EXHIBIT 10.3
EXECUTION COPY
STOCK PURCHASE AGREEMENT
among
CONNELL LIMITED PARTNERSHIP,
and
FEDERAL SIGNAL CORPORATION
and
FEDERAL SIGNAL OF EUROPE B.V.
Dated as of April 3, 2008

 

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TABLE OF CONTENTS

              ARTICLE 1 PURCHASE AND SALE OF SHARES     1  
1.1
  Purchase and Sale of Shares; Closing     1  
1.2
  Certain Definitions     2  
1.3
  Purchase Price for the Shares; Payment     3  
1.4
  Adjustments to Purchase Price     4  
1.5
  Designation of Agent     5  
1.6
  Currency and Currency Exchange Rates     5  
 
            ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLERS     5  
2.1
  Status of Sellers and Subsidiaries     5  
2.2
  Financial Matters     7  
2.3
  Taxes     9  
2.4
  Real and Personal Property     10  
2.5
  Intellectual Property; Patents; Trademarks; Trade Names     11  
2.6
  Loans and Contracts     12  
2.7
  Employee Plans     13  
2.8
  Labor Relations     15  
2.9
  Litigation and Other Proceedings     16  
2.10
  Compliance with Laws     16  
2.11
  Bank Accounts     18  
2.12
  Brokers and Commissions     18  
2.13
  Related Party Transactions     18  
2.14
  Accounting Controls     18  
2.15
  Receivables     19  
2.16
  Inventory     19  
2.17
  Customers and Suppliers     19  
2.18
  No Other Representations     19  
 
            ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER     20  
3.1
  Status of Buyer     20  
3.2
  Brokers and Commissions     21  
3.3
  Available Funds     21  
3.4
  Solvency     21  
 
            ARTICLE 4 COVENANTS OF SELLERS     21  
4.1
  Conduct of Business by the Subsidiaries     21  
4.2
  Affirmative Covenants Relating to the Subsidiaries     23  
4.3
  Access Before Closing     23  
4.4
  Public Disclosure; Sellers’ Post-Closing Confidentiality Obligation     24  
4.5
  Monthly and Quarterly Financial Statements     24  
4.6
  Termination of Related Party Transactions     24  
4.7
  Bank Accounts     25  
4.8
  Resignations     25  
4.9
  Real Estate     25  
4.10
  Consents     25  
4.11
  No Negotiation     25  
4.12
  Cooperation     26  
4.13
  Other Assets     26  

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4.14
  Release of Claims by Sellers     26  
4.15
  Excluded Assets     26  
 
            ARTICLE 5 COVENANTS OF BUYER     26  
5.1
  Consents and Closing Conditions     26  
5.2
  Affected Employees     27  
5.3
  Employee Plans     27  
5.4
  Severance     28  
5.5
  Buyer Plans     29  
5.6
  Vacation Benefits Accrued Through Closing Date     29  
5.7
  Public Disclosure     29  
5.8
  Cooperation     29  
5.9
  Books and Records     30  
 
            ARTICLE 6 TAX MATTERS     30  
6.1
  Payment of Taxes; Preparation of Returns     30  
6.2
  Tax Contest Provisions     31  
6.3
  Tax Sharing Agreements     32  
6.4
  Cooperation and Records Retention with Respect to Tax Matters     32  
6.5
  Tax Clearance under Section 116 of the ITA     32  
6.6
  Purchase Price Allocation     32  
 
            ARTICLE 7 BUYER’S CONDITIONS TO CLOSING     33  
7.1
  Continued Truth of Warranties     33  
7.2
  Performance of Covenants     33  
7.3
  No Litigation or Order     33  
7.4
  No Material Adverse Effect     33  
7.5
  Permits and Consents     33  
7.6
  Authorization     33  
7.7
  Release of Encumbrances; Debt     33  
7.8
  Closing Documents     33  
7.9
  Key Employee Agreements     33  
 
            ARTICLE 8 SELLERS’ CONDITIONS TO CLOSING     34  
8.1
  Continued Truth of Warranties     34  
8.2
  Performance of Covenants     34  
8.3
  No Litigation or Order     34  
8.4
  Closing Documents     34  
 
            ARTICLE 9 DOCUMENTS TO BE DELIVERED AT CLOSING     34  
9.1
  Deliveries of Sellers     34  
9.2
  Deliveries of Buyer     35  
 
            ARTICLE 10 TERMINATION     36  
10.1
  Termination by Mutual Consent     36  
10.2
  Termination by Either Buyer or Sellers     36  
10.3
  Termination by Buyer     36  
10.4
  Termination by Sellers     37  
10.5
  Effect of Termination and Abandonment     37  
 
            ARTICLE 11 SURVIVAL; INDEMNIFICATION     37  
11.1
  Survival     37  

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11.2
  Indemnification by Sellers     37  
11.3
  Indemnification by Buyer     38  
11.4
  Notice of Claims     39  
11.5
  Indemnification Payments as Adjustment to Final Purchase Price     40  
11.6
  Exclusive Remedy     40  
 
            ARTICLE 12 MISCELLANEOUS     41  
12.1
  Notices     41  
12.2
  Amendment     42  
12.3
  Counterparts     42  
12.4
  Binding on Successors and Assigns     42  
12.5
  Severability     42  
12.6
  Waivers     42  
12.7
  Headings     42  
12.8
  List of Schedules and Exhibits     42  
12.9
  Entire Agreement; Law Governing; Waiver of Jury Trial     44  
12.10
  No Third-Party Rights     44  
12.11
  Sales and Transfer Taxes     44  
12.12
  Expenses     44  
12.13
  No Presumption Against Drafting Party     44  
12.14
  Computation of Time     44  
12.15
  Specific Performance     45  
12.16
  Confidentiality     45  
12.17
  Survivability of Provisions After Termination     45  

EXHIBITS

     
Exhibit A
  Target Net Assets
Exhibit B
  Form of Transition Services Agreement
Exhibit C
  Form of Non-Competition/Non-Solicitation Agreement

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INDEX OF DEFINED TERMS

      Defined Term   Section
401(k) Plan
  5.3(e)
409A Plan
  2.7(h)
$ or USD
  1.6
ACM
  2.10(c)(v)
Affected Employees
  5.2
Affiliate
  1.2
Agreement
  Preamble
Arbitrator
  1.4(b)(iii)
Business
  Recitals
Business Day
  1.2
Buyer
  Preamble
Buyer 401(k) Plan
  5.3(e)
Buyer Indemnitees
  11.2(a)
Buyer Plans
  5.5
Buyer’s Cap
  11.3(b)
Buyer’s Floor
  11.3(b)
Buyer’s Loss
  11.2(a)
Cash
  1.2
Cash Adjustment
  1.2
Closing
  1.1(b)
Closing Date
  1.1(b)
Code
  2.3(a)(i)
Confidential Information
  4.4(b)
Contract
  2.6(b)
Debt
  1.2
Debt Instruments
  2.6(a)
DOL
  2.7(d)
DP-Canada
  Recitals
DP-Portugal
  Recitals
DP-US
  Recitals
Employee Plan; Employee Plans
  2.7(a)
Environmental Condition
  2.10(c)(iv)
Environmental Laws
  2.10(c)(i)
Environmental Permits
  2.10(c)(iii)
ERISA
  2.7(a)(i)
ERISA Affiliate
  2.7(a)
Excluded Assets
  4.15
Federal Signal
  Preamble
Final Closing Statement
  1.4(b)(i)
Final Purchase Price
  1.4(b)(i)
Financial Statements
  2.2(a)
Foreign Benefit Plan
  2.7(f)
FSBV
  Preamble
GAAP
  1.2
Governmental Body
  1.2

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      Defined Term   Section
Hazardous Substances
  2.10(c)(iv)
HIPAA
  2.7(e)
Indemnified Party
  11.4(a)(i)
Indemnifying Party
  11.4(a)(i)
Insurance Policies
  2.6(c)
Intellectual Property
  2.5
Intellectual Property Licenses
  2.5
Interim Purchase Price
  1.3
ITA
  0
Knowledge of Sellers
  1.2
Laws
  2.10(a)
Lease
  2.4(b)
LTD Former Employees
  5.2
Material Adverse Effect
  1.2
Material Customers
  2.17(a)
Material Suppliers
  2.17(b)
Net Assets
  1.2
Net Assets Adjustment
  1.2
Non-Competition/Non-Solicitation Agreement
  9.1(o)
Notice of Objection
  1.4(b)(ii)
ODS
  2.10(c)(v)
Other Agreements
  2.1(e)(i)
Participants
  2.7(a)
Party or Parties
  Preamble
PBGC
  2.7(d)
PCBs
  2.10(c)(v)
Permitted Encumbrances
  2.4(a)
Person
  1.2
Pre-Closing Period
  6.1(a)
Property or Properties
  2.4(a)
Purchase Price Adjustment
  1.2
Released Claims
  4.14
Returns
  2.3(a)(ii)
Seller Related Party
  2.13(a)
Seller Retirement Plan
  5.3(c)
Sellers
  Preamble
Sellers’ Cap
  11.2(b)
Sellers’ Floor
  11.2(b)
Sellers’ Loss
  11.3(a)
Shares
  Recitals
Solvency
  3.4
STD Employees
  5.2
Subsidiary or Subsidiaries
  Recitals
Subsidiary Tax Group
  2.3(b)
Target Net Assets
  1.2
Tax Audit
  2.3(b)
Tax Records
  0
Taxes
  2.3(a)(iii)
Third Party Claim
  11.4(a)(i)

