1.1

        The Assets . Effective as of the Closing Date (as hereinafter defined) and subject to the terms and provisions contained in this Agreement, Seller hereby sells, transfers, conveys, assigns and delivers the Assets (as hereinafter defined) at the Premises or such other location where any Asset exists as of the Closing Date to Purchaser, and Purchaser hereby purchases, acquires and accepts the Assets from Seller, free and clear of all Liens (as hereinafter defined), other than Permitted Liens (as hereinafter defined), except for the Excluded Assets (as hereinafter defined), Except for the Excluded Assets, the assets, rights, interests, properties and goodwill sold, transferred, conveyed, assigned and delivered by Seller to Purchaser hereunder (collectively, the “Assets”) consists of the Seller’s right, title and interest in and to the following:

1.1.1

        Machinery &Equipment . All of the machinery, equipment, office and computer equipment, furniture, furnishings, fixtures, jigs, dies, tooling, patterns, tooling fixtures, trucks, motor vehicles and all other fixed tangible assets owned by Seller and used by Seller in the Embassy Business, including those identified in Schedule 1.1.1 attached hereto (the “Machinery & Equipment”), together with any rights of Seller to all warranties, and guaranties by, and rights, choses in action, and claims, known or unknown, matured or unmatured, accrued or contingent against third parties relating to any other Assets, including rights in and to insurance and indemnity claims of the Seller relating to any such other Assets, if any, and to the extent assignable, received from the manufacturers and sellers of such items;

1.1.2

        Inventory . All inventory owned by Seller relating to the Embassy Business including raw materials, work-in-process, and finished goods (the “Inventory”);

1.1.3

        Material Agreements . Subject to required consents by third parties, all right, title and interest of Seller in, to and under those certain executory contracts (including the right to the return of any and all deposits which Seller delivered to vendors), contract rights and agreements (including open purchase orders issued by Seller to vendors in the ordinary course of business as well as open purchase orders issued to Seller from customers) to provide equipment, repair parts and services to the customers of Seller, sales representative agreements, leases of real or personal property, licenses, service and maintenance agreements, and other agreements related to the ownership or operation of the Embassy Business, copies of which agreements have been made available to Purchaser, including, but not limited to, the agreements described on Schedule 1.1.3 attached hereto all of which shall be, except as otherwise disclosed on Schedule 1.1.3 and or Schedule 7.3 , as of the Closing Date in full force and effect without any existing defaults (or events or conditions which, with notice or lapse of time or both, would constitute a default) thereunder (the “Material Agreements”), provided however , it is acknowledged and agreed among the parties hereto that, Schedule 1.1.3 shall not be required to include any agreements requiring payments of $25,000 or less to or from Seller (though such agreements are being assigned hereby, to the extent assignable);

1.1.4

        Intellectual Property . All patents, patent applications, trademarks, trademark applications, service marks, tradenames, including the registered tradenames “Embassy”, “System 6", “Panel Track”, “Hide-A-Vector”, “Embassy Systems”, “Red-E-Pak Baseboard”, “Liquipex” and “Hydropex” as identified in Schedule 1.1.4(a) as “Registered Intellectual Property” and “Falcon”, “Paladin”, “Curvant”, “Ambassador”, “Axia”, and “Platinum” as identified in Schedule 1.1.4(b) as “Unregistered Tradenames”, copyrights and copyright applications, and licenses with respect to any of the foregoing, and all inventions, inventor’s notes, discoveries, trade secrets, ideas, product designs, proprietary processes and formulae, improvements, engineering drawings, computer-assisted design and manufacturing data, bills of material, designs and specifications (including design choices), computer software and laboratory certifications, proprietary and trade rights and data, ideas and know-how, whether patentable or not, and all shop rights, manufacturing data, licenses, and other intellectual property of Seller, and all correspondence related thereto, that are used in connection with the Embassy Business, whether in written, graphic, or electromagnetic format along with all income, royalties, damages and payments for past, present or future infringement or misappropriation and the right to sue and recover for past infringement or misappropriation), and any and all corresponding rights (including applications for and licenses concerning any of the foregoing) (all of which are hereinafter collectively referred to as the “Intellectual Property”);

1.1.5

        Receivables. All accounts or notes receivable (if any) of Seller as of the Closing Date (the "Receivables");

1.1.6

        [INTENTIONALLY OMITTED]

1.1.7

        Permits . All of Seller’s right, title and interest in and to any and all permits, licenses, authorizations, certifications, consents, orders, registrations and approvals of any federal, state or local governmental entity or certifying or regulatory agency or authority required of Seller or otherwise necessary or advisable for the operation of the Embassy Business as set forth on Schedule 1.1.7 attached hereto (the “Permits”), to the extent the same are transferable or assignable to Purchaser;

1.1.8

        Files and Records . All of Seller’s right, title and interest in or to the Files and Records (as hereinafter defined) as further provided herein.

