GREENMAN TECHNOLOGIES OF IOWA, INC. GREENMAN TECHNOLOGIES OF MINNESOTA, INC. ASSET PURCHASE AGREEMENT

Exhibit 2.1

GreenMan Technologies

Execution Version

This Asset Purchase Agreement (this “ Agreement ”), dated as of September 12, 2008, is by and among Liberty Tire Services, LLC, a Delaware limited liability company   (“ LTS ”); Liberty Tire Services of Ohio, LLC, a Delaware limited liability company and wholly owned subsidiary of LTS (“ Purchaser ”); GreenMan Technologies, Inc., a Delaware corporation (“ GTI ”); GreenMan Technologies of Iowa, Inc., an Iowa corporation and wholly owned subsidiary of GTI (“ GTIA ”); and GreenMan Technologies of Minnesota, Inc. , a Minnesota corporation and wholly owned subsidiary of GTI (“ GTMN ” and, together with GTIA, “ Sellers ”).

Sellers operate their businesses of tire collection, disposal, shredding, processing, recycling and sale of used tires, including without limitation the production of tire derived fuel chips, tire derived mulch, tire shreds, crumb rubber and other tire derived feedstock, located primarily in Iowa and Minnesota, although they also conduct business in Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska, North Dakota, South Dakota and Wisconsin (collectively, the “ Business ”), utilizing (i) GTIA’s leased facility located at 1914 E. Euclid Avenue, Des Moines, Iowa (such real property together with all improvements and equipment located thereon, the “ Des Moines Facility ”); and (ii) GTMN’s leased facility located at 12498 Wyoming Avenue, Savage, Minnesota (such real property together with all improvements and equipment located thereon, the “ Savage Facility ”).

The foregoing named plants and facilities are referred to herein collectively as, the “ Business Facilities. ”  Further, as used in this Agreement, the “ LTS Group Members ” means LTS and Purchaser, and the “ GTI Group Members ” means GTI, GTIA and GTMN.  Certain additional terms used in this Agreement are separately defined in the Addendum attached hereto and are integral to this Agreement.

Sellers desire to sell and assign to Purchaser substantially all assets related to or used in connection with the Business, including, without limitation, their leasehold rights to the Business Facilities, and Purchaser desires to purchase such assets from Sellers, each in separate transactions below.

The parties to this Agreement agree as follows:

1.1            The GTIA Transaction .  The transactions set forth in this Section 1.1 are referred to herein collectively as the “ GTIA Transaction. ”

(a)             Purchase of GTIA Purchased Assets.   Effective at the Effective Time  (as defined in Section 2.1 ), Purchaser shall purchase from GTIA, and GTIA shall sell to Purchaser, free and clear of all Indebtedness and Encumbrances, except for Indebtedness expressly identified on Schedule 1.1(c) and Permitted Encumbrances, all of GTIA’s right, title and interest in and to all of its assets, properties, rights and business as a going concern of every kind, nature and description, wherever located and whether real, personal or mixed, tangible or intangible, in electronic form or otherwise, and whether or not having any value for accounting purposes or carried or reflected on or specifically referred to in its books or financial statements, related to or used in its operation of the Business (other than the GTIA Retained Assets, as defined in Section 1.1(b) ), including those identified in this Section 1.1(a)  below (collectively, the “ GTIA Purchased Assets ”): 

(i)            all of GTIA’s right, title and interest in the leaseholds, leasehold improvements and fixtures for all Leased Real Property (as defined in Section 4.14 ) leased by GTIA as lessee, which is more particularly described on Schedule 4.14 , including the Des Moines Facility, and including any security deposits for Leased Real Property leased by GTIA as lessee;

(ii)            all of the parts and supplies inventory, machinery, equipment, shop tools and equipment, shredders, processing equipment, support equipment, tippers, magnetic equipment, peripherals, parts, tooling, fork lifts, tractors, trucks, bulldozers, graders, loaders, unloaders, back hoes, dump trucks, containers, trailers, cabs, other vehicles (whether titled or untitled), radios, motors, furniture, office equipment and supplies, fixtures, and other tangible personal property, owned by GTIA and related to or used in the Business, including those identified on Schedule 1.1(a)(ii) ;

(iii)            all inventory of tires, tire shreds, tire chips, crumb rubber and other finished rubber products located at the Leased Real Property on the Closing Date;

(iv)            all of GTIA’s computer equipment and related software and licenses related to or used in the Business, including those identified on Schedule 1.1(a)(iv) ;

(v)            all other tangible assets located at the Leased Real Property leased by GTIA as lessee, including the Des Moines Facility;

(vi)            all of GTIA’s books, records, files, manuals, sales and credit reports, customer lists, customer records, billing information, routing sheets, warranty records and similar documents and other information related to or used in the operation of the Business, whether inscribed on tangible medium or stored in electronic or other medium, and other assets related to or used in the Business;

(vii)            all of GTIA’s rights under all Contracts related to or used in the Business, including those identified on Schedule 1.1(a)(vii) , including, without limitation, all Contracts related to GTIA’s acquisition of its businesses;

(viii)           all of GTIA’s rights under all Governmental Authorizations held by it in connection with the Business, including those Governmental Authorizations identified on Schedule 1.1(a)(viii) ;

(ix)            all of GTIA’s claims, choses in action, causes of action and judgments related to the Business and all warranties in favor of GTIA related to the Business or the other assets described in this Section   1.1(a) ;

(x)            all of GTIA’s right, title and interest in all leases for personal property, including equipment and rolling stock, entered into in connection with the Business, including those identified on Schedule 1.1(a)(x) , and including security deposits relating thereto;

(xi)            all notes and accounts receivable and other rights to payment due from customers of GTIA and the full benefit of any security for such accounts or rights to payment, other than those notes and accounts receivable and other rights to payment due from the GTI Group Members or their Affiliates;

(xii)            all of GTIA’s pre-paid expenses (including software license fees, annual license fees for vehicles, and insurance premiums) related to the Business;

(xiii)           all of GTIA’s intangible rights and property, including goodwill and rights in and to any trade name, trademark, fictitious name or service mark, or any variant of any of them, and any applications therefor or registrations thereof (other than rights in the name “GreenMan Technologies of Iowa,” which shall be the subject of the license described in Section 2.2(c) , below), and any other forms of intellectual property, and all research related to the Business conducted by GTIA, all rights to GTIA’s telephone numbers, facsimile numbers, e-mail addresses, Internet sites, Internet addresses and domain names thereof and other listings;

(xiv)           all of GTIA’s customer relationships, outstanding customer orders and goodwill and right to own and operate its Business; and

(xv)            all assets not otherwise identified above that are owned or leased and used or employed by GTIA in connection with the Business.

This Section 1.1(a) and the Schedules referred to herein identify all of the GTIA Purchased Assets that will be conveyed herein by GTIA.  If and to the extent that GTI has any interest in any of the GTIA Purchased Assets, then at the Effective Time (as defined in Section 2.1 ), GTI shall be deemed to have sold, transferred and assigned all such interests to Purchaser for no additional consideration.

(b)             GTIA Retained Assets.   GTIA shall retain and the GTIA Purchased Assets shall not include all of its other assets, including the following (collectively, the “ GTIA Retained Assets ”):  

(i)            any of GTIA’s cash and cash equivalents, including bank accounts and mutual fund accounts;

(ii)            any cash securing any Governmental Authorization held by GTIA;

(iii)            any deposits under closure   bonds in the name of GTIA;

(iv)            any Seller Plans (as defined in Section 4.15 ) (including any Seller Plans listed on Schedule 4.15 );

(v)            any Tax Returns and Tax records of GTIA and any business records required by law to be retained by GTIA; provided , that such records shall be available to Purchaser to the extent reasonably necessary for its Tax purposes;

(vi)            all of GTIA’s minute and stock book records;

(vii)            any accounts receivable owed to GTIA by any other GTI Group Member or their Affiliates ;

(viii)           any of GTIA’s agreements, Contracts, understandings or business relationships with GTI or any of its Affiliates (other than the other Seller), except for those listed and identified as such on Schedule 1.1(a)(vii)) ;

(ix)            shares of stock, equity interests or ownership or debt securities in any other Person;

(x)            all rights in the name “GreenMan Technologies of Iowa,” subject to the license described in Section 2.2(c) , below; and

(xi)            all of GTIA’s rights under the Asset Purchase Agreement, dated March 1, 2006, by and among MTR of Georgia, Inc., GreenMan Technologies of Georgia, Inc., and GreenMan Technologies, Inc. (the “ MTR Purchase Agreement ”).