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      Defined Term   Section
Title IV Plans
  2.7(b)
Total Assets
  1.2
Total Liabilities
  1.2
Transition Services Agreement
  9.1(i)
UFI
  2.10(c)(v)
UST
  2.10(c)(v)

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STOCK PURCHASE AGREEMENT
     THIS STOCK PURCHASE AGREEMENT (this “Agreement”), is made as of this 3rd
day of April, 2008, by and among CONNELL LIMITED PARTNERSHIP, a Delaware limited
partnership (“Buyer”), on the one hand, and FEDERAL SIGNAL CORPORATION, a
Delaware corporation (“Federal Signal”), and FEDERAL SIGNAL OF EUROPE B.V., a
Dutch corporation (“FSBV”), on the other hand (Federal Signal and FSBV are
sometimes hereinafter referred to as the “Sellers” and Buyer and each Seller are
sometimes hereinafter referred to separately as a “Party” and collectively as
the “Parties”).
RECITALS
     WHEREAS, (a) Federal Signal is the direct or indirect owner of (i) 100
(0.025%) of the issued and outstanding shares of Dayton Progress — Perfuradores,
Lda, a Portuguese corporation (“DP-Portugal”), (ii) 25 (2.44%) of the issued and
outstanding shares of Dayton Progress Canada Ltd., a Canadian corporation
(“DP-Canada”), and (iii) 100% of the issued and outstanding shares of Dayton
Progress Corporation, an Ohio corporation (“DP-US”), and (b) FSBV is the direct
owner of 399,900 shares (99.975%) of the issued and outstanding shares of
DP-Portugal;
     WHEREAS, DP-US is the direct or indirect owner of (a) the remaining 97.56%
of the issued and outstanding shares of DP-Canada and (b) 100% of the issued and
outstanding equity interests of each of those entities identified as owned by it
in Schedule 2.1(a)(ii) (DP-Portugal, DP-US, DP-Canada and each of the entities
identified as owned by DP-US in Schedule 2.1(a)(ii) being a “Subsidiary” and
collectively the “Subsidiaries”);
     WHEREAS, the Subsidiaries are engaged in the business of manufacturing,
selling and reselling a broad range of tooling components, mold bases and
accessories for plastic injection molding and tooling components, punches and
die components for metal stamping and other material forming applications (the
“Business”);
     WHEREAS, Sellers desire to sell, assign, transfer and convey to Buyer or
one or more of its Affiliates, and Buyer or one or more of its Affiliates
desires to acquire from Sellers, (a) all of the issued and outstanding shares of
each of DP-Portugal and DP-US and (b) the shares of DP-Canada directly owned by
Federal Signal (such shares of DP-Canada, along with all of the issued and
outstanding shares of DP-Portugal and DP-US, collectively, the “Shares”); and
     WHEREAS, each of the Parties desires to set forth certain representations,
warranties and covenants, and to establish certain closing conditions, made to
induce the other to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
     NOW, THEREFORE, in consideration of the premises, covenants and agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
     1.1 Purchase and Sale of Shares; Closing. The purchase and sale of the
Shares shall be effected as follows:

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          (a) At the Closing, Sellers shall sell to Buyer, and Buyer shall
purchase from Sellers, the Shares, for the consideration set forth in this
ARTICLE 1.
          (b) The closing (the “Closing”) of the transactions contemplated
hereby shall take place at the offices of Thompson Coburn Fagel Haber, 55 East
Monroe Street 40th Floor, Chicago, IL, 60603, commencing at 9:00 a.m. Chicago
time on April 21, 2008 or such other date or time as may be mutually agreed upon
in writing by the Parties (the “Closing Date”). The Closing shall be effective
as of 12:01 a.m. prevailing local time on the Closing Date.
     1.2 Certain Definitions. As used in this Agreement, the following terms
shall have the following meanings:
          “Affiliate” when used in reference to a specified Person, means any
Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with the specified Person.
          “Business Day” means a day, other than a Saturday or Sunday, on which
commercial banks in Chicago, Illinois are open for the general transaction of
business.
          “Cash” means all cash and cash equivalents within the meaning of GAAP.
          “Cash Adjustment” means the sum of the fair market value of all Cash
of the Subsidiaries as of immediately prior to the Closing.
          “Debt” means, without duplication, the outstanding principal amount
of, all accrued and unpaid interest on and other payment obligations (including
any premiums, termination fees, expenses or breakage costs due upon or payable
in connection with the consummation of the transactions contemplated by this
Agreement) in respect of, (a) any long-term or short-term interest-bearing
indebtedness for borrowed money of any Subsidiary to any third party, whether or
not recourse to the Subsidiaries, (b) any inter-company indebtedness owed by any
Subsidiary to any Seller or any of their Affiliates other than to another
Subsidiary, (c) any capital leases under which any Subsidiary is a lessee,
(d) any reimbursement obligation of any Subsidiary with respect to letters of
credit (including standby letters of credit to the extent drawn upon), bankers’
acceptances or similar facilities issued for the account of any Subsidiary,
(e) any obligation of any Subsidiary evidenced by bonds, debentures, notes or
other similar instruments, (f) any obligation of any Subsidiary issued or
assumed as the deferred purchase price of property or services, (g) any
obligation of any Subsidiary under any factoring, securitization or other
similar facility or arrangement not accounted for as a sale under GAAP and
(h) any obligation of the type referred to in clauses (a) through (g) of this
definition of another Person the payment of which any of the Subsidiaries have
guaranteed or for which any Subsidiary is responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or otherwise. “Debt”
shall not include short term (150 days or less) commercial notes issued to third
party vendors by Nippon Dayton Progress, Kabushiki Kaisha (Dayton Progress
Corporation of Japan) or Dayton Progress SAS to memorialize trade debt incurred
in the ordinary course of business consistent with past practice.
          “GAAP” means United States generally accepted accounting principles
except as set forth in Schedule 1.2, consistently applied.
          “Governmental Body” means any: (a) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, board, commission, department, instrumentality, office or other entity,
and any court or other tribunal); (d) multinational organization or body; or
(e) body exercising, or entitled or purporting to

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exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
          “Knowledge of Sellers” means the knowledge of Alan Shaffer, Randy
Wissinger, Jeff Welday, Bob Clark, David Turpin, Ed Mohrbach, Ed Mehney, Stefan
Richardson, John Gruber, Paul Henry, Stephanie Kushner or Paul Brown after
reasonable inquiry.
          “Material Adverse Effect” means with respect to the Subsidiaries, any
effect which, individually or in the aggregate with all other such effects,
(a) is materially adverse to the condition (financial or otherwise) or results
of operations, assets (tangible or intangible), liabilities or business of the
Subsidiaries taken as a whole, except for effects caused by or resulting from
(i) the announcement of this Agreement or the transactions contemplated hereby
or the taking of any action specifically required by this Agreement and any
Other Agreement, (ii) changes in general social or political conditions
including the engagement by the United States in hostilities or the occurrence
of military or terrorist attacks on the United States which do not
disproportionately affect the Subsidiaries as compared to other similarly
situated participants in the industries in which the Subsidiaries operate,
(iii) changes in general business, economic or market conditions or prevailing
interest rates which do not disproportionately affect the Subsidiaries as
compared to other similarly situated participants in the industries in which the
Subsidiaries operate, (iv) changes in Laws or (v) the labor strike described in
Schedule 1.2 or (b) would prevent or materially impede the ability of Sellers to
consummate the transactions contemplated by this Agreement in accordance with
the terms hereof and applicable Laws.
          “Net Assets” means “Total Assets,” as of immediately prior to the
Closing, less “Total Liabilities,” as of immediately prior to the Closing.
“Total Assets” means the consolidated total assets (other than Cash or goodwill)
of the Subsidiaries, in each case without duplication and as determined in
accordance with GAAP and with the application thereof in Exhibit A. “Total
Liabilities” means the consolidated total liabilities (other than Debt) of the
Subsidiaries, in each case without duplication and as determined in accordance
with GAAP and with the application thereof in Exhibit A.
          “Net Assets Adjustment” means (a) if Net Assets exceeds Target Net
Assets, the amount of such excess or (b) if Net Assets is less than Target Net
Assets, the amount of such difference; provided, that any amount resulting under
clause (b) above shall be deemed to be a negative number.
          “Person” means any individual, corporation (including any non-profit
corporation), general, limited or limited liability partnership, limited
liability company, joint venture, estate, trust, association, organization, or
other entity or Governmental Body.
          “Purchase Price Adjustment” means (a) the Final Purchase Price minus
(b) the Interim Purchase Price.
          “Target Net Assets” means $40,562,106, the calculation of which is set
forth on Exhibit A.
     1.3 Purchase Price for the Shares; Payment. At the Closing, Buyer shall
deliver or cause to be delivered to Federal Signal, by wire transfer to an
account designated by Federal Signal at least three Business Days prior to the
Closing Date, an aggregate amount in immediately available funds equal to the
Interim Purchase Price. For purposes of this Agreement, the term “Interim
Purchase Price” shall mean (a) $61,000,000, plus (b) Sellers’ good faith
estimate of the Cash Adjustment and plus (c) Sellers’ good faith estimate of the
Net Assets Adjustment (which may be a negative number if the calculation results
in a negative number under clause (b) of the definition of “Net Assets
Adjustment”).