1.1.9

        Goodwill . The goodwill associated with the Embassy Business, including the telephone number 631-694-1800.

1.2

        [INTENTIONALLY OMITTED]

1.3

        Off-Site Assets . All tangible Assets held at any location other than the Premises at the Closing Date are described in Schedule 1.3 attached to this Agreement, which schedule includes a description of each of such assets, its type, the name and address of the vendor or customer holding such assets and, if such asset is held pursuant to an agreement, a copy or description of such agreement is attached as an exhibit to, or described on, such schedule.

3.1

        Purchase Price; Adjustment . The purchase price being paid simultaneously herewith by Purchaser to Seller under this Agreement for the Assets is Eight Million and 00/100 Dollars ($8,000,000.00), plus the Assumed Obligations, as hereinafter defined, which are being expressly assumed under section 5 of this Agreement (the “Purchase Price”), subject to the adjustment as set forth below.

3.2

        [INTENTIONALLY OMITTED]

3.3

        Reference Statement, Closing Statement; Inventory; Purchase Price Adjustment.

3.3.1

        Reference Statement. Attached hereto as Exhibit 3.3.1 is a Reference Statement (the “Reference Statement”) consisting of certain itemized current assets and current liabilities as of March 31, 2005 which result in a net working capital amount of $3,144,002.82(the “Reference Net Working Capital Amount”), established for purposes of the Purchase Price Adjustment described in Section 3.3.4 below. Such items as are set forth in the Reference Statement have been determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) and the past practices of the Seller except as agreed upon by the Seller and the Purchaser as set forth on the Reference Statement.

3.3.2

        Closing Statement . A statement (the “Closing Statement”) shall be prepared by Purchaser, consisting of the same item categories as are set forth in the Reference Statement, and reflecting all current assets of the Seller being transferred and of benefit to the Purchaser, and all current liabilities specifically being assumed by Purchaser (including those referenced in Section 10.5.4(a) below) or which are imposed upon the Purchaser, and based upon the results of the Inventory Count described in Section 3.3.3 below and the Files and Records of Seller as of the Closing Date. The Closing Statement will result in a net working capital amount (the “Closing Net Working Capital Amount”), established for purposes of the Purchase Price Adjustment described in Section 3.3.4 below. The items set forth in the Closing Statement shall be determined in accordance with GAAP and the past practices of the Seller. Purchaser shall deliver to Seller the Closing Statement not later than sixty (60) days after the date hereof. Any dispute between Purchaser and Seller with regard to the Closing Statement shall be resolved pursuant to the provisions of Section 3.4 .

3.3.3

        Inventory . As of the Closing Date, a physical count of the Inventory (the “Inventory Count”) was conducted by the employees of Seller in accordance with past practices of the Seller and mutually agreed upon procedures, subject to the supervision of Purchaser and its accountants. The Inventory as counted at the Closing Date shall be valued as soon as reasonably possible following the Closing Date as follows: raw materials and purchased components shall be valued individually at the lower of acquisition costs or market value in accordance with GAAP consistently applied. Acquisition costs shall be determined on an item-by-item basis by reference to the price most recently paid by Seller (i.e., first-in, first-out basis). Work-in-process, consisting of manufactured parts, sub-assemblies and equipment in the process of being assembled, and finished goods shall be valued at the sum of the value of the raw material and purchased components, the direct labor and the factory burden applicable to said items as further set forth herein: (i) raw materials and purchased components shall be valued at the lower of acquisition costs or market value in accordance with GAAP consistently applied, (ii) direct labor shall be valued at the year-to-date average actual rate per hour for direct labor employed by Seller, multiplied by verifiable time standards and (iii) burden shall determined by reference to a rate per hour of direct labor, reflecting actual expenses (both fixed and variable) of manufacturing overhead, excluding costs generally associated with engineering, sales, marketing, general and administrative expense and the like. The above inventory processes shall be conducted in accordance with Seller’s past practice so long as not inconsistent with GAAP and with appropriate reduction for all non-saleable, unusable, damaged, obsolete and slow-moving inventory items (i.e., inventory reserves). Notwithstanding the foregoing, and solely for the purposes of calculating the Inventory Valuation Reduction (defined below), all products in work-in-process will be increased by amounts required to deem them equivalent to their respective finished goods values, consistent with above, and to the extent that the gross value of finished goods and pro-forma work in process inventories, as of the Closing Date, are determined to have been, in the aggregate, of a value in excess of 75% of the average demonstrable recent selling prices actually invoiced by Seller to its customers within sixty (60) days prior to the Closing Date (or, if not available within such time frame, the last selling price actually invoiced by Seller to its customer), extended to reflect the number of items of Inventory being valued, such excess, further reduced by the amount of the Inventory “general” reserve recorded on the books up to a maximum of $35,000, shall constitute an “Inventory Valuation Reduction”. The amount of any such work in process or finished goods Inventory Valuation Reduction, however, shall not exceed $250,000 in the aggregate.

