CONFIDENTIAL ASSET PURCHASE AGREEMENT by and among IMAR Group, Inc., a wholly-owned subsidiary of Challenger Powerboats, Inc. and Execute Sports Inc

CONFIDENTIAL

ASSET PURCHASE AGREEMENT

by and among

IMAR Group, Inc., a wholly-owned subsidiary of Challenger Powerboats, Inc.

and

Execute Sports Inc.

August 29, 2007

Table of Contents

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “ Agreement ” ), dated as of August 29, 2007, is entered into by and among IMAR Group, Inc. (“ Seller ”), a wholly-owned subsidiary of Challenger Powerboats, Inc., a Nevada corporation and Execute Sports Inc., a Nevada corporation ( “ Buyer ”).

R E C I T A L S:

WHEREAS , Seller is in the business of designing, manufacturing and marketing powerboats; and

WHEREAS , on the terms and conditions hereof, Buyer wishes to purchase from Seller and Seller wish to sell, transfer, assign and deliver to Buyer substantially all of the assets and rights relating to, used in or held for use in relation to Seller’s Sugar Sands line of powerboats (collectively, the “ Business” ).

NOW, THEREFORE , in consideration of the premises, and the mutual representations, warranties, covenants and agreements hereinafter set forth, the parties hereto agree as follows:

ARTICLE I.

CLOSING

The closing of the purchase and sale contemplated hereby (the “ Closing ”) will take place at the offices of Challenger Powerboats, at 10:00a.m. local time on the earlier of: (i) August 29, 2007 or (ii) the third Business Day after all of the conditions to Closing set forth in Sections 7.1 and 7.2 have been satisfied or waived by the party entitled to waive the same, or such other date as to which Buyer and Seller Representative (as defined herein) may agree in writing (the “ Closing Date ”). The Closing shall be effective as of 12:01 a.m., Eastern Time, on the Closing Date (the “ Effective Time ”).

ARTICLE II.

PURCHASE AND SALE

2.1

Purchased Assets .  Subject to the terms and conditions of this Agreement, and on the basis of the representations, warranties and indemnities contained or referred to herein, at the Closing, Seller shall, and shall cause each Seller Entity (as defined below) to, sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts, charges, hypothecations, or monetary encumbrances whatsoever or adverse claims, title defects or restrictions (each, a “ Lien ”) (other than Permitted Liens and Permitted Exceptions as such terms are hereinafter defined), all right, title and interest of Seller or any Seller Entity in and to all the assets, properties and rights to the extent relating to, currently being used, or held for use in the Businesses or necessary for the operation of the Businesses, excepting only the Excluded Assets (as defined in Section 2.2 ), wherever located, and whether or not reflected on the books of Seller or any Seller Entity (collectively, the “ Purchased Assets ”), including, but not limited to, all of Seller’s or any Seller Entity’s right, title and interest in and to the following:

(a)

all real tangible and intangible property, together with all easements, rights and privileges appurtenant thereto, leased by any Seller and/or any Seller Entity as of the Closing Date, as listed and designated on Schedule 4.5(e) (the “ Leased Real Property ”);

(b)

all Permits (as defined in Section 4.8), in each case to the extent transferable or assignable;

(c)

all records, files, books and operating data, whether in print, electronic or other media, to the extent relating to the Businesses or any of the Purchased Assets, including without limitation Confidential Information (as defined in Section 6.8 hereof), equipment maintenance records, correspondence, financial, sales, market and credit information and reports, drawings, patterns, slogans, market research and other research materials and contract documents;

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(d)

all prepaid expenses and deposits of the Businesses;

(e)

(i) all goodwill to the extent incident to or associated with the Businesses as a going concern, all customer, supplier and distributor lists and all other information and data to the extent relating to the customers or suppliers of the Businesses; (ii) all promotional displays and materials, price lists, bid and quote information, literature, catalogs, brochures, advertising material and the like, in each case to the extent relating to the Businesses; (iii) all product and packaging development; (iv) all computer programs and other software, engineering, drawings, plans and product specifications, in each case to the extent used in the Businesses; and (v) any licenses, license agreements and applications related to any of the foregoing in clause (i), (ii), (iii) or (iv) (collectively the “ Intangible Assets ”);

(f)

the U.S. and International trade names, service marks and service names and applications and registrations therefore used in the Businesses and listed on Schedule 2(1)(f) , together with the goodwill associated therewith (the “ Transferred Trademarks ”);