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     1.4 Adjustments to Purchase Price.
          (a) Interim Purchase Price. No later than five Business Days prior to
the Closing Date, Sellers shall deliver to Buyer a calculation of the Interim
Purchase Price and the components thereof, based on the Subsidiaries’ books and
records and other information then available and prepared in accordance with
GAAP.
          (b) Calculation of Final Purchase Price.
          (i) Within 90 days following the Closing Date, Buyer shall deliver to
Sellers a proposed calculation of the Final Purchase Price (the “Final Closing
Statement”) and the components thereof, together with reasonable supporting
detail, based on the Subsidiaries’ books and records and other information then
available and prepared in accordance with GAAP. For purposes of this Agreement,
the term “Final Purchase Price” shall mean (A) $61,000,000, plus (B) the Cash
Adjustment and plus (C) the Net Assets Adjustment (which may be a negative
number if the calculation results in a negative number under clause (b) of the
definition of “Net Assets Adjustment”).
          (ii) Unless Sellers notify Buyer in writing within 45 days after
Buyer’s delivery of the Final Closing Statement of any objection to any
component of the Final Closing Statement (the “Notice of Objection”), the Final
Purchase Price set forth in such Final Closing Statement shall be deemed final
and binding. During such 45-day period, Sellers and their representatives shall
be permitted to review during normal business hours as they shall reasonably
request the books, records and working papers of Buyer and the Subsidiaries
relating to the Final Closing Statement. Any Notice of Objection shall specify
in reasonable detail the basis for the objections set forth therein. Items and
amounts not objected to by Sellers in any Notice of Objection shall be deemed
final and binding at the conclusion of such 45-day period.
          (iii) If Sellers provide a Notice of Objection to Buyer within such
45-day period, Buyer and Sellers shall, during the 30-day period following
Buyer’s receipt of the Notice of Objection, attempt in good faith to resolve
Sellers’ objections. During the 30-day period following Buyer’s receipt of the
Notice of Objection, Buyer and its representatives shall be permitted to review
during normal business hours as they shall reasonably request the working papers
of Sellers relating to the Notice of Objection and the basis therefor. If the
Parties are unable to resolve Sellers’ objections within the 30-day period
following Buyer’s receipt of the Notice of Objection, the Parties shall appoint
a nationally recognized accounting firm reasonably acceptable to each Party
(such accounting firm, or any successor accounting firm appointed by the
Parties, if necessary, the “Arbitrator”), which shall, at Sellers’ and Buyer’s
joint expense, review the matters under dispute in the Final Closing Statement.
The Arbitrator shall, within 30 days of its appointment, render a determination
resolving such disputes. The Parties agree to cooperate with the Arbitrator and
provide it with such information as it reasonably requests to enable it to make
any such determination. The finding of the Arbitrator shall be final and binding
on the Parties. The Parties will revise the Final Closing Statement as
appropriate to reflect the final and binding resolution of any objections
thereto pursuant to this Section 1.4(b)(iii).
          (c) Payment of Purchase Price Adjustment. If the Purchase Price
Adjustment is (i) a positive amount, Buyer will pay or cause to be paid to
Sellers in accordance with the wire transfer instructions delivered by Sellers
or (ii) a negative amount, Sellers will pay or cause to be paid to Buyer in
accordance with wire transfer instructions delivered by Buyer, an amount in cash
equal to the absolute value of the Purchase Price Adjustment together with
interest thereon at a rate of 5.25% per annum from the Closing Date to the date
of such payment, by wire transfer or delivery of other immediately available

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funds within three Business Days after the date on which the Final Purchase
Price is finally determined pursuant to Section 1.4(b).
     1.5 Designation of Agent. FSBV does hereby irrevocably designate Federal
Signal to be its agent to collect on its behalf any portion of the Interim
Purchase Price, the Final Purchase Price or the Purchase Price Adjustment
allocable to the DP-Portugal shares owned by FSBV. Buyer shall have no liability
on account thereof to FSBV.
     1.6 Currency and Currency Exchange Rates. The Interim Purchase Price, Final
Purchase Price and all other amounts referenced hereunder shall be denominated
in United States Dollars (“$” or “USD”). All account balances denominated in
foreign currencies shall be translated into United States Dollars using the
currency exchange rates published in the Wall Street Journal as of the Business
Day immediately prior to the Closing Date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLERS
     Sellers hereby jointly and severally represent and warrant to Buyer as
follows:
     2.1 Status of Sellers and Subsidiaries.
          (a) Corporate Existence, Status and Capitalization.
          (i) Federal Signal and each of the US-chartered Subsidiaries are
corporations duly incorporated, organized, entitled to conduct business and
validly existing in good standing under the Laws of the state of their
respective incorporation. Each of FSBV and the non-US chartered Subsidiaries is
either a corporation or limited liability company, in each case entitled to
conduct business and validly existing and in good standing under the Laws of the
country of its respective organization.
          (ii) Schedule 2.1(a)(ii) sets forth with respect to each Subsidiary
(A) the total authorized capital, (B) the number of shares or quotas that are
issued and outstanding and (C) the owner of such shares or quotas. All of the
shares and quotas reflected in Schedule 2.1(a)(ii) have been duly authorized,
validly issued and are fully paid and nonassessable and were not issued in
violation of any preemptive rights. There are no issued or outstanding shares of
preferred stock of any of the Subsidiaries. There are no outstanding options,
warrants, rights (including preemptive rights), agreements, contracts,
arrangements, understandings, obligations, undertakings, puts, calls,
commitments or demands of any character relating to the equity of the
Subsidiaries or that may require the Subsidiaries to issue any shares, quotas or
other equity interests, and there are no outstanding securities convertible into
or exchangeable for any of such shares, quotas or other equity interests. There
are no bonds, debentures, notes or other indebtedness of any Subsidiary issued
or outstanding as of the date hereof (A) having the right to vote on any matters
on which stockholders or members may vote (or which is convertible into or
exchangeable for, securities having such right) or (B) the value of which is in
any way based upon or derived from capital or voting stock or quotas of any
Subsidiary.
          (iii) Sellers are the sole record and beneficial owners of all of the
Shares, free and clear of any lien, security interest, pledge, restriction on
transferability or voting, or other claim or encumbrance, except those
restrictions imposed by applicable securities Laws, and have full legal right,
power and authority to transfer such Shares to Buyer in accordance

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with this Agreement. There are no voting trust agreements or other agreements
restricting the voting, dividend rights or disposition of any shares of capital
stock or quotas of the Subsidiaries.
          (b) Qualification. Schedule 2.1(b) lists the jurisdictions in which
each Subsidiary is qualified to do business as a foreign corporation. Each
Subsidiary is qualified to do business and in good standing in all jurisdictions
material to its business where the nature of its business makes such
qualification necessary.
          (c) Corporate Power. Each Subsidiary has all requisite corporate or
limited liability company (as the case may be) power to own, lease or use its
Properties and otherwise to conduct the Business.
          (d) Ownership Interests. Except as set forth in Schedule 2.1(d), no
Subsidiary has any equity securities of, investment in or loans or advances to
any Person or any agreements or commitments for such (other than trade terms
extended to customers in the ordinary course of business consistent with past
practice and travel advances to employees).
          (e) Authorization.
          (i) Each Seller has the right, power and authority to enter into this
Agreement and each other agreement, instrument or other document contemplated
herein (collectively, the “Other Agreements”) required to be executed by such
Seller hereunder and to consummate the transactions contemplated by, and
otherwise to comply with and perform its obligations under, this Agreement and
the Other Agreements, subject in each case to obtaining the consents and
approvals described in Schedule 2.1(f).
          (ii) The execution and delivery by each Seller of this Agreement and
the Other Agreements to which such Seller is a party, and the consummation by
each Seller of the transactions contemplated by, and other compliance with and
performance of its obligations under, this Agreement and the Other Agreements to
which such Seller is a party have been duly authorized by all necessary
corporate action on the part of such Seller, in compliance with its governing
documents and applicable Laws.
          (iii) This Agreement and the Other Agreements to which each Seller is
a party constitute valid and binding agreements of such Seller that are
enforceable against such Seller in accordance with their respective terms,
except to the extent that such enforceability may be limited by (A) the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium,
rehabilitation or similar Laws relating to the enforcement of creditors’ rights
generally, (B) the availability of the remedies of specific performance or
injunctive relief which may be subject to the discretion of the court before
which any proceeding for such remedies may be brought or (C) the exercise by any
court of its discretion in invoking general principles of equity.
          (f) Absence of Violations or Conflicts. Except as disclosed in
Schedule 2.1(f), the execution and delivery of this Agreement by each Seller and
the Other Agreements to which such Seller is a party by such Seller and the
consummation of the transactions contemplated by, or other compliance with or
performance under, this Agreement by such Seller and the Other Agreements to
which such Seller is a party by such Seller, do not and will not with the
passage of time or giving of notice or both, constitute a violation or breach
of, be in conflict with, constitute a default or require any payment under,
permit a termination of, require any consent under, result in any default of or
result in the creation or acceleration of any obligations or the creation or
imposition of any lien, encumbrance or other adverse claim or interest other
than Permitted Encumbrances under any (i) material agreement, contract,

