TAX-EXEMPT LEASE PURCHASE AGREEMENT

Exhibit 10.7

[EXECUTION COPY]

TAX-EXEMPT LEASE PURCHASE AGREEMENT
(FEDERAL SIGNAL CORPORATION)

     This TAX-EXEMPT LEASE PURCHASE AGREEMENT (FEDERAL SIGNAL CORPORATION) (this “ Agreement ”) is entered into as of June 27, 2008 between FEDERAL SIGNAL CORPORATION, a Delaware corporation (“ Seller ”), and BANC OF AMERICA PUBLIC CAPITAL CORP, a Kansas corporation (“ Buyer ”).

STATEMENT OF PURPOSE

     Seller leases vehicles to municipal customers in the ordinary course of its business. Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, in each case from time to time in accordance with the terms and conditions of this Agreement, certain of such leases and certain related assets.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other consideration the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

ARTICLE I
DEFINITIONS

     1.1. Definitions . As used in this Agreement, the following terms shall have the following meanings:

     “ Adverse Claim ” means, with respect to any property, any mortgage, pledge, security interest, encumbrance, lien, charge or other right or claim in, of or on such property; provided , however , that Adverse Claim shall not include (i) with respect to any Equipment, the rights and interests of the related Obligor (to the extent such rights and interests arise under the related Lease), (ii) with respect to any Equipment, any statutory mechanic’s or landlord’s lien arising in the ordinary course of business which attach to such Equipment and which secure obligations arising with respect to such Equipment, which obligations are either not yet due and payable or are not delinquent and are discharged in the ordinary course of business, and (iii) with respect to Equipment that constitutes fire trucks or other emergency response vehicles, liens that are subordinate to the lien in favor of Buyer held by the Pennsylvania Emergency Management Agency (PEMA) and arising pursuant to its Volunteer Fire Company, Ambulance Services and Rescue Squad Assistance program.

     “ Aggregate Purchase Price ” means, as of any date, (i) the aggregate Purchase Price paid by Buyer to Seller on or before such date pursuant this Agreement with respect to Unencumbered Leases plus (ii) the aggregate purchase price paid by Buyer to E-ONE, Inc., E-ONE New York, Inc., Elgin Sweeper Company, FS Depot, Inc. or Vactor Manufacturing, Inc. on or before such date pursuant to the Tax-Exempt Lease Purchase Agreement dated as of June 27, 2008 between such Person and Buyer, in each case with respect to Unencumbered Leases.

     “ Applicable Spread ” means, as of any Purchase Date, (i) if the Aggregate Purchase Price paid before such Purchase Date is less than or equal to $12,000,000, 2.15% and (ii) if the Aggregate Purchase Price paid before such Purchase Date is greater than $12,000,000, 2.55%.

     “ Assignment ” means a written assignment substantially in the form of Exhibit B to this Agreement (or in such other form as may be agreed to by Buyer and Seller) pursuant to which Seller sells, transfers, assigns, sets-over and otherwise conveys the related Purchased Assets to Buyer.

     “ BALCAP ” means Banc of America Leasing & Capital, LLC, a Delaware limited liability company, and its successors and assigns.

     “ Business Day ” means any day, other than a Saturday or a Sunday, on which banks are not authorized or required to close in Chicago, Illinois.

     “ Buyer ” has the meaning set forth in the preamble to this Agreement.

     “ Closing Date ” means June 27, 2008.

     “ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

     “ Collections ” means all cash collections and other cash proceeds received with respect to the Purchased Leases, including, without limitation, all Scheduled Payments, all partial or full prepayments and all amounts received with respect to Defaulted Leases (including, without limitation, all cash proceeds or rents realized from the sale or lease of the related Equipment following repossession and all insurance proceeds received with respect to such Equipment).

     “ Cut-Off Date ” means, with respect to any Purchased Assets, the Cut-Off Date set forth in the related Assignment.