(g)

all insurance policies related solely to the Businesses, to the extent that such insurance policies are assignable by Seller or any Seller Entity to Buyer, and independently thereof, the right to receive any insurance proceeds relating to the Businesses;

2.2

Excluded Assets .  Notwithstanding anything in Section 2.1 to the contrary, the Purchased Assets shall not include any of the following (collectively, the “ Excluded Assets ”):

(a)

any rights or liabilities arising under, or with respect to, any of the Seller Employee Plans (as hereinafter defined);

(b)

Any Seller’s or any Seller Entity’s rights to claim refunds and causes of action directly and solely related to the Excluded Assets;

(c)

the corporate seal, minute books, stock books, blank share certificates and other records relating to the corporate organization of Seller or any Seller Entity;

(d)

any licenses, permits, orders or approvals from any Governmental Authority (as hereinafter defined) that are not transferable under applicable Law (as hereinafter defined);

(e)

all Tax Returns of Seller or any Seller Entity (subject to the cooperation provisions of Section 6.15 );

(f)

any assets, properties or rights of Seller or any Seller Entity to the extent they do not relate to or are not used or held for use in the Businesses;

(g)

all collective bargaining agreements in effect between Seller or any Seller Entity and any labor organization covering employees of Seller or any Seller Entity engaged in the Businesses;

2.3

Payments .  In consideration for the Purchased Assets, Buyer shall pay to Seller:

(a)

an aggregate of $5,000,000.00 (five million US dollars), subject to certain conditions as set forth in Section 2.3(a)(i) below;  

(i)

the Seller and Buyer agree to a service agreement through which Seller will provide Buyer manufacturing and administrative services relative to the Sugar Sand line of jet boats, for which Buyer will compensate Seller (as defined in Manufacturing Agreement attached as Exhibit A);

(ii)

the Seller and Buyer agree to a service agreement through which Seller will provide Buyer sales and marketing services relative to the Sugar Sand line of jet boats, for which Buyer will compensate Seller (as defined in Sales and Marketing Agreement attached as Exhibit B);

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2.4

Delivery of Purchase Price .  Buyer shall deliver the Purchase Price in United States currency via wire transfer to a financial institution according to instruction provided by Seller.

2.5

Allocation Reporting .  Buyer and Seller agree to allocate the payments set forth in this Article II (including Assumed Obligations) among the Purchased Assets in accordance with Section 1060 of the Code, which allocation shall be prepared by Buyer within ninety (90) days after the Closing Date.  If Seller Representative disputes the allocation, Buyer and Seller Representative shall cooperate in good faith to resolve any dispute.  Should the parties fail to reach an agreement within thirty (30) days after Buyer's delivery of such allocation to Seller Representative, the determination of the allocation shall be made by Jaspers & Hall, PC whose decision shall be final.   Buyer and Seller , in connection with their respective U.S. federal, state , and local tax returns and other filings (including without limitation Internal Revenue Service Form 8594), shall not take any position inconsistent with such treatment and allocation.

ARTICLE III.

LIABILITIES AND OBLIGATIONS

3.1

Obligations Assumed .   As part of the consideration for the Purchased Assets, at the Effective Time and subject to Section 3.2 , Buyer shall assume only the following obligations of Seller or a Seller Entity arising from or related to the Businesses (the “ Assumed Obligations ”):

(a)

All obligations to procure or maintain Permits in connection with the post-Closing operation of the Businesses by Buyer;

3.2

Liabilities and Obligations Not Assumed .  Other than as specifically listed in Section 3.1 above, Buyer shall assume no obligation or liabilities whatsoever of Seller or any Seller Entity, whether or not arising from or related to the Businesses (the “ Excluded Liabilities ”), and Seller shall or shall cause a Seller Entity to pay and perform each such Excluded Liability as and when due.  Without limiting the generality of the foregoing, the Excluded Liabilities shall include, and under no circumstances shall Buyer be deemed to assume any Liability (as defined herein) of Seller or any Seller Entity arising out of or relating to:  (a) any actual or alleged tortious conduct of Seller, any Seller Entity, or any of their respective employees or agents; (b) any product liability claim arising out of a product sold or disposed of by Seller or any Seller Entity prior to the Effective Time; (c) any claim for breach of warranty or contract by Seller or any Seller Entity; (d) any claim predicated on strict liability or any similar legal theory based on acts, omissions, events or circumstances prior to the Effective Time; (e) any actual or alleged violation of any Law (as defined in Section 4.3 ) occurring prior to the Effective Time; (f) any business or business activities of Seller or any Seller Entity that are not part of the operation of the Businesses; (g) any Liability for Taxes (as defined in Section 4.7 ) of any kind or character of Seller or any Seller Entity that relate to any period prior to the Effective Time; (h) any Excluded Asset; (i) the WARN Act (as hereinafter defined) in connection with the transactions contemplated by or provided for in this Agreement; (j) any Environmental Liability relating to or arising out of any pre-Closing condition or obligation; or (k) any Liability of Seller or any Seller Entity under or arising by reason of this Agreement, or incurred in connection with the transactions contemplated by this Agreement.  Notwithstanding any other provision of this Agreement, the obligations of Seller and the Seller Entities with respect to all Liabilities other than the Assumed Obligations shall survive the Closing and the transactions contemplated by this Agreement.  “ Liability ” for the purposes hereof shall mean any liability or obligation whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated and whether due or to become due.

