ASSET PURCHASE AGREEMENT



         ASSET PURCHASE AGREEMENT, dated as of October 17, 2003, among LifeStyle

Innovations, Inc., a Nevada corporation ("LIFESTYLE"), FutureSmart Systems,

Inc., a Delaware corporation and wholly owned subsidiary of LifeStyle

("FUTURESMART" or "SELLER"), and Honeywell International Inc., a Delaware

corporation ("PURCHASER").



                              W I T N E S S E T H:

                               - - - - - - - - - -



         WHEREAS, Seller is engaged as of the date hereof in the business of

designing, manufacturing, marketing, selling and distributing residential

networking systems and equipment (collectively, the "BUSINESS"), which Business

constitutes the entirety of the operations of FutureSmart, and is operated by

Lifestyle and Seller entirely through FutureSmart;



WHEREAS, Seller wishes to sell the Assets and Purchaser wishes to purchase the

Assets on the terms and conditions and for the consideration described in this

Agreement (all defined terms in this Agreement having the meanings indicated in

Article XI); and WHEREAS, Seller wishes to assign and Purchaser wishes to assume

the Assumed Liabilities on the terms and conditions and for the consideration

described in this Agreement; NOW, THEREFORE, in consideration of the mutual

promises, covenants, representations and warranties made herein and of the

mutual benefits to be derived herefrom, the sufficiency of which the Parties

hereby acknowledge, the Parties hereto agree as follows:



                                    ARTICLE I

                                SALE AND PURCHASE



         SALE AND PURCHASE OF THE ASSETS.

         --------------------------------



Subject to the terms and conditions of this Agreement, at the Closing, Seller

will sell, and Purchaser will purchase, all of the Assets for an aggregate

initial purchase price of One and One-half Million Dollars ($1,500,000.00)(the

"INITIAL PURCHASE PRICE"). The Initial Purchase Price is subject to adjustment

pursuant to Section 1.3 (as adjusted, the "FINAL PURCHASE PRICE").



         CLOSING.

         --------



         The closing of the transaction contemplated hereunder (the "CLOSING")

will take place on the date stated in the Preamble to this Agreement (the

"CLOSING DATE"). The "Effective Time" of the consummation of the transactions

contemplated by this Agreement and the Closing Date shall be deemed to take

place at 11:59 p.m. Eastern Standard Time on the Closing Date;



         At the Closing, Seller will convey, transfer, assign and deliver to

Purchaser, free and clear of all Liens, all of Seller's right, title and

interest in and to the Assets, accompanied by any necessary bills of sale,

assignment agreements or other instruments of transfer reasonably requested by

Purchaser;



         All amounts set forth in the Agreement shall be paid in United States

Dollars. At Closing, the aggregate sum of One Million Dollars

($1,050,000.00)("ESCROW AMOUNT") shall be deposited into an escrow account, with

an institution agreed to by the Seller and the Purchaser, to secure the

indemnification obligations of the Seller and of LifeStyle hereunder, and

subject to the Escrow Agreement as set forth in Annex A. The disbursement of the

Escrow Amount shall be subject to reduction in an amount equal to any Losses (as





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defined in Sections 9.2 and 9.3 below) incurred by the Purchaser for which the

Purchaser is entitled to indemnification pursuant to Article IX, and/or in an

amount equal to the Closing Deficit as defined in Section 1.3(d) below. In the

event of a dispute between the Seller and/or LifeStyle, on the one hand, and the

Purchaser, on the other hand, in connection with any scheduled disbursement of

the Escrow Amount, the parties shall resolve such dispute pursuant to Section

10.11 hereof; and



         The remaining portion of the Initial Purchase Price, the aggregate sum

of Five Hundred Thousand Dollars ($450,000.00), shall be paid by the Purchaser

at the Closing by wire transfer of immediately available funds to an account or

accounts previously designated by the Seller. This portion of the Initial

Purchase Price shall also be available to Purchaser to secure the

indemnification obligations of the Seller and of LifeStyle hereunder as set

forth in the Intercreditor Agreement as set forth in Annex B.



