ASSET PURCHASE AGREEMENT

2.1.

Buyer shall pay Seller $150,000 at Closing, which amount shall be inclusive of Buyer’s $50,000 good faith advance deposit (the “Escrow Deposit” ) escrowed pursuant to that certain Escrow Agreement dated as of July 2, 2009 by and among Seller, Buyer and Fettmann, Tolchin & Majors PC, as escrow agent (the “Escrow Agreement” ).  This payment is allocated $75,000 to the Purchased Assets consisting of finished goods, work in progress, and components (the “Goods and WIP Assets” ), and $75,000 to the Purchased Assets consisting of service inventory (the “Service Inventory Assets” ), all as further specified on Exhibit 1 attached hereto.  Subject to offset pursuant to Section 12.4 hereof, the remaining $325,000 of the Purchase Price (the “Earnout Amount” ), allocated to good will, shall be payable solely from, and solely to the extent of, revenue actually received by Buyer after the Closing Date until the third (3 ^rd ) anniversary of the Closing Date from the existing Integration Business clients and prospects with respect to which Seller has had verifiable contact regarding the Integration Business within the six-month period immediately preceding the Closing Date, in each case as listed on Exhibit 2 attached hereto (collectively, “Clients” ), at a rate equal to 15% of the Net Sales Price actually received by Buyer from such Clients.  For purposes of this Agreement, “Net Sales Price” means the aggregate amount, net of any returns or credits against sales, that one or more Clients shall have paid to Buyer relating to the Goods and WIP Assets or the Service Inventory Assets, in connection with a sale transaction accepted by Buyer and closed, less any (i) sales taxes, excise taxes, value-added taxes and any other taxes (other than income taxes payable by Buyer to U.S. federal or state authorities) payable in connection with or as a result of such sale transaction and (ii) any freight costs, insurance costs or duties payable in connection with or as a result of such sale transaction.

2.2.

Any post-Closing payments owed to Seller hereunder, including but not limited to payments in respect of sales of Consigned Filter Inventory pursuant to Section 5 hereof, are due and payable to Seller on or before the tenth (10 ^th ) business day of the month following the month Buyer actually receives the applicable payment from Clients.

2.3.

Buyer shall keep full and complete records of sales to Clients.  Buyer shall provide to Seller a report each month on or before the tenth (10 ^th ) business day of the month listing the Clients from which Buyer actually received revenue, and the amounts and nature of such sales, during the prior month, including but not limited to information regarding any sales of Consigned Filter Inventory pursuant to Section 5 hereof.  Seller shall have the right at any reasonable time to audit or review such records of Buyer at Seller’s own cost.  However, if the audit or review shows aggregate undisputed underpayments to Seller in excess of 5% in any calendar quarter, Buyer shall reimburse Seller the reasonable cost of such audit or review.

4.1.

At Closing, Buyer shall assume and agrees to pay, discharge or perform as necessary only the following liabilities and obligations (the “Assumed Liabilities” ):

a.

Fulfillment obligations under customer purchase orders with Clients that were not fulfilled as of the Closing Date, as set forth on Schedule 4.1 attached hereto; and

b.

Responsibilities to Clients under the terms of existing warranties (the “Existing Warranties” ) and existing contracts (the “Existing Contracts” ).

4.2.

Except for the Assumed Liabilities, Buyer is not assuming, nor shall it in any way be liable or responsible for, any liabilities, obligations or debts of Seller, whether accrued, absolute, contingent or otherwise and whether arising out of or relating to the Purchased Assets or otherwise, arising before or after the Closing Date, including, without limitation, any liability of Seller or its affiliates not specifically identified in Section 4.1 , whether known or unknown and whether relating to the ownership or use of the Purchased Assets, Seller’s conduct of the Integration Business or otherwise, any product liability relating to or in respect of the Purchased Assets, and any liability of Seller arising out of or relating to the execution, delivery or performance by Seller of this Agreement or any other document or instrument in connection with the transactions contemplated hereby (collectively, the “Excluded Liabilities” ).  Seller shall pay all liabilities of Seller and take any and all actions necessary to prevent any person or governmental authority from having recourse against any of the Purchased Assets purchased by Buyer or against Buyer solely with respect to any such liabilities of Seller, including, without limitation, the Excluded Liabilities.

