ASSET PURCHASE AGREEMENT

Exhibit 10.14

ASSET PURCHASE AGREEMENT

Agreement entered into on March 4, 2005, by and between Clarion Sensing

Systems Acquisition Corp. , a New Jersey corporation (the "Buyer"), and Clarion

Sensing Systems, Inc., an Indiana corporation (the "Target"). The Buyer and the

Target are referred to collectively herein as the "Parties."

This Agreement contemplates a transaction in which the Buyer will purchase

all of the assets (and assume certain of the liabilities) of the Target.

Now, therefore, in consideration of the premises and the mutual promises

herein made, and in consideration of the representations, warranties, and

covenants herein contained, the Parties agree as follows.

1. Definitions.

"Acquired Assets" means all right, title, and interest in and to all of

the assets of the Target, including without limitation, those assets set forth

on Schedule 1 or otherwise wherever located, whether known or unknown, and

whether or not on the books and records of the Target, including without

limitation all of its (a) real property, leaseholds and subleaseholds therein,

improvements, fixtures, and fittings thereon, and easements, rights-of-way, and

other appurtenants thereto (such as appurtenant rights in and to public

streets), (b) tangible personal property (such as computers and peripherals,

equipment, purchased parts, furniture and automobiles), (c) Intellectual

Property, goodwill associated therewith, licenses and sublicenses granted and

obtained with respect thereto, and rights thereunder, remedies against

infringements thereof, and rights to protection of interests therein under the

laws of all jurisdictions, (d) leases, subleases, and rights thereunder, (e)

agreements, contracts, indentures, mortgages, instruments, Security Interests,

guaranties, other similar arrangements, and rights thereunder, (f) accounts,

notes, and other receivables, (g) securities, (h) claims, deposits, prepayments,

refunds, causes of action, choses in action, rights of recovery, rights of set

off, and rights of recoupment (including any such item relating to the payment

of Taxes), (i) franchises, approvals, permits, licenses, orders, registrations,

certificates, variances, and similar rights obtained from governments and

governmental agencies, (j) books, records, ledgers, files, documents,

correspondence, lists, plats, architectural plans, drawings, and specifications,

creative materials, advertising and promotional materials, studies, reports, and

other printed or written materials, and (k) Cash; provided, however, that the

Acquired Assets shall not include (i) the corporate charter, qualifications to

conduct business as a foreign corporation, arrangements with registered agents

relating to foreign qualifications, taxpayer and other identification numbers,

seals, minute books, stock transfer books, blank stock certificates, and other

documents relating to the organization, maintenance, and existence of the Target

as a corporation or (ii) any of the rights of the Target under this Agreement

(or under any side agreement between the Target on the one hand and the Buyer on

the other hand entered into on or after the date of this Agreement).

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"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations

promulgated under the Securities Exchange Act.

"Assumed Liabilities" means only those Liabilities of the Target set forth

on Exhibit A attached hereto.

"Basis" means any past or present fact, situation, circumstance, status,

condition, activity, practice, plan, occurrence, event, incident, action,

failure to act, or transaction that forms or could form the basis for any

specified consequence.

"Buyer" has the meaning set forth in the preface above.

"Buyer Disclosure Schedule" has the meaning set forth in ss.4 below.

"Cash" means cash and cash equivalents (including marketable securities

and short term investments) calculated in accordance with GAAP applied on a

basis consistent with the preparation of the Financial Statements.

"Closing" has the meaning set forth in ss.2(d) below.

"Closing Date" has the meaning set forth in ss.2(d) below.

"COBRA" means the requirements of Part 6 of Subtitle B of Title I of ERISA

and Code ss.4980B.

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

"Disclosure Schedule" has the meaning set forth in ss.3 below.

"Employee Benefit Plan" means any (a) nonqualified deferred compensation

or retirement plan or arrangement, (b) qualified defined contribution retirement

plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified

defined benefit retirement plan or arrangement which is an Employee Pension

Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit

Plan or material fringe benefit or other retirement, bonus, or incentive plan or

program.

"Employee Pension Benefit Plan" has the meaning set forth in ERISA

ss.3(2).

"Employee Welfare Benefit Plan" has the meaning set forth in ERISA

ss.3(1).

