ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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CECO ENVIRONMENTAL CORP | CECO Environmental Corp, GMD Acquisition Corp, GMD Environmental Technologies, Inc, GMD Properties, Inc | GMD Services, Inc

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Title: ASSET PURCHASE AGREEMENT
Governing Law: Ohio Date: 11/2/2007
Industry: Misc. Capital Goods Sector: Capital Goods

ASSET PURCHASE AGREEMENT

by and among CECO Environmental Corp., GMD Acquisition Corp., GMD Environmental Technologies, Inc., GMD Properties, Inc. and GMD Services, Inc.

Dated October 31, 2007

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Table of Contents

1.	Definitions and Usage		1
	1.1	Definitions	1
	1.2	Usage	10
2.	Sale and Transfer of Assets; Closing		11
	2.1	Assets To Be Sold	11
	2.2	Excluded Assets	12
	2.3	Consideration	13
	2.4	Liabilities	13
	2.5	Allocation	15
	2.6	Closing	16
	2.7	Closing Obligations	16
	2.8	Consents	18
3.	Representations and Warranties of Sellers		19
	3.1	Organization and Good Standing	19
	3.2	Enforceability; Authority; No Conflict	19
	3.3	Capitalization	20
	3.4	Financial Statements	21
	3.5	Books and Records	21
	3.6	Sufficiency of Assets	21
	3.7	Description of Leased Real Property	21
	3.8	Title to Assets; Encumbrances	21
	3.9	Condition of the Assets	21
	3.10	Accounts Receivable	22
	3.11	Inventories	22
	3.12	No Undisclosed Liabilities	22
	3.13	Taxes	22
	3.14	No Material Adverse Change	24
	3.15	Labor Relations	24
	3.16	Employee Benefit Plans	24
	3.17	Compliance With Legal Requirements; Governmental Authorizations	25
	3.18	Legal Proceedings; Orders	27
	3.19	Absence of Certain Changes and Events	28
	3.20	Contracts; No Defaults	28
	3.21	Insurance	31
	3.22	Environmental Matters	32
	3.23	Intellectual Property Assets	34
	3.24	Related Persons	36
	3.25	Brokers Or Finders	36
	3.26	Disclosure	37
4.	Representations and Warranties of Buyer and Parent		37
	4.1	Organization and Good Standing	37
	4.2	Authority; No Conflict	37
	4.3	Certain Proceedings	38
	4.4	Brokers or Finders	38

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5.	Covenants of Sellers Prior to Closing		38
	5.1	Access and Investigation	38
	5.2	Operation of the Business of Sellers	39
	5.3	Negative Covenants	40
	5.4	Required Approvals	40
	5.5	Notification	40
	5.6	No Negotiation	41
	5.7	Commercially Reasonable Efforts	41
	5.8	Change of Name	41
	5.9	Payment of Liabilities	41
6.	Covenants of Buyer and Parent Prior to Closing		41
	6.1	Required Approvals	41
	6.2	Commercially Reasonable Efforts	42
7.	Conditions Precedent to Buyer and Parent’s Obligation to Close		42
	7.1	Accuracy of Representations	42
	7.2	Sellers’ Performance	42
	7.3	Consents	42
	7.4	Additional Documents	42
	7.5	No Injunction	43
	7.6	No Material Adverse Change	43
	7.7	Due Diligence	43
8.	Conditions Precedent to Sellers’ Obligation to Close		43
	8.1	Accuracy of Representations	43
	8.2	Buyer’s Performance	43
	8.3	Consents	44
	8.4	Additional Documents	44
	8.5	No Injunction	44
	8.6	Shareholder Approval	44
9.	Termination		44
	9.1	Termination Events	44
	9.2	Effect of Termination	45
10. Additional Covenants			45
	10.1	Employees And Employee Benefits	45
	10.2	Payment of All Taxes Resulting From Sale of Assets by Sellers	47
	10.3	Payment of Other Retained Liabilities	47
	10.4	Restrictions on Seller Dissolution and Distributions	47
	10.5	Removing Excluded Assets	47
	10.6	Assistance in Proceedings	48
	10.7	Noncompetition, Nonsolicitation, and Nondisparagement	48
	10.8	Retention of and Access to Records	49
	10.9	Delivery of Compiled 2007 Financial Statements	49
	10.10	Further Assurances	50
11. Indemnification; Remedies			50
	11.1	Survival	50
	11.2	Indemnification and Reimbursement by Sellers	50
	11.3	Indemnification and Reimbursement by Buyer	51

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11.4	Limitations on Amount – Sellers	51
11.5	Limitations on Amount – Buyer and Parent	51
11.6	Time Limitations	51
11.7	Third-Party Claims	52
11.8	Other Claims	53
11.9	Indemnification in Case of Strict Liability or Indemnitee Negligence	54
12. Confidentiality		54
12.1	Definition of Confidential Information	54
12.2	Restricted Use of Confidential Information	55
12.3	Exceptions	56
12.4	Legal Proceedings	56
12.5	Press Releases and Public Announcements	56
12.6	Return or Destruction of Confidential Information	56
12.7	Attorney-Client Privilege	57
12.8	Specific Performance	57
13. General Provisions		57
13.1	Expenses	57
13.2	Public Announcements	58
13.3	Notices	58
13.4	Jurisdiction; Service of Process; Waiver of Jury Trial	58
13.5	Enforcement of Agreement	59
13.6	Waiver; Remedies Cumulative	59
13.7	Entire Agreement and Modification	60
13.8	Disclosure Schedule	60
13.9	Assignments, Successors, and No Third-Party Rights	60
13.10	Severability	61
13.11	Construction	61
13.12	Time of Essence	61
13.13	Governing Law	61
13.14	Execution of Agreement	61

EXHIBITS

A – Form of Assignment and Assumption Agreement B – Form of Bill of Sale C – Form of Employment Agreement D – Allocation of Purchase Price E – Form of New Lease F – Form of Intellectual Property Assignment Agreement G – Form of Noncompetition Agreement

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iii

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “ Agreement ”), dated as of October 31, 2007, is entered into by and among CECO Environmental Corp., a Delaware corporation (“ Parent ”); GMD Acquisition Corp., a Delaware corporation (“ Buyer ”), GMD Environmental Technologies, Inc., a Texas corporation (“ Technologies ”), GMD Properties, Inc., a Texas corporation

(“ Properties ”), GMD Services, Inc., a Texas corporation (“ Services ”) (each of Technologies, Properties and Services, a “ Seller ” and collectively “ Sellers ”), and Gerald J. Reier and Lynda Reier (each a “ Shareholder ” and collectively, the “ Shareholders ”).

