ASSET PURCHASE AGREEMENT

Exhibit 10.1

ASSET PURCHASE AGREEMENT

           This ASSET PURCHASE AGREEMENT, dated as of September 1, 2008 (the “Agreement”), among Universal Power Group, Inc., a Texas corporation, having its principal place of business at 1720 Hayden Road, Carrollton, Texas 75006 (“UPG” or the “Buyer”), as purchaser, and Shanah, Inc. (“Shanah”) and Long Knight, Inc. (formerly known as Silver Spur, Inc.), each a Texas corporation having its principal place of business at 6112 W. Pioneer Parkway, Arlington, Texas 76013 (the “Sellers”), as sellers, and James R. Nachlinger, also known as Dick Nachlinger, an individual residing at 2900 Mistletoe Ct., Arlington, Texas 76013 (“Nach-linger”).

W I T N E S S E T H :

           WHEREAS, Sellers are engaged in the business of manufacturing, fabricating and selling hunting and hunting-related products under the names “Monarch,” “Monarch Hunting Products” and derivatives thereof (the “Business”); and

           WHEREAS, Nachlinger owns one hundred percent (100%) of the issued and outstanding shares of the capital stock of each of the Sellers; and

           WHEREAS, UPG wishes to acquire all of the Purchased Assets (as more particularly described below) on the terms and conditions set forth herein; and

           WHEREAS, the Sellers wish to sell the Purchased Assets to UPG on the terms and conditions set forth herein.

           NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants set forth herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

           1.          Purchase and Sale of Assets.

           1.01      Purchase of Assets and Assumption of Liabilities. On the terms and subject to the conditions set forth herein, at the Closing (as defined in Section 4.01), effective as of the Closing Date (as defined in Section 4.01), the Buyer shall (a) purchase from the Sellers, and the Sellers shall sell, assign, transfer, convey and deliver to the Buyer, all of the Sellers’ respective rights, title and interests in and to all of the assets and properties used in connection with the Business, as the same shall exist on the Closing Date, except for the Excluded Assets as described in Section 1.03, all of such assets and properties being hereinafter collectively referred to as the “Purchased Assets”; (b) assume all of the liabilities set forth all of the liabilities of Sellers as specifically set forth in Section 3.01 hereof and on Schedule 1.01 hereto.

           1.02      List of Assets. Except as expressly provided in Section 1.03 hereof, the Purchased Assets shall include, without limitation, all of the Sellers rights, title and interests in and to:

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           1.03     Excluded Assets. The Purchased Assets shall not include:

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           1.04     Instruments of Transfer. On the Closing Date, the Sellers shall deliver, or cause to be delivered, to the Buyer (a) duly executed instruments of transfer and assignment, including, without limitation, bills of sale and assignments in form and substance reasonably satisfactory to the Buyer and its counsel, sufficient to vest in the Buyer valid title to all of the Sellers right, title and interest in and to the Purchased Assets, free and clear of all mortgages, claims, liens, charges or encumbrances of any kind or nature whatsoever, and (b) a check in the amount of all cash and cash equivalents included in the Purchased Assets (excludes cash balance as of August 31, 2008).

           2.         Purchase Price.

           2.01     Purchase Price. The aggregate price to be paid by the Buyer (the “Purchase Price”) for and in consideration of the sale and transfer of the Purchased Assets as provided herein and for the covenant not to compete set forth in Section 7.01 hereof (the “Covenant Not To Compete”) shall be $1,000,000.

           2.02     Allocation of Purchase Price.

           (a)       The Purchase Price shall be allocated on the Closing Date (or within 30 days thereafter) to the Covenant Not To Compete and among the Purchased Assets in accordance with an allocation schedule to be prepared by the Buyer and consented to by the Sellers, which consent shall not be unreasonably withheld. Such allocation schedule shall be prepared in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended.