"Environmental, Health, and Safety Requirements" shall mean all federal,

state, local and foreign statutes, regulations, ordinances and other provisions

having the force or effect of law, all judicial and administrative orders and

determinations, all contractual obligations and all common law concerning public

health and safety, worker health and safety, and pollution or protection of the

environment, including without limitation all those relating to the presence,

use, production,

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generation, handling, transportation, treatment, storage, disposal,

distribution, labeling, testing, processing, discharge, release, control, or

cleanup of any hazardous materials, substances or wastes, chemical substances or

mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum

products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation,

each as amended and as now in effect.

"ERISA" means the Employee Retirement Income Security Act of 1974, as

amended.

"ERISA Affiliate" means each entity which is treated as a single employer

with Seller for purposes of Code ss.414.

"Fiduciary" has the meaning set forth in ERISA ss.3(21).

"Financial Statement" has the meaning set forth in ss.3(g) below.

"GAAP" means United States generally accepted accounting principles as in

effect from time to time.

"Intellectual Property" means (a) all inventions (whether patentable or

unpatentable and whether or not reduced to practice), all improvements thereto,

and all patents, patent applications, and patent disclosures, together with all

reissuances, continuations, continuations-in-part, revisions, extensions, and

reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,

trade names, and corporate names, together with all translations, adaptations,

derivations, and combinations thereof and including all goodwill associated

therewith, and all applications, registrations, and renewals in connection

therewith, (c) all copyrightable works, all copyrights, and all applications,

registrations, and renewals in connection therewith, (d) all mask works and all

applications, registrations, and renewals in connection therewith, (e) all trade

secrets and confidential business information (including ideas, research and

development, know-how, formulas, compositions, manufacturing and production

processes and techniques, technical data, designs, drawings, specifications,

customer and supplier lists, pricing and cost information, and business and

marketing plans and proposals), (f) all computer software (including data and

related documentation), (g) all other proprietary rights, and (h) all copies and

tangible embodiments thereof (in whatever form or medium).

"Knowledge" means with respect to a person or entity actual knowledge

after reasonable investigation.

"Liability" means any liability (whether known or unknown, whether

asserted or unasserted, whether absolute or contingent, whether accrued or

unaccrued, whether liquidated or unliquidated, and whether due or to become

due), including any liability for Taxes.

"Most Recent Balance Sheet" means the balance sheet contained within the

Most Recent Financial Statements.

"Most Recent Financial Statements" has the meaning set forth in ss.3(g)

below.

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"Most Recent Fiscal Month End" has the meaning set forth in ss.3(g) below.

"Most Recent Fiscal Year End" has the meaning set forth in ss.3(g) below.

"Multiemployer Plan" has the meaning set forth in ERISA ss.3(37).

"Ordinary Course of Business" means the ordinary course of business

consistent with past custom and practice (including with respect to quantity and

frequency).

"Parent" means Electronic Control Security International, Inc., a New

Jersey corporation.

"Parent Shares" means any shares of common stock $.001 par value per share

of the Parent.

"Party" has the meaning set forth in the preface above.

"PBGC" means the Pension Benefit Guaranty Corporation.

"Person" means an individual, a partnership, a corporation, an

association, a joint stock company, a trust, a joint venture, an unincorporated

organization, or a governmental entity (or any department, agency, or political

subdivision thereof).

"Prohibited Transaction" has the meaning set forth in ERISA ss.406 and

Code ss.4975.

"Purchase Price" has the meaning set forth in ss.2(c) below.

"Reportable Event" has the meaning set forth in ERISA ss.4043.

"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,

or other security interest, other than (a) mechanic's, materialmen's, and

similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money

liens and liens securing rental payments under capital lease arrangements, and

(d) other liens arising in the Ordinary Course of Business and not incurred in

connection with the borrowing of money.

"Side Agreements" means the agreements referred to in Exhibit B.

"Subsidiary" means any corporation with respect to which a specified

Person (or a Subsidiary thereof) owns a majority of the common stock or has the

power to vote or direct the voting of sufficient securities to elect a majority

of the directors.

"Target" has the meaning set forth in the preface above.

"Target Share" means any share of the Common Stock of the Target.

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"Target Stockholder" means any person who or which holds any Target

Shares.

"Tax" means any federal, state, local, or foreign income, gross receipts,

license, payroll, employment, excise, severance, stamp, occupation, premium,

windfall profits, environmental (including taxes under Code ss.59A), customs

duties, capital stock, franchise, profits, withholding, social security (or

similar), unemployment, disability, real property, personal property, sales,

use, transfer, registration, value added, alternative or add-on minimum,

estimated, or other tax of any kind whatsoever, including any interest, penalty,

or addition thereto, whether disputed or not.