(c)             GTIA Assumed Liabilities.   Effective at the Effective Time, Purchaser shall assume only (i) the obligations of GTIA existing as of the Effective Time expressly set forth in the Contracts identified on Schedule 1.1(a)(vii), the Governmental Authorizations identified on Schedule 1.1(a)(viii) , the payment obligations for GTIA’s trade payables reflected on the Closing Working Capital Statement (as defined in Section 1.4(d) ), and any Indebtedness expressly identified on Schedule 1.1(c), none of which will be repaid at Closing, other than (with respect to any of the preceding in this clause (i) ) for Liabilities arising out of any violation, breach or non-performance of the terms or obligations thereunder or expenses, costs or payments owing as of the Effective Time or applicable prior to the Effective Time; and (ii) other short term accruals of GTIA expressly identified on the Closing Date Certificate Example (as defined below) to the extent included in Current Liabilities as provided in Section 1.4(c)  (collectively, the “ GTIA Assumed Liabilities ”).

(d)             GTIA Retained Liabilities.   Except for the GTIA Assumed Liabilities, Purchaser does not hereby and shall not assume or in any way undertake to pay, perform, satisfy or discharge any Liabilities of any kind or nature whatsoever of GTIA, GTI or GTMN (except as provided in Section 1.2(c) ), existing before, on or after the Effective Time or arising out of any transactions entered into, or any state of facts existing before, on or after the Effective Time, and whether or not related to or arising out of any of the GTIA Purchased Assets (the “ GTIA Retained Liabilities ”).  Without limiting the foregoing, except as set forth on the Closing Working Capital Statement in the amounts set forth therein, the term “GTIA Retained Liabilities” shall include:

(i)            Liabilities arising out of or relating to claims for breaches of warranties or products liability with respect to any product shipped or manufactured by, or any services provided by, GTIA in whole or in part, prior to the Closing Date;

(ii)            Liabilities of GTIA to any Related Party;

(iii)            Liabilities the existence of which constitute a breach of the representations, warranties or covenants of GTIA contained in this Agreement; or for expenses, taxes or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement and the consummation of the Contemplated Transactions, including all legal and accounting fees and all brokers or finders fees or commissions payable by GTIA;

(iv)            Liabilities for any Taxes of GTIA, whether or not by reason of, or in connection with, the Contemplated Transactions, including (A) any Taxes arising as a result of GTIA’s operation of its business or ownership of the GTIA Purchased Assets prior to the Closing Date, (B) any liability of GTIA for Taxes of any person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise, and (C) any Taxes that will arise as a result of the sale of the GTIA Purchased Assets pursuant to this Agreement;

(v)            Liabilities attributable to the GTIA Retained Assets; that are incurred outside the ordinary course of business or not consistent with past practice; or that are not clearly included in the express terms of the Contracts and Governmental Authorizations identified in clause (i) of Section 1.1(c) ;

(vi)            Liabilities to, under or with respect to any Seller Plan or other Benefit Plan and the administration of any Seller Plan, or relating to payroll, vacation, sick leave, workers’ compensation, unemployment benefits, disability and occupational diseases of or with respect to employees or former employees of GTIA, under any employment, severance, retention or termination agreement with any employee of GTIA or any of its Related Parties, or arising out of or relating to any employee grievance whether or not the affected employees are hired by Purchaser;

(vii)           Except for Indebtedness identified on Schedule 1.1(c) , Liabilities of GTIA for or arising out of any Indebtedness, including any Contract giving rise to any Indebtedness;

(viii)          Liabilities relating to Legal Proceedings that exist on the Closing Date and any Legal Proceedings that arise after the Closing Date that arise out of transactions entered into, or any state of facts existing, on or before the Closing Date;

(ix)            Environmental Liabilities of GTIA arising out of or relating to:

(A)            the GTIA Retained Assets or any properties previously owned, leased or operated by GTIA;

(B)            any violation of Environmental Laws existing prior to or as of the Closing Date arising from or related to (1) the ownership, use or operation of the Business, any Facility, or any GTIA Purchased Assets; (2) the design, configuration or condition of any equipment or Facilities; (3) the failure to have or to comply with any Governmental Authorization required by Environmental Laws prior to or as of the Closing Date; or (4) the failure to have, maintain or properly operate programs and equipment for monitoring of, or the failure to report in an accurate and timely manner any discharges, emissions, Releases, employee exposures, incidents, or occupational health and safety conditions;

(C)            Existing Environmental Conditions, including any such Environmental Liabilities for (1) Environmental Remedial Actions to address Existing Environmental Conditions; (2) claims asserted by any third party (including any employee of GTIA or Purchaser) for bodily injury, death, or property damage allegedly caused by, or arising from exposure to, any Existing Environmental Condition; (3) any natural resource damages arising from any Existing Environmental Condition, and (4) any Liabilities relating to any off-site transportation, treatment, disposal or Release of any Regulated Materials resulting from any Environmental Remedial Action to address Existing Environmental Conditions, whether such Environmental Remedial Action is taken before or after the Closing Date;

(D)            the storage, transportation, treatment, disposal, discharge, recycling or Release of any Regulated Material at any Off-Site Location by GTIA on or before the Closing Date, or the arrangement by GTIA for any storage, transportation, treatment, disposal, discharge, recycling, or Release of any Regulated Material at any Off-Site Location on or before the Closing Date; and

(E)            any contractual indemnity obligations relating to requirements of Environmental Law or Environmental Liabilities that GTIA has undertaken in connection with the Business or any Facilities;

(x)            Liabilities, including penalties, fines, levies and assessments, arising out of any violation or breach of, or noncompliance with, any Contracts, Governmental Authorizations or Legal Requirements by GTIA or any other person acting as agent for or on behalf of any of GTIA; and

(xi)            Liabilities of GTIA under the MTR Purchase Agreement.

(e)             GTIA Purchase Price.   The purchase price for the GTIA Purchased Assets shall be the proportion of the Purchase Price (as defined in Section 1.3(a) ) allocated to the GTIA Purchased Assets as provided in Section 1.3(c) plus the assumption of the GTIA Assumed Liabilities (the “ GTIA Purchase Price ”), as adjusted and payable in accordance with Section 1.3(c) and Section 1.4 .

(f)             Allocation of the GTIA Purchase Price.   The GTIA Purchase Price shall be allocated among the GTIA Purchased Assets in accordance with the allocation set forth on Schedule 1.1(f) .  GTIA and Purchaser shall report the federal, state and local income and other Tax consequences of the purchase and sale of the GTIA Purchased Assets contemplated hereby in a manner consistent with such allocation and shall not take any position inconsistent therewith upon examination of any Tax Return, in any refund claim, in any litigation, or otherwise unless otherwise required by applicable Legal Requirements.  Any Working Capital Adjustment (as defined in Section 1.4(a) ) or EBITDA True-Up Amount (as defined in Section 1.4(f) ) allocated to the GTIA Purchase Price shall be allocated among the GTIA Purchased Assets consistent with the allocation set forth on Schedule 1.1(f) and shall be binding upon GTIA and Purchaser.