           (b)       In connection with a determination of the allocation schedule contemplated in Section 2.02(a) above, the parties shall cooperate with each other and provide such information

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as any of them shall reasonably request. The parties shall each report the federal, state and local and other tax consequences of the purchase and sale contemplated hereby (including the filing of IRS Forms 8594) in a manner consistent with such allocation schedule and shall not make any inconsistent written statement or take any inconsistent position on any tax returns during the course of any IRS or other tax audit, for any financial or regulatory purpose, in any litigation or investigation or otherwise.

           (c)       Each party shall promptly notify the other party if it receives notice that the IRS proposes any allocation different from the allocation agreed upon in accordance with this Section 2.02.

           2.03     Payment of Purchase Price. Within five business days of the execution of this Agreement, the Buyer shall deposit the sum of $900,000.00 (the “Escrow Amount”) to Wood-haven Bank (the “Escrow Agent”) to be held in escrow pursuant to the terms and conditions of the Escrow Agreement, substantially in the form annexed hereto as Exhibit A. On the Closing Date, the Buyer shall authorize the release to the Sellers of the Escrow Amount plus any earnings thereon (the “Escrow Earnings”) not previously paid to the Sellers, and shall deliver the balance of the Purchase Price, $100,000.00, to the Sellers by certified or bank check payable to the Sellers or by wire transfer to an account designated by the Sellers.

           2.04      Retroactive Economic Effect to Transfer of Assets. As part of the inducement for the parties hereto to enter into this Agreement, the Sellers and the Buyer agree to give, to the extent herein provided, economic effect to the sale and transfer of the Purchased Assets as of the opening of business on September 1, 2008, by providing for an adjustment in the Purchase Price as follows:

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           (a)       From and after September 1, 2008, through and including December 31, 2008 (the “Operating Period”), Nachlinger and the Sellers shall operate the Business consistent with past practice for the benefit and account of the Buyer and in connection therewith.

           (b)       On or before January 31, 2009, the Sellers shall pay to the Buyer an amount equal to their aggregate pre-tax net operating income, or the Buyer shall so pay to the Sellers, an amount equal to their aggregate pre-tax net operating loss, in either case as may result from the Seller’s conduct of the Business during the Operating Period consistent with past practice. For purposes of this Section 2.04, the Seller’s aggregate pre-tax net operating income or loss shall be determined in accordance with Sellers’ usual accounting procedures for determining their net income consistently applied except that (i) the Seller’s rent expense shall be deemed to be $7,800 per month or $31,200 in the aggregate and (ii) Nachlinger’s salary may not exceed $6,500 per month or $26,000 in the aggregate..

           (c)       For and in consideration of the foregoing, on the earlier of (i) the Closing Date or (ii) January 15, 2009, the Buyer shall instruct the Escrow Agent to pay the interest earned on the Escrow Amount to the Sellers.

           3.         Post-Closing Obligations.

           3.01     Assumption.

           (a)       Upon the transfer of the Purchased Assets to Buyer on the Closing Date, Buyer shall (except as may otherwise be specifically agreed to in any other provision of this Agreement) assume and agree to timely and fully pay, perform and discharge those obligations and liabilities of Sellers (the “Assumed Liabilities”) (i) incurred by the Sellers on or after September 1, 2008; provided that such obligations and liabilities are reasonable in light of the conduct of the Business prior to September 1, 2008 or such obligations or liabilities that have been approved in

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advance by the Buyer and (ii) arising from and after the Closing Date under those Contracts set forth on Schedule 5.20 which are marked with an asterisk (the “Assumed Contracts”).

           (b)       Except as specifically set forth in this Agreement, Buyer shall not and does not assume any liability or obligation of Seller.

           3.02     Endorsement of Checks . The Sellers hereby agree that any check received by the Buyer on or after the Closing Date as payment on account of any trade account receivable constituting a part of the Purchased Assets, which check is payable to a Seller, may be endorsed by Buyer for its own account.