"Tax Return" means any return, declaration, report, claim for refund, or

information return or statement relating to Taxes, including any schedule or

attachment thereto, and including any amendment thereof.

2. Basic Transaction.

(a) Purchase and Sale of Assets. On and subject to the terms and

conditions of this Agreement, the Buyer agrees to purchase from the Target, and

the Target agrees to sell, transfer, convey, and deliver to the Buyer, all of

the Acquired Assets at the Closing for the consideration specified below in this

ss.2.

(b) Assumption of Liabilities. (i) On and subject to the terms and

conditions of this Agreement, the Buyer agrees to assume and become responsible

for all of the Assumed Liabilities at the Closing. The Buyer will not assume or

have any responsibility, however, with respect to any other obligation or

Liability of the Target not included within the definition of Assumed

Liabilities.

(ii) Certain of the Assumed Liabilities as follows:

Mark Harmless $267,423

Jon Payne - $81,846.49

Barry Pachciarz - $80,668.01

Bob Plummer - $5,841.49

William Eby - $3,049.28

Scott Cronk - $131.25

(collectively "Contingent Liabilities")

shall be payable, if at all, only in the event the Buyer achieves

(i) sales in excess of $3,000,000 ("$3,000,000 in Sales") and/or

(ii) net earnings before taxes in excess of $600,000 ("$600,000 in

Net Earnings") in one of its fiscal years beginning within three (3)

years of the date hereof all determined in accordance with GAAP. In

the event $3,000,000 in Sales are achieved but $600,000 in Net

Earnings are not achieved, then 10% of Buyer's net earnings before

taxes earned during such fiscal year shall be utilized to pay the

Contingent Liabilities which amount shall be allocated among the

Contingent Liabilities pro rata until paid in full. In the event

$600,000 in Net Earnings are achieved (whether or not

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$3,000,000 in Sales are achieved), then (y) all net earnings before

taxes in excess of $600,000 earned during such fiscal year plus (z)

10% of Buyer's net earnings before taxes earned during such fiscal

year, shall be utilized to pay the Contingent Liabilities which

amount shall be allocated among the Contingent Liabilities pro rata

until paid in full. If the Contingent Liabilities are not paid in

full and $3,000,000 in Sales or $600,000 in Net Earnings occurs in

one or more subsequent fiscal years, then net earnings before taxes

with respect to such fiscal years shall be utilized to pay the

Contingent Liabilities in the manner set forth in the preceding two

sentences until such time, if ever, the Contingent Liabilities are

paid in full. Any amounts paid hereunder shall be paid in cash or

shares of Parent Stock (valued as of the closing ask price on the

date of issuance) as the recipient shall direct.

(iii) Parent hereby guarantees the performance of Buyer of its

obligations under this Section2(b).

(c) Purchase Consideration. In addition to the assumption of the Assumed

Liabilities, the consideration for the Purchase of the Acquired Assets shall

consist of 394,682 shares of Parent Shares which shares shall be issued and

delivered to the escrow agent named in that certain escrow agreement of even

date herewith, which Parent Shares shall be held and disposed of in accordance

with said escrow agreement.

(d) The Closing. The closing of the transactions contemplated by this

Agreement (the "Closing") shall take place at the offices of Lasser Hochman,

L.L.C. in Roseland, New Jersey, commencing at 10:00 a.m. local time on the

second business day following the satisfaction or waiver of all conditions to

the obligations of the Parties to consummate the transactions contemplated

hereby (other than conditions with respect to actions the respective Parties

will take at the Closing itself) or such other date as the Parties may mutually

determine (the "Closing Date"); provided, however, that the Closing Date shall

be no earlier than November 15, 2004.

(e) Deliveries at the Closing. At the Closing, (i) the Target will deliver

to the Buyer the various certificates, instruments, and documents referred to in

ss.6(a) below; (ii) the Buyer will deliver to the Target the various

certificates, instruments, and documents referred to in ss.6(b) below; (iii) the

Target will execute, acknowledge (if appropriate), and deliver to the Buyer (A)

assignments (including real property and Intellectual Property transfer

documents) in the form attached hereto as Exhibit 2(e)-1 and (B) such other

instruments of sale, transfer, conveyance, and assignment as the Buyer and its

counsel reasonably may request; (iv) the Buyer will execute, acknowledge (if

appropriate), and deliver to the Target (A) an assumption in the form attached

hereto as Exhibit 2(e)-2 and (B) such other instruments of assumption as the

Target and its counsel reasonably may request; and (v) the Buyer will deliver to

the Target the consideration specified in ss.2(c) above.