     “ Defaulted Lease ” means a Lease (i) as to which an Insolvency Event has occurred with respect to the related Obligor, (ii) as to which an event of non-appropriation has occurred, (iii) which, in accordance with Seller’s standard policies and procedures and consistent with its past practices, should be written off as uncollectible, (iv) which Seller has identified as uncollectible, or (v) as to which a Scheduled Payment, or part thereof, remains unpaid for ninety (90) days or more from the original due date for such payment.

     “ Delinquent Lease ” means a Lease as to which a Scheduled Payment, or part thereof, remains unpaid for at least thirty-one (31) days from the original due date for such payment (other than a Defaulted Lease).

     “ Discount Rate ” means, with respect to any Purchased Lease, the Discount Rate set forth for such Purchased Lease on Schedule 1 to the related Assignment.

     “ Eligible Lease ” has the meaning set forth in Exhibit C to this Agreement.

     “ Encumbered Lease ” means a Lease pledged by Seller to BALCAP pursuant to the Loan Agreement.

     “ Equipment ” means the emergency warning or signaling equipment leased by Seller under a Lease (including all additions, parts, accessories, accessions or attachments to such equipment and any replacements or substitutions for such equipment) and all other personal property leased by Seller under such Lease.

     “ Excluded Amounts ” has the meaning set forth in Section 7.2 .

     “ Indemnified Amounts ” has the meaning set forth in Section 7.1 .

     “ Indemnified Party ” has the meaning set forth in Section 7.1 .

     “ Insolvency Event ” means, with respect to any Person, that (i) such Person shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) an Insolvency Proceeding shall be instituted by or against such Person and, in the case of an Insolvency Proceeding instituted against such Person, such Person shall fail within thirty (30) days of the commencement of such Insolvency Proceeding to move to have such Insolvency Proceeding dismissed or such Insolvency Proceeding shall remain undismissed or unstayed for a period of sixty (60) days, or (iii) such Person shall take any action to authorize any of the actions set forth in clauses (i) or (ii) above.

     “ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, any assignment for the benefit of creditors, any formal or informal moratorium, any composition, any extension generally with creditors or any proceeding seeking reorganization, arrangement or other similar relief.

     “ Investment Balance ” means, with respect to any Purchased Lease as of any date, the sum of (i) the present value as of such date of all unpaid Scheduled Payments due as of such date or to become due after such date under such Purchased Lease (and that Buyer used in calculating the related Purchase Price), even if such Scheduled Payments are no longer owed by the related Obligor due to the termination of such Purchased Lease by such Obligor pursuant to the terms of such Purchased Lease or due to an event of non-appropriation (such present value to be calculated as of such date by discounting such Scheduled Payments monthly at the applicable Discount Rate using a 30 day month and a 360 day year) plus (ii) any applicable late charges, unpaid taxes, indemnity payments, costs of collection, including reasonable attorneys’ fees, or other amounts due with respect to such Purchased Lease; provided , however , that if the periodic payments due under such Purchased Lease are revised after the related Purchase Date in connection with an amendment, waiver or modification of such Purchased Lease, the Investment Balance of such Purchased Lease as of any date on which such revised periodic payments are in effect shall be calculated based on such revised periodic payments.

     “ Lease ” means an agreement pursuant to which Seller leases emergency warning or signaling equipment and related personal property to a state (as defined in section 103(c)(2) of the Code) or a political subdivision of a state.

     “ Lease File ” has the meaning set forth in Section 3.2.1 .

     “ Loan Agreement ” means the Amended and Restated Loan and Security Agreement dated as of December 20, 2007 among E-ONE, Inc., Elgin Sweeper Company, Vactor Manufacturing, Inc. and E-ONE New York, Inc., as Borrowers, and BALCAP, as Lender, as such agreement may be amended, supplemented, restated or otherwise modified from time to time.

     “ Lock-Box ” means P.O. Box 371992, Pittsburgh, Pennsylvania 15250-7992 or such other post office box as Buyer may designate as the Lock-Box by notice to Seller.