3.3.4

        Purchase Price Adjustment . When the Closing Net Working Capital Amount is finally determined (including pursuant to Section 3.4 , if applicable), the Purchase Price will be adjusted in the following manner:

(a)

        If the Closing Net Working Capital Amount is greater than the Reference Net Working Capital Amount, the Purchase Price will be increased, dollar for dollar, by an amount equal to such excess, and Purchaser shall, and Purchaser Parent shall cause Purchaser to, pay to Seller such excess amount in accordance with Section 3.5.

(b)

        If the Closing Net Working Capital Amount is less than the Reference Net Working Capital Amount, the Purchase Price will be decreased, dollar for dollar, by an amount equal to such difference, and Seller shall, and Parent shall cause Seller to, pay to Purchaser such amount in accordance with Section 3.5 .

3.4

        Disputes .

(a)

        In the event that Seller disputes the Closing Statement in any respect, Seller shall so notify Purchaser within fifteen (15) days of its receipt of the Closing Statement (which notice shall specify in reasonable detail the disputed items). If the parties are unable to resolve such dispute within fifteen (15) days thereafter, the items that remain in dispute (the “Disputed Items”) shall be submitted to an independent accounting firm that is mutually acceptable to Purchaser and Seller (the “Independent Accountant”) for determination. In the event that the parties do not agree upon an Independent Accountant within fifteen (15) days of the date on which an Independent Accountant is initially proposed by one party to the other, the parties shall submit the matter to the American Arbitration Association for a determination of the Independent Accountant. In connection with its review, the Independent Accountant shall (i) have the right to undertake such procedures as it may deem appropriate and examine all work papers utilized in connection with the preparation of the Closing Statement, and (ii) only make a determination as to the Disputed Items. The decision of the Independent Accountant as to the Disputed Items shall be final, conclusive and binding upon the parties, without any right of further appeal (absent manifest error). The expense of (A) the Independent Accountant, and (B) the submission to the American Arbitration Association (as set forth in this paragraph) shall be (i) borne by Purchaser and Purchaser Parent, jointly and severally, on the one hand, and Seller, on the other hand, in proportion to the relative differences between (x) the final position of the parties prior to submission of the matter to the Independent Accountant and (y) the determination of the Independent Accountant.

(b)

             Promptly following the delivery of the Closing Statement, each of Seller, the Purchaser, and Purchaser Parent shall make the Files and Records of the Embassy Business within their respective possession available to each other on reasonable notice during normal business hours in order for the parties to verify the calculations of the amounts set forth in the Closing Statement.

3.5

        Payment of Purchase Price; Payment of Escrow Amounts.

(a)

        The Purchase Price is being paid to Seller contemporaneously with the execution of delivery of this Agreement as follows:

(i)

                    Seven Million Two Hundred Thousand ($7,200,000.00) Dollars (the “Closing Payment”) is being paid by wire transfer to an account of Seller designated in writing by Seller;

(ii)

                    Eight Hundred Thousand ($800,000.00) Dollars (the “Escrow Payment”) is being paid by Purchaser to Greenberg, Traurig LLP (the “Escrow Agent”), to be held and disbursed pursuant to the terms of that certain escrow agreement of even date among Purchaser, Seller and the Escrow Agent (the “Escrow Agreement”); and

(iii)

                    an amount equal to the Assumed Obligations will be paid by Purchaser’s assumption thereof; and

(b)

                       The amount payable pursuant to Section 3.3.4 (the “Adjustment Amount”) shall be payable within ten (10) days following the final determination of the amount thereof.