(f) Allocation. The Parties agree to allocate the Purchase Consideration

(and all other capitalizable costs) among the Acquired Assets for all purposes

(including financial accounting and tax purposes) in accordance with the

allocation schedule attached hereto as Exhibit 2 (f).

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(g) Post Closing Covenant. The Parties intend that the transaction

contemplated hereby will be treated for income tax purposes as a taxable

purchase of assets and not a tax-free reorganization. The Seller shall take no

action or fail to take an action contrary to this intention, including but not

limited to (i) distributing any property it receives in connection with the

transaction pursuant to a plan of reorganization or (ii) taking the position for

tax or other purposes to the effect that the transaction is a tax-free

reorganization.

3. Representations and Warranties of the Target. The Target represents and

warrants to the Buyer and Parent that the statements contained in this ss.3 are

correct and complete as of the date of this Agreement and will be correct and

complete as of the Closing Date (as though made then and as though the Closing

Date were substituted for the date of this Agreement throughout this ss.3),

except as set forth in the disclosure schedule accompanying this Agreement and

initialed by the Parties (the "Disclosure Schedule"). The Disclosure Schedule

will be arranged in paragraphs corresponding to the lettered and numbered

paragraphs contained in this ss.3. Any information contained on the Disclosure

Schedule shall be adequate to disclose an exception to any representation or

warranty made herein even if such information contained on the Disclosure

Schedule does not specifically correspond to a lettered or numbered paragraph

contained in this Agreement.

(a) Organization of the Target. The Target is a corporation duly

organized, validly existing, and in good standing under the laws of the

jurisdiction of its incorporation.

(b) Authorization of Transaction. The Target has full power and authority

(including full corporate power and authority) to execute and deliver this

Agreement and to perform its obligations hereunder. Without limiting the

generality of the foregoing, the board of directors of the Target and the Target

Stockholders have or will have by the Closing Date duly authorized the

execution, delivery, and performance of this Agreement by the Target. This

Agreement constitutes the valid and legally binding obligation of the Target,

enforceable in accordance with its terms and conditions, except that the

enforceability hereof may be subject to bankruptcy, insolvency, reorganization,

moratorium or other similar laws now or hereafter in effect relating to

creditors' rights generally and that the remedy of specific performance and

injunctive and other forms of equitable relief may be subject to equitable

defenses and to the discretion of the court before which any proceeding may be

brought.

(c) Noncontravention. Neither the execution and the delivery of this

Agreement, nor the consummation of the transactions contemplated hereby

(including the assignments and assumptions referred to in ss.2 above), will (i)

violate any constitution, statute, regulation, rule, injunction, judgment,

order, decree, ruling, charge, or other restriction of any government,

governmental agency, or court to which the Target is subject or any provision of

the charter or bylaws of the Target or (ii) conflict with, result in a breach

of, constitute a default under, result in the acceleration of, create in any

party the right to accelerate, terminate, modify, or cancel, or require any

notice under any material agreement, contract, lease, license, instrument, or

other arrangement to which the Target is a party or by which it is bound or to

which any of its assets is subject (or result in the imposition of any Security

Interest upon any of its assets). The Target

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does not need to give any notice to, make any filing with, or obtain any

authorization, consent, or approval of any government or governmental agency in

order for the Parties to consummate the transactions contemplated by this

Agreement (including the assignments and assumptions referred to in ss.2 above).

(d) Brokers' Fees. The Target has no Liability or obligation to pay any

fees or commissions to any broker, finder, or agent with respect to the

transactions contemplated by this Agreement for which the Buyer could become

liable or obligated.

(e) Title to Assets. The Target has good title to, or a valid leasehold or

license interest in, the properties and assets used by it, located on its

premises, or shown on the Most Recent Balance Sheet or acquired after the date

thereof, free and clear of all Security Interests, except for properties and

assets disposed of in the Ordinary Course of Business since the date of the Most

Recent Balance Sheet. Without limiting the generality of the foregoing, the

Target has good title to all of the Acquired Assets, free and clear of any

Security Interest or restriction on transfer. Schedule 1 contains a list of each

item of tangible and intangible property included in the Most Recent Balance

Sheet carrying a value of more than $500.

(f) Subsidiaries. The Target has no and has never had any Subsidiaries.