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arrangement, understanding, obligation, undertaking or commitment to which
either Seller or any Subsidiary is a party or to which any Seller or Subsidiary
or any Subsidiary’s assets or Properties are subject or bound, (ii) material
judgment, decree or order of any Governmental Body to which any Seller or
Subsidiary or any Subsidiary’s assets or Properties are subject or bound,
(iii) applicable Laws or (iv) governing documents of such Seller or any
Subsidiary (including their articles of incorporation and by-laws or comparable
documents).
          (g) No Governmental Consents Required. Except as set forth in Schedule
2.1(g), no consent, approval, waiver, order or authorization of, or
registration, declaration or filing with, any Governmental Body on the part of
any Seller or Subsidiary is required in connection with its execution or
delivery of this Agreement or the Other Agreements or the consummation of the
transactions contemplated by, or other compliance with or performance under,
this Agreement or such Other Agreements by Sellers.
     2.2 Financial Matters.
          (a) Financial Statements. Sellers have delivered to Buyer true and
complete copies of the unaudited consolidated balance sheets of the Subsidiaries
as of December 31, 2007 and 2006 and the related unaudited consolidated
statements of income for the years ended December 31, 2007 and 2006, together
with the unaudited consolidated balance sheets as of March 2, 2008 and the
related unaudited consolidated statements of income for the two month periods
ended February 3, 2008 and March 2, 2008 (collectively the unaudited financial
statements described in this sentence are referred to in this Agreement as the
“Financial Statements”). The Financial Statements of the Subsidiaries were
prepared in accordance with GAAP and fairly and accurately present in all
material respects the financial condition and results of operations of the
Subsidiaries as of the respective dates thereof, except as set forth in
Schedule 2.2(a) and except that any unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which have not been
or are not expected to be material in amount, individually or in the aggregate.
          (b) Absence of Certain Events. Except as set forth in Schedule 2.2(b),
since December 31, 2007, Sellers and the Subsidiaries have conducted the
Business in the ordinary and usual course consistent with past practice and
there has not been any:
          (i) event, development or state of circumstance or fact that,
individually or taken together with all other facts, events and circumstances,
could reasonably be expected to have a Material Adverse Effect;
          (ii) damage, destruction or casualty loss with respect to the
Properties (whether or not covered by insurance) which materially affected the
Business or financial condition or results of the Subsidiaries;
          (iii) change in the articles of incorporation, by-laws or other
governing documents of any of the Subsidiaries or any declaration or payment of
distributions with respect to the capital stock or quotas of any of the
Subsidiaries or redemption or repurchase of any such shares or quotas or any
options, warrants, calls or rights to acquire any such shares or quotas;
          (iv) change in Sellers’ accounting policies or practices applicable to
any of the Subsidiaries;
          (v) individual capital expenditure by the Subsidiaries in excess of
$75,000;

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          (vi) acquisition by any of the Subsidiaries of, or agreement by any
Subsidiary to acquire by merging or consolidating with, or by purchasing any
assets or equity securities of, or by any other manner, any Person or any
business organization or division thereof, for an amount in excess of $75,000,
or any solicitation of, participation in, or negotiations with respect to any of
the foregoing;
          (vii) entry into, amendment or termination by the Subsidiaries of any
contract, agreement in principle, letter of intent, memorandum of understanding
or similar agreement with a Person with respect to a joint venture, strategic
partnership or alliance;
          (viii) creation or incurrence of any lien, other than Permitted
Encumbrances, on any of the assets of the Subsidiaries;
          (ix) entry into, amendment or termination by Sellers or any
Subsidiaries of any contract material to any individual Subsidiary or to the
Business taken as a whole;
          (x) payment or increase by any of the Subsidiaries of any bonuses,
salaries or other compensation to any shareholder, director, officer or
employee, except in the ordinary course of business consistent with past
practice, or entry into or amendment of any employment, severance or similar
agreement or arrangement with any director, officer or employee;
          (xi) sale (other than sales of inventory and obsolete equipment or
machinery in the ordinary course of business consistent with past practice),
lease, or other disposition of any asset or Property of the Subsidiaries for
which the aggregate proceeds thereof or payments therefor or net book value
thereof exceed $75,000;
          (xii) material change in the level of product returns or anticipated
returns as a result of changes in policies relating to accounts receivable or
reserves, bad debts or rights to accounts receivable experienced by the
Subsidiaries;
          (xiii) material change in the pricing of products or services sold or
provided by the Subsidiaries other than in the ordinary course of business
consistent with past practice;
          (xiv) material change in the level or market value of the inventory of
the Subsidiaries, other than changes resulting from exchange rate fluctuations
and changes in the ordinary course of business consistent with past practice;
          (xv) incurrence of Debt in excess of $75,000 or forgiveness of any
debt, loan or obligation pursuant to which any amount in excess of $75,000 is
owed to any Subsidiary;
          (xvi) advance (other than to employees of the Subsidiaries relating to
travel expenses), loan or capital contribution by the Subsidiaries to, or
investment in, any Person in the aggregate in excess of $75,000;
          (xvii) change or revocation of any material tax election or any
agreement or settlement with any taxing authority or a failure to pay any
material tax or any other liability or charge when due, in each case by Sellers
with respect to any Subsidiary, other than charges contested in good faith by
appropriate proceedings;
          (xviii) material revaluation or any determination by Sellers or any
Subsidiary that such a revaluation is required under GAAP of any of the assets
of the Subsidiaries, including, without limitation, writing down the value of
long-term or short-term investments,

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inventory, fixed assets, goodwill, intangible assets or deferred tax assets or
writing off notes or accounts receivable other than in the ordinary course of
business consistent with past practice;
          (xix) commencement or settlement of any material suit, action,
proceeding or other claim or the threat of any material suit, action, proceeding
or other claim by any Subsidiary;
          (xx) material transactions or arrangements entered into, including
material modifications to existing transactions and arrangements, between a
Subsidiary and a Seller Related Party or an officer, director or employee of a
Subsidiary (other than those directly related to services as an officer,
director or employee); and
          (xxi) commitment or agreement to do any of the foregoing.
          (c) Absence of Undisclosed Liabilities. Except (i) as set forth in or
otherwise disclosed in the Financial Statements, (ii) for liabilities and
obligations arising since December 31, 2007 in the ordinary course of business
consistent with past practice, (iii) for contractual obligations and other
liabilities and obligations which would not be of a nature required to be
disclosed on a consolidated balance sheet or in the related notes to
consolidated financial statements prepared in accordance with GAAP or (iv) as
set forth in Schedule 2.2(c), none of the Subsidiaries has any liabilities or
obligations (absolute, accrued, contingent or otherwise).
     2.3 Taxes.
          (a) Definitions. For purposes of this Agreement:
          (i) The term “Code” shall mean the Internal Revenue Code of 1986, as
amended. All citations to the Code or to the regulations promulgated thereunder
shall include any amendments or any substitute or successor provisions thereto.
          (ii) The term “Returns” shall mean, collectively, all reports, forms,
declarations, estimates, returns, information statements, and similar documents
relating to, or required to be filed in respect of, any Taxes and the term
“Return” means any one of the foregoing Returns.
          (iii) The term “Taxes” shall mean (A) all net income, alternative or
add-on minimum tax, gross income, gross receipts, gains, sales, use, ad valorem,
value added, franchise, profits, license, unitary, intangible, corporate loan
tax, capital stock tax, lease, service, service use, withholding, estimated
employment, payroll, excise, severance, transfer, documentary, mortgage,
registration, stamp, occupation, environmental, premium, property, windfall,
profits, customs, duties, and other taxes, fees, assessments or charges of any
kind whatsoever, together with any interest, penalties and other additions with
respect thereto, imposed by any federal, territorial, state, provincial, local
or foreign government; (B) any penalties, interest, or other additions for the
failure to collect, withhold, or pay over any of the foregoing, or to accurately
file any Return; or (C) liability for the payment of any amount of the type
described in clauses (A) or (B) above as a result of any express or implied
obligation to indemnify or otherwise assume or succeed to the liability of any
other Person. The term “Tax” shall mean any one of the foregoing Taxes.
          (b) Returns Filed and Taxes Paid. Except as otherwise set forth in
Schedule 2.3(b), (i) all Returns required to be filed by each Subsidiary or by
any combined, consolidated or unitary group of which any Subsidiary is or has
been a member (a “Subsidiary Tax Group”) have duly filed or caused to