(c)

                (i) In accordance with the provisions of Section 3.5 (b) of this Agreement, in the event that the Adjustment Amount is payable to Purchaser, then:

(A)

                if such amount is equal to or less than the Adjustment Escrow (as hereinafter defined), the Adjustment Amount shall be paid by the Escrow Agent to Purchaser and the balance, if any, of the Adjustment Escrow shall be paid by the Escrow Agent to Seller simultaneously therewith; and

(B)

                if such amount is greater than the Adjustment Escrow, the Adjustment Escrow shall be paid by the Escrow Agent to Purchaser and the difference between the Adjustment Amount and the Adjustment Escrow shall be paid by Seller to Purchaser.

(ii)

                In accordance with the provisions of Section 3.5 (b) of this Agreement, in the event that the Adjustment Amount is payable to Seller, then the Adjustment Escrow shall be paid by the Escrow Agent to Seller and the Adjustment Amount shall be paid by Purchaser to Seller. For purposes of this Agreement, the term “Adjustment Escrow” shall mean a portion of the Escrow Fund, as such term is defined in the Escrow Agreement, in the amount of Four Hundred Thousand Dollars ($400,000).

(d)

                (i) In the event that one or more Claims (as hereinafter defined) is made by Purchaser pursuant to Section 16 of this Agreement and notice of such Claim is received by Seller prior to the expiration of the period ending on the twenty (20) month anniversary of the Closing Date (the “Survival Period”) (an “Allowed Claim”):

(ii)

                To the extent that the aggregate amount of all such Allowed Claims (the “Aggregate Claim Amount”) is less than the amount of the Indemnification Escrow (as hereinafter defined), the Seller shall be entitled to receive from the Escrow Agent the difference between the Indemnification Escrow and the Aggregate Claim Amount upon the expiration of the Survival Period.

(iii)

                In the event that the amount of any Allowed Claim (a “Claim Amount”) is determined by the final, binding, non-appealable order of a court of competent jurisdiction (determined in accordance with the provisions of this Agreement) (an “Order”) to be due Purchaser, Purchaser shall be entitled to receive from the Escrow Agent such Claim Amount up to the amount of the Indemnification Escrow or the remaining balance thereof, if less. The balance, if any, of the Indemnification Escrow after the payment of amounts due Purchaser as contemplated by the immediately preceding sentence shall be payable by the Escrow Agent to Seller on the later of the expiration of the Survival Period or the day the last such payment is made to Purchaser.

(iv)

                If no Allowed Claim is made, the Indemnification Escrow shall be paid by the Escrow Agent to the Seller upon the expiration of the Survival Period. For purposes of this Agreement, the term “Indemnification Escrow” shall mean a portion of the Escrow Fund, as such term is defined in the Escrow Agreement, in the amount of Four Hundred Thousand Dollars ($400,000.

(e)

                Notwithstanding the foregoing, if, at the time the Escrow Agent is required to pay any amount to Seller pursuant to Section 3.5 (c) or 3.5 (d) hereof, there is a dispute with regard to the payment of the Adjustment Amount and/or any amount under Section 3.5 (d), no amounts shall be paid by the Escrow Agent to Seller or Purchaser, as the case may be, until there has been a resolution of the dispute and then only in a manner consistent with the resolution of the dispute. In such event, the Seller and Purchaser shall, and Purchaser Parent shall cause Purchaser to, deliver written instructions to the Escrow Agent authorizing the Escrow Agent to disburse the Escrow Fund or such portion thereof consistent with the resolution of such dispute.

(f)

                Each payment made pursuant to Section 3.5 (c) or 3.5 (d) shall include interest thereon as contemplated by the Escrow Agreement

5.1

        Assumed Liabilities . (a) Those accounts payable, customer deposits, open customer and vendor purchase orders, other contractual liabilities and obligations together with commissions payable, all incurred by Seller in the ordinary course of the conduct of the Embassy Business, and (b) any and/or all other liabilities and obligations of Seller as specifically set forth in Schedule 5.1(b) attached hereto.

5.2

        Assumption of Material Agreements. The liabilities and obligations of the Seller with respect to and arising under the Material Agreements.

5.3

        Employee Obligations. The Employee Obligations, as such term is hereinafter defined.

5.4

        Liabilities After Closing . All liabilities and obligations arising in connection with the Embassy Business and/or the Assets on or after the Closing Date as a result of the operation of the Embassy Business or use or ownership of the Assets on and/or after such date.

5.5

        Warranty . All warranty obligations with respect to products (including Products) manufactured by or on behalf of Purchaser and/or on account of the Embassy Business on and after the Closing Date and/or related to any Products regardless of when manufactured if and to the extent such warranty obligations arise due to the negligence and/or willful misconduct of Purchaser.