RECITALS

Parent and Technologies entered into a letter of intent on July 25, 2007 concerning the sale of the Business (as defined herein) of Sellers. Buyer is an indirect subsidiary of Parent. Sellers desires to sell, and Buyer desires to purchase, the Assets for the consideration and on the terms set forth in this Agreement. Shareholders own all of the outstanding capital stock of each Seller.

The parties, intending to be legally bound, agree as follows:

1. Definitions and Usage

1.1 DEFINITIONS

Capitalized terms and variations thereof used in this Agreement and not otherwise defined herein have the meanings set forth below:

“ Accounts Receivable ” – (a) all trade accounts receivable and other rights to payment from customers of Sellers and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of Sellers, (b) all other accounts or notes receivable of Sellers and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right of Sellers related to any of the foregoing.

“ Appurtenances ” – all privileges, rights, easements, hereditaments, and appurtenances belonging to or for the benefit of the Land and all rights existing in and to any streets, alleys, passages, and other rights-of-way included thereon or adjacent thereto (before or after vacation thereof), and vaults beneath any such streets.

“ Assignment and Assumption Agreement ” – an assignment of all of the Assets that are intangible personal property in the form of Exhibit A , which assignment shall also contain Buyer’s undertaking and assumption of the Assumed Liabilities.

“ Bill of Sale ” – a bill of sale for all of the Assets that are Tangible Personal Property, in the form of Exhibit B .

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“ CERCLA ” – as defined within the definition of Environmental, Health and Safety Liabilities.

“ Cleanup ” – as defined within the definition of Environmental, Health and Safety Liabilities.

“ COBRA ” – Section 4980B of the Code (as well as its predecessor provision, Section 162(k) of the Code) and Sections 601 through 608, inclusive, of ERISA.

“ Code ” – the Internal Revenue Code of 1986, as amended.

“ Commercially Reasonable Efforts ” – the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible; provided, however, that a Person required to use Commercially Reasonable Efforts under this Agreement will not be required thereby to take actions that would result in a material adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions or to dispose of or make any change to its business, expend any material funds, or incur any other material burden.

“ Consent ” – any approval, consent, ratification, waiver, or other authorization.

“ Contemplated Transactions ” – all of the transactions contemplated by this Agreement.

“ Contract ” – any agreement, contract, Lease, consensual obligation, promise, or undertaking (whether written or oral and whether express or implied), whether or not legally binding.

“ Copyrights ” – all registered and unregistered copyrights in both published works and unpublished works.

“ Damages ” – any loss, liability, claim, damage, expense (including reasonable costs of investigation and defense and reasonable attorneys’ fees and expenses), or diminution of value, whether or not involving a Third-Party Claim.

“ Disclosure Schedule ” – the Disclosure Schedule delivered by Sellers to Buyer and Parent concurrently with the execution and delivery of this Agreement.

“ Dollars ” or “ $ ”– United States dollars.

“ Employee Plans ” – any written or unwritten plan what provides benefits, or describes policies or procedures applicable to any current or former director, officer, employee, or service provider of any Seller, or the dependents of any thereof, regardless of how (or whether) liabilities for the provision of benefits are accrued or assets are acquired or dedicated with respect to the funding thereof

“ Employment Agreement ” – an employment agreement substantially in the form of Exhibit C executed by Gerald J. Reier.

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“ Encumbrance ” – any charge, claim, community or other marital property interest, condition, equitable interest, lien, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first option, right of first refusal, or similar restriction, including any restriction on use, voting (in the case of any security or equity interest), transfer, receipt of income, or exercise of any other attribute of ownership.

“ Environment ” – soil, land surface or subsurface strata, surface waters (including navigable waters and ocean waters), groundwaters, drinking water supply, stream sediments, ambient air (including indoor air), plant and animal life, and any other environmental medium or natural resource.

“ Environmental, Health and Safety Liabilities ” – any cost, damages, expense, liability, obligation, or other responsibility arising from or under any (i) Environmental Law, (ii) Occupational Safety and Health Law, or (iii) common law, including those consisting of or relating to:

(a)	any environmental, health, or safety matter or condition (including on-site or off-site contamination, occupational safety and health, and regulation of any chemical substance or product);

(b)	any fine, penalty, judgment, award, settlement, legal, or administrative proceeding, damage, loss, claim, demand or response, or remedial or inspection cost or expense arising under any Environmental Law or Occupational Safety and Health Law;

(c)	financial responsibility under any Environmental Law, Occupational Safety and Health Law or common law for investigation costs, monitoring costs, cleanup costs, or corrective action, including any cleanup, removal, containment, or other remediation or response actions (“ Cleanup ”) required by any Environmental Law or Occupational Safety and Health Law (whether or not such Cleanup has been required or requested by any Governmental Body or any other Person) and for any natural resource damages or any other compliance, corrective, or remedial measure required under any Environmental Law or Occupational Safety and Health Law; or

(d)	personal injury, bodily injury, property damage, environmental damage, natural resource damage, or harm to humans resulting from or arising out of any matter covered by this definition.

The terms “removal,” “remedial” and “response action” include the types of activities covered by the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“ CERCLA ”).

“ Environmental Law ” – any Legal Requirement that requires or relates to:

(a)	advising appropriate authorities, employees, or the public of intended, threatened, or actual Releases of Hazardous Materials, violations of discharge limits, or other prohibitions and the commencement of activities, such as resource extraction or construction, that could reasonably be expected to have an impact on the Environment;

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(b)	preventing or reducing to acceptable levels the Release of Hazardous Materials into the Environment;

(c)	reducing the quantities, preventing the Release, or minimizing the hazardous characteristics of wastes or Hazardous Materials that are generated or possessed;

(d)	assuring that products are designed, formulated, packaged, and used so that they do not present risks to human health or the Environment when handled, used, or disposed of;

(e)	protecting resources, species, or ecological amenities;

(f)	reducing to acceptable levels the risks inherent in the handling or transportation of Hazardous Materials or other potentially harmful substances;

(g)	cleaning up Hazardous Materials that have been Released, preventing the Threat of Release, or paying the costs of such clean up or prevention; or

(h)	making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

	“ ERISA ” – the Employee Retirement Income Security Act of 1974, as amended.

	“ Exchange Act ” – the Securities Exchange Act of 1934, as amended.

“ Facilities ” – any real property, leasehold, or other interest in real property currently owned or leased by Sellers, including the Tangible Personal Property used or operated by Sellers at the respective locations of the Real Property specified in Section 3.7 .