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be filed, on or before the due date thereof (including any valid extensions),
with the appropriate taxing authorities, and all such Returns are true, correct
and complete in all material respects; (ii) all Taxes of each Subsidiary and
each Subsidiary Tax Group have been timely paid or adequate reserves have been
established in the Financial Statements for the payment of such Taxes;
(iii) there is no valid basis for the assessment of any deficiency with regard
to any Return of a Subsidiary or Subsidiary Tax Group; (iv) no audit,
examination, refund litigation or other administrative or judicial proceeding (a
“Tax Audit”) with respect to any Taxes or Return of any Subsidiary is pending
or, to the Knowledge of Sellers, has been proposed or threatened; (v) there are
no outstanding waivers of statute of limitations that have been given or
requested with respect to any Taxes of the Subsidiaries; (vi) no Subsidiary has
granted (or has had granted on its behalf) any power of attorney that is
currently in force with respect to any Tax matter; (vii) no Subsidiary is or has
ever been subject to Tax in any jurisdiction other than its place of
incorporation by virtue of having a permanent establishment or other place of
business in that jurisdiction; (viii) no Governmental Body in any jurisdiction
where a Subsidiary does not file a Return has made a written claim that such
Subsidiary is required to file a Return for such jurisdiction; (ix) no closing
agreements, private letter rulings, technical advice memoranda or similar
agreement or rulings have been entered into or issued by any taxing authority
with respect to the Subsidiaries that continue to remain outstanding and/or
effective; (x) the Subsidiaries are not bound by any tax indemnity, tax sharing
or tax allocation agreement or arrangement; (xi) the Subsidiaries have withheld
and paid all Taxes that they are required to withhold; (xii) each Seller has
disclosed on its income Returns all positions taken therein that could
reasonably give rise to a substantial understatement of federal income Tax
within the meaning of Code Section 6662; (xiii) the Subsidiaries have not made
and are not obligated to make a payment that would not be deductible by reason
of Code Section 280G; (xiv) to the Knowledge of Sellers, no other Taxes are due
with respect to any taxable periods or portions of periods ending on or before
the Closing Date; and (xv) there are no liens, attachments, or similar
encumbrances on any of the assets of each Subsidiary and the Shares with respect
to any Taxes, other than immaterial liens for Taxes that are not yet due and
payable.
     2.4 Real and Personal Property.
          (a) Property. For purposes of this Agreement, “Property” or
“Properties” means those real and personal properties owned, leased or used by
each Subsidiary. Schedule 2.4(a) lists all of the real Property which each
Subsidiary holds legal or equitable title (whether or not of record) or leases.
Except as set forth in Schedule 2.4(a), (i) each Subsidiary has good and
marketable title to or, in the case of leased Properties, valid leasehold
interests in, all Properties in Schedule 2.4(a) and (ii) none of the Properties
is subject to any lien, claim or other encumbrance whatsoever, except for
Permitted Encumbrances. For purposes of this Agreement, the term “Permitted
Encumbrances” shall mean (i) liens for Taxes not yet due and payable or being
contested in good faith by appropriate proceedings, (ii) liens shown or
described in the Financial Statements and (iii)(A) liens imposed by Laws and
incurred in the ordinary course of business consistent with past practice for
obligations not yet due and payable to landlords, carriers, warehousemen,
laborers, materialmen and the like, (B) easements, building restrictions, rights
of way, reservations and such similar encumbrances or charges against real
property as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect the use thereof in
the Business and (C) liens, claims, encumbrances or other exceptions which are
identified on the title insurance policies set forth in Schedule 2.4(a).
          (b) Leases; Subleases. For purposes of this Agreement, the term
“Lease” shall mean any written or oral lease, sublease or rental agreement (and
any related agreement, contract, arrangement, understanding, obligation,
undertaking or commitment) and all amendments, modifications and supplements
thereof and waivers and consents thereunder pursuant to which each Subsidiary
leases, subleases or rents any Property, either as lessor, lessee, landlord or
tenant. Schedule 2.4(b) lists all Leases which involve annual rental or lease
payments in excess of $75,000 and describes all oral Leases. True and complete
copies of all written Leases have been made available to Buyer. With respect to
each

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of the Leases set forth in Schedule 2.4(b): (i) it is in full force and effect
and is valid and effective in accordance with its respective terms; (ii) the
Subsidiary is not and, to the Knowledge of Sellers, no other party to such Lease
is in material default in connection with such Lease; (iii) no act or event has
occurred which, with notice or lapse of time or both, would constitute a
material default under such Lease with respect to the Subsidiary or, to the
Knowledge of Sellers, any other party; (iv) the Subsidiary has not given or
received any notice of cancellation or termination in connection with such
Lease; and (v) except as disclosed in Schedule 2.4(b), such Lease will not
require consents of the other parties thereto in connection with consummation of
the transactions contemplated by this Agreement.
          (c) Condition. To the Knowledge of Sellers and except as set forth in
Schedule 2.4(c), (i) the Properties are in good repair and condition subject to
reasonable wear and tear and structurally and mechanically sound, as applicable,
(ii) the Properties comply in all material respects with the present zoning
classifications assigned to such Properties or are legal nonconforming uses and
(iii) all improvements constructed on the land included in the Properties have
been constructed in all material respects in accordance with the requirements of
all applicable building, health, safety, environmental, zoning and other
federal, state and local Laws applicable at the time of such construction, do
not contain any material defect in design or construction, and have access to
existing highways, roads and utility services. No Seller or Subsidiary has
received any notice or request from any Governmental Body, utility, insurer,
board of fire authorities or similar organization for the performance of any
work or alteration with respect to the Properties or for the termination or
limitation of any access, services or insurance with respect thereto. The
Subsidiaries do not own or lease any real Property not listed in
Schedule 2.4(a).
          (d) Sufficiency of Assets. As of the Closing, other than services or
assets to be provided to the Subsidiaries pursuant to the Transition Services
Agreement or set forth in Schedule 2.4(d), the assets held, owned or leased by
the Subsidiaries will constitute all of the assets necessary to conduct the
Business after the Closing substantially as conducted as of the date hereof.
     2.5 Intellectual Property; Patents; Trademarks; Trade Names. For purposes
of this Agreement, the term “Intellectual Property” shall mean all intellectual
property, patents, inventions (whether patented or unpatented), trade secrets,
proprietary know-how, methods, processes and information, trademarks, service
marks, trade names, trade dress, fictitious business names, brand names, product
names, logos, slogans, domain names, software, mask works and copyrights owned
by or primarily used or proposed to be used by the Subsidiaries and all
applications, registrations, renewals and other filings with respect to any of
the foregoing. For Purposes of this Agreement, the term “Intellectual Property
Licenses” shall mean all contracts, agreements, commitments and understandings
relating to the use or license of technology, know-how, trade secrets,
confidential or proprietary information, customer and supplier lists or
processes to which a Subsidiary is a party and which is related to or used in
the Business. All Intellectual Property and Intellectual Property Licenses
material to the Business are listed in Schedule 2.5. All necessary registration,
maintenance and renewal fees currently due in connection with any registered
Intellectual Property have been paid and all necessary documents, recordations
and certifications in connection with such registered Intellectual Property have
been filed with the relevant authorities for the purpose of maintaining such
registered Intellectual Property. Except as disclosed in Schedule 2.5: (a) each
Subsidiary owns (free and clear of all liens, claims and encumbrances, other
than Permitted Encumbrances), or has the right to use, all Intellectual
Property, whether under Intellectual Property Licenses or otherwise, used in the
ordinary conduct of the Business, consistent with past practice; (b) the
consummation of the transactions contemplated by this Agreement will not
materially alter or impair any such rights or require any third-party consent or
approval; (c) no Intellectual Property or Intellectual Property License is the
subject of a lawsuit or any other proceeding, nor, to the Knowledge of Sellers,
has any party challenged or threatened to challenge any Subsidiary’s rights to
use such Intellectual Property or Intellectual Property License or application
for any of the foregoing; (d) to the Knowledge of Sellers, the operation of the
Business as it has been and is currently conducted, has not and