5.6

        Limits on Assumption . Except for the Assumed Obligations (including as set forth in Sections 5.1, 5.2, 5.3, 5.4, and 5.5) , Purchaser shall not assume, and Seller shall retain and be responsible for, (a) any other liabilities, obligations and commitments of Seller, whether fixed or contingent, legal or equitable, mature or inchoate, written or oral, express or implied, known or unknown, including those for taxes, employment practices, employee benefits and pensions, collective bargaining matters, product warranties (whether express or implied) (subject to the Purchaser’s and Purchaser Parent’s obligations set forth in Section10.5 hereof), products or professional liability, and, except as provided in the Lease, environmental, health and safety practices, all as related to, arising from or in connection with the Embassy Business arising from or relating to the Embassy Business prior to the Closing Date, (b) any liability related in whole or in part to the businesses of Seller or Parent other than the Embassy Business, (c) any liability arising from any default, breach, nonperformance, misfeasance, malfeasance, violation of Law, or nonfeasance by or on behalf of Seller or Parent, including any warranty claims or claims of breach or default under any assigned contract, (d) any liability for accounts or notes payable of the Embassy Business other than the Assumed Obligations, (e) any litigation in process or pending as of the Closing Date, or otherwise arising from or relating to activities of the Seller or Parent relating to the Embassy Business prior to the Closing Date, including litigation identified on Schedule 7.10, (f) any indebtedness, obligations, duties or other liabilities related to or arising in connection with the Excluded Assets, including all executory obligations under contracts included in the Excluded Assets, (g) any liability arising out of the actual or alleged tortious conduct of the Seller or Parent or any of their respective representatives, whether related to the Embassy Business or otherwise, (h) anyand all liabilities, obligations or claims arising from or relating to Products manufactured and services performed prior to the Closing Date, and (i) those liabilities, obligations and commitments of Seller that arise after the Closing Date.

5.7

        Assignment of Contracts and Rights . Notwithstanding anything in this Agreement, this Agreement shall not constitute an agreement to assign, an attempt to assign or, an assignment of, any particular Asset, including any claim, contract, license, lease, commitment, sales order, purchase order or any claim or right or any benefit arising thereunder or resulting therefrom if the assignment, attempt to assign or agreement to assign, would constitute a breach thereof or be unlawful or in any way adversely affect the rights of Purchaser or Seller thereunder. Until such consent is obtained, or if an assignment, attempt to assign or agreement to assign, would be ineffective or would affect the rights of Seller thereunder so that the Purchaser would not in fact receive all such rights, Purchaser and Seller will cooperate with each other in any arrangement reasonably designed to provide for Purchaser the benefits of, and to permit Purchaser to assume (and Purchaser hereby assumes and agrees to pay, perform and discharge, as and when due) all liabilities and obligations under and related to the particular Asset, including enforcement at the request and expense and for the benefit of Seller of any and all rights of Seller against a third party thereto arising out of the breach or cancellation thereof by such third party or otherwise. Any transfer or assignment to Purchaser by Seller of any Asset, property or property rights or any contract or agreement which shall require the consent or approval of any third party shall be made subject to such consent or approval being obtained.

6.1

        Covenant Not to Compete . Subject to the substantial performance of each of the Purchaser and Purchaser Parent with its respective covenants and obligations hereunder and there having been no material breach of any representation or warranty by Purchaser or Purchaser Parent, Seller and Parent, including any other entity which at the time of a breach, if any, of this Section 6.1 is under the control of the Seller or Parent (collectively, “Seller’s Group”), respectively, covenant and agree that it shall not at any time within the two (2) year period commencing as of the Closing Date (a) compete, directly or indirectly, with Purchaser with respect to the Embassy Business in the design, development, engineering, manufacture, marketing and selling of the Products, whether for its own benefit or account, or on behalf of or in conjunction with any other person, firm, proprietorship, partnership, joint venture, limited liability company, corporation, or other business entity, (b) have any ownership interest in any firm, corporation, limited liability company, partnership, proprietorship or other business that engages with third parties in the activities now engaged in and in the territory served by the Embassy Business, to the extent and provided that Purchaser or any affiliate or any successor thereof remains engaged in the Embassy Business; provided, however, that Seller’s Group may own, directly or indirectly, solely as an investment, securities of any entity which are publicly traded if each member of Seller’s Group does not, directly or indirectly, own five percent (5%) or more of any class of securities of any such competitive entity, or (c) directly or indirectly solicit any present or past (last sale within two (2) years prior to the Closing Date) customer of the Embassy Business for themselves, or any other person, firm, corporation, limited liability company, partnership, proprietorship or other business entity, for the purpose of obtaining business in competition with the Embassy Business.