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller and the Seller Entity each jointly and severally represent and warrant to Buyer, as of the date of this Agreement and again as of the Closing Date, the following:

4.1

Organization.

(a)

Seller is a Nevada Corporations, duly qualified, validly existing and in good standing under the laws of the State of Nevada.  Seller Entity is a North Dakota corporation, duly qualified, validly existing and in good standing under the laws of the State of North Dakota. Each Seller is duly qualified or licensed, as applicable, and authorized to conduct its Business in each state in which the nature of the Business of such Seller or the Purchased Assets to be purchased from such Seller makes such qualification or license necessary.  

4.2

Authority; Sufficiency of Purchased Assets .

(a)

Seller and each Seller Entity have full right, corporate power, legal capacity and authority to execute, deliver and perform this Agreement and all documents, certificates and instruments referred to in this Agreement to be executed, delivered and performed by Seller or any Seller Entity (the “ Seller Related Documents ”).   This Agreement has been duly executed and delivered by Seller and constitutes, and the Seller Related Documents, when duly executed and delivered by Seller and the applicable Seller Entities, will constitute, legal, valid and binding obligations of Seller and such Seller Entities, as applicable, enforceable against Seller and such Seller Entities in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

(b)

Seller and each Seller Entity have full right, corporate power, legal capacity and authority necessary to conduct the Businesses as being conducted on the date hereof and to own, lease and operate the Purchased Assets.

(c)

The Purchased Assets are all of the assets, properties or rights necessary to conduct the Businesses as historically conducted.

4.3

Consents .

(a)

Except as listed on Schedules 4.3 , the execution and delivery of this Agreement and the Seller Related Documents by Seller or any Seller Entity do not, and the performance of this Agreement and the Seller Related Documents by Seller or any Seller Entity will not:  (i) require any authorization, approval, consent, waiver, amendment or other action by, or registration, declaration or filing with or notice to, any foreign, domestic, federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, arbitral panel, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing (each, a “ Governmental Authority ”); (ii) result in a violation of any statute, law, rule, regulation or ordinance (the foregoing, collectively, “ Laws ”), or of any order, writ, injunction, judgment decree or other requirement of any Governmental Authority (the foregoing, each an “ Order ”) applicable to Seller or any Seller Entity, the Businesses or the Purchased Assets; (iii) result in the creation of any Lien on any of the Purchased Assets; or (iv) violate the articles (or certificate) of incorporation, bylaws or other organizational documents or instruments of Seller or any Seller Entity.

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(b)

Each Material Contract with respect to which the consent of the other party or parties thereto must be obtained by Seller or any Seller Entity by virtue of the execution and delivery of this Agreement or any of the Seller Related Documents to avoid the invalidity of such Material Contract, the termination thereof or acceleration of any remedies thereunder, a breach or default thereunder (whether with notice, passage of time or both) or any other change or modification to the terms thereof is marked with an asterisk (“*”) on Schedule 4.6(a) (each a “ Required Contractual Consent ”).

