ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (“Agreement”), dated as of August 29, 2008, is by and among American International Industries, Inc., a -----------------Nevada corporation (the “ Purchaser ”), Shumate Machine Works, Inc., a Texas corporation (the “ Company ”), and Shumate Industries, Inc., a Delaware corporation and the sole shareholder of the Company (the “ Parent ”).

A.   The Parent owns all of the issued and outstanding shares of capital stock of the Company.

B.   The parties hereto wish to provide for the terms and conditions upon which the Purchaser will acquire substantially all of the assets and assume specified liabilities of the Company.

C.   The parties hereto wish to make certain representations, warranties, covenants and agreements in connection with the purchase of assets and assumption of liabilities and also to prescribe various conditions to such transaction.

Accordingly, and in consideration of the representations, warranties, covenants, agreements and conditions herein contained, the parties hereto agree as follows:

1.1   Assets to be Purchased . Upon satisfaction of all conditions to the obligations of the parties contained herein (other than such conditions as shall have been waived in accordance with the terms hereof), the Company shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase from the Company, at the Closing (as hereinafter defined), all of the Company’s right, title and interest in and to the assets, properties, goodwill and rights of the Company, as a going concern, of every nature, kind and description, tangible and intangible, wherever located and whether or not carried or reflected on the books and records of the Company (hereinafter sometimes collectively called the “ Assets ”), including without limitation: (i) the assets referred to in the form of Bill of Sale listed on Exhibit 1.1(a) hereto; and (ii) the assets reflected on the Latest Balance Sheet (as hereinafter defined), with only such dispositions of such assets reflected on the Latest Balance Sheet as shall have occurred in the ordinary course of the Company’s business between the date thereof and the Closing and which are permitted by the terms hereof, and excluding only (x) the minute books, corporate seal and stock records of the Company and (y) the assets specifically described on Exhibit 1.1(b) hereto. All machinery, equipment, vehicles and other personal property, including without limitation inventories, accounts and notes receivable, trade notes, trade accounts, shall be conveyed free and clear of any mortgage, pledge, lien or security interest of any kind or nature (whether or not of record) except for the Permitted Liens.

1.2   Assumptions of Certain Liabilities . Upon satisfaction of all conditions to the obligations of the parties contained herein (other than such conditions as shall have been waived in accordance with the terms hereof), the Purchaser, pursuant to a Liabilities Undertaking in the form of Exhibit 1.2(a) hereto (“ Liabilities Undertaking ”), shall assume those certain liabilities and obligations of the Company listed on Exhibit A to Exhibit 1.2(a) hereto (the “ Assumed Liabilities ”). The Purchaser is not assuming, and will not be obligated or liable for, any liability of the Company not listed on Exhibit A to Exhibit 1.2(a).

1.3   Purchase Price . The Purchaser shall pay for the Company’s Assets the following consideration (the “ Purchase Price ”):

(a)   Five Million Dollars ($5,000,000); and

(b)   Assumption by the Purchaser of the Assumed Liabilities.

As set forth in further detail in Sections 6.3 and 6.11, payment of the Purchase and Closing are subject to (i) simultaneous closing of the new Five Million Dollar ($5,000,000) term note and One Million Dollar ($1,000,000) revolving facility at terms acceptable to the Purchaser with Stillwater National Bank and Trust Company and (ii) the revised appraisal of the fair market value in place of the property and equipment and the intangible assets of the Company attached hereto as Schedule 6.11 being valued at least $5,000,000.

1.4   Payment of Purchase Price .

The Purchase Price shall be payable by the Purchaser as follows:

(a)   The Purchaser shall pay Five Million Dollars ($5,000,000), by either (i) federal wire transfer on the date of Closing in accordance with such instructions as the Company may provide to the Purchaser at least 72 hours prior to the Closing or (ii) assumption of those certain term notes of the Parent and Company with Stillwater National Bank and Trust Company set forth on Schedule 1.4(a) (the “ Assumed Stillwater Notes ”) or (iii) a combination of (i) and (ii) totaling $5,000,000.

