvertent failure to provide any of the foregoing items.

(iii)           During the Due Diligence Period, FPT and its agents and consultants shall have complete access to the Property for the purpose of conducting, at its sole cost and expense, such testings, soil borings, soil analyses, engineering tests and studies, environmental tests and studies, economic and/or topographic tests, studies and/or investigations with respect to the Property as FPT may deem necessary in order to determine whether the Property is suitable for FPT’s intended use thereof, provided that FPT repair any damage to the Property caused in connection with such tests and studies.  FPT shall indemnify and hold LATI harmless from and against all costs, expenses and liabilities incurred by LATI in connection with the tests and studies conducted by FPT and FPT’s entry upon the Property, except to the extent that any of the foregoing costs, expenses or liabilities are attributable in full all or in part to the gross negligence or willful misconduct of LATI.

6.             Closing Date and Place .  The closing of the sale and purchase of the Property and the Equipment and transfer of title to the Property and the Equipment (the “Closing”) shall take place at a mutually agreeable date on or before thirty (30) days from the expiration of the Due Diligence Period; provided however that the Closing shall may be scheduled by FPT at any time during the Due Diligence Period by providing three (3) business days advance written notice to LATI.  The date on which the Closing actually occurs as provided pursuant to this Section 6 is herein referred to as the “Closing Date.”  On the Closing Date,  the Closing shall take place at 10:00 am at the offices of Haynsworth Sinkler Boyd, P.A. in Charleston, South Carolina or at such other location as may be mutually agreeable.

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7.             Assignment of FILOT Lease .

(a)           At the Closing, LATI and FPT shall execute and deliver an Assignment and Assumption Agreement in the form attached hereto as Exhibit C (the “Assignment Agreement”) for the assignment of the FILOT Lease from LATI to FPT.

(b)           As of the Closing Date, the Property and the Equipment subject the FILOT Lease and this Contract shall be free and clear of all liens, encumbrances, security interests, claims, rights-of-way, easements, leases, restrictions and restrictive covenants, except for the Permitted Exceptions (defined below) and the terms of the FILOT Lease.  For purposes of this paragraph, the term “Title Exceptions” shall mean any conditions, liens or encumbrances affecting or purporting to affect title to the Property, or other matters relating to title to the Property, whether evidenced by written instrument, disclosed on a survey or otherwise evidenced.  FPT shall have the right to object to any Title Exception (collectively, the “Objections”).  FPT shall submit in writing to LATI its Objections within thirty (30) days of the Contract Date.  In the event FPT notifies LATI of any Objections that it has concerning the title to or a survey of the Property, then LATI shall have fifteen (15) days from the receipt of such notice within which to notify FPT as to whether LATI will cure all or any of the Objections raised by FPT.  In the event LATI elects to cure any of FPT’s Objections, then LATI shall do so on or before the Closing Date as a covenant of LATI hereunder.  In the event LATI elects not to cure any of FPT’s Objections then FPT shall, within fifteen (15) days of receipt of said notice of non-cure from LATI, give notice to LATI that FPT has elected to (i) terminate this Contract and receive a refund of the entire Binder, or (ii) waive the uncured Objections and close under the terms of this Contract.  Those Title Exceptions which FPT accepts shall herein collectively be referred to as the “Permitted Exceptions.”

8.             No Assumed Liabilities .  Except for the assumption of the FILOT Lease as described in this Contract and the Assignment Agreement, FPT assumes absolutely no liabilities of LATI.

9.             Retained Equipment .  Pursuant to the provisions contained in Section 36 below, LATI shall have thirty (30) days from the Closing Date to remove from the Property any items of tangible personal property described in Exhibit D attached hereto which are not being purchased by the FPT under this Contract (the “Retained Equipment”).  Upon the expiration of the thirty (30) day license period, the Retained Equipment shall be deemed abandoned.  FPT shall not have any responsibility for the any loss or damage to the Retained Equipment.

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10.           Closing Costs .  LATI shall pay for any transfer tax stamps to be affixed to the Assignment Agreement and the cost of discharging any mortgage, lien or title encumbrance on the Property and the Equipment other than those permitted hereunder.  FPT shall be responsible for the cost of recording the Assignment Agreement and any instruments to be recorded under the terms of this Contract with respect to the Property.  FPT shall pay for the cost of any surveys or environmental reports of the Property, any title insurance, and all fees and expenses associated with any loan on the Property.  Except as otherwise provided herein, each party shall bear its own costs and expenses, including its own attorneys’ fees.

11.           Settlement Adjustments .  Unless otherwise specified in this Contract, all expenses and costs related to the FILOT LEASE shall be prorated as of the Closing Date.

12.           Covenants of LATI .

(a)            Between the date hereof and the Closing Date, LATI shall not cause or permit any waste respecting the Property or take any action which would adversely affect the value or title to the Property or the Equipment.

(b)           Between the date hereof and the Closing Date, LATI shall cooperate and assist, to the extent reasonably requested by FPT, with FPT’s investigation of the FILOT Lease, the Property, the Equipment, and items related to the Closing.