1.2            The GTMN Transaction.   The transactions set forth in this Section 1.2 are referred to herein collectively as the “ GTMN Transaction. ”  

(a)             Purchase of GTMN Purchased Assets.   Effective at the Effective Time, Purchaser shall purchase from GTMN, and GTMN shall sell to Purchaser, free and clear of all Indebtedness and Encumbrances, except for Indebtedness expressly identified on Schedule 1.2(c) and Permitted Encumbrances, all of GTMN’s right, title and interest in and to all of its assets, properties, rights and business as a going concern of every kind, nature and description, wherever located and whether real, personal or mixed, tangible or intangible, in electronic form or otherwise, and whether or not having any value for accounting purposes or carried or reflected on or specifically referred to in its books or financial statements, related to or used in its operation of the Business (other than the GTMN Retained Assets, as defined in Section 1.2(b) ), including those identified in this Section 1.2(a) below (collectively, the “ GTMN Purchased Assets ” and, together with the GTIA Purchased Assets, the “ Purchased Assets ”):  

(i)            all of GTMN’s right, title and interest in the leaseholds, leasehold improvements and fixtures for all Leased Real Property (as defined in Section 4.14 ) leased by GTMN as lessee, which is more particularly described on Schedule 4.14 , including the Savage Facility, and including any security deposits for Leased Real Property leased by GTMN as lessee;

(ii)            all of the parts and supplies inventory, machinery, equipment, shop tools and equipment, shredders, processing equipment, support equipment, tippers, magnetic equipment, peripherals, parts, tooling, fork lifts, tractors, trucks, bulldozers, graders, loaders, unloaders, back hoes, dump trucks, containers, trailers, cabs, other vehicles (whether titled or untitled), radios, motors, furniture, office equipment and supplies, fixtures, and other tangible personal property, owned by GTMN and related to or used in the Business, including those identified on Schedule 1.2(a)(ii) ;

(iii)            all inventory of tires, tire shreds, tire chips, crumb rubber and other finished rubber products located at the Leased Real Property on the Closing Date;

(iv)            all of GTMN’s computer equipment and related software and licenses related to or used in the Business, including those identified on Schedule 1.2(a)(iv) ;

(v)            all other tangible assets located at the Leased Real Property leased by GTMN as lessee, including the Savage Facility;

(vi)            all of GTMN’s books, records, files, manuals, sales and credit reports, customer lists, customer records, billing information, routing sheets, warranty records and similar documents and other information related to or used in the operation of the Business, whether inscribed on tangible medium or stored in electronic or other medium, and other assets related to or used in the Business;

(vii)            all of GTMN’s rights under all Contracts related to or used in the Business, including those identified on Schedule 1.2(a)(vii) , including, without limitation, all Contracts related to GTMN’s acquisition of its businesses;

(viii)           all of GTMN’s rights under all Governmental Authorizations held by it in connection with the Business, including those Governmental Authorizations identified on Schedule 1.2(a)(viii) ;

(ix)            all of GTMN’s claims, choses in action, causes of action and judgments related to the Business and all warranties in favor of GTMN related to the Business or the other assets described in this Section   1.2(a) ;

(x)            all of GTMN’s right, title and interest in all leases for personal property, including equipment and rolling stock, entered into in connection with the Business, including those identified on Schedule 1.2(a)(x) , and including security deposits relating thereto;

(xi)            all notes and accounts receivable and other rights to payment due from customers of GTMN and the full benefit of any security for such accounts or rights to payment, other than those notes and accounts receivable and other rights to payment due from the GTI Group Members or their Affiliates;

(xii)            all of GTMN’s pre-paid expenses (including software license fees, annual license fees for vehicles, and insurance premiums) related to the Business;

(xiii)           all of GTMN’s intangible rights and property, including goodwill and rights in and to any trade name, trademark, fictitious name or service mark, or any variant of any of them, and any applications therefor or registrations thereof (other than rights in the name “GreenMan Technologies of Minnesota,” which shall be the subject of the license described in Section 2.2(c) , below), and any other forms of intellectual property, and all research related to the Business conducted by GTMN, all rights to GTMN’s telephone numbers, facsimile numbers, e-mail addresses, Internet sites, Internet addresses and domain names thereof and other listings;

(xiv)           all of GTMN’s customer relationships, outstanding customer orders and goodwill and right to own and operate its Business; and

(xv)            all assets not otherwise identified above that are owned or leased and used or employed by GTMN in connection with the Business.

This Section 1.2(a) and the Schedules referred to herein identify all of the GTMN Purchased Assets that will be conveyed herein by GTMN.  If and to the extent that GTI has any interest in any of the GTMN Purchased Assets, then at the Effective Time, GTI shall be deemed to have sold, transferred and assigned all such interests to Purchaser for no additional consideration.

(b)             GTMN Retained Assets.   GTMN shall retain and the GTMN Purchased Assets shall not include all of its other assets, including the following (collectively, the “ GTMN Retained Assets ”):  

(i)            any of GTMN’s cash and cash equivalents, including bank accounts and mutual fund accounts;

(ii)            any cash securing any Governmental Authorization held by GTMN;

(iii)            any deposits under closure   bonds in the name of GTMN;

(iv)            any Seller Plans (as defined in Section 4.15 ) (including any Seller Plans listed on Schedule 4.15 );

(v)            any Tax Returns and Tax records of GTMN and any business records required by law to be retained by GTMN; provided , that such records shall be available to Purchaser to the extent reasonably necessary for its Tax purposes;

(vi)            all of GTMN’s minute and stock book records;

(vii)            any accounts receivable owed to GTMN by any other GTI Group Member or their Affiliates ;

(viii)           any of GTMN’s agreements, Contracts, understandings or business relationships with GTI or any of its Affiliates (other than the other Seller), except for those listed and identified as such on Schedule 1.2(a)(vii)) ;

(ix)            shares of stock, equity interests or ownership or debt securities in any other Person;

(x)            all rights in the name “GreenMan Technologies of Minnesota,” subject to the license described in Section 2.2(c) , below; and

(xi)            all of GTMN’s rights under the MTR Purchase Agreement.

(c)             GTMN Assumed Liabilities.   Effective at the Effective Time, Purchaser shall assume only (i) the obligations of GTMN existing as of the Effective Time expressly set forth in the Contracts identified on Schedule 1.2(a)(vii), the Governmental Authorizations identified on Schedule 1.2(a)(viii) , and the payment obligations for GTMN’s trade payables reflected on the Closing Working Capital Statement (as defined in Section 1.4(d) ), and any Indebtedness expressly identified on Schedule 1.2(c), none of which will be repaid at Closing, other than (with respect to any of the preceding in this clause (i) ) for Liabilities arising out of any violation, breach or non-performance of the terms or obligations thereunder or expenses, costs or payments owing as of the Effective Time or applicable prior to the Effective Time; and (ii) other short term accruals of GTMN expressly identified on the Closing Date Certificate Example to the extent included in Current Liabilities as provided in Section 0  (collectively, the “ GTMN Assumed Liabilities ” and, together with the GTIA Assumed Liabilities, the “ Assumed Liabilities ”).

(d)             GTMN Retained Liabilities.   Except for the GTMN Assumed Liabilities, Purchaser does not hereby and shall not assume or in any way undertake to pay, perform, satisfy or discharge any Liabilities of any kind or nature whatsoever of GTMN, GTI or GTIA (except as provided in Section 1.1(c) ), existing before, on or after the Effective Time or arising out of any transactions entered into, or any state of facts existing before, on or after the Effective Time, and whether or not related to or arising out of any of the GTMN Purchased Assets (the “ GTMN Retained Liabilities ”).  Without limiting the foregoing, except as set forth on the Closing Working Capital Statement in the amounts set forth therein, the term “GTMN Retained Liabilities” shall include:

(i)            Liabilities arising out of or relating to any product shipped or manufactured by, or any services provided by, GTMN in whole or in part, prior to the Closing Date;

(ii)            Liabilities of GTMN to any Related Party;

(iii)            Liabilities the existence of which constitute a breach of the representations, warranties or covenants of GTMN contained in this Agreement; or for expenses, taxes or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement and the consummation of the Contemplated Transactions, including all legal and accounting fees and all brokers or finders fees or commissions payable by GTMN;

(iv)            Liabilities for any Taxes of GTMN, whether or not by reason of, or in connection with, the Contemplated Transactions, including (A) any Taxes arising as a result of GTMN’s operation of its business or ownership of the GTMN Purchased Assets prior to the Closing Date, (B) any liability of GTMN for Taxes of any person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise, and (C) any Taxes that will arise as a result of the sale of the GTMN Purchased Assets pursuant to this Agreement;

(v)            Liabilities attributable to GTMN Retained Assets; that are incurred outside the ordinary course of business or not consistent with past practice; or that are contingent in nature and not clearly included in the express terms of the Contracts and Governmental Authorizations identified in clause (i) of Section 1.2(c) ;

(vi)            Liabilities to, under or with respect to any Seller Plan or other Benefit Plan and the administration of any Seller Plan, or relating to payroll, vacation, sick leave, workers’ compensation, unemployment benefits, disability and occupational diseases of or with respect to employees or former employees of GTMN, under any employment, severance, retention or termination agreement with any employee of GTMN or any of its Related Parties, or arising out of or relating to any employee grievance whether or not the affected employees are hired by Purchaser;

(vii)            Except for Indebtedness identified on Schedule 1.2(c) , Liabilities of GTMN for or arising out of any Indebtedness, including any Contract giving rise to any Indebtedness;