(b)   The Purchaser shall execute the Liability Undertaking and deliver it to the Company at the Closing.

1.5   Purchase Price Adjustment . The determination of the Company’s Negative Working Capital (as defined below) on the date of Closing, and the Shares (as defined below) due Purchaser, if any, shall be accomplished at and after the Closing in the following manner:

(a)   As of or prior to the Closing, the Purchaser and the Company shall use their best commercially reasonable efforts to mutually agree upon and prepare a balance sheet as of the Closing Date (as hereinafter defined) in accordance with GAAP, including a calculation of the Negative Working Capital as of the Closing Date (the “ Closing Balance Sheet ”).

(b)   For purposes of this Agreement, “Negative Working Capital” means the amount by which, if any, Assumed Liabilities exceeds the sum of accounts receivable, inventory, cash and pre-paid assets of the Company on the Adjusted Closing Balance Sheet (as defined below). Upon final determination of the Adjusted Closing Balance Sheet and Negative Working Capital as set forth in subsections (c) and (d) below, Parent agrees to issue Purchaser shares of Parent’s common stock, par value $0.001 per share (the “ Common Stock ”) having an aggregate market value equal to the Negative Working Capital not to exceed $700,000 (the “ Shares ”), such number of shares to be determined by dividing the Negative Working Capital (not to exceed $700,000) by the closing price of the Common Stock on the Over the Counter Bulletin Board on the Closing Date (“ Closing Price ”). Parent and Purchaser hereby agree that the Closing Price shall not exceed $0.40.

(c)   The Parent and the Company shall promptly prepare the post Closing Balance Sheet within forty-five (45) days of the date of Closing and shall deliver copies thereof to the Purchaser (the “ Adjusted Closing Balance Sheet ”). The Parent and Company shall prepare a computation of the Negative Working Capital based on the Adjusted Closing Balance Sheet and shall submit such computation to Purchaser in writing at the same time that copies of the Adjusted Closing Balance Sheet are delivered.

(d)   The Purchaser shall have thirty (30) days after receipt of the Adjusted Closing Balance Sheet and the Negative Working Capital of the Company (the “ Review Period ”) to review and verify the Adjusted Closing Balance Sheet and the Negative Working Capital of the Company. If no party objects in writing to the Adjusted Closing Balance Sheet and the Negative Working Capital of the Company within the Review Period, then the Adjusted Closing Balance Sheet and the Negative Working Capital of the Company shall be final and binding on all parties, and the Shares shall be payable in accordance with subsection (b). If any party does so object within the Review Period then the parties shall meet as soon as practicable to attempt to resolve any such objection. If the parties agree in writing on a final Adjusted Closing Balance Sheet and the Negative Working Capital of the Company within ten (10) days after the expiration of the Review Period, then the provisions of subsection (b) shall apply. If the parties cannot agree upon a final Adjusted Closing Balance Sheet and the Negative Working of the Company within ten (10) days after the Review Period, then the provisions of Section 10.12 shall become applicable.

(e)   The Purchase Price will be allocated among the Assets in the manner required by Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”) as shall be mutually agreed by the Purchaser and the Company. The Company and the Purchaser will file all Tax Returns (as defined herein) and tax reports (including IRS Form 8594) in accordance with and based upon such allocation and will take no position in any Tax Return, tax proceeding or tax audit which is inconsistent with such allocation.

1.6   Closing . Unless this Agreement shall have been terminated and the transactions contemplated herein shall have been abandoned pursuant to Article 7 hereof, a closing (the “ Closing ”) will occur within 48 hours of satisfaction or waiver of all closing conditions set forth in Articles 6 and 7, or such later date or time as the parties hereto may agree in writing (the “ Closing Date ”), provided, however, that in no event shall the Closing occur later than the “ Termination Date ” which shall be the October 1, 2008, unless the parties hereto shall agree in writing to extend the date of such Closing. The Closing shall be held at the offices of the Purchaser at 601 Cien Street, Suite 235, Kemah, Texas 7765, or such other place as the parties may agree, at 10:00 a.m., local time or such other time as the parties may agree, at which time and place the documents and instruments necessary or appropriate to effect the transactions contemplated herein will be exchanged by the parties.