“ Financial Statements ” – with respect to any accounting period for Sellers, statements of income and cash flows of Sellers for such period, and a balance sheet of Seller as of the end of such period setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year all prepared in reasonable detail in accordance with the Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants, except that interim Financial Statements will omit footnotes, statement of shareholder’s equity and year-end adjustments.

“ Fiscal Year ” – the 12-month period ended September 30 of each year.

“ GAAP ” – generally accepted accounting principles for financial reporting in the United States, consistently applied.

“ Governing Documents ” – with respect to any particular entity, (a) if a corporation, the articles or certificate of incorporation and the bylaws or code of regulations; (b) if a general partnership, the partnership agreement and any statement of partnership; (c) if a limited partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a limited liability company, the articles of organization or certificate of formation and operating agreement or limited liability company agreement; (e) if another type of Person, any other

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charter or similar document adopted or filed in connection with the creation, formation, or organization of the Person; and (f) any amendment or supplement to any of the foregoing.

“ Governmental Authorization ” – any Consent, license, registration, or permit issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

“ Governmental Body ” – any:

(i)	nation, state, county, city, town, borough, village, district, or other jurisdiction;

(j)	federal, state, local, municipal, foreign, or other government;

(k)	governmental or quasi-governmental authority of any nature (including any agency, branch, department, board, commission, court, tribunal, or other entity exercising governmental or quasi-governmental powers);

(l)	multinational organization or body;

(m)	body exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power; or

(n)	official of any of the foregoing.

“ Ground Lease ” – any long-term lease of land in which most of the rights and benefits comprising ownership of the land and the improvements thereon or to be constructed thereon, if any, are transferred to the tenant for the term thereof.

“ Ground Lease Property ” – any land, improvements, and appurtenances subject to a Ground Lease in favor of any Seller.

“ Hazardous Activity ” – the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Material in, on, under, about, or from any of the Facilities or any part thereof into the Environment and any other act, business, operation or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm, to persons or property on or off the Facilities.

“ Hazardous Material ” – any pollutant, contaminant, chemical, substance, material, or waste that is or will foreseeably be regulated by any Governmental Body, including any pollutant, contaminant, chemical, material, substance, or waste that is defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “special waste,” “contaminant,” “toxic waste,” or “toxic substance” under any provision of Environmental Law, and including oil, used oil, petroleum, petroleum products and byproducts, asbestos, presumed asbestos-containing material or asbestos-containing material, urea formaldehyde, radon, and polychlorinated biphenyls.

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“ Improvements ” – all buildings, structures, fixtures, and improvements located on the Land or included in the Assets, including those under construction.

“ Indemnified Person ” – a Person entitled to indemnity under Section 11.2 or 11.3 .

“ Indemnifying Person ” – a Person obligated to indemnify an Indemnified Person.

“ Intellectual Property Assets ” – all intellectual property owned or licensed by Sellers, or licensed to Sellers in a transferable license, in which Sellers have a proprietary interest, including Marks, Patents, Copyrights, all rights in mask works, Trade Secrets, and Net Names.

“ Interim Financial Statements ” – the unaudited Financial Statements of Sellers as of September 30, 2007 and any subsequent monthly unaudited Financial Statements prepared prior to the Closing Date. The Interim Financial Statements will omit footnotes and the statement of shareholder’s equity, as well as year-end adjustments (if not covering a 12-month period).

“ Inventories ” – all inventories of Sellers, wherever located, including all finished goods, work in process, raw materials, spare parts, and all other materials and supplies to be used or consumed by Sellers in the production of finished goods.

“ IRS ” – the United States Internal Revenue Service and, to the extent relevant, the United States Department of the Treasury.

“ Knowledge ” – an individual will be deemed to have Knowledge of a particular fact or other matter if:

(a)	that individual is actually aware of that fact or matter; or

(b)	a prudent individual would reasonably be expected to discover or otherwise become aware of that fact or matter in the course of conducting a reasonably comprehensive investigation.

	“ Land ” – all parcels and tracts of land in which Sellers have an ownership interest.

“ Lease ” – any Real Property Lease or any lease or rental agreement, license, right to use, or installment and conditional sale agreement to which any Seller is a party and any other Seller Contract pertaining to the leasing or use of any Tangible Personal Property.

“ Legal Requirement ” – any federal, state, local, municipal, foreign, international, multinational, or other constitution, law, ordinance, principle of common law, code, regulation, statute, or treaty.

“ Liability ” – with respect to any Person, any liability or obligation of such Person of any kind, character, or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable, or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.

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“ Marks ” – Sellers’ names, all assumed fictional business names, trade names, registered trademarks, service marks, and applications for any of the foregoing.

“ Material Adverse Change ” – (a) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities, or condition (financial or otherwise) of the referenced Person and its Subsidiaries, taken as a whole, (b) a change that results in a material impairment of the referenced Person’s ability to perform its obligations under this Agreement or the other documents and agreements to which it is a party that have been entered into in connection with this Agreement or the transactions contemplated hereby, or (c) a change that materially and negatively impacts the rights and remedies of any of the other parties hereunder or thereunder.

“ Material Adverse Effect ” – any effect that results in, or has a reasonable likelihood of resulting in, a Material Adverse Change.

“ Net Names ” – all rights in Internet web sites and internet domain names presently used by Seller.

“ Occupational Safety and Health Law ” – any Legal Requirement designed to provide safe and healthful working conditions and to reduce occupational safety and health hazards, including the Occupational Safety and Health Act, and any program, whether governmental or private (such as those promulgated or sponsored by industry associations and insurance companies), designed to provide safe and healthful working conditions.

“ Order ” – any order, injunction, judgment, decree, ruling, assessment, or arbitration award of any Governmental Body or arbitrator.

“ Ordinary Course of Business ” – an action taken by a Person will be deemed to have been taken in the Ordinary Course of Business only if that action is consistent, in all material respects, in nature, scope, and magnitude with the past practices of such Person and is taken in the ordinary course of the normal, day-to-day operations of such Person.

“ Patents ” – all patents, patent applications, and inventions and discoveries that may be patentable.

“ Permitted Encumbrances ” means (i) with respect to real property (A) Encumbrances for or relating to real estate taxes and assessments not yet due and payable, (B) zoning, building code and similar restrictions and land use Legal Requirements that are not violated by the current use or occupancy of such real property, and (C) easements, covenants, conditions and restrictions of record which, individually or in the aggregate, do not materially and adversely impair the current use or occupancy of such real property, (ii) Encumbrances for or relating to personal property taxes and assessments not yet due and payable, (iii) worker’s, carrier’s and materialman’s Encumbrances, and (iv) Encumbrances that are immaterial in character, amount and extent, and which do not materially detract from the value of or interfere with the present or proposed use of the properties they affect.