(viii)           Liabilities relating to Legal Proceedings that exist on the Closing Date and any Legal Proceedings that arise after the Closing Date that arise out of transactions entered into, or any state of facts existing, on or before the Closing Date;

(ix)            Environmental Liabilities of GTMN arising out of or relating to;

(A)            the GTMN Retained Assets or any properties previously owned, leased or operated by GTMN;

(B)            any violation of Environmental Laws existing prior to or as of the Closing Date arising from or related to (1) the ownership, use or operation of the Business, any Facility, or any GTMN Purchased Assets; (2) the design, configuration or condition of any equipment or Facilities; (3) the failure to have or to comply with any Governmental Authorization required by Environmental Laws prior to or as of the Closing Date; or (4) the failure to have, maintain or properly operate programs and equipment for monitoring of, or the failure to report in an accurate and timely manner any discharges, emissions, Releases, employee exposures, incidents, or occupational health and safety conditions;

(C)            Existing Environmental Conditions, including any such Environmental Liabilities for (1) Environmental Remedial Actions to address Existing Environmental Conditions; (2) claims asserted by any third party (including any employee of GTMN or Purchaser) for bodily injury, death, or property damage allegedly caused by, or arising from exposure to, any Existing Environmental Condition; (3) any natural resource damages arising from any Existing Environmental Condition, and (4) any Liabilities relating to any off-site transportation, treatment, disposal or Release of any Regulated Materials resulting from any Environmental Remedial Action to address Existing Environmental Conditions, whether such Environmental Remedial Action is taken before or after the Closing Date;

(D)            the storage, transportation, treatment, disposal, discharge, recycling or Release of any Regulated Material at any Off-Site Location by GTMN on or before the Closing Date, or the arrangement by GTMN for any storage, transportation, treatment, disposal, discharge, recycling, or Release of any Regulated Material at any Off-Site Location on or before the Closing Date; and

(E)            any contractual indemnity obligations relating to requirements of Environmental Law or Environmental Liabilities that GTMN has undertaken in connection with the Business or any Facilities;

(x)            Liabilities, including penalties, fines, levies and assessments, arising out of any violation or breach of, or noncompliance with, any Contracts, Governmental Authorizations or Legal Requirements by GTMN or any other person acting as agent for or on behalf of GTMN;

(xi)            Liabilities of GTMN under the MTR Purchase Agreement.

(e)             GTMN Purchase Price.   The purchase price for the GTMN Purchased Assets shall be the proportion of the Purchase Price (as defined in Section 1.3(a) ) allocated to the GTMN Purchased Assets as provided in Section 1.3(c) plus the assumption of the GTMN Assumed Liabilities (the “ GTMN Purchase Price ”), as adjusted and payable in accordance with Section 1.3(c) and Section 1.4 .

(f)             Allocation of the GTMN Purchase Price.   The GTMN Purchase Price shall be allocated among the GTMN Purchased Assets in accordance with the allocation set forth on Schedule 1.2(f) .  GTMN and Purchaser shall report the federal, state and local income and other Tax consequences of the purchase and sale of the GTMN Purchased Assets contemplated hereby in a manner consistent with such allocation and shall not take any position inconsistent therewith upon examination of any Tax Return, in any refund claim, in any litigation, or otherwise unless otherwise required by applicable Legal Requirement .  Any Working Capital Adjustment (as defined in Section 1.4(a) ) or EBITDA True-Up Amount (as defined in Section 1.4(f) ) allocated to the GTMN Purchase Price shall be allocated among the GTMN Purchased Assets consistent with the allocation set forth on Schedule 1.2(f) and shall be binding upon GTMN and Purchaser.

1.3            Purchase Price.

(a)             Purchase Price.   The aggregate consideration for the Purchased Assets shall be an amount equal to (i) five dollars ($5.00) for each dollar of EBITDA for the Business (as defined in and determined pursuant to Section 1.3(b) ) for the twelve (12) month period commencing on October 1, 2007 and ending on September 30, 2008 (the “ Measurement Period ”) (such aggregate amount, the “ EBITDA Amount ”) minus (ii) $492,000 minus (iii) all outstanding Indebtedness identified on Schedules 1.1(c)  and  1.2(c)  (which will be assumed by Purchaser and not paid at Closing)   (the “ Assumed Indebtedness ”), plus (iv) the assumption of the Assumed Liabilities (such net amount, the “ Purchase Price ”) , adjusted by the Working Capital Adjustment and subject to the EBITDA True-Up in accordance with Section 1.4 .  The Purchase Price shall be allocated among the Purchased Assets as follows: 41.81% of the Purchase Price  shall be  allocated to the GTIA Purchased Assets and 58.19% of the Purchase Price  shall be allocated to the GTMN Purchased Assets; provided , however , that any Working Capital Adjustment (as defined below) or EBITDA True-Up Amount (as defined below) shall be allocated according to each Seller’s proportionate contribution to such Working Capital Adjustment or EBITDA True-Up Amount.

(b)             EBITDA.   “ EBITDA ” for the Business means the earnings of the Business from operations before interest, taxes, depreciation and amortization, determined solely in accordance with generally accepted accounting principles (“ GAAP ”) derived from the unaudited segmented income statement for the fiscal year ended September 30, 2008 included in the unaudited segmented financial statements of Sellers at September 30, 2008 and for the fiscal year then ended (the “ 2008 Segmented Financial Statements ”), which GTI shall deliver to Purchaser by October 24, 2008.  GTI shall reconcile the 2008 Segmented Financial Statements (in a manner consistent with the reconciliations included in Exhibit J ) to the audited consolidated financial statements of GTI and its subsidiaries at September 30, 2008 and for the fiscal year then ended (the “ 2008 Audited Financial Statements ”), which reconciliation GTI shall deliver to Purchaser together with the 2008 Audited Financial Statements by December 12, 2008.  EBITDA shall be determined solely and exclusively for the Business as a stand-alone business enterprise.  No extraordinary gains or losses under GAAP shall be included in determining EBITDA.  EBITDA shall be determined in the ordinary course, consistent with past practice, through the end of the Measurement Period, except that no items of accelerated or prepaid income shall be included, no income from Affiliates of or Related Parties to any GTI Group Member shall be included, no gain or loss on the sale of assets shall be included, no overhead expense allocation of GTI shall be included, and no income outside the ordinary course of Business or not consistent with past practice shall be included.  EBITDA shall include the burden of a full year’s Gainshare (GTI’s bonus program) compensation.

(c)             Payment of the Purchase Price.   Subject to the terms and conditions herein, the Purchase Price shall be paid as follows:

(i)             Deposit.   On July 9, 2008, LTS delivered to BNY Mellon, National Association (the “ Escrow Agent ”), a deposit of Fifty Thousand Dollars ($50,000) (the “ Initial Deposit ”).   At the date of this Agreement, LTS is delivering to the Escrow Agent an additional deposit of Two Hundred and Fifty Thousand Dollars ($250,000) (the “ Second Deposit ” and, together with the Initial Deposit and all earnings thereon, the “ Deposit ”).  At the Closing, the Deposit shall be applied against payment of the Purchase Price as provided in  Section 1.3(c)(ii) below.  In the event there is no Closing due to a Seller Fault (as defined below), the parties shall direct the Escrow Agent to deliver the Deposit to LTS.  In the event there is no Closing for any reason other than a Seller Fault, the parties shall direct the Escrow Agent to deliver the Deposit to GTI.  For the purposes of this Section 1.3(c)(i) the term “ Seller Fault ” shall mean (A) any misrepresentation by a GTI Group Member the effect of which would have a material adverse effect on the value of the Business or the Purchased Assets, (B) any failure by a GTI Group Member to deliver at any time prior to the Closing any requested documentation or information that would materially adversely affect the value of the Business or the Purchased Assets, (C) a material breach by a GTI Group Member of this Agreement, (D) any failure by a GTI Group Member to cooperate fully and in good faith with the LTS Group Members in connection with their due diligence efforts related to the Contemplated Transactions, (E) any condition or state of facts identified by an LTS Group Member in connection with its due diligence efforts reasonably expected to have a material adverse effect on the value of the Business or the Purchased Assets, (F) failure of a GTI Group Member to obtain all necessary approvals to close or (G) the failure of Purchaser or the GTI Group Members, as applicable, to obtain (x) a Waste Tire Facility Permit from the Minnesota Pollution Control Agency, (y) a Solid Waste Facility License from Scott County Community Development Division, Environmental Health Department and (z) a Permit for Waste Tire Processing from the State of Iowa, Department of Natural Resources, as required for Purchaser to own and operate the Purchased Assets and the Business after the Closing; provided, however , there shall be no “ Seller Fault ” unless and until LTS notifies GTI of its intent to terminate the transaction due to a Seller Fault, and the applicable GTI Group Member fails to cure (or the parties agree that such GTI Group Member is unable to cure) the Seller Fault to LTS’s reasonable satisfaction within five (5) business days following such notice (or as extended by LTS at its sole discretion).