The Company hereby represents and warrants to the Purchaser as of the date hereof as follows:

2.1   Corporate Organization . The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of Texas, has full corporate power and authority to carry on its business as it is now being conducted and to own, lease and operate its properties and assets, is duly qualified or licensed to do business as a foreign corporation in good standing in every other jurisdiction in which the character or location of the properties and assets owned, leased or operated by it or the conduct of its business requires such qualification or licensing, except in such jurisdictions in which the failure to be so qualified or licensed and in good standing would not, individually or in the aggregate, have a Material Adverse Effect (as hereinafter defined) on the Company.

2.2   Capitalization . The authorized capital stock of the Company is set forth in Section 2.2 of the disclosure schedule delivered by the Company (the “ Disclosure Schedule ”). The number of shares of capital stock of the Company outstanding is set forth in Section 2.2 of the Disclosure Schedule. All issued and outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid, nonassessable and are without, and were not issued in violation of, preemptive rights. Except as set forth in Section 2.2 of the Disclosure Schedule: (i) there are no shares of capital stock or other equity securities of the Company outstanding or any securities convertible into or exchangeable for such shares, securities or rights; (ii) there are no outstanding options, warrants, conversion privileges or other rights to purchase or acquire any capital stock or other equity securities of the Company or any securities convertible into or exchangeable for such shares, securities or rights; and (iii) there are no contracts, commitments, understandings, arrangements or restrictions by which the Company is bound to issue or acquire any additional shares of its capital stock or other equity securities or any options, warrants, conversion privileges or other rights to purchase or acquire any capital stock or other equity securities of the Company or any securities convertible into or exchangeable for such shares, securities or rights.

2.3   Authorization . The Company has full corporate power and authority to enter into this Agreement and the Company Delivered Documents (as hereinafter defined) and to carry out the transactions contemplated herein and therein. The Board of Directors of the Company has taken all action required by law, its articles of incorporation and bylaws and otherwise to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein. This Agreement has been duly and validly executed and delivered by the Company and no other corporate action is necessary. This Agreement is the valid and binding legal obligation of the Company enforceable against the Company in accordance with its terms.

2.4   Non-Contravention . Except as set forth in Section 2.4 of the Disclosure Schedule, neither the execution, delivery and performance of this Agreement nor the consummation of the transactions contemplated herein will to the Company’s knowledge: (i) violate or be in conflict with any provision of the articles of incorporation or bylaws of the Company; or (ii) except for such violations, conflicts, defaults, accelerations, terminations, cancellations, impositions of fees or penalties, mortgages, pledges, liens, security interests, encumbrances, restrictions, changes or other events which could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, (A) be in conflict with, or constitute a default, however defined (or an event which, with the giving of due notice or lapse of time, or both, would constitute such a default), under, or cause or permit the acceleration of the maturity of, or give rise to any right of termination, cancellation, imposition of fees or penalties under, any debt, note, bond, lease, mortgage, indenture, license, obligation, contract, commitment, franchise, permit, instrument or other agreement or obligation to which the Company (unless with respect to which defaults or other rights, requisite waivers or consents shall have been obtained at or prior to the Closing) or (B) result in the creation or imposition of any mortgage, pledge, lien, security interest, encumbrance, restriction, adverse claim or charge of any kind, upon any property or assets of the Company or under any debt, obligation, contract, agreement or commitment to which the Company is a party or by which the Company or any of its assets or properties is or may be bound; or (iii) violate any applicable statute, treaty, law, judgment, writ, injunction, decision, decree, order, regulation, ordinance or other similar authoritative matters (sometimes hereinafter separately referred to as a “ Law ” and sometimes collectively as “ Laws ”) of any applicable foreign, federal, state or local governmental or quasi-governmental, administrative, regulatory or judicial court, department, commission, agency, board, bureau, instrumentality or other authority (hereinafter sometimes separately referred to as an “ Authority ” and sometimes collectively as “ Authorities ”).