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will not infringe on or misappropriate the intellectual property of any third
party; (e) Sellers and Subsidiaries have taken all commercially reasonable steps
to protect and maintain the Intellectual Property that is registered with a
Governmental Body or in the process of being registered with a Governmental
Body; and (f) to the Knowledge of Sellers, no party has or is infringing on or
misappropriating any Intellectual Property.
     2.6 Loans and Contracts.
          (a) Indebtedness. Schedule 2.6(a) sets forth a true and complete list
or description of all instruments or other documents (“Debt Instruments”)
relating to Debt.
          (b) Other Contracts. Schedule 2.6(b) sets forth each agreement,
contract, arrangement, understanding, obligation, undertaking or commitment,
whether written or oral, to which any of the Subsidiaries is a party or by which
any of the Subsidiaries or any of their respective Properties or assets is or
may be bound that:
          (i) contains covenants that limit the ability of any Subsidiary to
compete in any business or with any Person or in any geographic area, or to
sell, supply or distribute any service or product;
          (ii) provides for the formation, creation, operation, management or
control of any partnership or joint venture or other similar arrangement by any
Subsidiary with any Person other than another Subsidiary;
          (iii) relates to conditional sale arrangements, the sale,
securitization or servicing of loans or loan portfolios, in each case in
connection with which the aggregate obligations of any Subsidiary under such
contract are greater than $100,000;
          (iv) contains any material support, maintenance or service obligations
on the part of any Subsidiary, other than those obligations that are terminable
by such Subsidiary on no more than 30 days notice without liability or financial
obligation to such Subsidiary, in each case in connection with which the
aggregate obligations of any Subsidiary under such contract are greater than
$100,000;
          (v) contains a cap or “most favored nation” provision relating to the
prices that can be charged by any Subsidiary for products or services;
          (vi) provides for annual payments to or from any Subsidiary of $75,000
or more and has a term of 12 months or more;
          (vii) relates to any hedging or swap arrangement;
          (viii) is a stock purchase agreement, asset purchase agreement or
other acquisition or divestiture contract entered into during the past five
years; or
          (ix) the termination prior to the scheduled expiration date or breach
of which would be materially adverse to the Business.
Each contract of the type described in this Section 2.6(b) is referred to herein
as a “Contract,” but such list and the term “Contract” shall not include
Property Leases, Intellectual Property Licenses, Debt Instruments, Insurance
Policies, inter-Subsidiary loans or similar arrangements and employee-related
matters of each Subsidiary disclosed elsewhere in this Agreement. Sellers have
made available to Buyer

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complete and correct copies of each written Contract (including all amendments
thereto) and a summary of the terms of each oral Contract (or a copy of written
terms proposed for Contracts not executed but in which performance has begun).
          (c) Insurance. The material terms of all insurance coverage now in
force with respect to the Business or the Subsidiaries (“Insurance Policies”)
have been disclosed to Buyer, and the Insurance Policies are set forth in
Schedule 2.6(c). All such policies are in full force and effect. Sellers, with
respect to the Subsidiaries, and the Subsidiaries have not been denied any
application for insurance or had any policy of insurance terminated during the
past three years, nor has any Seller or Subsidiary been notified in writing of
any pending termination. There is no material claim pending under any such
Insurance Policies as to which coverage has been denied or is being disputed by
the underwriters of such policies. To the Knowledge of Sellers, all premiums due
and payable under such Insurance Policies have been paid and the Subsidiaries
are otherwise in compliance in all material respects with the terms of such
policies.
          (d) Status. (i) Each Subsidiary is not, nor, to the Knowledge of
Sellers, is any other party in material default in connection with any
Intellectual Property License, Debt Instrument or Contract; (ii) no Subsidiary
has received any notice of cancellation or termination in connection with any
Intellectual Property License, Debt Instrument or Contract; (iii) no
Intellectual Property License, Debt Instrument or Contract will be affected by,
or require the consent of or payment to any other party to avoid an event of
default or event of termination with respect to such Intellectual Property
License, Debt Instrument or Contract (assuming that any required notice of
default or termination has been given and any periods for cure have expired) by
reason of the transactions contemplated by this Agreement; and (iv) each
Intellectual Property License, Debt Instrument and Contract is a valid and
legally binding obligation of the Subsidiaries and is in full force and effect.
     2.7 Employee Plans.
          (a) Except as set forth in Schedule 2.7(a), none of the Sellers, any
of the Subsidiaries or any other Person under common control within the meaning
of Section 414(b), (c), (m) or (o) of the Code (an “ERISA Affiliate”) maintains,
contributes, or is required to maintain or contribute to or otherwise
participates in or is a party to:
          (i) any employee pension benefit plan, including any employee stock
ownership plan, or any employee welfare benefit plan (as such terms are defined
in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
whether or not such plan is subject to ERISA), including any pension, profit
sharing, retirement or thrift plan;
          (ii) any other compensation, severance, change in control, welfare,
fringe benefit or retirement, stock purchase or stock option, equity
compensation plan, program, policy, understanding or arrangement of any kind
whatsoever, whether formal or informal; or
          (iii) any employment, consulting, termination, severance, change in
control or similar agreement;
with or for the benefit or the welfare of any current or former employee,
officer, independent contractor, consultant or director who provides or provided
services to the Business (collectively, the “Participants”) or any of their
respective beneficiaries or dependents (the items listed under foregoing clauses
(i), (ii) and (iii) being referred to herein collectively as the “Employee
Plans” and individually as an “Employee Plan”).

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          (b) None of the Sellers, any of the Subsidiaries or any ERISA
Affiliate maintains, contributes, is required to maintain or contribute to, with
respect to any Participant, (i) a “Multiemployer Plan” (as defined in
Section 3(37) of ERISA) (ii) an Employee Plan subject to Title IV of ERISA
(“Title IV Plans”) or (iii) a “multiple employer plan” (as defined in ERISA or
the Code). No amount is due or owing from Sellers, any Subsidiary or any ERISA
Affiliate on account of a Multiemployer Plan covering a Participant or on
account of any “complete withdrawal” or “partial withdrawal” (as defined in
Sections 4203 and 4205 of ERISA) therefrom. All contributions, premiums and
benefit payments under or in connection with the Employee Plans that are
required to have been made by Sellers, any of the Subsidiaries or any ERISA
Affiliate in accordance with the terms of the Employee Plans and applicable Laws
have been timely made.
          (c) No Employee Plan, other than Title IV Plans, provides benefits,
including without limitation death, health or medical benefits (whether or not
insured), with respect to any Participant beyond his or her retirement or other
termination of service from the Subsidiaries (other than (i) coverage mandated
by applicable Laws or (ii) benefits the full cost of which is borne by the
Participant (or his or her beneficiary)).
          (d) For each Employee Plan, to the extent applicable to each such
Employee Plan, true and complete copies of the following have been delivered to
Buyer: (i) the documents embodying the Employee Plans, including the plan
documents, all amendments thereto, the related trust or funding contracts,
investment management contracts, administrative service contracts, insurance
contracts, union or trade contracts and, in the case of any unwritten Employee
Plans, written descriptions thereof; (ii) annual reports including Forms 5500
and all schedules thereto for the last three years; (iii) financial statements
for the last three years; (iv) actuarial reports, if applicable, for the last
three years; (v) each communication (other than routine communications) received
by Sellers, any of the Subsidiaries or any ERISA Affiliate from or furnished by
Seller, any of the Subsidiaries or any ERISA Affiliate to the Service, federal
Department of Labor (“DOL”), Pension Benefit Guaranty Corporation (“PBGC”) or
other Governmental Body; and (vi) if the Employee Plan is intended to be
qualified under Code Section 401(a) or 403(a), the most recent determination
letter received from the Service. Sellers have also furnished to Buyer a copy of
the current summary plan description and each summary of material modification
prepared in the last three years for each Employee Plan, and all employee
manuals, handbooks, policy statements and other written materials given to
employees relating to any Employee Plans. No material oral or written
representations or commitments inconsistent with such written materials have
been made to any Participant by Sellers, any Subsidiary or ERISA Affiliate.
          (e) Except as set forth in Schedule 2.7(e), each of the Employee Plans
and all related trusts, insurance contracts and funds have been created,
maintained, funded and administered in all material respects in compliance with
all applicable Laws including, without limitation, all applicable requirements
of the Code and any predecessor federal income tax laws, ERISA, the health care
continuation requirements of COBRA, the Health Insurance Portability And
Accountability Act of 1996 (“HIPAA”) and any applicable collective bargaining
contracts. There exists no condition or set of circumstances with respect to an
Employee Plan under which Sellers or the Subsidiaries could, directly or
indirectly, be subject to any material liability under ERISA or the Code or
other applicable Laws, other than liability for benefit claims payable in the
ordinary course. Without limiting the generality of the foregoing, Sellers and
the Subsidiaries have provided all notices and other correspondence to the
Participants required by HIPAA and the health care continuation provisions of
COBRA. Each of the Employee Plans and all related trusts, insurance contracts
and funds have also been created, maintained, funded and administered in all
material respects in compliance with applicable Laws, the plan document, trust
agreement, insurance policy or other writing creating the same or applicable
thereto. To the Knowledge of Sellers, no Employee Plan is or is proposed to be
under audit or investigation, and no completed audit of any Employee Plan has
resulted in the imposition of any tax, fine, penalty or lien. None of the
Sellers or any of its ERISA Affiliates (i) has incurred or is expected to incur,
any liability to