4.4

Legal Actions .  Except as set forth in Schedule 4.4, there is no action, suit, claim, proceeding, inquiry, hearing or arbitration or governmental investigation (whether public or private) of any nature (each, a “ Proceeding ”) pending or threatened against Seller or any Seller Entity (to the extent related to the Businesses, and not otherwise), the Businesses or the Purchased Assets.  Except as set forth in Schedule 4.4, neither Seller nor any Seller Entity has received notice of any investigation pending or threatened against Seller or any Seller Entity (to the extent related to the Businesses, and not otherwise), the Businesses or the Purchased Assets by or before any Governmental Authority.  Schedule 4.4 sets forth, with respect to any such pending or threatened Proceeding or investigation, the forum, the parties thereto, and the subject matter thereof.  No Governmental Authority or other person has notified Seller or any Seller Entity of any challenge or question of the legal right of Seller or any Seller Entity to offer or sell any of the products or services related to the Businesses in the present manner or style thereof.  There is no Proceeding pending or threatened, that in any manner challenges or seeks, or reasonably could be expected to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement or that questions the validity of this Agreement, any of the transactions contemplated hereby or any action that has been taken by Seller or any Seller Entity in connection herewith or in connection with any of the transactions contemplated hereby.

4.5

Personal Property, Inventory, Other Tangible Assets, and Intellectual Property .  

(a)

Schedule 4.5(a) lists the Purchased Assets that are Equipment or Other Tangible Assets.   Schedule 4.5(a) :  (i) separately lists the Purchased Assets that are (A) Leased Personal Property and (B) any Equipment or Other Tangible Assets that are leased; and (ii) includes a cross-reference for each such asset to the relevant lease documents listed on Schedule 4.6 .  Except as disclosed on Schedule 4.5(a) , all of the Purchased Assets that are Equipment or Other Tangible Assets are located at the Leased Real Property.

(b)

Schedule 4.5(b) is a list of all Inventory as of August 29, 2007 and, except as indicated on such Schedule, all Inventory on such Schedule, and any Inventory acquired by Seller or any Seller Entity since such date, was produced or acquired by Seller or such Seller Entity only under existing Contracts or in bona fide, arm’s-length transactions entered into in the ordinary course of business; and except as indicated on such Schedule, no Inventory has been consigned to Seller or any Seller Entity, is otherwise owned by a third party or is excluded from the Purchased Assets.  The Inventories reflected in the Seller Financial Reports (as defined in Section 4.10 ) as related to the Businesses:  (i) were classified as current assets in accordance with GAAP; (ii) were reflected consistently with past practices; and (iii) fairly reflect the average Inventory levels maintained during the 12-month period ended on that date.  Neither Seller nor any Seller Entity depends on any single vendor for a material portion of its Inventories, the loss of business with which could have a material adverse effect on the Businesses, nor has Seller or any Seller Entity ever had difficulty, material to the Businesses, in obtaining its Inventories.  Except for such items reflected on Schedule 4.5(b) , all items of Inventory [reflected on the most recent balance sheet in the Seller Financial Reports, or thereafter acquired by Seller or any Seller Entity for use in the Businesses (and not subsequently disposed of in the ordinary course of the Businesses), are of a quality and quantity which are merchantable and fully useable in the ordinary course of the Businesses.  The values at which such items of Inventory are accrued on the most recent balance sheet contained in the Seller Financial Reports, or in the case of Inventory acquired following the date thereof, on the books and records of Seller or any Seller Entity relating to the Businesses, reflect the normal Inventory valuation policies of Seller or such Seller Entity in respect of the Businesses (and such policies include the writing down of or reserving against the value of slow moving or obsolete Inventory and stating Inventories at the lower of cost or market, in each case in accordance with GAAP consistently applied).

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(c)

Seller and/or a Seller Entity own all right, title and interest in and to all of the (i) Purchased Assets that are Equipment, (ii) Purchased Assets that are Inventory, (iii) Purchased Assets that are Other Tangible Assets, and (iv) other tangible personal property included in the Purchased Assets free and clear of any and all Liens, except as listed in Schedules 4.5(a), 4.5(b) and 4.6 , and except for taxes not yet due and payable, liens imposed by applicable law and incurred in the ordinary course of business for obligations not yet due and payable to landlords, carriers, warehousemen, laborers, material men and the like, and other liens, encumbrances and adverse claims that do not and will not materially restrict the use of such property as presently used or materially impair the value thereof (“ Permitted Liens ”) and (y) Permitted Exceptions (as described in Section 7.1 ).  No person or entity other than Seller or a Seller Entity owns any right, title or interest in or to, or operates, any of the Purchased Assets.  Except as listed on Schedules 4.5(a ) and 4.5(b) , the Purchased Assets are in good operating condition and repair and are adequate for the uses to which they are put, and no properties or assets necessary for the conduct of the Businesses in substantially the same manner as the Businesses has heretofore been conducted are in need of replacement or material maintenance or repair except for routine replacement, maintenance and repair and Seller or a Seller Entity has performed such routine replacement, maintenance and repair in the ordinary course of its conduct of the Businesses.