(g) Financial Statements. Attached hereto as Exhibit 3(g) are the

following financial statements (collectively the "Financial Statements"): (i)

Statements of Assets, Liabilities and Equity for the year ending December 31,

2003; and (ii) Statements of Assets, Liabilities, and Equity (the "Most Recent

Financial Statements") as of and for the month ended, October 31, 2004 (the

"Most Recent Fiscal Month End") for the Target. The Financial Statements have

been prepared in accordance with GAAP applied on a consistent basis throughout

the periods covered thereby, present fairly in all material respects the

financial condition of the Target as of such dates and the results of operations

of the Target for such periods, subject to customary year end adjustments, are

correct and complete, and are consistent with the books and records of the

Target (which books and records are correct and complete).

(h) Events Subsequent to Most Recent Fiscal Month End. Since the Most

Recent Fiscal Monthly End, there has not been any material adverse change in the

business, financial condition, operations, results of operations, or future

prospects of the Target. Without limiting the generality of the foregoing, since

that date:

(i) the Target has not sold, leased, transferred, or assigned any of

its assets, tangible or intangible, other than for a fair consideration in

the Ordinary Course of Business;

(ii) the Target has not entered into any agreement, contract, lease,

or license (or series of related agreements, contracts, leases, and

licenses) either involving more than $1,000 or outside the Ordinary Course

of Business;

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(iii) no party (including the Target) has accelerated, terminated,

modified, or cancelled any agreement, contract, lease, or license (or

series of related agreements, contracts, leases, and licenses) to which

the Target is a party or by which is bound;

(iv) the Target has not imposed any Security Interest upon any of

its assets, tangible or intangible;

(v) the Target has not made any capital expenditure (or series of

related capital expenditures) either involving more than $5,000 or outside

the Ordinary Course of Business;

(vi) the Target has not made any capital investment in, any loan to,

or any acquisition of the securities or assets of, any other Person (or

series of related capital investments, loans, and acquisitions) either

involving more than $5,000 or outside the Ordinary Course of Business;

(vii) the Target has not issued any note, bond, or other debt

security or created, incurred, assumed, or guaranteed any indebtedness for

borrowed money or capitalized lease obligation;

(viii) the Target has not delayed or postponed the payment of

accounts payable and other Liabilities;

(ix) the Target has not cancelled, compromised, waived, or released

any right or claim (or series of related rights and claims) either

involving more than $1,000 or outside the Ordinary Course of Business;

(x) the Target has not granted any license or sublicense of any

rights under or with respect to any Intellectual Property;

(xi) there has been no change made or authorized in the charter or

bylaws of the Target;

(xii) the Target has not issued, sold, or otherwise disposed of any

of its capital stock, or granted any options, warrants, or other rights to

purchase or obtain (including upon conversion, exchange, or exercise) any

of its capital stock;

(xiii) the Target has not declared, set aside, or paid any dividend

or made any distribution with respect to its capital stock (whether in

cash or in kind) or redeemed, purchased, or otherwise acquired any of its

capital stock;

(xiv) the Target has not experienced any damage, destruction, or

loss (whether or not covered by insurance) to its property;

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(xv) the Target has not made any loan to, or entered into any other

transaction with, any of its directors, officers, and employees outside

the Ordinary Course of Business;

(xvi) the Target has not entered into any employment contract or

collective bargaining agreement, written or oral, or modified the terms of

any existing such contract or agreement;

(xvii) the Target has not granted any increase in the base

compensation of any of its directors, officers, and employees outside the

Ordinary Course of Business;

(xviii) the Target has not adopted, amended, modified, or terminated

any bonus, profit-sharing, incentive, severance, or other plan, contract,

or commitment for the benefit of any of its directors, officers, and

employees (or taken any such action with respect to any other Employee

Benefit Plan);

(xix) the Target has not made any other change in employment terms

for any of its directors, officers, and employees outside the Ordinary

Course of Business;

(xx) the Target has not made or pledged to make any charitable or

other capital contribution outside the Ordinary Course of Business;

(xxi) the Target has not paid any amount to any third party with

respect to any Liability or obligation (including any costs and expenses

the Target has incurred or may incur in connection with this Agreement and

the transactions contemplated hereby) which would not constitute an

Assumed Liability if in existence as of the Closing;

(xxii) there has not been any other material occurrence, event,

incident, action, failure to act, or transaction outside the Ordinary

Course of Business involving the Target; and

(xxiii) the Target has not committed to any of the foregoing.