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“ Person ” – an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity, or a Governmental Body.

“ Proceeding ” – any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, judicial, or investigative, whether formal or informal, whether public or private) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

“ Real Property ” – the Land and Improvements and all Appurtenances thereto and any Ground Lease Property.

“ Real Property Lease ” – any Ground Lease or Space Lease.

“ Record ” – information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“ Related Person ” – means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, (a) “ control ” (including “ controlling ,” “ controlled by ,” and “ under common control with ”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and shall be construed as such term is used in the rules promulgated under the Securities Act.

“ Release ” – any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching, or migration on or into the Environment or into or out of any property.

“ Remedial Action ” – all actions, including any capital expenditures, required or voluntarily undertaken (a) to clean up, remove, treat, or in any other way address any Hazardous Material or other substance; (b) to prevent the Release or Threat of Release or to minimize the further Release of any Hazardous Material or other substance so it does not migrate or endanger or threaten to endanger public health or welfare or the Environment; (c) to perform pre-remedial studies and investigations or post-remedial monitoring and care; or (d) to bring all Facilities and the operations conducted thereon into compliance with Environmental Laws and environmental Governmental Authorizations.

“ Representative ” – with respect to a particular Person, any director, officer, manager, general partner, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel, or other representative of that Person.

“ Schedule ” – section of the Disclosure Schedule.

“ SEC ” – the United States Securities and Exchange Commission.

“ Securities Act ” – the Securities Act of 1933, as amended.

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“ Seller Contract ” – any Contract: (a) under which any Seller has or may acquire any rights or benefits; (b) under which any Seller has or may become subject to any obligation or liability; or (c) by which any Seller or any of the assets owned or used by any Seller is or may become bound.

“ Sellers’ Knowledge,” or “Knowledge of Sellers” – Sellers will be deemed to have Knowledge of a particular fact or other matter if Gerald J. Reier has Knowledge of that fact or other matter.

“ Software ” – all computer software and subsequent versions thereof, including source code, object, executable or binary code, objects, comments, screens, user interfaces, report formats, templates, menus, buttons, and icons, and all electronic files, electronic data, materials, manuals, design notes, and other items and documentation related thereto or associated therewith.

“ Space Lease ” – any lease or rental agreement pertaining to the occupancy of any improved space on any Land.

“ Subsidiary ” – as to any Person, (a) any corporation more than fifty percent (50%) of whose capital stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, (b) any partnership, association, joint venture, or other entity in which such Person directly or indirectly through Subsidiaries has more than a fifty percent (50%) interest in the total capital, total income, or total ownership interests of such entity at any time, and (c) any partnership in which such Person is a general partner.

“ Tangible Personal Property ” – all machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles, and other items of tangible personal property (other than Inventories) of every kind owned or leased by Seller (wherever located and whether or not carried on Seller’s books), together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto.

“ Tax ” – any income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental, windfall profit, customs, vehicle, airplane, boat, vessel, or other title or registration, capital stock, franchise, employees’ income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative, add-on minimum, and other tax, fee, assessment, levy, tariff, charge, or duty of any kind whatsoever, and any interest, penalty, addition, or additional amount thereon imposed, assessed, or collected by or under the authority of any Governmental Body or payable under any tax-sharing agreement or any other Contract.

“ Tax Return ” – any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund, or other document or information filed with

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or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

“ Third Party ” – a Person that is not a party to this Agreement.

“ Third-Party Claim ” – any claim against any Indemnified Person by a Third Party, whether or not involving a Proceeding.

“ Threat of Release ” – a reasonable likelihood of a Release that could reasonably be expected to require action in order to prevent or mitigate damage to property, humans, or the Environment that could reasonably be expected to result from such Release.

“ Trade Secrets ” – all know-how, trade secrets, confidential or proprietary information, customer lists, Software, technical information, data, process technology, plans, drawings, and blue prints of Sellers.

“ WARN Act ” – the Worker Adjustment and Retraining Notification Act, as amended.

1.2 USAGE

(a)	Interpretation . In this Agreement, unless a clear contrary intention appears:

	(i)	the singular number includes the plural number and vice versa;

	(ii)	reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are not prohibited by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually;

	(iii)	reference to any gender includes each other gender;

	(iv)	reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or modified and in effect from time to time in accordance with the terms thereof;

	(v)	reference to any Legal Requirement means such Legal Requirement as amended, modified, codified, replaced, or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any Legal Requirement means that provision of such Legal Requirement from time to time in effect and constituting the substantive amendment, modification, codification, replacement, or reenactment of such section or other provision;

	(vi)	“hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section, or other provision hereof;

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(vii)	“including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

(viii)	“or” is used in the inclusive sense of “and/or”;

(ix)	with respect to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”; and

(x)	references to documents, instruments, or agreements shall be deemed to refer as well to all addenda, exhibits, schedules, or amendments thereto.

(b)	Accounting Terms and Determinations . Unless otherwise specified herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP.

(c)	Legal Representation of the Parties . This Agreement was negotiated by the parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation hereof.

2. Sale and Transfer of Assets; Closing

2.1 ASSETS TO BE SOLD

Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, but effective as of the Closing Date, Sellers shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Sellers, free and clear of any Encumbrances other than Permitted Encumbrances, all of Sellers’ right, title, and interest in and to all property and assets, real, personal, or mixed, tangible and intangible, of every kind and description, wherever located, belonging to Sellers and which relate to the business currently conducted by Sellers as a going concern, including the design, manufacture, and sale of its air pollution control systems and the furnishing of installation services to customers (the “ Business ”), including the following (but excluding the Excluded Assets):

(a)	all Tangible Personal Property, including those items described in Schedule 2.1(a) ;

(b)	all Inventories;

(c)	all Accounts Receivable;

(d)	all Seller Contracts, including those listed in Schedule 3.20(a) , and all outstanding offers or solicitations made by or to Seller to enter into any Contract;

(e)	all Governmental Authorizations and all pending applications therefor or renewals thereof, in each case to the extent transferable to Buyer, including those listed in

	Schedule 3.17(b) ;

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(f)	all data and Records related to the operations of Sellers, including client and customer lists and Records, referral sources, research and development reports and Records, production reports and Records, service and warranty Records, equipment logs, operating guides and manuals, financial and accounting Records, creative materials, advertising materials, promotional materials, studies, reports, correspondence, and other similar documents and Records and, subject to Legal Requirements, copies of all personnel Records and other Records described in Section 2.2(g) ;

(g)	all of the intangible rights and property of Sellers, including Intellectual Property Assets, going concern value, telephone, telecopy and e-mail addresses and listings, and those items listed in Schedules 3.23(a), (b), (c), (d), (e) and (g) ;

(h)	all claims of Sellers relating to the Assets, whether, known or unknown, contingent or noncontingent, including all such claims listed in Schedule 2.1(h) ;

(i)	all rights of Sellers relating to deposits and prepaid expenses, claims for refunds (other that in respect of Taxes) and rights to offset in respect thereof that are not listed in

	Schedule 2.2(d) and that are not excluded under Section 2.2(h) ;

(j)	all rights in connection with and assets of the Employee Plans listed in Schedule 2.1(k) (the “ Assumed Plans ”);

(k)	all cash and cash equivalents, except as excluded in Section 2.2(a) ; and

(l)	all other properties and assets of every kind, character, and description, tangible or intangible, owned by Sellers and used or held for use in connection with the Business, whether or not similar to the items specifically set forth above.