(d)

Schedule 4.5(d) lists all items of Intellectual Property of Seller or any Seller Entity necessary to the operation of the Businesses as now conducted, in each case free of any claims of infringement or any actual infringement.  No consent will be required for the use of any Intellectual Property by Buyer and no governmental registration of any of the Intellectual Property has lapsed or expired or been canceled, abandoned, opposed, or the subject of any reexamination request.  No current licenses for the use of any of the Intellectual Property have been granted by Seller or any Seller Entity to any third parties, and none of the Intellectual Property is being used by any other individual or entity.

(e)

All receivables included in the Purchased Assets (including without limitation trade accounts and other accounts receivable, loans receivable and advances) reflected on the most recent balance sheet in the Seller Financial Reports, or which have arisen from the conduct of the Businesses since the date of such most recent balance sheet, are valid and have arisen only from bona fide, arm’s-length transactions in the ordinary course of the Businesses consistent with past practices, and all such receivables have been fully collected or shall be fully collected without resort to litigation and without offset or counterclaim, in the aggregate face amounts.

4.6

Material Agreements .  

(a)

Schedule 4.6(a) lists each Material Agreement (as defined below in Section 4.6(c) ).  True and correct copies of all Material Agreements as currently in effect have previously been delivered to Buyer.

(b)

With respect to the Businesses:

(i)

Neither Seller nor any Seller Entity (A) has in any material respect breached, violated or defaulted under (or taken or failed to take any action that, with the giving of notice, the passage of time or both would constitute a default under) any Contract that is a Purchased Asset, (B) neither Seller nor any Seller Entity has received notice that Seller or any Seller Entity has breached, violated or defaulted under (or taken or failed to take any action that, with the giving of notice, the passage of time or both would constitute a default under), any Contract that is a Purchased Asset, and (C) no other party obligated to Seller or any Seller Entity pursuant to a Contract that is a Purchased Asset is in material default under any obligation under such Contract that is a Purchased Asset.

(ii)

All of the agreements and understandings of Seller or any Seller Entity and each of the respective third parties are set forth in the copies of the Contracts that are Purchased Assets provided to Buyer, and there are no other agreements, written or oral, changing, in any material manner, the rights or obligations of Seller or any Seller Entity thereunder.

 (iii)

All of the Contracts have been entered into in the ordinary course of business on commercially reasonable terms, with bona fide third parties in arm’s-length transactions, are valid and enforceable in all material respects in accordance with their terms, are in full force and effect, and will continue to be valid and enforceable and in full force and effect on identical terms following the Closing

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Date and their assignment to Buyer.  All Contracts that are Purchased Assets can be fulfilled or performed by Seller or a Seller Entity in accordance with their respective terms.

(c)

The term “Material Agreement” means each contract, lease, undertaking, commitment, mortgage, indenture, note, security agreement, pledge agreement, guaranty, bond, letter of credit, lease or instrument creating any lien or claim on any of the assets used in the Businesses (other than unsecured trade accounts payable and incurred in the ordinary course of business), license and other agreement of Seller or any Seller Entity in effect on the date hereof which relates to the Businesses and:

(i)

involves the expenditure or receipt of more than Ten Thousand Dollars ($10,000) over the term thereof, and which cannot be cancelled by Seller or any Seller Entity upon thirty (30) days’ or less notice without any liability, penalty or premium;

(ii)

contains provisions for the sale or purchase of raw materials, products or services at prices that vary in a material respect from the market prices of such raw materials, products or services generally prevailing in customary third party markets;

(iii)

contains provisions for the sale or purchase of raw materials, products or services at prices that vary in a material respect from the market prices of such raw materials, products or services generally prevailing in customary third party markets;

(iv)

requires Seller or any Seller Entity to indemnify or hold harmless any other person or entity (other than pursuant to endorsements in the ordinary course of business) or provides for a guaranty of or by Seller or any Seller Entity;

(v)

evidences any warranty obligation of Seller or any Seller Entity with respect to goods, services or products sold or leased by any of them;

(vi)

 imposes on Seller or any Seller Entity any confidentiality, non-disclosure or non-compete obligation or imposes on a third party any confidentiality, non-disclosure or non-compete obligation with respect to Seller or any Seller Entity;

(vii)

pertains to the lease of any equipment or other asset of tangible personal property used in the Businesses (whether Seller or any Seller Entity is lessee or lessor);