6.2

        No Solicitation . Seller and Parent respectively covenant and agree that it (including any other entity which at the time of a breach, if any, of this Section 6.2 is under the control of the Seller or Parent) shall not at any time (a) during the two (2) year period commencing as of the Closing Date, solicit any Offered Non-Union Employee (as hereinafter defined) to discontinue his or her employment, if any, with the Purchaser, or (b) during the two (2) year period commencing as of the Closing Date, cause or entice any agent, representative, distributor or supplier employed or engaged in the Embassy Business to discontinue its relationship, if any, with the Purchaser.

6.3

        Remedies . Without waiving the Purchaser’s rights to monetary damages, all parties to this Agreement acknowledge that the breach of the obligations contained in this Section 6 would result in substantial but indeterminable harm to Purchaser, that the restraints imposed are reasonable, that there is no adequate remedy at law for a breach of such obligations, and that therefore injunctive relief, specific performance or other equitable remedies are appropriate to enforce the obligations undertaken in this Section 6 . In the event that a court finds that the term, territory, or scope of this Section 6 is too broad to be enforceable, Seller and Purchaser further agree that a reformation of the terms of this Section 6 is appropriate and should be undertaken by the court in order to protect the value of the Assets being conveyed pursuant to this Agreement, and to provide for the enforceability of the obligations contained in this Section 6 to the fullest extent allowed by law and equity.

7.1

        Corporate Existence . Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of New York. Seller is in good standing and is qualified to transact business as a foreign corporation in all states in which the nature of the Embassy Business or the Assets requires it to be so qualified. Seller has full corporate power and authority to own, lease and operate its properties and carry on and conduct the Embassy Business as it is now being conducted. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Parent is in good standing and is qualified to transact business as a foreign corporation in the State of New York.

7.2

        Due Authorization and Enforceability . Seller has full corporate power and authority to execute and deliver this Agreement and the Bill of Sale (as hereinafter defined), the Assignment and Assumption Agreement (as hereinafter defined), the Patent Assignment (as hereinafter defined), the Trademark Assignment (as hereinafter defined), the Lease and the Escrow Agreement, and the other documents, instruments and agreements to which it is a party and which are to be delivered to Purchaser upon the Closing Date pursuant to this Agreement (collectively, the “Related Agreements”), and to consummate the transactions contemplated hereby and thereby. Parent has full corporate power and authority to execute and deliver this Agreement. The execution and delivery of this Agreement and the Related Agreements to which it is a party by Seller, and the execution and delivery of this Agreement by Parent, and the consummation of the transactions contemplated hereby and thereby has been duly authorized by all necessary corporate actions of Seller and Parent, respectively, including votes of the directors and of the shareholder of Seller, and no other corporate action or proceeding on the part of Seller or Parent is necessary to authorize the execution and delivery of this Agreement or the Related Agreements, or the consummation by Seller or Parent (as the case may be) of the transactions contemplated hereby or thereby. This Agreement has been duly executed and delivered by Seller and Parent, and this Agreement and the Related Agreements to which Seller is a party (when executed and delivered to Purchaser at the Closing Date) are or will be legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their terms. This Agreement (when executed and delivered to Purchaser at the Closing Date) will be the legal, valid and binding obligation of Parent, enforceable against it in accordance with its terms.

7.3

        No Conflicts . Except as set forth as Schedule 7.3 and/or Schedule 1.1.3 attached hereto: neither the execution and delivery of this Agreement or the Related Agreements, nor the consummation of the transactions contemplated hereby or thereby will (i)  conflict with or violate any provision of the Certificate or Articles of Incorporation, Bylaws or other charter documents of Seller or Parent, as applicable, (ii) conflict with or violate any law, rule, regulation, ordinance, order, writ, injunction, judgment or decree applicable to the Embassy Business or by which any of the Assets are bound or affected or (iii) conflict with or result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination or cancellation of, or accelerate the performance required by or maturity of, or result in the creation of any Lien (other than Permitted Liens), on any of the material Assets, pursuant to any of the terms, conditions or provisions of, any note, bond, mortgage, indenture, permit, license, franchise, lease, contract or other instrument or obligation to which Seller or Parent is a party or by which any of the Assets are bound or affected, except, in the case of (i) (ii) and (iii) above, for such conflicts, violations, breaches, defaults, terminations, cancellations and accelerations which in the aggregate will not have a material adverse effect on the Assets or the Embassy Business.