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an Employee Plan under Title IV of ERISA (other than for contributions not yet
due) or to the PBGC (other than for payment of premiums not yet due) that would
result in a material liability of Sellers, any of the Subsidiaries or any ERISA
Affiliate which liability has not been fully paid or (ii) has engaged in or has
knowledge of a “prohibited transaction” (as defined in Section 4975 of the Code
or Section 406 of ERISA) with respect to an Employee Plan that would result in a
tax or penalty under Section 4975 of the Code or Section 502 of ERISA.
          (f) Except as set forth in Schedule 2.7(f), with respect to each
Employee Plan that is subject to the law of any jurisdiction other than the
United States (a “Foreign Benefit Plan”) (i) each such Foreign Benefit Plan in
all material respects is in compliance with and maintained in all material
respects in accordance with all applicable requirements and all applicable Laws,
(ii) all employer and employee contributions to each such Foreign Benefit Plan
required by law or by the terms of such Foreign Benefit Plan have been made or,
if applicable, accrued in accordance with accepted accounting practices,
(iii) if such Foreign Benefit Plan is intended to qualify for special tax
treatment, such Foreign Benefit Plan meets all requirements for such treatment
and (iv) if such Foreign Benefit Plan is intended to be funded and/or
book-reserved, is fully funded and/or book reserved, as appropriate, in
accordance with applicable Laws.
          (g) Except as set forth in Schedule 2.7(g), neither the negotiation
and execution of this Agreement nor the consummation of the transactions
contemplated hereby (either alone or in combination with another event),
(i) entitle any Participant to severance pay, unemployment compensation or any
other payment under an Employee Plan or (ii) accelerate the time of payment or
vesting of benefits, or materially increase the amount of compensation, due any
such Participant under an Employee Plan.
          (h) Each Employee Plan that is a “nonqualified deferred compensation
plan” (as defined under Section 409A(d)(1) of the Code) is listed in
Schedule 2.7(h) (the “409A Plans”). Each 409A Plan has been or will be amended
before December 31, 2008 to comply with, and has been operated and administered
in good faith compliance with, the applicable requirements of Section 409A (or
an exception therefrom) as defined in Notice 2007-78, from the period beginning
January 1, 2005 through the date hereof or, to the extent amounts were deferred
and vested (as defined under Section 409A) in taxable years beginning before
January 1, 2005, the plan under which the deferral is made has not been
materially modified since October 3, 2004.
          (i) The Subsidiaries have no employees who have been determined to be
eligible for long-term disability benefits whose employment has not been
terminated.
     2.8 Labor Relations. Except as described in Schedule 2.8: (a) there is no
unfair labor practice, complaint, charge, representation proceeding or other
matter against or involving any of the Subsidiaries or their employees pending
or, to the Knowledge of Sellers, threatened before any Governmental Body;
(b) there is no labor strike, organizing effort, slow down, stoppage or other
material labor difficulty pending against or involving any of the Subsidiaries
or, to the Knowledge of Sellers, threatened against or affecting any of the
Subsidiaries; (c) no grievance or any arbitration proceeding arising out of or
under collective bargaining agreements to which any of the Subsidiaries is a
party is pending, and, to the Knowledge of Sellers, no claim therefor exists;
(d) there is no collective bargaining agreement which is binding on any of the
Subsidiaries; (e) all of the Subsidiaries’ employees are employed at will; and
(f) the Subsidiaries are in compliance in all material respects with all
applicable Laws regarding labor, employment, pay equity, workers’ compensation,
equal employment opportunity, workplace safety and health, immigration, terms
and conditions of employment, leaves of absence, and wages and hours. Except as
described in Schedule 2.8, no consent, approval, waiver, order or authorization
of, notice to, or registration, declaration, consultation or filing with any
labor organization, trade union, works council, personnel committee or similar
employee council or committee or employee

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representative body on the part of any Seller or Subsidiary is required in
connection with either Seller’s execution or delivery of this Agreement or the
Other Agreements to which such Seller is a party or the consummation of the
transactions contemplated by, or other compliance with or performance under,
this Agreement or such Other Agreements by Sellers.
     2.9 Litigation and Other Proceedings. Except as disclosed in Schedule 2.9,
none of the Subsidiaries is engaged in, a party to, subject to (nor are any of
the assets of the Sellers used in the Business subject to) or, to the Knowledge
of Sellers, threatened with, any legal or equitable action, other proceeding or
any material claim (whether as plaintiff, defendant or otherwise and regardless
of the forum or the nature of the opposing party).
     2.10 Compliance with Laws.
          (a) Generally. Except as set forth in Schedule 2.10(a), (a) each
Subsidiary is conducting the Business in all material respects in compliance
with all applicable laws, statutes, ordinances, codes, common law, rules,
regulations, standards and agency requirements (“Laws”) excluding, however,
Environmental Laws, as to which the Subsidiary’s sole representations and
warranties are set forth in Section 2.10(c). There is no judgment, injunction,
order or decree binding upon any Subsidiary that has had a material impact on
the Business.
          (b) Permits. Except as set forth in Schedule 2.10(b) and except with
regard to Environmental Permits as to which each Subsidiary’s sole
representations and warranties are set forth in Section 2.10(c), to the
Knowledge of Sellers, each Subsidiary holds all material permits and franchises
necessary to operate the Business as currently operated, excluding permits under
Environmental Laws, as to which the Subsidiary’s sole representations and
warranties are as set forth in Section 2.10(c).
          (c) Environmental.
          (i) Except as set forth in Schedule 2.10(c)(i) and except as has been
fully resolved, no Person (including, but not limited to, any Governmental Body)
has asserted any claim within the past five years with respect to any of the
Subsidiaries or with respect to the Business or to the Knowledge of Sellers,
against any Person whose liability any Subsidiary has or may have retained or
assumed either contractually or by operation of law, relating to any
Environmental Law. Except as has been fully resolved, no Seller or Subsidiary
has received within the past five years written notice of any existing or
pending violation, citation, claim, order, decree, direction, instruction or
complaint relating to the Business, or any facility now or previously owned or
operated by any Subsidiary in connection therewith, arising under any
Environmental Law. For purposes of this Agreement, the term “Environmental Law”
means the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., as
amended; the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. § 9601 et seq., as amended; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. § 11001 et seq.; the Toxic Substances Control Act,
15 U.S.C. §§ 2601-2629; the Safe Drinking Water Act, 42 U.S.C. § 300f-300j, as
amended; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., as
amended; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Oil Pollution Act, 33
U.S.C. § 2701 et seq.; and all other Laws relating to the exposure to, or
releases or threatened releases of, Hazardous Substances or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, transport
or handling of Hazardous Substances and all Laws with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Substances and all permits and authorizations issued in connection therewith, as
well as comparable Laws promulgated by any state, local, municipal or foreign
Governmental Body.

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          (ii) To the Knowledge of Sellers and except as disclosed in Schedule
2.10(c)(ii), each Subsidiary’s operation of the Business is materially in
compliance with all applicable Environmental Laws.
          (iii) To the Knowledge of Sellers and except as disclosed in Schedule
2.10(c)(iii), each Subsidiary currently holds all required permits, approvals or
other authorizations required under or issued pursuant to any Environmental Law
(“Environmental Permits”) that are material to the operation of the Business.
          (iv) To the Knowledge of Sellers, there are no material Environmental
Conditions. The term “Environmental Condition” means (A) the presence in surface
water, groundwater, drinking water supply, land surface, subsurface strata,
above-ground or underground storage tanks or other containers, or ambient air of
any pollutant, contaminant, industrial waste, hazardous waste, polychlorinated
biphenyls, radioactive materials, or any other chemicals, materials or
substances defined by any Environmental Law as, or included in the definition
of, “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“restricted hazardous materials,” “extremely hazardous substances,” “toxic
substances,” or words of similar meaning and regulatory effect, or any other
chemical, material or substance, exposure to which is prohibited, limited, or
regulated by any applicable Environmental Law (“Hazardous Substances”) or
(B) any violation of any statue, ordinance, regulation, administrative order,
judicial order or decree or other governmental requirement issued by any
Governmental Body relating to the emission, discharge, deposit, disposal,
leaching, migration or release of any Hazardous Substance into the environment
or the generation, treatment, storage, transportation or disposal of any
Hazardous Substance (1) arising out of or otherwise related to the operations or
other activities (including the disposition of such materials or substances) of
the Subsidiaries, or of any predecessor in title, interest or line of business
to the Subsidiaries, conducted or undertaken prior to the Closing or
(2) existing at or prior to the Closing at any of the Properties or, to the
Knowledge of Sellers, any property previously owned, operated, leased, occupied
or used.
          (v) Except as set forth in Schedule 2.10(c)(v), to the Knowledge of
Sellers, no ozone depleting substances (“ODS”), polychlorinated biphenyls
(“PCBs”), asbestos containing material (“ACM”), underground storage tanks
(“USTs”) or urea formaldehyde insulation (“UFI”) are present on or at the
Properties or any prior property, and the Subsidiaries have complied in all
material respects with all regulatory requirements relating to the storage,
removal, disposal or release, if any, of ODS, ACM, PCB, USTs or UFIs which
currently are or any in the past have been located on or at the Properties and
any property previously owned, operated, leased, occupied or used.
          (vi) To the Knowledge of Sellers, Sellers and the Subsidiaries comply
and within the past five years have complied in all material respects with all
applicable provisions of any Environmental Laws that condition, restrict or
prohibit the transfer, sale, lease or closure of any property for environmental
reasons and no environmental lien has attached to any portion of the
Subsidiaries or the Properties.
          (vii) Sellers and the Subsidiaries have delivered or otherwise made
available for inspection to Buyer true, complete and correct copies and results
of any material reports, studies, analyses, tests or monitoring that are within
the possession or reasonable control of Sellers or the Subsidiaries pertaining
to Hazardous Substances in, on, beneath or adjacent to any property currently or
formerly owned, operated or leased by the Sellers or the Subsidiaries, or
regarding the Sellers’ or any Subsidiaries’ compliance with applicable
Environmental Laws.