     “ Lock-Box Account ” means the following deposit account or such other deposit account as Buyer may designate as the Lock-Box Account by notice to Seller:

Bank Name: The Bank of New York Mellon
Bank Address: 500 Ross Street, 154-0460
                         Pittsburgh, Pennsylvania 15259
ABA Number: 043 000 261
Account Number: 0209576
Lock-Box Number: 371992

     “ Material Adverse Effect ” means a material adverse effect on (i) the ability of Seller to perform its obligations under this Agreement or any other Transaction Document, (ii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iii) the interest of Buyer in the Purchased Assets or (iv) the collectibility of the Purchased Leases.

     “ Obligor ” means any party obligated under a Lease, including any guarantors, but not including Seller or any other lessor or vendor of the related Equipment.

     “ Person ” means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, limited liability company, joint venture or other entity, or a government or any political subdivision or agency thereof.

     “ Purchase Date ” means, with respect to any Purchased Assets, the date of the related Assignment.

     “ Purchase Price ” means, with respect to any Purchased Assets, the aggregate present value of all Scheduled Payments due or to become due under each related Purchased Lease (each such present value to be calculated as of the related Purchase Date by discounting such Scheduled Payments monthly at the applicable Discount Rate using a 30 day month and a 360 day year).

     “ Purchased Assets ” means the Purchased Assets identified in an Assignment (it being understood that the Purchased Assets shall include (i) the related Purchased Leases; (ii) all amounts due on or after the related Cut-Off Date under such Purchased Leases and all Collections received with respect to such amounts; (iii) all Equipment leased under such Purchased Leases and all proceeds of such Equipment; (iv) the Lease Files with respect to such Purchased Leases; (v) all guaranties, insurance policies or other contracts or arrangements securing or supporting payment of such Purchased Leases and all amounts received on or after such Cut-Off Date with respect to such Purchased Leases under any such contract or arrangement; and (vi) all proceeds of the foregoing); provided , however , that, if Seller repurchases Purchased Assets pursuant to Article V of this Agreement, such Purchased Assets shall cease to be Purchased Assets as of the date of such repurchase.

     “ Purchased Leases ” means the Purchased Leases identified in an Assignment; provided , however , that, if Seller repurchases Purchased Assets pursuant to Article V of this Agreement, the related Purchased Lease(s) shall cease to be Purchased Lease(s) as of the date of such repurchase.

     “ Release Price ” means, with respect to any Encumbered Lease as of any date, the Release Price (as defined in the Loan Agreement) for such Encumbered Lease as of such date.

     “ Scheduled Payments ” means, with respect to any Lease, the periodic payments identified with respect to such Lease on Schedule 1 to the related Assignment.

     “ Seller ” has the meaning set forth in the preamble to this Agreement.

     “ Servicing Rights ” means the right to bill and collect amounts due under the Purchased Leases, the right to send and receive notices or other communications with respect to the Purchased Leases, the right to obtain or maintain insurance with respect to the related Equipment, the right to take possession of, dispose of or otherwise exercise rights or remedies with respect to the related Equipment and any other right to service the Purchased Leases.

     “ Title Default ” means, with respect to any Purchased Lease, that (i) a default shall have occurred and be continuing under such Purchased Lease or the related Obligor shall have asserted that such Purchased Lease is not enforceable against such Obligor in accordance with its terms or such Obligor shall have failed to appropriate funds with respect to obligations owing under such Purchased Lease and (ii) Buyer shall have attempted to take possession of, dispose of or otherwise exercise rights or remedies with respect to the related Equipment and shall have determined that its ability to take such action has been impaired because of (A) the failure of Seller to obtain before the related Purchase Date and maintain as of such Purchase Date a perfected, first-priority security interest in such Equipment in accordance with applicable law or (B) if the perfection or priority of a security interest in all or any portion of such Equipment is governed by a certificate of title statute, the failure of the related Lease File to contain as of such Purchase Date an original certificate of title (or an original lienholder certificate, if applicable) or an original manufacturer’s statement of origin with respect to such Equipment or the failure of the information contained in such certificate of title (or an original lienholder certificate, if applicable) or manufacturer’s statement of origin to be true and correct in all material respects as of such Purchase Date.