5.1.

Seller hereby consigns to Buyer, and Buyer hereby accepts consignment from Seller of, the Consigned Filter Inventory.  The term of such consignment arrangment shall begin on the Closing Date and shall continue for a period of two (2) years from the Closing Date (the “Consignment Period” ).  For purposes of this Agreement, the term “Consigned Filter Inventory” shall mean the filter inventory of Seller set forth on Exhibit 3 attached hereto, in the quantities set forth thereon.

5.2.

During the Consignment Period, Buyer generally may effect the sale of the Consigned Filter Inventory through one or more sales or series of sales to one or more Clients; provided, however, that the pricing terms of any such sale or sales are within the sole and absolute discretion of Buyer.  Buyer will pay to Seller for each item of the Consigned Filter Inventory sold to a Client the price stated on Exhibit 3   attached hereto corresponding to the applicable item of the Consigned Filter Inventory (irrespective of the pricing terms of such sale, as between Buyer and a Client), in accordance with Section 0 hereof.

5.3.

For purposes of this Agreement, Buyer will at all times be acting as a consignee of Seller and not as a principal with regard to the Consigned Filter Inventory.  Ownership in and title to the Consigned Filter Inventory including ownership in and to all intellectual proprietary rights relating to the Consigned Filter Inventory shall at all times, before, during and after the termination of this Agreement and until items of the Consigned Filter Inventory are sold to a Client, remain vested in Seller.  At all times, the Consigned Filter Inventory shall be kept separately identified and segregated from the Purchased Assets and any property of Buyer.

5.4.

Buyer shall return all unsold Consigned Filter Inventory to Seller within thirty (30) days after the end of the Consignment Period.

6.1.

Seller shall use its best efforts to maintain its current relationships with suppliers, customers, Clients and others having business relations with Seller in connection with the Purchased Assets or the Integration Business and shall assist Buyer in effecting an orderly transition of these relationships to Buyer from and after Closing.

6.2.

Seller shall use its best efforts to preserve the Purchased Assets and conduct the Integration Business and all transactions with respect to the Purchased Assets in the usual and ordinary course of business consistent with Seller’s past practice.

6.3.

Seller shall not, directly or indirectly, sell, transfer, pledge, lease, license, offer to sell, abandon or make any other disposition of any of the Purchased Assets or grant or suffer to exist, or agree to grant or suffer to exist, any Encumbrances on any of the Purchased Assets.

6.4.

Seller shall be responsible for, and shall indemnify Buyer from and against, any and all accounts payable relating to the Purchased Assets arising on or prior to the Closing Date; provided, however, that none of the foregoing of this Section 6.4 shall be deemed to limit or waive Seller’s obligations to deliver to Buyer the Purchased Assets free and clear of all Encumbrances.

6.5.

Buyer shall have the first right, but not any obligation, to offer employment from and after the Closing Date to some or all of Seller’s employees involved with the Integration Business, at such salaries or wages, duties and responsibilities as shall be mutually acceptable to Buyer and such employees; provided, however, that Buyer is not committing to the hiring of any employees, and under no circumstances shall Buyer assume or bear any responsibility for any severance obligations in respect of any terminated Seller employees subsequently hired by Buyer, if any; provided, further, that Seller shall retain all obligations and liabilities, if any, for, and shall defend, indemnify and hold harmless Buyer, in accordance with Section 12.3 hereof, in connection with (i) any claim (including, without limitation, any claim for unpaid wages, accrued vacation time and employee benefits matters) relating to any employment by Seller, (ii) any lawsuit, administrative charge, arbitration, formal proceeding or written demand or notice pertaining to an employee and arising out of employment with Seller and (iii) any worker’s compensation or other claims arising from any injury or act occurring during employment with Seller.  Without limiting any of the foregoing, Seller shall use its best efforts to cause the assignment to Buyer of any and all employee non-competition agreements pertaining to any of Seller’s employees subsequently hired by Buyer.