(ii)             Closing Payment.  At Closing, Purchaser (x) shall direct the Escrow Agent to deliver the Deposit to GTI and (y) shall deliver to GTI (on behalf of Sellers) an amount equal to (A) the EBITDA Amount, minu s (B) $492,000, minus (C) Assumed Indebtedness, minus (D) any Indebtedness that will be repaid at Closing by Purchaser on behalf of the GTI Group Members (which excludes Assumed Indebtedness), plus or minus , as applicable, (E) an amount equal to a good faith estimate of the Working Capital Adjustment (unless such estimate is zero), minus (F) each of the Purchase Price True-Up Holdback (as defined below) and the Indemnification Holdback (as defined below), and minus (G) the Deposit (such net amount, the “ Closing Payment ”), by wire transfer of federal funds to an account specified in writing by GTI at least two (2) business days prior to the Closing.  The parties agree to use the Initial EBITDA Statement and the Initial Working Capital Statement for the purposes of determining the Closing Payment, as provided in Section 1.3(vi) below.

(iii)             Indebtedness.   At Closing, LTS shall repay the Closing Date Repayment Indebtedness on behalf of the GTI Group Members as provided in the payoff letters delivered pursuant to Section 2.2(a)(vii) .

(iv)             Indemnification Holdback.   At Closing, Purchaser shall withhold from delivery of the Purchase Price an amount equal to Five Hundred Thousand Dollars ($500,000) (the “ Indemnification Holdback ”).  Purchaser may setoff and recoup against the Indemnification Holdback any amounts due by GTI Group Members to Purchaser hereunder with respect to any GTI Group Member’s indemnification obligations under Article VI .  Purchaser shall deliver one-half (1/2) of the Indemnification Holdback, less any Purchaser claims for setoff or recoupment under this Agreement, on the date that is 180 days   after the Closing Date (or the next business day if such date is not a business day) by wire transfer of federal funds to accounts to be designated by GTI within three (3) business days prior to payment.  The remainder of the Indemnification Holdback not distributed to Purchaser pursuant to this Agreement shall be delivered to GTI (on behalf of Sellers) on the date that is 365 days after the Closing Date (or the next business day if such date is not a business day) by wire transfer of federal funds to accounts to be designated by GTI within three (3) business days prior to payment.

(v)             Purchase Price True-Up Holdback.   At Closing, Purchaser shall withhold from delivery of the Purchase Price an amount equal to Two Hundred Fifty Thousand Dollars ($250,000) (the “ Purchase Price True-Up Holdback ” and, together with the Indemnification Holdback, the “ Holdback ”) until the Closing Statements shall have been finalized and the last of the Purchase Price True-Up Amount (as such term is defined in Section 1.4(f)(iii) ) is payable.  Purchaser may setoff and recoup against the Purchase Price True-Up Holdback any unpaid Purchase Price True-Up Amount then owing by Sellers.  Purchaser shall deliver the Purchase Price True-Up Holdback, less any Purchase Price True-Up Amount owing by Sellers under this Agreement, on the date that is three (3) business days following the date that the last of the Closing Statements are finalized by wire transfer of federal funds to accounts to be designated by GTI within three (3) business days prior to payment.

(vi)             Initial EBITDA Statement and Initial Working Capital Statement.   At least five (5) business days prior to the Closing Date, GTI shall deliver to Purchaser a certificate certified by GTI’s Chief Financial Officer in a form consistent with the Closing Date Certificate Example (as defined below) setting forth:

(A)             GTI’s good faith calculation of EBITDA for the Business (as defined in and determined pursuant to Section 1.3(b) ) based on actual results for the Measurement Period, along with a copy of Sellers’ proposed Closing EBITDA Statement (the “ Initial EBITDA Statement ”), and all relevant information and support used in preparing the Initial EBITDA Statement, to be used to determine the Closing Payment, and

(B)            GTI’s good faith calculation of Working Capital of the Business (as defined and determined pursuant to Section 1.4(c) ) as of the Effective Time, along with a copy of Sellers’ proposed Closing Working Capital Statement (the “ Initial Working Capital Statement ”), and all relevant information and support used in preparing the Initial Working Capital Statement, to be used to calculate the estimate of the Working Capital Adjustment and to determine the Closing Payment.

If within two (2) business days following receipt thereof, Purchaser has not given GTI notice of any disagreement with the Initial EBITDA Statement or the Initial Working Capital Statement, they shall be used to determine the Closing Payment.  If Purchaser gives notice of such disagreement, the parties will use commercially reasonable good faith efforts to resolve the issues in dispute.  If all disputed issues are resolved, the EBITDA and estimated Working Capital Adjustment agreed to by the parties shall be used to determine the Closing Payment.  If the parties are unable to resolve all disputed issues within three (3) business days following Purchaser’s receipt thereof, the Initial EBITDA Statement and the Initial Working Capital Statement shall be as determined by Purchaser.

(vii)             Closing Date Certificate Example.   The Closing Date Certificate Example which is Exhibit A to this Agreement (the “ Closing Date Certificate Example ”) contains the parties’ agreed upon form of Closing Statements and methodologies for determining EBITDA of the Business and the Closing Date Working Capital based on the Interim Balance Sheet and actual EBITDA results from October 1, 2007 through the Interim Balance Sheet Date.  The Initial EBITDA Statement, the Initial Working Capital Statement and the Closing Statements shall be estimated or prepared (as the case may be) in a manner consistent with the Closing Date Certificate Example.

(viii)            Delivery of Purchase Price True-Up Amounts.   Purchaser or GTI (on behalf of Sellers), as the case may be, shall deliver (or refund, as the case may be) the applicable Purchase Price True-Up Amount by wire transfer of federal funds to an account designated by the other within three (3) business days after such Purchase Price True-Up Amount is finally determined.  Purchaser, however, may offset, setoff or recoup from the Purchase Price True-Up Holdback either Purchase Price True-Up Amount that is owed by Sellers to Purchaser.  Notwithstanding the foregoing, if one Purchase Price True-Up Amount in favor of Purchaser is due and the other Purchase Price True-Up Amount has not been finally determined at that time, then GTI (on behalf of Sellers) shall pay directly to Purchaser the Purchase Price True-Up Amount that is then due, and the full amount of the Purchase Price True-Up Holdback shall continue to be held by Purchaser to secure the other Purchase Price True-Up Amount.

(d)             Withholding.   Purchaser will be entitled to deduct and withhold from the Purchase Price any withholding Taxes or other amounts required under the Code or any applicable Legal Requirements to be deducted and withheld.  To the extent that any such amounts are so deducted and withheld, such amounts will be treated for all purposes of this Agreement as having been paid to the person or entity in respect of which such deduction and withholding was made.

1.4            Working Capital Adjustment and EBITDA True-Up.

(a)             Working Capital Adjustment.   The Purchase Price was determined on the basis that Working Capital for the Business as of the Effective Time, derived solely from the Closing Working Capital Statement (“ Closing Date   Working Capital ”), would equal $1,500,000 (“ Target Working Capital ”).  If Closing Date Working Capital (x) is less than Target Working Capital, then the Purchase Price shall be decreased dollar-for-dollar by the amount of such deficiency, or (y) exceeds Target Working Capital, then the Purchase Price shall be increased dollar-for-dollar by the amount of such excess (such adjustment, the “ Working Capital Adjustment ” ) .  The Working Capital Adjustment shall be without prejudice to the LTS Group Members’ rights of indemnification under Section 6.1(b)  for any breach by any GTI Group Member of the representations and warranties contained in Article   IV (without any right to duplicate damages).

(b)            EBITDA True-Up.   Simultaneously with determination of the Working Capital Adjustment, Purchaser shall have the right to review and verify the determination of EBITDA used to calculate the Purchase Price through review of the Initial EBITDA Statement, subject to the provisions of this Section 1.4 .  If as a result of such review process it is determined that the EBITDA amount used to calculate the Purchase Price was incorrect, then the Purchase Price shall be corrected to reflect the proper EBITDA amount as reflected on the Closing EBITDA Statement (the “EBITDA True-Up” ).