(viii)

involves purchase orders, contracts or commitments for which Seller or any Seller Entity has received payment, but has not, as of the Closing Date, fully performed its respective obligations thereunder;

(ix)

relates to, evidences, or guarantees, or provides security for, any debt or the deferred purchase price of property (whether incurred, assumed, guaranteed or secured by any asset);

(x)

relates to or provides for the marketing, sale or distribution of products or services;

(xi)

relates to any arrangement, agreement or relationship of any kind with any labor union or association;

(xii)

relates to the acquisition within the past [five (5)] years by Seller, any Seller Entity, or any predecessor-in-interest of Seller or any Seller Entity of any of the Purchased Assets;

(xiii)

provides for a partnership, joint venture, teaming or similar arrangement between Seller or any Seller Entity and any other person or entity or entities to share in the profits or losses of the Businesses of any parties thereof

(xiv)

provides for or relates to any employment or consulting relationship with any person or entity;

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(xv)

is between Seller or any Seller Entity and any of their respective shareholders, directors, officers or affiliates;

(xvi)

pursuant to which (A) Seller or any Seller Entity is a lessee of, or holds or operates, any real property owned by any person or entity or (B) Seller or any Seller Entity is a lessor of, or makes available for use by any person or entity, any real property owned or held as lessee by Seller or any Seller Entity

(xvii)

pursuant to which Seller or any Seller Entity grants or is granted a license of any patent, copyright, trade mark, trade secret or other intellectual property right;

(xviii)

was not entered into in the ordinary course of business;

(xix)

relates to (A) the prospective sale of any of the Purchased Assets (other than Inventory sales in the ordinary course of business) or (B) the grant of any existing preferential rights to purchase any of the Purchased Assets or (C) requires the consent of any party to the transfer of the Purchased Assets;

(xx)

grants a lien on any of the Purchased Assets (including liens upon properties acquired under conditional sales, capital leases or other title retention or security devices); or

(xxi)

extends for a term more than twelve (12) months from the Closing Date (unless terminable without payment or penalty upon no more than thirty (30) days notice).

4.7

Applicable Laws and Permits .  Schedule 4.8 sets forth a list of all of the licenses, permits, permit applications, qualifications, certificates, franchises, approvals, authorizations, exemptions, registrations, all applications therefor, and other documentation necessary to own and operate the Purchased Assets and to conduct the Businesses as it is currently being conducted, including without limitation any thereof required pursuant to any Environmental Law (as defined in Section 4.13 ) (collectively, “ Permits ”).  Seller has heretofore delivered or caused to be delivered to Buyer true and correct copies of all such Permits as presently in effect.  Except as listed in Schedule 4.8:  (a) Seller and each Seller Entity have all such Permits, each of which is in full force and effect; (b) the Businesses is now being, and has at all times been, conducted and such assets and properties are being, and have at all times been, owned and operated in material compliance with all applicable Laws and Orders and all such Permits; (c) the Businesses is now being operated in compliance with all pending Permit applications and neither Seller nor any Seller Entity has any reason to believe the governing agency will not approve such pending Permit applications; and (d) neither Seller nor any Seller Entity has received any notice of any violation, breach or default of any such Laws, Orders or Permits.

4.8

Certain Changes .  Since June 30, 2007, Seller and each Seller Entity have conducted the Businesses solely in the ordinary course of business consistent with past practices, and have used commercially reasonable efforts to preserve the Businesses, and except as specifically listed on Schedule 4.9, since June 30, 2007, there has not been, with respect to the Businesses, any:

(a)

material adverse change of any nature whatsoever in the business, operations, cash flows, affairs, prospects, liabilities (contingent or otherwise), results of operation, properties or assets or the condition (financial or otherwise) of the Businesses, or any event or circumstance that would, individually or in the aggregate, reasonably be expected to result in such a material adverse change;

(b)

damage, destruction or loss (whether or not covered by insurance) that resulted in or could reasonably be expected to result in losses with respect to the Purchased Assets or the Businesses of more than Ten Thousand Dollars ($10,000);

(c)

revaluation or write-down of any of the Purchased Assets or any other assets or properties associated with the Businesses;

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(d)

amendment or termination of any Material Agreement other than in the ordinary course of business or as contemplated in this Agreement;

(e)

change by Seller or any Seller Entity in its accounting principles, methods or practices or in the manner it keeps its books and records or any change by Seller or any Seller Entity of its current practices with respect to sales, receivables, payables or accrued expenses related to the Businesses;