7.4

        Financial Statements . Attached hereto as Schedule 7.4 are the balance sheets of Seller as of December 31, 2003, December 31, 2004, and March 31, 2005 (the “Balance Sheet Date”), and the related statements of operations, for the respective fiscal years and interim period then ended (all of the foregoing referred to above in this Section 7.4 are herein collectively referred to as the “Seller Financial Statements”). The Seller’s balance sheet as of the Balance Sheet Date is sometimes referred to in this Agreement as the “Balance Sheet.” The Seller Financial Statements in all material respects fairly present the assets, liabilities and financial position of Seller as of the respective dates set forth therein and the results of operations of Seller for the respective periods set forth therein. The Seller Financial Statements have been prepared in each case in conformity with GAAP applied on a consistent basis throughout the periods involved.

7.5

        No Material Adverse Change . Except as set forth on Schedule 7.5 , since the Balance Sheet Date, there has been no material adverse change in the nature, business, operations, properties, assets, liabilities (actual or contingent), except for accounts payable and accrued expenses incurred in the ordinary course of business of the Embassy Business, or in the financial condition thereof, or in the manner of conducting the Embassy Business, or in the condition or position of the Embassy Business, other than changes in the ordinary course of business which in the aggregate are not material and adverse or which are adjusted for in accordance with Section 3 hereof. To the Seller’s Knowledge, except as set forth on Schedule 7.5 , since the Balance Sheet Date, there has been no event or condition of any character which, either individually or in the aggregate, might reasonably be expected to affect in a material adverse manner the business, operations, properties, assets, liabilities, earnings or financial condition of Embassy Business or the Assets. Without limiting the generality of the foregoing, and since March 31, 2005, Seller has not, except in the ordinary course of business:

(1)

        paid any dividend in respect of the Assets;

(2)

        suffered any damage, destruction or loss of any Asset, whether or not covered by insurance, which exceeds $25,000;

(3)

        sold, leased, transferred, assigned, distributed or otherwise disposed of any tangible Asset with a value in excess of $10,000, or any intangible Asset, except for the sale of finished goods or repair parts in the ordinary course of business and the replacement of certain Assets;

(4)

        changed its payment practices relative to trade payables in such a manner that the average age of Seller’s trade payables outstanding at the Closing Date is inconsistent with Seller’s historical practice as reflected in the Seller Financial Statements ; or

(5)

        offered any cash discounts on trade receivables inconsistent with the Seller’s historical practices as reflected in the Seller Financial Statements.

7.6

        All Necessary Assets . Except for the Excluded Assets, the Assets being sold, transferred, conveyed, assigned and delivered by Seller under this Agreement constitute all of the assets used by Seller in the conduct of the Embassy Business in all material respects.

7.7

        Title to Assets . Seller warrants that it owns the Assets free and clear of all mortgages, pledges, liens, security interests, assignments, conditional sales agreements, encumbrances, claims or charges of any kind (“Liens”), except for Permitted Liens or Liens to be discharged at Closing. At the Closing Date, none of the Assets will be subject to any commitment or other arrangement for its sale or use by third parties except under Material Agreements disclosed in Schedule 1.1.3. For purposes of this Agreement, the term “Permitted Liens” means: (i)  Liens for Taxes not yet due and payable or being contested in good faith, an adverse outcome from which would not result in a material adverse effect on the Assets or the Embassy Business, and (ii) minor imperfections of title, none of which, individually or in the aggregate, materially detracts from the value of the affected properties in the manner such properties currently are being used, or materially impairs the operations of the Embassy Business or the Assets. Schedule 7.7 sets forth Liens to be discharged at Closing with respect to the Assets. For purposes of this Agreement, this representation and warranty does not apply to the Receivables or the Inventory, each of which being the subject of separate representations and warranties.

7.8

        Machinery and Equipment;Condition of Assets . The Machinery & Equipment included in the Assets set forth in Schedule 1.1.1 are in good operating condition and repair, ordinary wear and tear excepted, and are reasonably satisfactory for the purposes for which the Assets are being used, and are capable of being used to carry on the Embassy Business consistent with past practice.

7.9

        Compliance with Laws . To Seller’s Knowledge, the operation of the Embassy Business and the use of the Assets comply in all material respects with all applicable laws, ordinances, rules, decrees, orders and regulations, including federal and state and local environmental, health and safety laws, rules and regulations, and material laws related to employment practices and payroll, except where failure to comply with any of the foregoing in the aggregate would not have a material adverse effect on the Assets or the Embassy Business (collectively the “Laws”). To Seller’s Knowledge, Seller has obtained all necessary material Permits and has filed all required material notices with federal, state and local governmentalbodies that are required by applicable Laws for the use of the Assets and in order to conduct Embassy Business as presently conducted, all of which are valid and effective as of the Closing Date, and all payments, fees and costs thereof have been paid in full to the Closing Date. Seller has not received written notice of any material violations of any Laws or any material covenants or material Contracts with respect to the Embassy Business or any of the Assets, and to Seller’s Knowledge, no such notice of violations is pending or has been threatened.