All of the property and assets to be transferred to Buyer hereunder are herein referred to collectively as the “ Assets .”

Notwithstanding the foregoing, the transfer of the Assets pursuant to this Agreement shall not include the assumption of any Liability related to the Assets unless Buyer expressly assumes that Liability pursuant to Section 2.4(a) .

2.2 EXCLUDED ASSETS

Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the following assets of Sellers (collectively, the “ Excluded Assets ”) are not part of the sale and purchase contemplated hereunder, are excluded from the Assets and shall remain the property of Sellers after the Closing:

(a)	$261,146 of cash or cash equivalents, subject to the adjustment in Section 5.3(b) ;

(b)	all minute books, stock Records, and corporate seals;

(c)	the shares of capital stock of Sellers held in treasury;

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(d)	those rights relating to deposits and prepaid expenses and claims for refunds and rights to offset in respect thereof listed in Schedule 2.2(d) ;

(e)	all insurance policies and rights thereunder (except to the extent specified in Section 2.1(h) );

(f)	all of the Seller Contracts listed in Schedule 2.2(f) ;

(g)	all personnel Records and other Records that Sellers are required by law to retain in its possession;

(h)	all claims for refund of Taxes and other governmental charges of whatever nature;

(i)	all rights in connection with and assets of the Employee Plans listed in Schedule 2.2(i) (the “ Excluded Plans ”);

(j)	all rights of Sellers under this Agreement or any other document executed in connection with the Contemplated Transactions; and

(k)	the property and assets expressly designated in Schedule 2.2(k) .

2.3 CONSIDERATION

The aggregate consideration for the Assets (the “ Purchase Price ”) shall be paid by Buyer or Parent as follows:

(a)	At the Closing, Buyer or Parent shall pay $1,400,000.00 in cash by wire transfer in immediately available funds to an account or accounts specified by Sellers and assume the Assumed Liabilities.

2.4 LIABILITIES

(a)	Assumed Liabilities . At the Closing, but effective as of the Closing Date, Buyer shall assume and agree to discharge when due only the following Liabilities of Sellers (the “ Assumed Liabilities ”):

	(i)	any trade account payable reflected on the Interim Balance Sheet (other than a trade account payable to any Shareholder or a Related Person of Sellers or any Shareholder that remains unpaid as of the Closing Date);

	(ii)	any trade account payable (other than a trade account payable to any Shareholder or a Related Person of Sellers or any Shareholder) incurred by Sellers in the Ordinary Course of Business between the date of the Interim Balance Sheet and the Closing Date that remains unpaid as of the Closing Date;

	(iii)	any Liability to Sellers’ customers under written warranty agreements given by Sellers to its customers in the Ordinary Course of Business prior to the Closing Date;

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	(iv)	any Liability to Sellers’ customers incurred by Sellers in the Ordinary Course of Business for orders outstanding as of the Closing Date reflected on Sellers’ books (other than any Liability arising out of or relating to a breach that occurred prior to the Closing Date);

	(v)	any Liability arising after the Closing Date under the Seller Contracts, offers and solicitations described in Section 2.1(d) (other than any Liability arising under the Seller Contracts arising out of or relating to a breach that occurred prior to the Closing Date);

	(vi)	any Liability of Sellers arising after the Closing Date under any Seller Contract included in the Assets that is entered into by any Seller after the date hereof in accordance with the provisions of this Agreement (other than any Liability arising out of or relating to a breach that occurred prior to the Closing Date);

	(vii)	any Liability arising out of or relating to any of the Assumed Plans on or after the Closing Date; and

	(viii)	any Liability of Sellers described in Schedule 2.4(a)(ix) .

(b)	Retained Liabilities . The Retained Liabilities shall remain the sole responsibility of and shall be retained, paid, performed, and discharged solely by the applicable Seller.

	“ Retained Liabilities ” shall mean every Liability of Sellers other than the Assumed Liabilities, including the following Liabilities of Sellers:

	(i)	any Liability arising out of or relating to products of Sellers to the extent manufactured or sold prior to the Closing Date other than to the extent assumed under Section 2.4(a)(iii) , (iv) , (v) or (vi) ;

	(ii)	any Liability under any Seller Contract assumed by Buyer pursuant to Section 2.4(a) that arises after the Closing Date but that arises out of or relates to any breach that occurred prior to the Closing Date;

	(iii)	any Liability for Taxes, including any (A) Taxes arising as a result of Sellers’ operation of its business or ownership of the Assets prior to the Closing Date, (B) any Taxes that will arise as a result of the sale of the Assets pursuant to this Agreement, and (C) any deferred Taxes of any nature;

	(iv)	any Liability under any Seller Contract not assumed by Buyer under Section 2.4(a) , including those Seller Contracts set forth on Schedule 2.4(b)(iv) ;

	(v)	any Environmental, Health and Safety Liabilities arising out of or relating to the operation of Seller’s business or Seller’s leasing, ownership or operation of real property;

	(vi)	any Liability arising out of or relating to (A) any of the Excluded Plans or (B) the Employee Plans or relating to payroll, vacation, sick leave, workers’ compensation, unemployment benefits, pension benefits, employee stock option

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	or profit-sharing plans, health care plans or benefits, or any other employee plans or benefits of any kind for Sellers’ employees or former employees or both;

(vii)	any Liability under any employment, severance, retention, or termination agreement with any employee or former employee of Sellers or any of its Related Persons;

(viii)	any Liability arising out of or relating to any grievance of any employee of Sellers arising prior to the Closing Date, whether or not the affected employees are hired by Buyer;

(ix)	any Liability to any Shareholder or Related Person of Sellers or any Shareholder;

(x)	any Liability to indemnify, reimburse, or advance amounts to any officer, director, employee, or agent of Seller;

(xi)	any Liability to distribute to any of Seller’s Shareholders or otherwise apply all or any part of the consideration received hereunder;

(xii)	any Liability arising out of any Proceeding pending as of the Closing Date

(xiii)	any Liability arising out of any Proceeding commenced after the Closing Date and arising out of or relating to any occurrence or event happening prior to the Closing Date;

(xiv)	any Liability arising out of or resulting from Sellers’ compliance or noncompliance with any Legal Requirement or Order of any Governmental Body;

(xv)	any Liability under this Agreement or any other document executed in connection with the Contemplated Transactions; and

(xvi)	any Liability based upon Sellers’ acts or omissions occurring after the Effective Date.