         POST-CLOSING PURCHASE PRICE ADJUSTMENT.

         ---------------------------------------



                  (a) Within two business days after the Closing Date, Seller

shall deliver to Purchaser a proposed balance sheet (the "PROPOSED CLOSING

BALANCE SHEET") of the Business on a stand-alone basis as of the Closing Date

reflecting only the Assets (as defined in Section 2.1 below) and the Assumed

Liabilities (as defined in Section 3.1 below), prepared on a basis consistent

with the principles used to prepare the Reference Balance Sheet and in

accordance with GAAP consistently applied by Seller; PROVIDED, HOWEVER, for

purposes of the determination of the amount of the post-Closing purchase price

adjustment (i) that no Excluded Assets or Retained Liabilities shall be

considered on either the Closing Balance Sheet or Reference Balance Sheet, and

(ii) that goodwill shall be deemed to have a value of zero on both the Closing

Balance Sheet and the Reference Balance Sheet. Purchaser and its representatives

shall be permitted full access to observe at all times the preparation of the

Proposed Closing Balance Sheet and to ask questions of Seller and its

representatives. The Parties shall conduct a joint physical count of the

Inventories as of the Closing Date, the results of which shall be used in the

preparation of the Proposed Closing Balance Sheet.



                  (b) Seller agrees to provide Purchaser and Purchaser's

accountants, at no cost to Purchaser, access to any books, records and personnel

of the Business retained by Seller after the Closing Date to the extent

reasonably requested by Purchaser for purposes of reviewing the Proposed Closing

Balance Sheet. Unless Purchaser notifies Seller in writing within thirty (30)

days after receipt of the Proposed Closing Balance Sheet that it disagrees with

any aspect of the Proposed Closing Balance Sheet (such notice to include all

Purchaser's specific objections and reasonably detailed proposed revisions

thereto and a description in reasonable detail of the basis therefor along with

any relevant supporting data), the Proposed Closing Balance Sheet shall be

deemed to constitute the Closing Balance Sheet (as defined below) and shall be

conclusive and binding on Seller and Purchaser. If Purchaser so notifies Seller

in writing within such thirty (30) day period, then Seller and Purchaser shall

attempt to resolve their differences with respect thereto within fifteen (15)

days after Seller's receipt of Purchaser's written notice of disagreement. Any

disputes not resolved by Seller and Purchaser within such fifteen (15) day

period regarding the Proposed Closing Date Balance Sheet will be resolved by a

nationally recognized accounting firm to be mutually agreed upon by the Parties





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(the "FIRM"). If the Parties cannot agree on an accounting firm or if such

accounting firm shall be unable or decline to act, the respective auditing firms

of Seller, on the one hand, and Purchaser, on the other, shall cooperate to

select an accounting firm after eliminating one accounting firm unacceptable to

Seller, on the one hand, and one that is unacceptable to Purchaser, on the

other. The Firm shall make a determination on the disputes so submitted as well

as such modifications, if any, to the Proposed Closing Balance Sheet as reflect

such determination, and the same shall be conclusive and binding upon the

Parties. The determination of the Firm for any item in dispute cannot, however,

be in excess of, or less than, the greatest or lowest value, respectively,

claimed for that particular item in the Proposed Closing Balance Sheet prepared

by Seller, in the case of Seller, or in the notice described in the second

sentence of this paragraph, in the case of Purchaser. The Firm shall have no

right to make any determination with respect to the undisputed portions of the

Proposed Closing Balance Sheet, and no such determination with respect to the

undisputed portions of the Proposed Closing Balance Sheet shall be binding on

Seller or Purchaser. The Proposed Closing Balance Sheet of the Business as

finally determined pursuant to the procedures set forth in this Section 1.3 is

hereinafter referred to as the "CLOSING BALANCE SHEET" and the net book value of

the Assets set forth on the Closing Balance Sheet are hereinafter referred to as

the "FINAL NET BOOK VALUE". The fees and expenses of the Firm shall be paid

equally by Seller and Purchaser.