6.6.

Until and for the first thirty (30) days following the Closing Date, Seller shall cooperate in good faith with Buyer and use commercially reasonably efforts to make available to Buyer its records, staff and such other materials as related to the Integration Business and the Purchased Assets.

7.1.

Buyer, at its sole cost, will remove the Purchased Assets and Consigned Filter Inventory from Seller’s premises within thirty (30) days of Closing.

7.2.

Buyer shall use its best efforts to cooperate in good faith with Seller to effect an orderly transition to Buyer of Seller’s current relationships with suppliers, customers, Clients and others having business relations with Seller in connection with the Purchased Assets or the Integration Business and shall assist Seller in transitioning these relationships to Buyer from and after Closing.

7.3.

Buyer shall cooperate in good faith with Seller and use commercially reasonably efforts to assist Seller in collecting outstanding receivables owed to Seller by Clients for transactions effected prior to Closing; provided, however, that in no event shall Buyer be required to incur any cost or any material obligations or suffer the loss of any right or benefit in connection therewith.  Seller acknowledges and agrees that attached hereto as Schedule 7.3 is a list of Seller’s receivables from Clients.  All payments received by Buyer from a Client in respect of a receivable listed on Schedule 7.3 on or after Closing will be credited to such receivable and remitted to Seller.  Without limiting the foregoing, Buyer shall not knowingly take any action that materially adversely interferes with Seller’s ability to collect said receivables.

8.1.

Organization of Seller .  Seller is a corporation duly formed, validly existing and in good standing under the laws of the Commonwealth of Virginia.

8.2.

Authorization; Enforceability .  Seller has all requisite power and authority to execute and deliver this Agreement and each other instrument required hereby to be executed and delivered by it, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  The execution and delivery by Seller of this Agreement and each other instrument required hereby and thereby to be executed and delivered by it, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of Seller and its stockholders, board of directors and officers, and no other proceedings on the part of Seller or its stockholders, board of directors or officers are required to authorize this Agreement or any of the other instruments required hereby or thereby or for Seller to consummate the transactions contemplated hereby or thereby.  This Agreement has been, and upon execution and delivery thereof by Seller each other instrument described herein and therein and to be executed and delivered by Seller, will be, duly and validly executed and delivered by Seller and, assuming the due and valid authorization, execution and delivery by the other parties thereto, constitutes, or in the case of each such other other instrument, will constitute, a valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms, except to the extent that enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by principles of equity regardless of whether such enforceability is considered in a proceeding in law or at equity.

8.3.

Title to Purchased Assets .  Seller has good and marketable title to all of the Purchased Assets, free and clear of all Encumbrances.  The Goods and WIP Assets are in good condition and repair.  Seller has complete and unrestricted power and the unqualified right to transfer, convey and assign the Purchased Assets, and the conveyance instrument executed and delivered at Closing will be, when executed and delivered by the parties thereto, valid and binding obligations of Seller, enforceable in accordance with their respective terms, sufficient for purposes of recordation and filing where permitted by law, and sufficient to transfer, convey and assign to Buyer all right, title and interest of Seller in and to the Purchased Assets.  Seller owns or licenses all the intellectual property associated with the Purchased Assets or that Seller otherwise uses in the Integration Business.  To the knowledge of Seller, the use of the intellectual property associated with the Purchased Assets or used in, or necessary to, the conduct of the Integration Business as presently conducted does not infringe, misappropriate or otherwise violate the rights of any third parties.  For purposes of this Agreement, the term “Encumbrances” shall mean any defect or imperfection in title, encumbrance, lien, pledge, security interest, charge, limitation, commitment or claim against or with respect to any Purchased Assets or other encumbrance of any kind or nature whatsoever (whether absolute or contingent).

8.4.

No Conflicts; Consents and Approvals .  The execution and delivery of this Agreement by Seller do not, and the consummation of the transactions contemplated hereby by Seller will not (i) violate or conflict with the constituent or organizational documents of Seller, or (ii) constitute a breach or default (or an event that with notice or lapse of time or both would become a breach or default) of any statute, regulation, judgment, order or