(f)

(i)  grant of any severance, continuation or termination pay to any director, officer, shareholder or employee of Seller or any Seller Entity engaged in the Businesses; (ii) entering into of any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer, shareholder or employee of Seller or any Seller Entity engaged in the Businesses; (iii) increase in benefits payable or potentially payable under any severance, continuation or termination pay policies or employment agreements with any director, officer, shareholder or employee of Seller or any Seller Entity engaged in the Businesses; (iv) increase in compensation, bonus or other benefits payable or potentially payable to directors, officers, shareholders or employees of Seller or any Seller Entity engaged in the Businesses, except for customary increases in non-executive employee compensation made in the ordinary course of business and consistent with past practices; (v) change in the terms of any bonus, pension, insurance, health or other benefit plan of Seller or any Seller Entity related to the Businesses; or (vi) representation of Seller or any Seller Entity to any employee or former employee of Seller or any Seller Entity engaged in the Businesses that Buyer would assume, continue to maintain or implement any benefit plan or would continue to employ such employees after the Closing Date;

(g)

disposal of assets used or held for use in the Businesses outside of the ordinary course of business, including any transfer to any affiliate or other division of or within Seller or any Seller Entity; or

(h)

agreement by Seller or any Seller Entity to do, either directly or indirectly, any of the things described in the preceding clauses (a) through (g).

4.9

Seller Financial Reports .  Attached hereto as Schedule 4.10 are the unaudited balance sheet, income statement and statement of cash flows for the Businesses the fiscal year ended December 31, 2006, as well for the six month period through the month ended June 30, 2007 (collectively, the “ Seller Financial Reports ”).  The Seller Financial Reports have been prepared in accordance with GAAP, consistently applied.  The Seller Financial Reports:  (a) present fairly the financial position of the Businesses as of the dates indicated and present fairly the results of operations of the Businesses for the periods then ended; and (b) are in accordance with the books and records of Seller and the Seller Entities relating to the Businesses that have been properly maintained and are complete and correct in all material respects, as of their respective dates.  Except as set forth on Schedule 4.10, there are no Liabilities of Seller or any Seller Entity other than:  (i) any Liability reflected as a Liability on the Seller Financial Reports and (ii) Liabilities incurred since June 30, 2007, that have been incurred in the ordinary course of the Businesses consistent with past practice.

4.10

WARN Act Notices .  Any notice required under the Federal Workers Adjustment and Retraining Notification Act (“ WARN Act ”) that is, has been or will be required of Seller or any Seller Entity to its employees or former employees by reason of its acts prior to the Closing or by reason of the consummation of the Closing has been given by either Seller or a Seller Entity and Seller and each Seller Entity shall be responsible for any liability arising under the WARN Act in connection with this transaction.

4.11

Product Liability .  There is no currently pending claim for product liability, warranty, material back-charge, material additional work, field repair or other claims by any third party (whether based on contract or tort and whether relating to personal injury, including death, property damage or economic loss) arising from: (a) services rendered by Seller or any Seller Entity in connection with the Businesses during periods through and including the Closing Date, (b) the sale, distribution, erection or installation of products by Seller or any Seller Entity in connection with the Businesses prior to the Closing Date, or the manufacture of products by Seller or any Seller Entity in connection with the Businesses, or (c) the operation of the Businesses or the ownership of the Purchased Assets during the period through and including the Closing Date.  All services rendered and products sold by Seller or any Seller Entity in connection with the Businesses have been in material conformity with all applicable contractual commitments and all express and implied warranties, and neither Seller nor any Seller Entity has any

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liability (and Seller has no knowledge of any basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand giving rise to any liability) for damages in connection therewith.  No services or products provided by Seller or any Seller Entity in connection with the Businesses are subject to any guaranty, warranty, or other indemnity beyond Seller’ or any Seller Entity’s standard terms and conditions of sale.

4.12

Brokers .  Neither Seller nor any Seller Entity has incurred any obligation or liability to any person or entity for any brokerage fees, agent’s commissions or finder’s fees in connection with the execution or delivery of this Agreement or the consummation of the transactions contemplated by this Agreement.  Seller agrees to indemnify and hold Buyer harmless from any claim, loss, liability or damage incurred by Buyer as a result of any Seller’s breach of this Section 4.14 .