2.5   Consents and Approvals . Except as set forth in Section 2.5 of the Disclosure Schedule, with respect to the Company, no consent, approval, order or authorization of or from, or registration, notification, declaration or filing with (hereinafter sometimes separately referred to as a “ Consent ” and sometimes collectively as “ Consents ”) any individual or entity, including without limitation any Authority, is required in connection with the execution, delivery or performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated herein, except where the failure to obtain such Consent would not prevent or delay consummation of the transactions contemplated herein, or otherwise prevent or delay the Company from performing its obligations under this Agreement, and would not have a Material Adverse Effect.

2.6   Financial Statements . The balance sheets of the Company as of December 31, 2007 (the “ December 2007 Balance Sheet ”), and related statements of operations are set forth in Section 2.6 of the Disclosure Schedule. The balance sheet of the Company as of June 30, 2008 is referred to herein as the “ Latest Balance Sheet ” and is also set forth in Section 2.6 of the Disclosure Schedule. Except as disclosed in Section 2.6 of the Disclosure Schedule, the aforesaid financial statements have been prepared from, and are consistent with, the books and records of the Company.

2.7   Absence of Certain Changes . Except as set forth in Section 2.7 of the Disclosure Schedule, except for the negotiation and execution of this Agreement, since the date of the Latest Balance Sheet, the Company has owned and operated its assets, properties and businesses in the ordinary course of business and consistent with past practice; without limiting the generality of the foregoing, the Company has not, subject to the aforesaid exceptions:

(a)   suffered any adverse change in its condition (financial or otherwise), working capital, assets, properties, liabilities, obligations, reserves, businesses, prospects, goodwill or going concern value or experienced any event or failed to take any action which reasonably could be expected to result in such an adverse change;

(b)   suffered any loss, damage, destruction or other casualty (whether or not covered by insurance) or suffered any loss of officers, employees, dealers, distributors, independent contractors, customers, or suppliers or other favorable business relationships;

(c)   declared, set aside, made or paid any dividend or other distribution in respect of its capital stock; or purchased or redeemed any shares of its capital stock;

(d)   issued or sold any shares of its capital stock, or any options, warrants, conversion, exchange or other rights to purchase or acquire any such shares or any securities convertible into or exchangeable for such shares;

(e)   incurred any indebtedness for borrowed money;

(f)   mortgaged, pledged, or subjected to any lien, lease, security interest or other charge or encumbrance any of its properties or assets, tangible or intangible, except for Permitted Liens;

(g)   acquired or disposed of any assets or properties, except in the ordinary course of business;

(h)   forgiven or canceled any debts or claims, or waived any rights;

(i)   granted to any officer or salaried employee or any other employee any increase in compensation in any form or paid any severance or termination pay;

(j)   entered into any commitment for capital expenditures for additions to plant, property or equipment; or

(k)   agreed, whether in writing or otherwise, to take any action described in this subsection.

2.8   Real Properties . The Company does not own any real properties. Section 2.8 of the Disclosure Schedule lists all real properties leased by the Company. Section 2.8 of the Disclosure Schedule includes a brief description of the operating facilities located thereon, the annual rent payable thereon, the length of the term, any option to renew with respect thereto and the notice and other provisions with respect to termination of rights to the use thereof. Except as set forth in Section 2.8 of the Disclosure Schedule, such leasehold interests are valid and in full force and effect and enforceable in accordance with their terms and there does not exist any violation, breach or default thereof or thereunder.