(c)            Working Capital.   “ Working Capital ” for the Business shall mean Current Assets minus Current Liabilities as of the Closing Date.  “ Current Assets ” for the Business, shall include only (A) accounts receivable that are less than 90 days old, (B) inventory included in the Purchased Assets, and (C) the unamortized portion of pre-paid expenses (including software license fees (to the extent that Purchaser elects to use such software), annual license fees for vehicles, and insurance premiums) to the extent that they provide commensurate value to Purchaser after the Closing.   “ Current Liabilities ” for the Business, shall include only (A) trade accounts payable, (B) the Transferred Employees’ (as defined in Section 3.5 ) earned and unused vacation that was accrued during such Transferred Employees’ employment with Sellers, (C) all severance obligations and change of control payments that may become payable after the Closing as a result of the consummation of the Contemplated Transactions, (D) the estimated cost of processing all unprocessed tires included in the Purchased Assets, and (E) other accrued current liabilities of the Business. “ Working Capital ” for the Business shall include all items without regard to materiality and shall not include the GTIA Retained Assets or the GTMN Retained Assets (collectively, the “ Retained Assets ”) or the GTIA Retained Liabilities or the GTMN Retained Liabilities (collectively, the “ Retained Liabilities ”).  As an example, if the effective date of the transaction would have been the Interim Balance Sheet Date , then the Closing Working Capital Statement would have been as set forth on the Closing Date Certificate Example.

(d)             Preparation of the Closing EBITDA Statement and Closing Working Capital Statement.  Within sixty (60) days following the Effective Time, Purchaser shall prepare and deliver to GTI (i) a statement of EBITDA for the Business for the Measurement Period (the “ Closing EBITDA Statement ”), and (ii) a statement of Working Capital for the Business as of the Effective Time (the “ Closing Working Capital Statement ” and, together, the “ Closing Statements ”).  The Closing Statements shall be derived solely from the 2008 Segmented Financial Statements and the Interim Balance Sheet, modified in each case to the extent required to be consistent with the definitions of EBITDA and Working Capital.  Each Closing Statement shall be prepared and determined in a manner consistent with the classifications, judgments and estimation and calculation methodologies used in the preparation of the Closing Date Certificate Example, and any conflict or ambiguity between this Agreement, the 2008 Segmented Financial Statements and the Closing Date Certificate Example shall be resolved in favor of the Closing Date Certificate Example.

(e)             Inventory Observation.   The parties shall conduct a physical count and inspection of the inventory of Sellers within five (5) business days before or after the Closing Date.  Both parties and their accountants may observe the inventory count, which shall be used as the basis in determining the inventory in the Closing Working Capital Statement.

(f)            Closing Payments True-Up Amounts.

(i)             EBITDA True-Up Amount.   If EBITDA for the Business set forth on the Closing EBITDA Statement after it is finally determined is in excess of or less than the EBITDA for the Business used to calculate the Purchase Price and the Closing Payment set forth in the Initial EBITDA Statement (such difference, the “ EBITDA True-Up Amount ”), then Purchaser shall pay to GTI the amount of such excess times five dollars ($5.00), or GTI shall pay to Purchaser (or Purchaser may offset, setoff or recoup from the Purchase Price True-Up Holdback the amount that is owed by Sellers to Purchaser) the amount of such deficiency times five dollars ($5.00), as the case may be, in accordance with Section 1.3(c)(viii) .

(ii)             Working Capital True-Up.   If the Working Capital for the Business set forth on the Closing Working Capital Statement after it is finally determined results in a Working Capital Adjustment in excess of or less than the estimated Working Capital Adjustment used to calculate the Closing Payment as set forth in the Initial Working Capital Statement, then Purchaser shall pay to GTI, or GTI shall pay to Purchaser (or Purchaser may offset, setoff or recoup from the Purchase Price True-Up Holdback the amount that is owed by Sellers to Purchaser), as the case may be, that amount necessary to properly reflect a net payment by GTI of the full final Working Capital Adjustment as set forth in the Closing Working Capital Statement (the “ Working Capital True-Up Amount ”), in accordance with Section 1.3(c)(viii) .

(iii)             Purchase Price True-Up Amounts.   The EBITDA True-Up Amount and the Working Capital True-Up Amount are sometimes referred to herein together as the “ Purchase Price True-Up Amounts .”  

(g)             Allocation of the Working Capital Adjustment and EBITDA True-Up Amount.   The Working Capital Adjustment and EBITDA True-Up Amount shall be allocated among the GTIA Purchase Price and the GTMN Purchase Price by reference to the source of any Working Capital Adjustment or EBITDA True-Up Amount in the Closing Statements.

(h)             Disputes Regarding Working Capital Adjustment or EBITDA True-Up Amount.    Purchaser and GTI shall each provide the other with access to all relevant information used in preparing the Closing Statements.  GTI shall have sixty (60) days after its receipt of the Closing Statements to dispute the Closing Statements and Working Capital Adjustment and EBITDA True-Up Amount or the Closing Statements and Working Capital Adjustment and EBITDA True-Up Amount shall be deemed to be accepted and final.  Any objection notice to any such Closing Statements must state with reasonable specificity the amounts and reasons for disagreement.  GTI and Purchaser shall thereafter use commercially reasonable efforts to agree on the disputed amounts and if they are unable to do so within thirty (30) days of receipt by Purchaser of GTI’s objection notice, GTI and Purchaser shall promptly engage a mutually agreed upon firm of independent accountants to resolve their dispute.  In the absence of prompt agreement on the identity of the independent accountants, the parties shall engage the accounting firm of PricewaterhouseCoopers LLP of Minneapolis, Minnesota to resolve the dispute as soon as practicable.  The independent accountants’ decisions shall be final, binding and conclusive upon the parties and shall be the parties’ sole and exclusive remedy regarding any dispute concerning the Closing Statements and the Working Capital Adjustment and EBITDA True-Up Amount.  Purchaser and GTI shall share equally the fees and expenses of the independent accountants.

(i)             Interpretation.   Notwithstanding anything to the contrary in this Agreement, the provisions of this Section 1.4 , together with the provisions of this Agreement giving effect to the Working Capital Adjustment and EBITDA True-Up Amount, shall not be interpreted or construed in any manner that would result in duplication of benefits or obligations.

1.5            Separate Transactions.   Each of the GTIA Transaction and the GTMN Transaction (individually, a “ Transaction ”,   and collectively, the “ Transactions ”) is independent, separate and discrete from each other Transaction for Tax and accounting purposes and asset conveyance documentation.  Notwithstanding such separate treatment, neither Transaction may close without both Transactions closing at the same time.

1.6            Certain Consents.   Nothing in this Agreement shall be construed as an attempt to assign any Contract or Governmental Authorization included in the Purchased Assets and as to which all the remedies for the enforcement thereof enjoyed by Sellers would not, as a matter of law, pass to Purchaser as an incident of the assignments provided for by this Agreement, without an applicable Legal Approval or Consent.  If any such Legal Approvals or Consents are not obtained prior to Closing, Purchaser shall have the option to forego any one or more of such assignments and not assume the obligations and liabilities under any one or more of such Contracts or Governmental Authorizations (in which case the rights and obligations under such specified Contracts or Governmental Authorizations shall be Retained Assets and Retained Liabilities, respectively), and Sellers shall, at the request and under the direction of Purchaser, in the name of Sellers or otherwise as Purchaser shall specify, take all commercially reasonable action (including the appointment of Purchaser as attorney-in-fact for Sellers) and do or cause to be done all such commercially reasonable things as shall in the reasonable opinion of Purchaser or its counsel be necessary or proper (i) to assure that the rights of Sellers under such Contracts or Governmental Authorizations shall be preserved for the benefit of Purchaser, and (ii) to facilitate receipt of the consideration to be received by Sellers in and under every such Contract or Governmental Authorization, which consideration shall be held for the exclusive benefit of, and shall be delivered to, Purchaser, and Sellers shall continue to use their commercially reasonable efforts to obtain such Legal Approvals and Consents as soon as reasonably possible after Closing.  Nothing in this Section 1.6  shall in any way diminish Sellers’ obligations hereunder to obtain all Consents or Legal Approvals and to take all such other actions prior to or at Closing as are necessary to enable Sellers to convey or assign valid title to all Contracts and Governmental Authorizations to Purchaser.