                  (c) Not later than thirty (30) days after the engagement of

the Firm (as evidenced by its written acceptance by facsimile or otherwise to

the Parties), the Parties shall submit simultaneous briefs to the Firm (with a

copy to the other Parties) setting forth their respective positions regarding

the issues in dispute and their respective calculations of the net book value of

the Assets of the Business as of the Closing Date. Rebuttal briefs shall be

submitted within fifteen (15) days after the submission of the initial briefs.

The Firm shall render its decision resolving the dispute within thirty (30) days

after submission of the rebuttal briefs. If additional briefing, a hearing, or

other information is required by the Firm, the Firm shall give notice thereof to

the Parties as soon as practicable before the expiration of such thirty (30) day

period, and the Parties shall promptly respond; PROVIDED, HOWEVER, that, without

the written consent of Seller and Purchaser, no request for additional briefing,

a hearing or other information shall act as an extension of the thirty (30) day

period in which the Firm must render its decision.



                  (d) If the Final Net Book Value is less than $(784,000.00)

(such deficiency, the "CLOSING DEFICIT"), then Seller shall pay to Purchaser an

amount equal to the Closing Deficit, plus interest accrued thereon since the

Closing Date computed using an interest rate equal to the "prime rate" as set

forth in THE WALL STREET JOURNAL on the Closing Date (the "BASE RATE"), within

five (5) business days of the final determination of the Closing Balance Sheet.

At Purchaser's option, Purchaser may elect to receive reimbursement for any

Closing Deficit determined hereunder by a reduction in the Escrow Amount

pursuant to Section 1.2(c) of this Agreement.



                  (e) Payments pursuant to this Section 1.3 shall be made by

wire transfer of immediately available funds in Dollars to a bank account

designated in writing by Purchaser or Seller, as applicable. If at any time

after Seller's delivery of the Proposed Closing Balance Sheet pursuant to

Section 1.3(a), any portion of any adjustment is in dispute between Purchaser

and Seller or, if following any such dispute, the Parties resolve their

difference with respect to all or any portion thereof without a determination by

the Firm, Seller or Purchaser, as applicable, shall within five (5) business

days pay to Purchaser or Seller, as applicable, the amount of the adjustment not

previously paid by Seller or Purchaser, as applicable, and not in dispute

(except to the extent the resolution of the disputed amount could affect whether

the party owing any undisputed amount is obligated to pay such undisputed

amount). Such payment shall be made by a wire transfer of immediately available

funds in Dollars to a bank account designated in writing by Purchaser or Seller,

as the case may be.



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                  (f) The purpose of this Section 1.3 is to determine the

purchase price to be paid by Purchaser under this Agreement. Accordingly, any

adjustment pursuant to this Section 1.3 shall not be deemed to be an

indemnification by Seller pursuant to Article IX, nor preclude Purchaser from

exercising any indemnification rights pursuant to Article IX.



                                   ARTICLE II

                                PURCHASE AND SALE



         2.1 PURCHASE AND SALE. Upon the terms and subject to the conditions

contained herein, except as otherwise provided in Section 2.2 hereof, at the

Closing, Seller shall sell, convey, transfer and assign to Purchaser, and

Purchaser shall purchase, assume and acquire from Seller, all of Seller's right,

title and interest in and to all of Seller's tangible and intangible assets,

properties and rights used, developed or held for use in the Business as of the

Closing Date, other than the Excluded Assets (the "ASSETS"). For purposes of

this Agreement, "ASSETS" shall include, but not be limited to, the following:



         (a) all cash (including without limitation cash overdrafts), cash

equivalents and other similar types of investments, certificates of deposit,

U.S. Treasury bills and other marketable third-party securities;



         (b) all inventory, including raw materials, work-in process, finished

goods, and consignment inventories of the Business ("INVENTORY") other than

Inventory disposed of after the date hereof in the ordinary course of business

in accordance with Section 6.1;



         (c) all Personal Property used, developed or held for use by Seller in

the conduct of the Business;



         (d) all Intellectual Property and IP License Agreements used in

connection with the Business;