7.10

        Absence of Litigation . Except as set forth on Schedule 7.10 attached hereto, there are no judgments or other judicial or administrative orders outstanding against Seller that if determined adversely to Seller would materially adversely impair the right or ability of Seller to carry on the Embassy Business as it is now conducted or would materially adversely affect the financial condition of Seller. Except as set forth on Schedule 7.10 attached hereto, there is no action, suit or proceeding at law or in equity or by or before any governmental or administrative instrumentality or other agency now pending or, to the Seller’s Knowledge, threatened against or affecting Seller or the Assets which, if adversely determined, would materially impair the right or ability of Seller to carry on the Embassy Business as it is now conducted or would materially adversely affect the financial condition of Seller.

7.11

        Material Agreements . Schedule 1.1.3 is an accurate and complete list of all of Seller’s Material Agreements required to be listed thereon pursuant to this Agreement. Each of the Material Agreements is valid and effective in accordance with its terms. True and correct copies of the written Material Agreements have been furnished to Purchaser by Seller. Except as set forth on Schedule 7.11 attached hereto, at the Closing Date, all required consents to the assignment by Seller to Purchaser of Seller’s rights under the Material Agreements will have been obtained by Seller. To Seller’s Knowledge no party to any of the Material Agreements is in material default thereunder and no event has occurred, which with the passage of time or the giving of notice or both would constitute a material default under any of the Material Agreements.

7.12

        Receivables . The Receivables being conveyed hereunder will, at the Closing Date, be owned by Seller. Seller shall guarantee the collectibility of the gross Receivables, as finally determined and set forth on the Closing Statement in accordance with the provisions of this Agreement, to the extent that, following reasonable collection efforts by or on behalf of Purchaser and Purchaser Parent (consistent with the past practices of Seller), the amount of uncollected gross Receivables six months following the Closing Date exceed an amount equal to 5.75% of the gross Receivables set forth on the Closing Statement, (it being understood that for purposes of determining the Closing Statement, a reserve equal to 5.75% of the gross Receivables will be utilized and Seller is guarantying collectibility of the Receivables to the extent uncollectible Receivables exceed such reserve).

7.13

        Intellectual Property . Schedule 1.1.4(a) lists Registered Intellectual Property owned by Seller and material to the conduct of the Embassy Business as of the Closing Date. All of the Intellectual Property is owned or lawfully used by Seller in the conduct of the Embassy Business. To Seller’s Knowledge, none of the Intellectual Property has been held or stipulated to be invalid in any litigation which has been concluded to which Seller was a party, and to Seller’s Knowledge the validity of the Intellectual Property has not been questioned in any litigation currently pending or which has been threatened. Seller will have conveyed to Purchaser at the Closing Date all Intellectual Property used in and material to the Embassy Business (or Purchaser will have the right to use such Intellectual Property on similar terms and conditions). The Intellectual Property does not, to Seller’s Knowledge, infringe any patent, trademark, tradename, service mark, copyright or other rights owned by others, nor, during the three (3) year period ending as of the Closing Date, has Seller received any written notice of conflict thereof with the asserted rights of others. To Seller’s Knowledge, all registration and maintenance fees due and payable on or before the Closing Date with respect to any registered patent, trademark, service mark, or copyright has been or will be paid prior to the Closing Date. Each registered patent, trademark, service mark, or copyright set forth in Schedule 1.1.4 is valid and in full force and effect, and has not been allowed to lapse or expire by the failure of Seller to elect to continue the registration thereof or to pay any registration or maintenance fees with respect therewith.

7.14

        Related Party Agreements . Except as set forth on Schedule 7.14 attached hereto, no affiliate, officer or director of Seller or Parent, nor any related person has, directly or indirectly, entered into any transaction with Seller relating to the Embassy Business during the three (3) year period ended as of the Closing Date, except on terms substantially similar to those that could be obtained with third-parties with respect to like transactions. For purposes of this Agreement, the term “related person” shall mean and include any person related to any officer or director of Seller or Parent by blood or by marriage, or any corporation, partnership, proprietorship, trust or other entit