2.1            Closing; Effective Time .  The parties to this Agreement shall consummate the purchase and sale of the Purchased Assets, the assumption of the Assumed Liabilities, and the other Contemplated Transactions (“ Closing ”) at the offices of K&L Gates LLP , Henry W. Oliver Building, 535 Smithfield Street, Pittsburgh, PA 15222-6501 on the date that is five (5) business days after satisfaction of the conditions set forth in Sections 2.2(a) and 2.2(b)  below or such other date as the parties mutually agree (the “Closing Date” ) .  Closing shall be deemed to take place effective as of 11:59 p.m. on the Closing Date (the “ Effective Time ”).  Title to all Purchased Assets shall pass from Sellers, respectively, to Purchaser at the Effective Time, subject to the terms and conditions of this Agreement.  Purchaser assumes no risk of loss to the Purchased Assets prior to the Effective Time.

2.2            Certain Conditions to Close; Closing Deliveries.

(a)             Conditions Precedent to Obligations of Purchaser.   The obligation of Purchaser to proceed with the Closing is subject to the fulfillment prior to or at Closing of the conditions set forth in this Section 2.2(a) .  Any one or more of these conditions may be waived in whole, or in part, by Purchaser at Purchaser’s sole option.

(i)            The representations and warranties of the GTI Group Members contained in Article IV  shall be accurate and complete, individually and collectively, in all material respects (a) as of the date of this Agreement and (b)  as of the Closing Date as if made on the Closing Date (except for those representations and warranties contained in Article IV  that relate to a specific date, which representations and warranties shall be accurate and complete in all material respects as of such date).  The representations and warranties of the GTI Group Members contained in Article IV  that contain an express materiality qualifier shall be accurate and complete, individually and collectively, in all respects (x) as of the date of this Agreement and (y)  as of the Closing Date as if made on the Closing Date (except for those representations and warranties contained in Article IV that relate to a specific date, which representations and warranties shall be accurate and complete in all respects as of such date).  Each GTI Group Member shall have performed all of the covenants and agreements and complied with all of the provisions required by this Agreement to be performed or complied with, individually and collectively, in all material respects, by such party at or before the Closing Date.

(ii)            No Legal Requirement shall be in effect that prohibits or threatens to prohibit the Contemplated Transactions or that would limit or adversely affect Purchaser’s ownership of the Purchased Assets or control of the Assumed Liabilities.  No Legal Proceeding shall be pending or threatened challenging the lawfulness of the Contemplated Transactions or seeking to prevent or delay any of the Contemplated Transactions, or seeking relief by reason of the Contemplated Transactions.  Neither the GTI Group Members nor LTS Group Members shall have received any claim by any Person (written or oral) asserting that any Person other than Sellers (A) is the legal or beneficial owner of the Purchased Assets, (B) has any Encumbrance (other than Permitted Encumbrances) on or Security Rights in the Purchased Assets, or (C) is entitled to all or any portion of the Purchase Price.

(iii)            Between the date of this Agreement and the Closing Date, there shall have been no change, event, development or occurrence that has had or would reasonably be expected to have a material adverse effect, regardless of insurance coverage, on the Business or the Purchased Assets, results of operations, Liabilities, or condition, financial or otherwise, of Sellers, taken together as a whole (a “ Material Adverse Effect ”).

(iv)            The GTI Group Members shall have delivered a certificate, dated as of the Closing Date, in a form and substance reasonably satisfactory to Purchaser, certifying to the fulfillment of the conditions set forth in Sections 2.2(a)(i) through (a)(iii) .  The contents of that certificate shall constitute a representation and warranty of the GTI Group Members as of the Closing Date and shall be deemed relied upon by Purchaser and fully incorporated in this Agreement.

(v)            Each party shall have received all Legal Approvals necessary or advisable to consummate the Contemplated Transactions.  Without limiting the foregoing, Sellers shall have received the Legal Approvals identified on Schedule 4.3 .  Sellers shall have received all Consents identified on Schedule 2.2(a)(v) .  Purchaser shall have received all Governmental Authorizations necessary to own and operate the Purchased Assets and the Business, in form and substance reasonably satisfactory to Purchaser.

(vi)            Mark Maust shall have executed and delivered to Purchaser the Employment Agreement substantially in the form of Exhibit B to this Agreement.

(vii)           Purchaser shall have received copies of the payoff letters received by Sellers from their creditors for all Closing Date Repayment Indebtedness as of the Closing Date, in form and substance reasonably acceptable to Purchaser, stating that all Encumbrances held by such creditors on any Purchased Assets shall be released upon payment of the Closing Date Repayment Indebtedness as provided therein.  All other Encumbrances, other than Permitted Encumbrances, on any Purchased Assets shall have been released.

(viii)          Purchaser shall have received an estoppel certificate from each lessor of Leased Real Property included in the Purchased Assets, in form and substance reasonably satisfactory to Purchaser, and Purchaser shall have entered into an amended lease with respect to each Business Facility on terms and conditions reasonably satisfactory to Purchaser (including, without limitation, environmental indemnification for all preexisting conditions).

(ix)            Each Seller shall provide Purchaser with a certificate, duly executed and acknowledged by an officer of such Seller under penalties of perjury, in the form prescribed by Treasury Regulation Section 1.1445-(2)(b)(2) and reasonably satisfactory to Purchaser, certifying that such Seller is not a “foreign person.”

(x)            The stockholders of GTI shall have approved the Contemplated Transactions.

(xi)            GTI shall have received the opinion of BCC Advisers, of Des Moines, Iowa as to the fairness of the Purchase Price.

(xii)           Purchaser shall have received (A) from Chicago Title Insurance Company   (I) leasehold title insurance policies issued to Purchaser with respect to the Leased Real Property being conveyed to Purchaser with such endorsements as may be requested by Purchaser and containing only such exceptions that are acceptable to Purchaser, in its sole and absolute discretion, and (II) lender’s policies issued to Purchaser’s lenders with such endorsements as may be requested by such lenders and containing only such exceptions that are acceptable to such lenders, in their sole and absolute discretion, and (B) an ALTA/ACSM as built survey of each parcel for such Leased Real Property in a form and showing such matters as are acceptable to Purchaser, in its sole and absolute discretion.

(xiii)          Purchaser shall have obtained on terms and conditions satisfactory to it funds sufficient to consummate the Contemplated Transactions.

(xiv)          Purchaser shall also have received the deliveries referred to in Section 2.2(c) .  All certificates, opinions and other documents delivered by the GTI Group Members to Purchaser under this Agreement shall be reasonably satisfactory to Purchaser in form and substance.

(xv)           Purchaser or the GTI Group Members, as applicable, shall have received (x) a Waste Tire Facility Permit from the Minnesota Pollution Control Agency, (y) a Solid Waste Facility License from Scott County Community Development Division, Environmental Health Department and (z) a Permit for Waste Tire Processing from the State of Iowa, Department of Natural Resources, as required for Purchaser to own and operate the Purchased Assets and the Business after the Closing.

(xvi)          Purchaser shall have received (x) the Sublease Agreement for Iowa Parcel I, the form of which is attached hereto as Exhibit C , duly executed by Maust Asset Management Co., LLC, (y) the Real Property Lease for Iowa Parcels G & H, the form of which is attached hereto as Exhibit D , duly executed by Maust Asset Management Co., LLC and (z) the Real Property Lease for Minnesota Location, the form of which is attached hereto as Exhibit E , duly executed by Two Oaks, LLC.

(b)             Conditions Precedent to Obligations of the GTI Group Members.   The obligation of the GTI Group Members to proceed with the Closing is subject to the fulfillment prior to or at Closing of the conditions set forth in this Section 2.2(b) .  Any one or more of these conditions may be waived in whole, or in part, by Sellers at Sellers’ sole option.

(i)            The representations and warranties of the LTS Group Members contained in Article V  shall be accurate and complete, individually and collectively, in all material respects (a) as of the date of this Agreement and (b) as of the Closing Date as if made on the Closing Date (except for those representations and warranties contained in Article V  that relate to a specific date, which representations and warranties shall be accurate and complete in all material respects as of such date).  The representations and warranties of the LTS Group Members contained in Article V  that contain an express materiality qualifier shall be accurate and complete, individually and collectively, in all respects (x) as of the date of this Agreement and (y) as of the Closing Date as if made on the Closing Date (except for those representations and warranties contained in Article V that relate to a specific date, which representations and warranties shall be accurate and complete in all respects as of such date).  Each LTS Group Member shall have performed all of the covenants and agreements and complied with all of the provisions required by this Agreement to be performed or complied with, individually and collectively, in all material respects, by such party at or before the Closing Date.