13.           Conditions Precedent to FPT’s Obligation to Close .  FPT’s obligation to purchase the Property and the Equipment and to take the other actions required to be taken by FPT at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by FPT, in whole or in part):

(a)            All of LATI’s representations and warranties in this Contract shall have been accurate in all material respects as of the date of this Contract, and shall be accurate in all material respects as of the time of the Closing as if then made.

(b)           All of the covenants and obligations that LATI is required to perform or to comply with pursuant to this Contract at or prior to the Closing, and each of these covenants and obligations, shall have been duly performed and complied with in all material respects.

(c)            FPT shall have obtained financing acceptable to FPT in its sole discretion to acquire and assume the FILOT Lease.  FPT shall use its best efforts to obtain such financing within twenty (20) days from the date of this Contract.  FPT shall promptly inform LATI if FPT is unable to obtain such financing and LATI may elect to terminate this Contract upon the receipt of such notification.

(d)           The issuance or assignment to FPT of all applicable licenses and permits necessary (i) to continue the operation of the Facility or (ii) to allow for FPT’s intended use of the Property.

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(e)           The written approval by the County of the assignment of the FILOT Lease from LATI to FPT.

14.           Brokerage Commission .  Other than LATI’s engagement of Coppedge & Tisson/Cushman & Wakefield, LATI and FPT mutually acknowledge and represent that they have not dealt with any brokers in connection with this transaction.  LATI acknowledges and agrees that it is solely responsible for the commission due Coppedge & Tisson/Cushman & Wakefield.  Each party agrees to indemnify and hold the other harmless from and against any and all claims, demands or the cost and expense thereof, including reasonable attorneys’ fees, arising out of any brokerage commission, fee or other compensation due or alleged to be due in connection with the transaction contemplated by this Contract based upon an agreement alleged to have been made or other action alleged to have been taken by the indemnifying party.

15.           Eminent Domain .  If  prior to the Closing Date, all or any part of the Property is taken by eminent domain or if condemnation proceedings are commenced, FPT shall have the option, by giving written notice to LATI, to terminate this Contract and receive an immediate refund of the full amount of the Binder.  If FPT does not so elect to terminate this Contract, the Contract shall remain in full force and effect, and LATI shall assign, transfer and set over to FPT at the Closing all of LATI’s rights, title and interest in and to any awards that may be made for such taking.

16.           Representations and Warranties of LATI .  LATI represents and warrants to FPT as follows:

(a)           Subject to the written approval of the County to the assignment of the FILOT Lease, LATI has full power and authority to enter into and perform this Contract in accordance with its terms and conditions, and at the Closing, LATI will furnish to FPT an opinion of LATI’s counsel to that regard.

(b)           LATI shall furnish to FPT such resolutions and certificates as FPT’s counsel may reasonably request regarding the authority of LATI to enter into this Contract and close the transaction contemplated herein.

(c)           LATI shall use its best efforts to obtain the written approval of the County for the assignment of the FILOT Lease to FPT.

(d)           The consummation of the terms and conditions of this Contract shall not constitute a default under any agreement to which LATI is subject or by which it may be bound.

(e)           Other than the FILOT Lease, LATI has not entered into any agreement or lease, oral or written, that will be binding upon FPT, the Property or the Equipment; and neither LATI, the FILOT Lease, the Property nor the Equipment are subject to any claim, encumbrance, mortgage, lien, demand, suit, unfiled lien, proceeding or litigation of any kind, pending or outstanding, or threatened or likely to be made or instituted which would limit or restrict in any way LATI’s right or ability to enter into this Contract and consummate the sale and purchase contemplated hereby.

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(f)            To the best of LATI’s knowledge, there are no taxes, charges or assessments of any nature or description arising out the operation of the Facility which would constitute a lien against the Property or the Equipment and that will be unpaid at the Closing Date or not paid from LATI’s closing proceeds.

(g)           LATI is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.

(h)           From the period of time between the Contract Date and the Closing Date, LATI shall refrain from undertaking any material changes to the Facility, the Property or the Equipment, without the express written consent of FPT.

(i)            All representations and warranties of LATI contained in this Contract are true and correct in all material respects as of the Contract Date, will be true and correct in all material respects as of the Closing Date, and shall survive the Closing.

17.           Representations and Warranties of FPT .  FPT represents and warrants to LATI as follows:

(a)           FPT has full power and authority to enter into and perform this Contract in accordance with its terms and conditions, and at the Closing, FPT will furnish to LATI an opinion of FPT’s counsel to that regard.

(b)           FPT shall furnish to LATI such resolutions and certificates as LATI’s counsel may reasonably request regarding the authority of FPT to enter into this Contract and close the transaction contemplated herein.

(c)           The consummation of the terms and conditions of this Contract shall not constitute a default under any agreement to which FPT is subject or by which it may be bound.

(d)           All representations and warranties of FPT contained in this Contract are true and correct as of the Contract Date, will be true and correct as of the Closing Date, and shall survive the Closing.

18.           Environmental Matters .

(a)           LATI represents and warrants that to the best of LATI’s knowledge, the Property does not contain any hazardous wastes, hazardous substances, hazardous materials, toxic substances, hazardous air pollutants or toxic pollutants as those terms are used in the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Clean Air Act and the Clean Water Act, and in any amendments thereto, or in any r