2.9   Machinery, Equipment, Vehicles and Personal Property . Section 2.9 of the Disclosure Schedule lists all material machinery, equipment and vehicles owned or leased by the Company, other than those items set forth on Exhibit 1.1(b). Except as set forth in Section 2.9 of the Disclosure Schedule, the Company has good and merchantable right, title and interest in and to all its machinery, equipment, vehicles and other personal property reflected in the Latest Balance Sheet and purchased or otherwise acquired since the date of the Latest Balance Sheet (except for such items sold in the ordinary course of business since the date of the Latest Balance Sheet). Except as set forth in Section 2.9 of the Disclosure Schedule, none of such machinery, equipment, vehicles or other personal property owned by the Company is subject to any mortgage, pledge, lien or security interest of any kind or nature (whether or not of record) except Permitted Liens. Except as set forth in Section 2.9 of the Disclosure Schedule, all of the machinery, equipment, vehicles or other personal property owned by the Company is in good repair and good operating condition, ordinary wear and tear excepted, and is free from latent and patent defects..

2.10   Inventories . Section 2.10 of the Disclosure Schedule lists all inventory of the Company as of July 31, 2008, excluding the inventory included within the Excluded Assets. Except as set forth in Section 2.10 of the Disclosure Schedule, all inventory of the Company, whether reflected in the Latest Balance Sheet or otherwise (but excluding the inventory included within the Excluded Assets), consists of a quality and quantity usable and salable in the ordinary course of business, and the present quantities of all inventory of the Company are reasonable in the present circumstances of the businesses as currently conducted or as proposed to be conducted; provided, however, that the foregoing does not take into account any plans of the Purchaser for conduct of the business after the Closing Date.

2.11   Receivables and Payables .

(a)   Section 2.11 of the Disclosure Schedule lists all accounts receivable, notes receivable, trade notes and trade accounts (collectively, “ Accounts Receivable ”) of the Company as of July 31, 2008, including their aging. Except as set forth in Section 2.11 of the Disclosure Schedule, (A) the Company has good right, title and interest in and to all its Accounts Receivable, including those reflected in the Latest Balance Sheet and those acquired and generated since the date of the Latest Balance Sheet (except for those paid since the date of the Latest Balance Sheet); (B) none of such Accounts Receivable is subject to any mortgage, pledge, lien or security interest of any kind or nature (whether or not of record) except Permitted Liens; (C) except to the extent of applicable reserves shown in the Latest Balance Sheet, to the knowledge of the Company, all of the Accounts Receivable owing to the Company constitute valid and enforceable claims arising from bona fide transactions in the ordinary course of business, and there are no claims, refusals to pay or other rights of set-off against any thereof; (D) no account or note debtor is delinquent in payment by more than ninety days; (E) the aging schedule of the Accounts Receivable of the Company set forth in the Disclosure Schedule is complete and accurate in all material respects; and (F) to the knowledge of the Company, there is no reason why any Accounts Receivable will not be collected in accordance with its terms, other than for such accounts and notes which are not in excess of the reserves established therefor and reflected in the Latest Balance Sheet.

(b)   Section 2.11(b) of the Disclosure Schedule lists all accounts payable of the Company. All accounts payable and notes payable by the Company arose in bona fide transactions in the ordinary course of business and except as set forth on Section 2.11 of the Disclosure Schedule no such account payable or note payable is delinquent by more than ninety days in its payment.

2.12   Litigation . Except as set forth in Section 2.12 of the Disclosure Schedule, to the knowledge of the Company, there is no legal, administrative, arbitration, or other proceeding, suit, claim or action of any nature or investigation, review or audit of any kind (including without limitation a proceeding, suit, claim or action, or an investigation, review or audit by any Authority, involving any environmental Law or matter), judgment, decree, decision, injunction, writ or order pending, noticed, scheduled or threatened or contemplated by or against or involving the Company, its assets, properties or businesses or its directors, officers, agents or employees (but only in their capacity as such), whether at law or in equity, before or by any person or entity or Authority, or which questions or challenges the validity of this Agreement or any action taken or to be taken by the parties hereto pursuant to this Agreement or in connection with the transactions contemplated herein.

2.13   Insurance . Section 2.13 of the Disclosure Schedule contains an accurate and complete list of all policies of fire and other casualty, general liability, theft, life, workers’ compensation, health, directors and officers, business interruption and other forms of insurance owned or held by the Company, specifying the insurer, the policy number, the term of the coverage and, in the case of any “claims made” coverage, the same information as to predecessor policies for the previous three years. All present policies are in full force and effect and all premiums with respect thereto have been paid. The Company has not been denied any form of insurance and no policy of insurance has been revoked or rescinded during the past five years, except as described in Section 2.13 of the Disclosure Schedule.