           4.         Closing.

           4.01     Closing. The closing of the transactions to be effected hereunder (the “Closing”) shall be held at the offices of UPG at 10:00 A.M. Dallas, Texas time on or before January 10, 2009, or at such other place or at such other time as Buyer and Sellers may mutually agree (the “Closing Date”).

           5.         Representations and Warranties of Seller. Each of the Sellers and Nachlinger, jointly and severally, represent and warrant to and agrees with the Buyer as follows:

           5.01     Organization and Good Standing. Each Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas; (ii) has full corporate power and authority to conduct its business as now conducted and to own or lease and operate the assets and properties now owned or leased and operated by it; and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its properties requires such qualification except where the failure to be so qualified would not have a material adverse effect on the Business or the Purchased Assets (a

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“Material Adverse Effect”). The jurisdictions in which each Seller is so qualified are set forth on Schedule 5.01.

           5.02     Capitalization of Seller. All of the outstanding shares of capital stock of each Seller are owned generally and of record by Nachlinger.

           5.03     Authority and Compliance . Each Seller has full corporate power and authority to execute and deliver this Agreement. The consummation and performance by each Seller of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate actions (including, without limitation, approval of the shareholders of such Seller). This Agreement has been duly and validly executed and delivered on behalf of each Seller and constitutes a valid obligation of such Seller, enforceable in accordance with its terms, except to the extent that such enforceability may be limited by applicable insolvency, bankruptcy, reorganization or similar laws affecting the enforcement of creditors' rights generally and by general equity principles. No consent, authorization or approval of, exemption by, or filing with, any domestic governmental or administrative authority, or any court, is required by either Seller or any of its shareholders to be obtained or made in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.

           5.04     No Conflict. The performance of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach or violation of any of the terms or provisions of, or constitute a default under (i) any Assumed Contract or other agreement or instrument relating to the Purchased Assets (subject to obtaining any consents required to assign the Assumed Contracts); (ii) the articles of incorporation or by-laws of either Seller; or (iii) any law, order, rule, regulation, writ, injunction or decree applicable to either Seller.

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           5.05     Compliance with Law; Environmental.

           (a)       Sellers’ operation of the Business and use and occupancy of the Purchased Assets are in compliance with all, and not in violation of any, and neither Sellers nor Nachlinger has received any claim or notice that such operation or use and occupancy is in violation of any, applicable law or ordinance, or any order, rule or regulation of any governmental agency or body to which the Sellers, the Business or the Purchased Assets are subject (except where the failure to be in compliance does not have a Material Adverse Effect); nor have the Sellers failed to obtain or to adhere to the requirements of any government license, permit or authorization necessary to the ownership of the Purchased Assets or to the conduct of the Business (except where such failure does not have a Material Adverse Effect). All governmental permits, licenses and authorizations which have been obtained in connection with the operation of the Business or the use of the Purchased Assets are set forth in Schedule 5.05.

           (b)       The operations of Sellers for all prior periods and through Closing have (i) complied in all material respects with all Environmental Laws (as defined in Section 5.05(c) below), except where the failure to be in compliance does not have a Material Adverse Effect; (ii) not been subject to any judicial or administrative proceeding alleging the violation of any Environmental Laws; and (iii) not been the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any Hazardous Substances (as defined in Section 5.05(c) below) into the environment. None of the operations of the Sellers involves the generation, manufacture, refining, transportation, treatment, storage, handling or disposal of any Hazardous Substances. The Sellers have not shipped any Hazardous Substances for treatment, storage or disposal at any other site or facility, except in compliance with all Envi-

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ronmental Laws. There are no underground storage tanks on any property on or in which the Business is conducted.