(ii)            No Legal Requirement shall be in effect that prohibits or threatens to prohibit the Contemplated Transactions.  No Legal Proceeding shall be pending or threatened challenging the lawfulness of the Contemplated Transactions, seeking to prevent or delay any of the Contemplated Transactions or seeking relief by reason of the Contemplated Transactions.

(iii)            The LTS Group Members shall have delivered a certificate, dated as of the Closing Date, in a form and substance reasonably satisfactory to Sellers, certifying to the fulfillment of the conditions set forth in Sections 2.2(b)(i)  and (ii) .  The contents of that certificate shall constitute a representation and warranty of the LTS Group Members as of the Closing Date and shall be deemed relied upon by Sellers and fully incorporated in this Agreement.

(iv)           The Contemplated Transactions shall have been duly authorized by the directors and stockholders of each of the GTI Group Members in compliance with their respective governing documents and applicable Legal Requirements.  Without limiting the foregoing, the stockholders of GTI shall have approved the Contemplated Transactions.

(v)            The Contemplated Transactions shall have been duly authorized by the managers of LTS.

(vi)            Purchaser shall have obtained on terms and conditions satisfactory to it funds sufficient to consummate the Contemplated Transactions.

(vii)           Sellers shall also have received the deliveries referred to in Section 2.2(d) .  All certificates, opinions and other documents delivered by the LTS Group Members to Sellers under this Agreement shall be reasonably satisfactory to Sellers in form and substance.

(viii)          Each of the GTIA Transaction and the GTMN Transaction shall close simultaneously on the Closing Date.

(c)             Deliveries by Sellers.   Sellers shall deliver to Purchaser at Closing: (i) general warranty bills of sale and instruments of assignment to the Purchased Assets, duly executed by each Seller; (ii) assumption agreements, duly executed by each Seller; (iii) assignments of lease to each parcel of Leased Real Property that is subject to a written lease, and title certificates (properly assigned or endorsed) to any motor vehicles and licensed trailers included in the Purchased Assets; (iv)   assignments of all transferable or assignable licenses, Governmental Authorizations and warranties relating to the Purchased Assets and of any trademarks, trade names, patents and other intellectual property which are included in the Purchased Assets, duly executed by each Seller;   (v) a raw material feedstock Supply Agreement, in the form of  Exhibit F to this Agreement, duly executed by Sellers; (vi) a Transition Services Agreement, in the form of  Exhibit G to this Agreement, duly executed by each Seller; (vii) licenses, in the form of  Exhibit H , duly executed by each Seller, granting the Purchaser the right to use the trade names and trademarks “GreenMan Technologies of Iowa” and “GreenMan Technologies of Minnesota” in connection with the Business in the States of Iowa, Minnesota, Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska, North Dakota, South Dakota and Wisconsin; (viii) a good standing certificate for each GTI Group Member from its respective state of incorporation, all relevant documents reasonably requested by the LTS Group Members relating to the authorization by the GTI Group Members to enter into and consummate this Agreement, and legal opinions with respect to such matters (and subject to such qualifications) as are customary in transactions similar to the Contemplated Transactions, from counsel to the GTI Group Members, as may be reasonably requested by the LTS Group Members; (ix) a secretary’s and incumbency certificate of each GTI Group Member, attaching certified copies of their organic documents, and all resolutions of the Board of Directors of each GTI Group Member authorizing the execution and delivery of this Agreement and the performance by it of the Contemplated Transactions; and (x)   such other agreements and documents as Purchaser may reasonably request .

(d)             Deliveries by Purchaser.   Purchaser shall deliver or cause to be delivered to Sellers at the Closing:   (i) wire transfers of federal funds equal (in the aggregate) to the Closing Payment (and shall direct the Escrow Agent to deliver the Deposit to GTI pursuant to Section 1.3(c)(ii) ; (ii) assumption agreements, duly executed by Purchaser; (iii) a raw material feedstock Supply Agreement, in the form of  Exhibit F to this Agreement, duly executed by Purchaser; (iv) a Transition Services Agreement, in the form of  Exhibit G to this Agreement, duly executed by Purchaser; (v) the licenses described in Section 2.2(c) , duly executed by Purchaser; (vi) a good standing certificate for each LTS Group Member from its respective state of organization, all relevant documents reasonably requested by the GTI Group Members relating to the authorization by the LTS Group Members to enter into and consummate this Agreement, and legal opinions with respect to such matters (and subject to such qualifications) as are customary in transactions similar to the Contemplated Transactions, from counsel to the LTS Group Members, as may be reasonably requested by the GTI Group Members; (vii) a secretary’s and incumbency certificate of each LTS Group Member, attaching certified copies of their organic documents, and all resolutions of the Board of Managers of each LTS Group Member authorizing the execution and delivery of this Agreement and the performance by it of the Contemplated Transactions; and (viii)  such other agreements and documents as Sellers may reasonably request.

2.3            Termination Prior to the Effective Time.

(a)             Events of Termination.   Subject to Section 1.3(c)(i) , this Agreement may be terminated in writing at any time prior to the Effective Time by:

(i)            the mutual consent of the parties;

(ii)            Purchaser, if any of the conditions specified in Section 2.2(a) shall not have been fulfilled (or if satisfaction becomes impossible) on or before December 31, 2008, and shall not have been waived by Purchaser;

(iii)            Sellers, if any of the conditions specified in Section 2.2(b) shall not have been fulfilled (or if satisfaction becomes impossible) on or before December 31, 2008, and shall not have been waived by Sellers;

(iv)            Purchaser, if a material breach of any provision of this Agreement has been committed by a GTI Group Member and such breach has not been waived by Purchaser or cured by such GTI Group Member within five (5) business days after receipt of written notice of such breach from Purchaser;

(v)            Sellers, if a material breach of any provision of this Agreement has been committed by an LTS Group Member and such breach has not been waived by Sellers or cured by such LTS Group Member within five  (5) business days after receipt of written notice of such breach from Sellers;

(vii)            Purchaser, if the Board of Directors of any GTI Group Member shall have taken any of the actions described in the first sentence of Section 3.7(b) , or any GTI Group Member has breached or is deemed to have breached any of the material provisions of Section 3.7, in which event the GTI Group Members shall pay to Purchaser, by wire transfer of immediately available federal funds to an account designated by Purchaser, the Termination Fee; and

(viii)           Purchaser or GTI, if GTI’s shareholders do not approve the Contemplated Transactions at the GTI Shareholders’ Meeting; provided, however , that GTI may not effect such termination unless GTI pays to Purchaser, by wire transfer of immediately available federal funds to an account designated by Purchaser, within three (3) business days following the later of such termination and the receipt of LTS’s demand, the documented legal fees and other out-of-pocket costs actually incurred by the LTS Group Members with respect to the Contemplated Transactions, up to a maximum of $150,000.

Subject to Section 1.3(c)(i) , if either party terminates this Agreement for any reason other than described in clauses (i), (vi), (vii) and (viii) of the preceding sentence, Purchaser and Sellers shall be liable to the other for any material breach of this Agreement by such party which breach led to such termination.  Subject to Section 1.3(c)(i)  and clauses (vi), (vii) and (viii) of the second preceding sentence, if the closing hereunder does not occur on or before December 31, 2008, and neither party’s material breach of this Agreement was the cause of the failure to close by that date, then neither party shall have any liability to the other party under this Agreement, and this Agreement shall terminate.

(b)             Exception.   As provided above, if (i) any GTI Group Member terminates this Agreement under Section 2.3(a)(vi) , or (ii) Purchaser terminates this Agreement under Section 2.3(a)(vii) , then, in the case of any such termination described in clause (i) or clause (ii) of this sentence, within three (3) business days following such termination, the GTI Group Members shall pay to Purchaser in cash by wire transfer in immediately available funds to an account designated by Purchaser a termination fee in an amount equal to four percent (4%) of the Purchase Price (the “ Termination Fee ”).  The Termination Fee constitutes liquidated damages, because calculation of actual damages would be speculative, and the Termination Fee represents the parties’ reasonable estimate of actual damages.

3.1            Restrictive Covenants.