     “ Transaction Documents ” means this Agreement, the Assignments and all other instruments, documents and agreements executed and delivered by Seller or Buyer in connection with this Agreement.

ARTICLE II
LEASE PURCHASES

     2.1. Purchase of Lease Assets .

     (a) Seller shall, from time to time after the Closing Date, offer to sell, transfer, assign, set-over and otherwise convey to Buyer, without recourse except as expressly provided herein or, if applicable, in the related Assignment, all right, title and interest of Seller in, to and under certain Eligible Leases (it being understood that Seller shall offer to sell, transfer, assign, set-over and otherwise convey an Eligible Lease to Buyer (i) if such Lease contained as of the Closing Date a prohibition against such conveyance, within thirty (30) days after Seller receives from the related Obligor a signed consent letter with respect to such Lease substantially in the form of Exhibit E to this Agreement and (ii) in all other cases, within thirty (30) days after the later of the Closing Date and the date on which such Lease was originated). Seller shall, in connection with each such offer, provide to Buyer (or provide Buyer with access to) such information with respect to such Leases or the related Obligors as Buyer may reasonably request.

     (b) Buyer shall, in each case within thirty (30) days after such offer, accept any offer made by Seller pursuant to Section 2.1(a) ; provided , however , that Buyer shall only be obligated to accept such offer to the extent that (i) the Leases subject to such offer are (A) listed on Schedule A to this Agreement and are Eligible Leases as the date of such acceptance (it being understood that the Leases listed on Schedule A to this Agreement include all of the Encumbered Leases as of the Closing Date and certain Unencumbered Leases acceptable to Buyer as of the Closing Date) or (B) otherwise approved by Buyer in its absolute and sole discretion, (ii) Seller and Buyer agree on the related Purchase Price and (iii) such offer is made before December 31, 2008. For purposes of clause (ii) above, Buyer and Seller agree that, in general, the aggregate Purchase Price with respect to the Purchased Leases identified in any

Assignment will be calculated as if (i) the Discount Rate for each Unencumbered Lease identified in such Assignment equaled 65% of the sum of (A) the interest rate swap rate for the term closest to (but not shorter than) the remaining average life of the Unencumbered Leases identified in such Assignment as published in the Federal Reserve Statistical Release H.15 Daily Update on the second Business Day preceding the related Purchase Date (or on such other date as may be agreed to by Seller and Buyer) plus (B) the Applicable Spread as of such Purchase Date and (ii) the Discount Rate for each Encumbered Lease identified in such Assignment equaled 82.9% of the interest rate applicable as of such Purchase Date to the Advance (as defined in the Loan Agreement) with respect to which such Encumbered Lease has been pledged as collateral (it being understood that a different Discount Rate may be used for each Purchased Lease identified in such Assignment to address certain federal tax concerns).

     (c) Buyer shall notify Seller in writing of each offer accepted pursuant to Section 2.1(b) . Each notice of acceptance shall include (i) a list of the Leases to be purchased (specifying for each such Lease the name of the related Obligor and the related lease term), (ii) the related Purchase Date, (iii) the estimated Purchase Price (it being understood that the final Purchase Price will be calculated as of the related Purchase Date) and (iv) in the case of each Encumbered Lease, the estimated Release Price (it being understood that the final Release Price will be calculated as of the related Purchase Date). Buyer and Seller shall, except as otherwise specifically set forth in this Agreement, promptly close each offer accepted pursuant to Section 2.1(b) . Except as otherwise specifically set forth in this Agreement, a sale of Purchased Assets pursuant to this Agreement shall not constitute and is not intended to result in an assumption by Buyer of any obligation of Seller or any other Person, including, without limitation, any obligation arising under or in connection with the related Purchased Leases or any other Purchased Assets (it being understood that Buyer shall acquire and be solely responsible for exercising the Servicing Rights).