2.14   Benefit Plans .

(a)   Section 2.14 of the Disclosure sets forth a true and complete list of each Employee Plan (as hereinafter defined) and Benefit Arrangement (as hereinafter defined).

(b)   The Company has performed in all material respects all obligations required to be performed by it under each Employee Plan that is intended to qualify under Sections 401(a), 401(k) or 401(m) of the Code, and each such Employee Plan and Benefit Arrangement has been established and maintained in all material respect in accordance with its terms and in compliance with all applicable laws, statutes, orders, rules and regulations, including but not limited to ERISA or the Code.

(c)   Except as set forth on Section 2.14 of the Disclosure Schedule, the execution of this Agreement and the consummation of the transactions contemplated herein will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Employee Plan or Benefit Arrangement that will or could reasonably be expected to result in any payment, acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits that will result in any liability of Purchaser.

2.15   Contracts and Commitments; No Default .

(a)   Except as set forth in Section 2.15 of the Disclosure Schedule, the Company:

(i)   has no written contract, commitment, agreement or arrangement with any person or, to the Company’s knowledge, any oral contract, commitment, agreement or arrangement which (1) requires payments individually in excess of $10,000 annually or in excess of $50,000 over its term (including without limitation periods covered by any option to extend or renew by either party) and (2) is not terminable on thirty (30) days’ or less notice without cost or other Liability;

(ii)   does not pay any person or entity cash remuneration at the annual rate (including without limitation guaranteed bonuses) of more than $50,000 for employment or consulting services rendered;

(iii)   is not restricted by agreement from carrying on its businesses or any part thereof anywhere in the world or from competing in any line of business with any person or entity;

(iv)   is not subject to any obligation or requirement to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any person or entity;

(v)   is not party to any agreement, contract, commitment or loan to which any of its directors, officers or shareholders or any “affiliate” or “associate” (as defined in Rule 405 as promulgated under the Securities Act of 1933) (or former affiliate or associate) thereof is a party;

(vi)   is not party to any purchase or sale contract or agreement that calls for aggregate purchases or sales in excess over the course of such contract or agreement of $25,000 or which continues for a period of more than twelve months (including without limitation periods covered by any option to renew or extend by either party) which is not terminable on sixty (60) days’ or less notice without cost or other Liability at or any time after the Closing;

(vii)   is not subject to any contract, commitment, agreement or arrangement with any “disqualified individual” (as defined in Section 280G(c) of the Code) which contains any severance or termination pay liabilities which would result in a disallowance of the deduction for any “excess parachute payment” (as defined in Section 280G(b)(1) of the Code) under Section 280G of the Code; and

(viii)   has no distributorship, dealer, manufacturer’s representative, franchise or similar sales contract relating to the payment of a commission.

Each contract, agreement, instrument, license, commitment, loan, restriction and other arrangement set forth on Section 2.15 of the Disclosure Schedule shall be referred to as a “ Material Contract ” and shall be collectively referred to as the “ Material Contracts .”

(b)   To the knowledge of the Company, true and complete copies (or summaries, in the case of oral items) of all Material Contracts have been made available to the Purchaser for review. Except as set forth in Section 2.15 of the Disclosure Schedule to the knowledge of the Company, all Material Contracts are valid and enforceable by and against the Company in accordance with their respective terms; the Company is not in material breach, violation or default, however defined, in the performance of any of its obligations thereunder, and, to the knowledge of the Company, no facts and circumstances exist which, whether with the giving of due notice, lapse of time, or both, would constitute such a material breach, violation or default thereunder or thereof; and, to the Company’s knowledge, no other parties thereto are in a breach, violation or default, however defined, thereunder or thereof, and no facts or circumstances exist which, whether with the giving of due notice, lapse of time, or both, would constitute such a breach, violation or default thereunder or thereof.