2.5 ALLOCATION

The Purchase Price shall be allocated in accordance with Exhibit D . After the Closing, the parties shall make consistent use of the allocation, fair market value, and useful lives specified in Exhibit D for all Tax purposes and in all filings, declarations, and reports with the IRS in respect thereof, including the reports required to be filed under Section 1060 of the Code. Buyer shall prepare and deliver IRS Form 8594 to Seller within forty-five (45) days after the Closing to be filed with the IRS. In any Proceeding related to the determination of any Tax, neither Buyer, Parent, nor Sellers shall contend or represent that such allocation is not a correct allocation.

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2.6 CLOSING

The purchase and sale provided for in this Agreement will take place at the offices of Buyer’s counsel at 425 Walnut Street, Suite 1800, Cincinnati, Ohio 45202, commencing at 10:00 a.m. (local time) on October 31, 2007, unless Buyer and Seller otherwise agree (the “ Closing ”). The Closing shall become effective as of 12:01 a.m. of the day following the Closing (the “ Closing Date ”). Subject to the provisions of Article 9 , failure to consummate the purchase and sale provided for in this Agreement on the date and at the place and time determined pursuant to this Section 2.6 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. In such a situation, the Closing will occur as soon as practicable, subject to Article 9 .

2.7 CLOSING OBLIGATIONS

In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:

(a)	Sellers shall deliver to Buyer:

	(i)	the Bill of Sale executed by Sellers;

	(ii)	the Assignment and Assumption Agreement executed by Sellers;

	(iii)	the consents set forth on Schedule 2.7(a)(iii) (the “ Material Consents ”);

	(iv)	for the interest in Real Property at 305 W. Arlington, the Lease in the form of Exhibit E or such other appropriate document, as the case may require, in form and substance satisfactory to Buyer and its counsel and executed by the landlord of the Real Property (the “ New Lease ”);

	(v)	an Assignment of Intellectual Property in the form of Exhibit F executed by Seller;

	(vi)	such other deeds, bills of sale, assignments, certificates of title (including endorsed certificates of title for motor vehicles), documents, and other instruments of transfer and conveyance as may reasonably be requested by Buyer, each in form and substance reasonably satisfactory to Buyer and its legal counsel and executed by Sellers;

	(vii)	the Noncompetition Agreement in the form of Exhibit G , executed by Sellers (the “ Noncompetition Agreement ”);

	(viii)	a certificate executed by each Seller as to the accuracy of its respective representations and warranties as of the date of this Agreement and as of the Closing in accordance with Section 7.1 and as to its compliance with and performance of its respective covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 7.2 ;

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	(ix)	a certificate of the Secretary of each Seller certifying, as complete and accurate as of the Closing, attached copies of the Governing Documents of each Seller, certifying and attaching all requisite resolutions or actions of each Seller’s board of directors and shareholders approving the execution and delivery of this Agreement, the consummation of the Contemplated Transactions and the change of name contemplated by Section 5.8 , and certifying to the incumbency and signatures of the officers of each Seller executing this Agreement and any other document relating to the Contemplated Transactions, accompanied by the requisite documents for amending the relevant Governing Documents of each Seller required to effect such change of name in form sufficient for filing with the appropriate Governmental Body;

	(x)	a certificate issued by the jurisdiction of each Seller’s organization as of a date not more than thirty (30) days before the Closing certifying that each Seller is validly existing and in good standing; and

	(xi)	a Closing Statement, setting forth the payment of all sums due under this Agreement (the “ Closing Statement ”), executed by Sellers.

(b)	Buyer shall deliver to Sellers:

	(i)	$1,400,000.00 by wire transfer pursuant to the Closing Statement;

	(ii)	the Assignment and Assumption Agreement executed by Buyer;

	(iii)	the Employment Agreement executed by Buyer and Parent

	(iv)	the Noncompetition Agreement executed by Buyer and Parent;

	(v)	the New Lease executed by Buyer;

	(vi)	a certificate executed by each of Buyer and Parent as to the accuracy of its respective representations and warranties as of the date of this Agreement and as of the Closing in accordance with Section 8.1 and as to its compliance with and performance of its respective covenants and obligations to be performed or complied with at or before the Closing in accordance with Section 8.2 ;

	(vii)	a certificate of the Secretary of Buyer certifying, as complete and accurate as of the Closing, attached copies of the Governing Documents of Buyer and certifying and attaching all requisite resolutions or actions of Buyer’s board of directors approving the execution and delivery of this Agreement and the consummation of the Contemplated Transactions and certifying to the incumbency and signatures of the officers of Buyer executing this Agreement and any other document relating to the Contemplated Transactions;

	(viii)	a certificate issued by the jurisdiction of Buyer’s organization as of a date not more than ten (10) days before the Closing certifying that Buyer is validly existing and in good standing;

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(ix) and the Closing Statement, executed by Buyer and Parent.

2.8 CONSENTS

(a)	If there are any Material Consents that have not yet been obtained (or otherwise are not in full force and effect) as of the Closing, in the case of each Seller Contract as to which such Material Consents were not obtained (or otherwise are not in full force and effect) (the “ Restricted Material Contracts ”), Buyer may waive the closing conditions as to any such Material Consent and either:

	(i)	elect to have Sellers continue its efforts to obtain the Material Consents; or

	(ii)	elect to have Sellers retain that Restricted Material Contract and all Liabilities arising therefrom or relating thereto.