     2.2. Closing Date Documentation . Seller shall deliver the following documentation to Buyer on the Closing Date:

     2.3. Lease Purchase Documentation . Seller shall deliver or cause to be delivered the following documentation to Buyer on or before each Purchase Date (or, in the case of the documentation described in Section 2.3.3 , within ten (10) Business Days after each Purchase Date) with respect to each related Lease:

     2.4. Additional Closing Conditions . Seller shall, on or before each proposed Purchase Date, inform Buyer of any material adverse change known to Seller in the business or financial condition of any related Obligor since the date of the related offer or of any other circumstance or event known to Seller that would reasonably be expected to have a material adverse effect on the interest of Buyer in the related proposed Purchased Assets or the collectibility of the related proposed Purchased Leases. Buyer shall not be obligated to purchase such Purchased Assets if (i) any circumstance or event exists or has occurred that would reasonably be expected to have a material adverse effect on the interest of Buyer in such Purchased Assets or the collectibility of such Purchased Leases (including, without limitation, the failure of any such Purchased Lease to be an Eligible Lease as of such Purchase Date) or (ii) Seller has breached in any material respect any obligation under this Agreement or any other Transaction Document. On each Purchase Date, Buyer shall duly acknowledge and deliver to Seller a copy of the related Assignment.

     2.5. Authority to File Financing Statements . Seller hereby authorizes Buyer to record, on or before each Purchase Date and at such other times as Buyer may deem necessary, such financing statements or financing statement amendments as are needed to perfect Buyer’s interest, as secured party or owner, of the related Purchased Assets.

     2.6. Payment of Purchase Price. On each Purchase Date, Buyer shall pay the related Purchase Price to Seller by wire transfer of immediately available funds to an account designated by Seller; provided , however , that, if all or a portion of such Purchase Price is allocable to an Encumbered Lease, Seller shall direct Buyer to remit directly to BALCAP, on behalf of Seller and in payment of all or a portion of any Advance (as defined in the Loan Agreement) with respect to which such Encumbered

Lease has been pledged as collateral, the portion of such Purchase Price allocable to the related Release Price. If Buyer has previously notified Seller that Seller owes Buyer an amount under this Agreement, Buyer may deduct such amount from such Purchase Price.

     2.7. Intent of Parties; Sale; Backup Security Interest . Buyer and Seller intend that this Agreement and each Assignment be construed as an agreement for the absolute sale of the related Purchased Assets. If, despite this intent, this Agreement or any Assignment is construed as an agreement for making one or more loans, then, as collateral security for the repayment of each Purchase Price and all other payment obligations of Seller under this Agreement, Seller hereby grants to Buyer a security interest in the Purchased Leases and all other Purchased Assets. All transactions contemplated by this Agreement, whether construed as a sale or a loan, shall be non-recourse to Seller except as specifically provided in this Agreement or, if applicable, any Assignment.

     2.8. Further Assurances . Seller shall execute and deliver to Buyer, at any time and from time to time, any and all further agreements, documents and instruments, and take any and all further actions which may be required under applicable law, or which Buyer may from time to time reasonably request, in order to effectuate the transactions contemplated by this Agreement and the other Transaction Documents.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

     3.1. Representations and Warranties Concerning Seller . Seller represents and warrants that the following are true as of the date of this Agreement. Each representation and warranty is made to induce Buyer to purchase the Purchased Assets pursuant to this Agreement and shall be automatically restated and ratified as of each Purchase Date.

     3.2. Representations and Warranties Concerning the Purchased Assets . Seller represents and warrants that the following are true with respect to the Purchased Leases or the other Purchased Assets, as applicable, as of the related Purchase Date (it being understood that the representations and warranties made as of each Purchase Date only apply to the Purchased Leases or the other Purchased Assets, as applicable, purchased on such Purchase Date). Each representation and warranty is made to induce Buyer to purchase the Purchased Assets pursuant to this Agreement and the re