4.13

Insurance .  Seller and each Seller Entity have obtained and will maintain through the Closing Date insurance policies that provide coverage to insure the Purchased Assets and the Businesses against such risks and in such amounts as are prudent and customary in the industry in which Seller or any Seller Entity operates and all such policies are in full force and effect.  Schedule 4.13 sets forth a complete and correct list of all material insurance policies of any kind currently in force with respect to the Businesses (the “ Insurance Policies ”), including all “ occurrence based ” liability policies regardless of the periods to which they relate and Seller has delivered or has caused to be delivered copies of such Insurance Policies to Buyer.  Schedule 4.13 also sets forth for each Insurance Policy, the type of coverage, the name of the insureds, the insurer, the premium, the expiration date, the period to which it relates, the deductibles and loss retention amounts and the amounts of coverage.  None of the insurers under any of the Insurance Policies has rejected the defense or coverage of any claim purported to be covered by such insurer or has reserved the right to reject the defense or coverage of any claim purported to be covered by such insurer.

4.14

Status of Buyer and Seller.

Each of the Seller acknowledges that the Buyer is a reporting company under Section 12 of the Securities and Exchange Act of 1934, as amended (the “1934 Act”); that each of the Seller has had an opportunity to review the Buyer’s various filings previously made pursuant to the 1934 Act which are publicly available; that each of the Seller has been given the opportunity to ask questions of, and receive answers from the officers of the Buyer concerning the Buyer and the terms and conditions of the transaction contemplated by this Agreement; and that in view of Seller’s close relationship to each other and the Buyer’s direct access to the Buyer, disclosures by the Buyer shall constitute disclosure to each Seller and all Seller for all purposes including without limitation for purposes of compliance with all applicable securities laws regarding disclosure.

4.15

Reliance . This Agreement is made by the Buyer with each Seller in reliance upon the representations and warranties and covenants made or given such Seller in this Agreement which by execution of this Agreement each Seller hereby confirms.

4.16

Disclosure .  No representation or warranty by Seller in this Agreement or in any Schedule hereto either (a) contains any untrue statement of a material fact or (b) omits to state a fact necessary to make such representation or warranty not materially misleading.  There are no facts or circumstances known to Seller which materially and adversely affect, or are reasonably likely to so affect, the business, operations, cash flows, affairs, prospects, liabilities (contingent or otherwise), results of operation, properties or assets or the condition (financial or otherwise) of the Businesses which have not been disclosed in this Agreement, including the Schedules attached to this Agreement.

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ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller, as of the date of this Agreement and again as of the Closing Date, the following:

5.1

Organization .  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.

5.2

Authority .  Buyer has full right, corporate power, legal capacity and authority to execute, deliver and perform this Agreement and all documents and instruments referred to in this Agreement to be executed, delivered and performed by Buyer (the “ Buyer Related Documents ”).  This Agreement has been duly executed and delivered by Buyer and constitutes, and the Buyer Related Documents, when duly executed and delivered by Buyer, will constitute, legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

5.3

Consents .  Except as listed on Schedule 5.3 , the execution and delivery of this Agreement and the Buyer Related Documents by Buyer does not, and the performance of this Agreement and the Buyer Related Documents by Buyer shall not:  (a) except for any filings required in compliance with, and the expiration of any applicable waiting periods under, the HSR Act, require any authorization, approval, consent, waiver, amendment or other action by, or registration, declaration or filing with or notice to any Governmental Authority; (b) result in a violation of any Laws or Orders applicable to Buyer; (c) result in a material violation or breach of, or a default under any material contract which would affect Buyer’s ability to close the transaction contemplated hereunder; or (d) violate the [certificate of incorporation], bylaws or other organizational documents or instruments of Buyer.

5.4

Defaults .  The execution, delivery and performance of this Agreement and the Buyer Related Documents and the consummation by Buyer of the transactions contemplated hereby and thereby will not result in a default under or a violation of: (a) any applicable Law; (b) the [certificate of incorporation] or bylaws of Buyer; or (c) any agreement of contract to which Buyer is a party, in each case which default or violation would prevent Buyer from consummating the transactions contemplated hereby.

5.5

Brokers .  Buyer has not incurred any obligation or liability to any person or entity for any brokerage fees, agent’s commissions or finder’s fees in connection with the execution or delivery of this Agreement or the consummation of the transactions contemplated by this Agreement.  Buyer agrees to indemnify and hold Seller harmless from any claim, loss, liability or damage incurred by Seller as a result of Buyer’s breach of this Section 5.5 .

ARTICLE VI.

COVENANTS