	If Buyer elects to have Sellers continue its efforts to obtain any Material Consents and the Closing occurs, notwithstanding Sections 2.1 and 2.4 , neither this Agreement nor the Assignment and Assumption Agreement nor any other document related to the consummation of the Contemplated Transactions shall constitute a sale, assignment, assumption, transfer, conveyance, or delivery or an attempted sale, assignment, assumption, transfer, conveyance, or delivery of the Restricted Material Contracts, and following the Closing, the parties shall use Commercially Reasonable Efforts, and cooperate with each other, to obtain the Material Consent relating to each Restricted Material Contract as quickly as practicable. Pending the obtaining of such Material Consents relating to any Restricted Material Contract, the parties shall cooperate with each other in any reasonable and lawful arrangements designed to provide to Buyer the benefits of use of the Restricted Material Contract for its term (or any right or benefit arising thereunder, including the enforcement for the benefit of Buyer of any and all rights of Sellers against a third party thereunder). Once a Material Consent for the sale, assignment, assumption, transfer, conveyance, and delivery of a Restricted Material Contract is obtained, Sellers shall promptly assign, transfer, convey, and deliver such Restricted Material Contract to Buyer, and Buyer shall assume the obligations under such Restricted Material Contract assigned to Buyer from and after the date of assignment to Buyer pursuant to a special-purpose assignment and assumption agreement substantially similar in terms to those of the Assignment and Assumption Agreement (which special- purpose agreement the parties shall prepare, execute, and deliver in good faith at the time of such transfer, all at no additional cost to Buyer).

(b)	If there are any Consents not listed on Schedule 2.7(a)(iii) necessary for the assignment and transfer of any Seller Contracts to Buyer (the “ Nonmaterial Consents ”) that have not yet been obtained (or otherwise are not in full force and effect) as of the Closing, Buyer shall elect at the Closing, in the case of each of the Seller Contracts as to which such Nonmaterial Consents were not obtained (or otherwise are not in full force and effect) (the “ Restricted Nonmaterial Contracts ”), whether to:

	(i)	accept the assignment of such Restricted Nonmaterial Contract, in which case, as between Buyer and Sellers, such Restricted Nonmaterial Contract shall, to the

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	maximum extent practicable and notwithstanding the failure to obtain the applicable Nonmaterial Consent, be transferred at the Closing pursuant to the Assignment and Assumption Agreement as elsewhere provided under this Agreement; or

(ii)	reject the assignment of such Restricted Nonmaterial Contract, in which case, notwithstanding Sections 2.1 and 2.4 , (A) neither this Agreement nor the Assignment and Assumption Agreement nor any other document related to the consummation of the Contemplated Transactions shall constitute a sale, assignment, assumption, conveyance, or delivery or an attempted sale, assignment, assumption, transfer, conveyance, or delivery of such Restricted Nonmaterial Contract, and (B) Sellers shall retain such Restricted Nonmaterial Contract and all Liabilities arising therefrom or relating thereto.

	3. Representations and Warranties of Sellers

Each Seller represents and warrants, jointly and severally, to Buyer and Parent as follows:

3.1 ORGANIZATION AND GOOD STANDING

(a)	Schedule 3.1(a) contains a complete and accurate list of each Seller’s jurisdiction of incorporation and any other jurisdictions in which it is qualified to do business as a foreign corporation. Each Seller is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under the Seller Contracts. Each Seller is qualified to do business as a foreign corporation and is in good standing under the laws of each state or other jurisdiction in which the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification, except to the extent that the failure to be so qualified could not be reasonably expected to have a Material Adverse Effect.

(b)	Complete and accurate copies of the Governing Documents of each Seller, as currently in effect, have been provided to Buyer.

(c)	Except as disclosed in Schedule 3.1(c) , each Seller has no Subsidiary and does not own any shares of capital stock or other securities or equity interests of any other Person.

3.2 ENFORCEABILITY; AUTHORITY; NO CONFLICT

(a)

This Agreement constitutes the legal, valid, and binding obligation of each Seller, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally. Upon the execution and delivery by each Seller of the Assignment and Assumption Agreement, the Noncompetition Agreement and each other agreement to be executed or delivered by any

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	Seller at the Closing (collectively, the “ Seller’s Closing Documents ”), each of the Seller’s Closing Documents will constitute the legal, valid and binding obligation of the respective Seller, enforceable against it in accordance with its terms, except as the enforcement thereof may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally. Each Seller has the corporate power and authority to execute and deliver this Agreement and the Seller’s Closing Documents to which it is a party and to perform its obligations under this Agreement and the Seller’s Closing Documents, and such action has been duly authorized by all necessary action by each Seller’s board of directors and shareholders.

(b)	Except as set forth in Schedule 3.2(b) , neither the execution and delivery of this Agreement by each Seller nor the consummation or performance of any of the Contemplated Transactions by each Seller does, directly or indirectly (with or without notice or lapse of time):

	(i)	breach (A) any provision of any of the Governing Documents of Seller or (B) any resolution adopted by the board of directors or the shareholders of Seller;

	(ii)	breach or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under any Legal Requirement or any Order to which Seller, or any of the Assets, is subject;

	(iii)	contravene, conflict with, or result in a violation or breach of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental Authorization that is held by Seller;

	(iv)	breach any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate, or modify, any Seller Contract; or

	(v)	result in the imposition or creation of any Encumbrance upon or with respect to any of the Assets.

(c)	Except as set forth in Schedule 3.2(c) , each Seller is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

3.3 CAPITALIZATION

(a)	The authorized and outstanding equity securities of each Seller and the record and beneficial owners of such securities are set for the on Schedule 3.3(a) .

(b)	There are no Contracts relating to the issuance, sale, or transfer of any equity securities of each Seller.

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3.4 FINANCIAL STATEMENTS

(a)	Sellers have delivered or will deliver to Buyer and Parent: (a) its compiled Financial Statements for the Fiscal Years 2003 through 2007, together with the respective reports thereon of TAD Accounting Inc., certified public accountants; and (b) the Interim Financial Statements, certified by Sellers’ chief financial officer. Such financial statements fairly present, or will fairly present, the financial condition and the results of operations, changes in shareholders’ equity, and cash flows of Seller as at the respective dates of and for the periods referred to in such financial statements, all in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants (except that in the case of the Interim Financial Statements, such statements will not contain footnotes or year end adjustments). The financial statements referred to in this Section 3.4 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements. The financial statements have been and will be prepared from and are and will be in accordance with the accounting Records of Sellers.

	Sellers also have delivered to Buyer and Parent copies of all letters from Sellers’ certified public accountants to any Seller’s board of directors or management during the thirty-six (36) months preceding the execution of this Agreement, together with copies of all responses thereto.

3.5 BOOKS AND RECORDS

The books of account and other financial Records of Sellers, all of which have been made available to Buyer, are complete and correct in all material respects.

3.6 SUFFICIENCY OF ASSETS

Except as set forth in Schedule 3.6 , the Assets constitute all of the assets, tangible and intangible, necessary for operation of the Business as conducted by Sellers on the date hereof.

3.7 DESCRIPTION OF LEASED REAL PROPERTY

Schedule 3.7 lists each parcel of real property leased by Sellers, including an accurate description (by location, name of lessor, date of Lease, and term expiry date) of all Real Property Leases. Sellers do not own any Real Property.