         (e) all rights under all Contracts, including the items listed on

Schedule 4.10(a), entered into by Seller relating to the Assets and/or the

Business and in effect as of the date hereof, except (i) the Excluded Employment

Contracts as sets forth in Section 3.2(b), and (ii) any contracts entered into

in violation of Section 7.1(h) below (collectively, the "TRANSFERRED

CONTRACTS");



         (f) all goodwill associated with the Business;



         (g) all Permits used or held for use by Seller in the conduct of the

Business;



         (h) all of Seller's customer and vendor lists to the extent relating to

the Business, all of Seller's files and documents (including credit information)

to the extent relating to customers and vendors of the Business, and all of

Seller's production data, equipment maintenance data, accounting records,

inventory records, sales and sales promotional data, advertising materials, cost

and pricing information, business plans, reference catalogs, information

(including but not limited to design specifications) on Seller's computer

systems or maintained in electronic format, and any other such data and records,

in each case to the extent relating to the Business; PROVIDED, HOWEVER, that

Seller shall be entitled to retain copies of any such materials which are solely

necessary for, and may use such copies solely in connection with, their tax,

accounting or legal purposes;



         (i) all rights of Seller pursuant to any express or implied warranties,

representations or guarantees made by suppliers furnishing goods or services to

the extent furnished to or on behalf of the Business;



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         (j) all of Seller's trade accounts receivable and trade notes

receivable of the Business, whether recorded or unrecorded, including without

limitation all such trade receivables from divisions or Affiliates of Seller,

and including all bank accounts of FutureSmart for the purpose of collecting the

Accounts Receivable (the "ACCOUNTS RECEIVABLE");



         (k) all of Seller's prepaid expenses and deposits relating to the

Business, but only to the extent that economic value is transferred to Purchaser

at Closing;



         (l) Seller's leases for real property listed on Schedule 2.1(l), and

specifically excluding the San Jose Lease (the "TRANSFERRED LEASES");



         (m) all Confidentiality Agreements that have been executed by any

Person in connection with Seller or any Affiliate of Seller seeking to sell

FutureSmart and/or the Business;



         (n) all rights to use the FutureSmart, Future Smart and Future Proof

names and trademarks, as well as the WWW.FUTURESMART.COM domain name; and



         (o) all other Assets used in connection with the Business that are not

expressly indicated herein to be Excluded Assets (as defined in Section 2.2

below).



         2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained

in this Agreement, the following assets, properties and rights (the "EXCLUDED

ASSETS") shall not be sold, assigned, transferred or conveyed to Purchaser

hereunder, and such assets, properties and rights shall not be deemed Assets

hereunder:



         (a) assets of employee benefit plans of Seller;



         (b) all Tax refunds (and credits) attributable to the Business for

periods on or prior to the Closing Date;



         (c) all rights of Seller under this Agreement;



         (d) any employee data which relates to employees of the Business who

are not transferred to Purchaser or which Seller is prohibited by law or legal

agreement from disclosing or delivering to Purchaser;



         (e) all of Seller's and/or Seller's Affiliates' equity interests in any

legal entity (including but not limited to any predecessor and/or subsidiary of

Seller or Seller's Affiliates), including without limitation any and all shares,

derivatives and/or derivative obligations of LifeStyle and/or FutureSmart;



         (f) all real property or interests in real property owned or leased by

Seller other than the Transferred Leases;



         (g) all contracts, arrangements, licenses and commitments of Seller

except for the Transferred Contracts (collectively, the "EXCLUDED Contracts");



         (h) all of FutureSmart's and/or LifeStyle's right, title and interest

in and to any of FutureSmart's and/or LifeStyle's tangible and intangible

assets, properties and rights to the extent not used, developed or held for use

in the Business; and



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         (i) all claims, rights, benefits and interests arising under or

resulting from any Excluded Asset or Retained Liability.



         2.3      ASSIGNMENT OF ASSETS.



         (a) Notwithstanding anything to the contrary in this Agreement, to the

extent that any sale, conveyance, transfer or assignment or attempted sale,

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