2.16   Orders, Commitments and Returns . Except as set forth in Section 2.16 of the Disclosure Schedule, to the knowledge of the Company, all accepted and unfulfilled orders for the sale of products and the performance of services entered into by the Company and all outstanding contracts or commitments for the purchase of supplies, materials and services were made in bona fide transactions in the ordinary course of business. Except as set forth in Section 2.16 of the Disclosure Schedule, to the knowledge of the Company, there are no claims against the Company to return products by reason of alleged over-shipments, defective products or otherwise, or of products in the hands of customers, retailers or distributors under an understanding that such products would be returnable.

2.17   Labor Matters . Except as set forth in Section 2.17 of the Disclosure Schedule to the knowledge of the Company: (i) the Company is and has been in material compliance with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including without limitation any such Laws respecting employment discrimination and occupational safety and health requirements, and has not and is not engaged in any unfair labor practice; (ii) to the knowledge of the Company, there is no unfair labor practice complaint against the Company pending or threatened before the National Labor Relations Board or any other comparable Authority; (iii) there is no labor strike, dispute, slowdown or stoppage actually pending or, to the Company’s knowledge, threatened against or directly affecting the Company; (iv) to the knowledge of the Company, no labor representation question exists respecting the employees of the Company and there is not pending or threatened any activity intended or likely to result in a labor representation vote respecting the employees of the Company; (v) no grievance or any arbitration proceeding arising out of or under collective bargaining agreements is pending and no claims therefor exist or, to the Company’s knowledge, have been threatened; (vi) no collective bargaining agreement is binding and in force against the Company or currently being negotiated by the Company; (vii) to the knowledge of the Company, the Company has not experienced any significant work stoppage or other significant labor difficulty; (viii) the Company is not delinquent in payments to any persons for any wages, salaries, commissions, bonuses or other direct or indirect compensation for any services performed by them or amounts required to be reimbursed to such persons, including without limitation any amounts due under any Employee Plan and Benefit Arrangement; (ix) except as upon termination of the employment of any person, neither the Purchaser nor any subsidiary of the Purchaser will, by reason of anything done by the Company or the Parent at or prior to or as of the date of Closing, be liable to any of such persons for so-called “severance pay” or any other payments; and (x) to the knowledge of the Company, within the twelve month period prior to the date hereof there has not been any expression of intention to the Company by any officer or key employee identified in Section 2.17 of the Disclosure Schedule to terminate such employment.

2.18   Dealers and Suppliers . Except as set forth in Section 2.18 of the Disclosure Schedule, there has not been in the twelve month period prior to the date hereof any adverse change in the business relationship of the Company with any dealer or supplier to the Company which is reasonably likely to have a Material Adverse Effect.

2.19   Permits and Other Operating Rights . Except as set forth in Section 2.19 of the Disclosure Schedule, the Company does not require the Consent of any Authority to permit it to operate in the manner in which it presently is being operated, and possesses all permits and other authorizations from all Authorities presently required necessary to permit it to operate it businesses in the manner in which they presently are conducted.

2.20   Compliance with Law . Except as set forth in Section 2.20 of the Disclosure Schedule, and without limiting the scope of any other representations or warranties contained in this Agreement, but without intending to duplicate the scope of such other representations and warranties to the knowledge of the Company, the assets, properties, businesses and operations of the Company are and have been in material compliance with all Laws applicable to the ownership and conduct of their assets, properties, businesses and operations. To the knowledge of the Company, there are no outstanding and unsatisfied deficiency reports, plans of correction, notices of noncompliance or work orders relating to any Authorities arising as a result of any such failure to be in material compliance, and no such discussions with any Authorities arising as a result of any such failure to be in material compliance are scheduled or pending.

2.21   Assets of Business . The Assets constitute substantially all of the assets held for use or used primarily in connection with its businesses, except for the Excluded Assets, and, except for the Excluded Assets, are adequate to carry on such businesses as presently conducted by the Company.

2.22   Brokers . Except as set forth in Section 2.22 of