3.8 TITLE TO ASSETS; ENCUMBRANCES

Sellers own good and transferable title to all of the Assets free and clear of any Encumbrances other than Permitted Encumbrances and those described in Schedule 3.8 (“ Non-Real Estate Encumbrances ”). Sellers warrant to Buyer that, at the time of Closing, all Assets shall be free and clear of all Non-Real Estate Encumbrances.

3.9 CONDITION OF THE ASSETS.

Sellers have maintained the tangible Assets in good operating order, ordinary wear and tear excepted. Except as set forth in Schedule 3.9 , all of the tangible Assets are located at

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Sellers’ principal place of Business located at 305 West Arlington Ave., Ft. Worth, Texas, 76110.

3.10 ACCOUNTS RECEIVABLE

All Accounts Receivable that are reflected (i) on the Financial Statements for the 2006 Fiscal Year, (ii) on the Interim Financial Statements or (iii) on the accounting Records of Sellers as of the Closing Date, to the extent outstanding as of the Closing Date, represent or will represent valid obligations arising from sales actually made or services actually performed by Sellers in the Ordinary Course of Business. Except to the extent paid, written off or otherwise adjusted prior to the Closing, such Accounts Receivable are or will be as of the Closing Date collectible net of the cumulative reserves shown on the Financial Statements for the 2006 Fiscal Year, the Interim Financial Statements, or the accounting Records of Seller as of the Closing Date (as appropriate). Such reserves are adequate as of the Closing Date. Schedule 3.10 contains a complete and accurate list of all Accounts Receivable as of the date of the Interim Financial Statements, which list sets forth the aging of each such Account Receivable.

3.11 INVENTORIES

All items included in the Inventories consist of a quality and quantity usable and, with respect to finished goods, saleable, in the Ordinary Course of Business of Sellers except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value in the Financial Statements for the 2006 Fiscal Year or the Interim Financial Statements or on the accounting Records of Sellers as of the Closing Date, as the case may be. Work-in-process Inventories will be valued on the Closing Date, according to GAAP.

3.12 NO UNDISCLOSED LIABILITIES

Except as set forth in Schedule 3.12 , Sellers have no Liability of the type required to be disclosed on a balance sheet under GAAP except for Liabilities reflected or reserved against in the Financial Statements for the 2006 Fiscal Year or the Interim Financial Statements and current liabilities incurred in the Ordinary Course of Business of Sellers since the date of the last Interim Financial Statements.

3.13 TAXES

(a)

Tax Returns Filed and Taxes Paid . Each Seller has filed or caused to be filed on a timely basis all Tax Returns and all reports with respect to Taxes that are or were required to be filed pursuant to applicable Legal Requirements. All Tax Returns and reports filed by each Seller are true, correct, and complete in all material respects. Each Seller has paid, or made provision for the payment of, all Taxes that have become due for all periods covered by the Tax Returns, or pursuant to any assessment received by any Seller, except such Taxes, if any, as are listed in Schedule 3.13(a) and are being contested in good faith and as to which adequate reserves have been provided in the Financial Statements or the Interim Financial Statements. Except as provided in Schedule 3.13(a) , each Seller currently is not the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made or is expected to be made by any Governmental Body in a jurisdiction where any Seller does not file Tax Returns that it is or may be

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	subject to taxation by that jurisdiction. There are no Encumbrances on any of the Assets that arose in connection with any failure (or alleged failure) to pay any Tax, and no Seller has Knowledge of any basis for assertion of any claims attributable to Taxes which, if adversely determined, would result in any such Encumbrance.

(b)	Delivery of Tax Returns and Information Regarding Audits and Potential Audits . Sellers have delivered or made available to Buyer copies of all Tax Returns filed since January 1, 2004. Schedule 3.13(b) contains a complete and accurate list of all Tax Returns of Sellers that have been audited or are currently under audit and describes any deficiencies or other amounts that were paid or are currently being contested. To the Knowledge of Sellers, no undisclosed deficiencies are expected to be asserted with respect to any such audit. All deficiencies proposed as a result of such audits have been paid, reserved against, settled, or are being contested in good faith by appropriate proceedings as described in Schedule 3.13(b) . Sellers have delivered, or made available to Buyer, copies of any examination reports, statements, or deficiencies or similar items with respect to such audits. Except as provided in Schedule 3.13(b) , Sellers have no Knowledge that any Governmental Body is likely to assess any additional taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Taxes of any Seller either (i) claimed or raised by any Governmental Body in writing or (ii) as to which any Seller has Knowledge. Except as described in Schedule 3.13(b) , no Seller has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of any Seller or for which any Seller may be liable.

(c)	No Proposed Assessment or Deficiency . To the Knowledge of each Seller, there exists no proposed tax assessment or deficiency against any Seller except as disclosed in the Interim Balance Sheet or in Schedule 3.13(c) .

(d)	Specific Potential Tax Liabilities and Tax Situations .

	(i)	Withholding . All Taxes that Sellers are or were required by Legal Requirements to withhold, deduct, or collect have been duly withheld, deducted, and collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

	(ii)	Tax Sharing or Similar Agreements . There is no tax sharing agreement, tax allocation agreement, tax indemnity obligation, or similar written or unwritten agreement, arrangement, understanding, or practice with respect to Taxes (including any advance pricing agreement, closing agreement, or other arrangement relating to Taxes) that will require any payment by any Seller.

	(iii)	Consolidated Group . No Seller (A) is a member of an affiliated group within the meaning of Code Section 1504(a) (or any similar group defined under a similar provision of state, local, or foreign law) and (B) has any liability for Taxes of any person (other than itself and its Subsidiaries) under Treas. Reg. Sect. 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor by contract or otherwise.

{W1118977.1}

(iv)	S Corporation . Technologies is not an S corporation as defined in Code Section 1361. Each of Properties and Services is an S corporation as defined in Code Section 1361, and neither Properties nor Services is or has been subject to either the built-in-gains tax under Code Section 1374 or the passive income tax under Code Section 1375.

	Schedule 3.13(d)(iv) lists all the states and localities with respect to which each Seller is required to file any corporate, income, or franchise tax returns and sets forth whether any Seller is treated as the equivalent of an S corporation by or with respect to each such state or locality. Each Seller has properly filed Tax Returns with and paid and discharged any liabilities for taxes in any states or localities in which it is subject to Tax.

3.14 NO MATERIAL ADVERSE CHANGE

Since the date of the most recent balance sheet in the Interim Financial Statements, there has not been any Material Adverse Change affecting the Business of Sellers, and no event has occurred or circumstance exists that could reasonably be expected to result in such a Mate

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