           (c)       For purposes of this Agreement, “Hazardous Substance” means hazardous waste, toxic substances, polychlorinated biphenyls, friable asbestos or asbestos containing materials and also includes, but is not limited to substances defined as “hazardous substances” or “toxic substances” in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C Sec. 9061, et seq. (“CERCLA”), the Hazardous Materials Transportation Act, 49 U.S.C. Sec. 6901, et seq . (“HMTA”), and any applicable state statutes. For purposes of this Agreement, “Environment Laws” means the following laws or acts or any other federal state or local laws relating to pollution or protection of the environment: CERCLA; HMTA; the Resource Conservation and Recovery Act, 42 U.S.C Sec 6901, et AIL; the Toxic Substances Control Act, 15 U.S.C Sec 2601, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Sec. 1251, et seq; the Safe Drinking Water Act, 42 U.S.C Sec. 300f, et seq.; and the Clean Air Act 42, U.S.C Sec 7401, et seq.

           5.06     Products. Schedule 5.06 contains a list of all products manufactured or sold by Sellers in the operation of the Business. None of the products manufactured or sold by the Sellers has in the past five years been recalled by Sellers or, to the best of Sellers’ actual knowledge, by any distributor, dealer or other independent agent.

           5.07     Financial Information. Schedule 5.07 contains financial information regarding the Sellers. Such financial information is true, complete and correct and fairly presents in all material respects the financial position of the Sellers at December 31, 2006 and 2007 and July 31, 2008 and the results of operations for the years and period then ended.

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           5.08     Books and Records. The books of account and other financial records of Sellers are complete and correct in all material respects and are maintained in accordance with good business practices, and accurately reflect the basis for the preparation of the financial information set forth on Schedule 5.07.

           5.09     Accounts Receivable. All accounts receivable constituting Purchased Assets arose and/or will arise from bona fide transactions in the ordinary course of business. All trade accounts receivable are by their terms generally due within thirty (30) days after being recorded on the books of the Sellers. All accounts receivable constituting Purchased Assets are expected to be collected in full within one hundred eighty (180) days after Closing.

           5.10    Inventory . All inventory constituting Purchased Assets will be merchantable and of a quality and quantity usable or salable in the ordinary course of business. All inventory is located at the locations set forth on Schedule 5.10.

           5.11    Assets and Properties. Sellers have valid title to all personal property included in the Purchased Assets, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts and other encumbrances or any kind or nature.

           5.12    Condition of Purchased Assets. All machinery, tools, equipment and other tangible personal property included in the Purchased Assets are in good operating condition and repair in all material respects and are usable in the ordinary course of the Business.

           5.13    Real Property. Nachlinger is the legal and beneficial owner of the real property listed on Schedule 5.13 (the “Property”) and has full power and authority to enter into a lease for the Property substantially in the form of Exhibit __ annexed hereto (the “Lease”). The Property is free and clear of all tenancies, licenses and other rights to occupancy and is suitable and adequate for the conduct of the Business as presently conducted.

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           5.14    Patents, Trademarks, Copyrights, Etc. Schedule 5.14 contains a complete and correct list of all patents, patent rights, patent applications, licenses, shop rights, trademarks, trademark applications, trade names, copyrights and similar rights currently used in the Business (collectively “Rights”), indicating the registered owner, the registration number, and the expiration date thereof. Sellers own or validly license all Rights and other proprietary information used in the conduct of the Business as currently being conducted; the conduct of the Business as currently operated does not conflict with valid rights of others in any way, nor has any material use been made of the Rights, except by the Sellers or by other entities duly licensed to use the same under agreements set forth in Schedule 5.14.

           5.15    Insurance. Schedule 5.15 contains a summary description of all policies or binders of fire, liability, product liability, vehicular, title and other insurance held by or on behalf of the Sellers and relating to the Business or any of the Purchased Assets. The policies and binders summarized in Schedule 5.15 are in full force and effect.

           5.16     Legal Proceedings. Etc. Except as set forth on Schedule 5.16, there are no claims, actions, suits, proceedings, arbitrations or investigations, either administrative or judicial, pending or, to the best of Sellers’ actual