(i) Undisclosed Liabilities. The Target has no Liability (and there is no

Basis for any present or future action, suit, proceeding, hearing,

investigation, charge, complaint, claim, or demand against any of them giving

rise to any Liability), except for (i) Liabilities set forth on the face of the

Most Recent Balance Sheet and (ii) Liabilities which have arisen after the Most

Recent Fiscal Month End in the Ordinary Course of Business (none of which

results from, arises out of, relates to, is in the nature of, or was caused by

any breach of contract, breach of warranty, tort, infringement, or violation of

law).

(j) Legal Compliance. Each of the Target and its predecessors has complied

in all material respects with all applicable laws (including rules, regulations,

codes, plans, injunctions, judgments, orders, decrees, rulings, and charges

thereunder) of federal, state, local, and foreign governments (and all agencies

thereof), and no action, suit, proceeding, hearing, investigation,

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charge, complaint, claim, demand, or notice has been filed or commenced against

any of them alleging any failure so to comply.

(k) Tax Matters.

(i) The Target has filed all Tax Returns that it was required to

file. All such Tax Returns were correct and complete in all respects. All

Taxes owed by the Target (whether or not shown on any Tax Return) have

been paid. The Target currently is not the beneficiary of any extension of

time within which to file any Tax Return. No claim has ever been made by

an authority in a jurisdiction where the Target does not file Tax Returns

that it is or may be subject to taxation by that jurisdiction. There are

no Security Interests on any of the assets of the Target that arose in

connection with any failure (or alleged failure) to pay any Tax.

(ii) The Target has withheld and paid all Taxes required to have

been withheld and paid in connection with amounts paid or owing to any

employee, independent contractor, creditor, stockholder, or other third

party.

(iii) The Target does not expect any authority to assess any

additional Taxes for any period for which Tax Returns have been filed.

There is no dispute or claim concerning any Tax Liability of the Target

either (A) claimed or raised by any authority in writing or (B) based upon

personal contact with any agent of such authority. ss.3(k) of the

Disclosure Schedule lists all federal, state, local, and foreign income

Tax Returns filed with respect to the Target for taxable periods ended on

or after December 31, 1996, indicates those Tax Returns that have been

audited, and indicates those Tax Returns that currently are the subject of

audit. The Target has delivered to the Buyer correct and complete copies

of all federal income Tax Returns, examination reports, and statements of

deficiencies assessed against or agreed to by the Target since December,

1996.

(iv) The Target has not waived any statute of limitations in respect

of Taxes or agreed to any extension of time with respect to a Tax

assessment or deficiency.

(v) The Target is not a party to any Tax allocation or sharing

agreement. The Target (A) has not been a member of an Affiliated Group

filing a consolidated federal income Tax Return (other than a group the

common parent of which was the Target) or (B) has any Liability for the

Taxes of any Person (other than any of the Target and its Subsidiaries)

under Reg. ss.1.1502-6 (or any similar provision of state, local, or

foreign law), as a transferee or successor, by contract, or otherwise.

(vi) S Corp. The Target has been an S Corporation since its

inception within the meaning of Section 1361(a) of the Code. The Target

has no unpaid balance of federal or state income Taxes resulting from (i)

any built-in gains under Section 1374 of the Code, (ii) any excess net

passive income under Section 1375 of the Code or (iii) any adjustments

under Section 481(a) of the Code. Neither the Target nor any Target

Stockholder has taken, or failed to take, any action, or is aware of any

circumstances, that

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would cause the Target not to be classified as an S Corporation within the

meaning of Section 1361(a) of the Code.

(l) Real Property.

(i) The Target does not own and has never owned any real property.

(ii) ss.3(l)(ii) of the Disclosure Schedule lists and identifies

briefly all of the leases pursuant to which real property is leased or

subleased to the Target. The Target has delivered to the Buyer correct and

complete copies of the leases and subleases listed in ss.3(l)(ii) of the

Disclosure Schedule (as amended to date). With respect to each lease and

sublease listed in ss.3(l)(ii) of the Disclosure Schedule:

(A) to the Knowledge of the Target, the lease or sublease is

legal, valid, binding, enforceable, and in full force and effect;

(B) to the Knowledge of the Target, the lease or sublease will

continue to be legal, valid, binding, enforceable, and in full force

and effect on identical terms following the consummation of the

transactions contemplated hereby (including the assignments and

assumptions referred to in ss.2 above);

(C) to the Knowledge the Target, no party to the lease or

sublease is in breach or default, and no event has occurred which,

with notice or lapse of time, would constitute a breach or default

or permit termination, modification, or acceleration thereu