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     2.11 Bank Accounts. Schedule 2.11 lists all bank, money market, savings and
similar accounts and safe deposit boxes of the Subsidiaries, specifying the
account numbers and the authorized signatories or persons having access to them.
     2.12 Brokers and Commissions. No Person has asserted or is entitled to any
commission or broker’s or finder’s fee in connection with the transactions
contemplated by this Agreement, except as provided in the letter agreement,
dated July 31, 2006 between Sellers and Credit Suisse Securities (USA) LLC.
     2.13 Related Party Transactions.
          (a) As of the date hereof, except as set forth in Schedule 2.13(a), no
Seller or any Affiliate, other than the Subsidiaries (each, a “Seller Related
Party”), has (i) had any interest in any Property (whether tangible or
intangible), (ii) owned, directly or indirectly, an ownership interest in any
Person with which any of the Subsidiaries competes or has a business
relationship (excluding ownership interests of up to (but not more than) two
percent of any class of securities of any Person (but without otherwise
participating in the activities of such Person) if such securities are listed on
any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934) or (iii) been a party to
any contract or agreement with, or had any claim or right against, any
Subsidiary. As of the Closing, no Seller Related Party will (i) have any
interest in any Property (whether tangible or intangible), (ii) own, directly or
indirectly, an ownership interest in any Person with which any of the
Subsidiaries competes or has a business relationship (excluding ownership
interests of up to (but not more than) two percent of any class of securities of
any Person (but without otherwise participating in the activities of such
Person) if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities Exchange
Act of 1934) or (iii) be a party to any contract or agreement with, or have any
claim or right against, any Subsidiary.
          (b) As of the date hereof, except as set forth in Schedule 2.13(b),
(i) no amount of Debt has been owed to any Seller Related Party or to any Person
as guarantor of the indebtedness of any Seller Related Party and (ii) no Seller
Related Party has been indebted to any Subsidiary or to any Person as guarantor
of the indebtedness of any Subsidiary. As of the Closing, (i) no amount of Debt
will be owed to any Seller Related Party or to any Person as guarantor of the
indebtedness of any Seller Related Party and (ii) no Seller Related Party will
be indebted to any Subsidiary or to any Person as guarantor of the indebtedness
of any Subsidiary.
     2.14 Accounting Controls. Sellers and the Subsidiaries have devised and
maintain systems of internal accounting controls sufficient to provide
reasonable assurances that prior to the Closing Date (a) all material
transactions are executed in accordance with management’s general or specific
authorization, (b) all transactions are recorded as necessary to permit the
preparation of financial statements in conformity with GAAP and to maintain
proper accountability for items, (c) all material information relating to the
Subsidiaries is promptly made known to the officers responsible for establishing
and maintaining the systems of internal controls, (d) access to assets is
permitted only in accordance with management’s general or specific
authorization, (e) the reporting of assets is compared with existing assets at
regular intervals and appropriate action is taken with respect to any
differences and (f) any significant deficiencies or material weaknesses in the
design or operation of internal controls which could reasonably be expected to
materially and adversely affect the ability to record, process, summarize and
report financial information, and any fraud, whether or not material, that
involves the Business’ management or other employees who have a significant role
in the preparation of financial statements or the internal controls utilized by
the Subsidiaries, are adequately and promptly disclosed to Sellers’ independent
auditors. Neither Sellers nor any Subsidiaries, nor, to the Knowledge of
Sellers, Sellers’ independent auditors have identified or been made aware of any
(a) significant deficiency or material weakness in the system of internal
controls utilized by the Subsidiaries, (b) fraud, whether or not material,

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that involves the Business’ management or other employees who have a significant
role in the preparation of financial statements or the internal controls
utilized by the Subsidiaries or (c) claim or allegation relating to any of the
foregoing.
     2.15 Receivables. All existing accounts receivable of each of the
Subsidiaries with respect to the Business and as reflected on the Financial
Statements or in the accounting records of the Subsidiaries as of the Closing
Date, (a) represent valid obligations of customers of the Subsidiaries arising
from bona fide transactions entered into in the ordinary course of business
consistent with past practice and (b) are collectible, net of reserves therein
reflected, in the ordinary course of business consistent with past practice and
without any defenses, counterclaims or setoffs. All notes receivable
memorialized by short term (150 days or less) commercial notes issued to Nippon
Dayton Progress, Kabushiki Kaisha (Dayton Progress Corporation of Japan) or
Dayton Progress SAS as reflected on the Financial Statements or in the
accounting records of Nippon Dayton Progress, Kabushiki Kaisha (Dayton Progress
Corporation of Japan) or Dayton Progress SAS as of the Closing Date,
(a) represent valid obligations of third parties arising from bona fide
transactions entered into in the ordinary course of business consistent with
past practice and (b) are collectible, net of reserves therein reflected, in the
ordinary course of business consistent with past practice and without any
defenses, counterclaims or setoff.
     2.16 Inventory. The inventories of the Subsidiaries set forth in the
Financial Statements are properly stated therein at the lower of cost or fair
market value determined in accordance with GAAP. The inventories of the
Subsidiaries set forth in the Financial Statements have been determined in
accordance with Federal Signal’s policies and procedures with respect to
accounting for inventory set forth in Schedule 2.16. The quantities of each item
of inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable for the continued conduct of the Business in the
ordinary course of business consistent with past practices. All such inventories
are owned by the Subsidiaries free and clear of any encumbrances, other than
Permitted Encumbrances.
     2.17 Customers and Suppliers.
     (a) Schedule 2.17(a) contains a list, as of the date hereof, of the 10 most
significant “ship to” locations of the Subsidiaries (the “Material Customers”)
based on the gross revenues of the Subsidiaries for the calendar year ended
December 31, 2007. Except as set forth in Schedule 2.17(a), since January 1,
2007, there has not been any termination, cancellation or adverse material
change in the Subsidiaries’ relationships with any of the Material Customers,
and the Subsidiaries have not received written notice from any Material Customer
that said customer intends to terminate or materially and adversely change its
business relationship with the Subsidiaries.
     (b) Schedule 2.17(b) contains a list, as of the date hereof, of the 10
largest suppliers of the Subsidiaries (the “Material Suppliers”) based on the
gross purchases of the Subsidiaries for the calendar year ended December 31,
2007. Except as set forth in Schedule 2.17(b), since January 1, 2007, there has
not been any termination, cancellation or adverse material change in the
Subsidiaries’ relationships with any of the Material Suppliers or, to the
Knowledge of Sellers, no termination, cancellation or adverse material change in
the Subsidiaries’ relationships with any of the Material Suppliers has been
threatened by any Material Supplier.
     2.18 No Other Representations. Except as set forth in this Agreement, the
Schedules hereto and any document delivered pursuant hereto, Sellers do not make
any other representation or warranty whatsoever to Buyer.

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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
     Buyer hereby represents and warrants to Sellers as follows:
     3.1 Status of Buyer.
          (a) Organization. Buyer is a duly formed limited partnership, entitled
to conduct business and validly existing in good standing under the Laws of the
State of Delaware.
          (b) Authorization.
          (i) Buyer has the right, power and authority to enter into this
Agreement and each Other Agreement required to be executed by Buyer hereunder
and to consummate the transactions contemplated by, and otherwise to comply with
and perform its obligations under, this Agreement and such Other Agreements.
          (ii) The execution and delivery by Buyer of this Agreement and the
Other Agreements to which Buyer is a party, and the consummation by Buyer of the
transactions contemplated by, and other compliance with and performance of its
obligations under, this Agreement and the Other Agreements to which Buyer is a
party have been duly authorized by all necessary corporate or other similar
action on the part of Buyer in compliance with its governing documents and
applicable Laws.
          (iii) This Agreement and the Other Agreements to which Buyer is a
party constitute the valid and binding agreements of Buyer that are enforceable
against Buyer in accordance with their respective terms, except to the extent
that such enforceability may be limited by (A) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, rehabilitation or similar
Laws relating to the enforcement of creditors’ rights generally, (B) the
availability of the remedies of specific performance or injunctive relief, which
may be subject to the discretion of any court before which any proceeding for
such remedies may be brought or (C) the exercise by the court of its discretion
in invoking general principles of equity.
          (c) Absence of Violations or Conflicts. The execution and delivery by
Buyer of this Agreement and the Other Agreements to which Buyer is party and the
consummation of the transactions contemplated by, or other compliance with or
performance under, this Agreement and the Other Agreements to which Buyer is a
party by Buyer, do not and will not with the passage of time or giving of notice
or both, constitute a violation or breach of, be in conflict with, constitute a
default or require any payment under, permit a termination of, require any
consent under, result in any default of or result in the creation or
acceleration of any obligations or the creation or imposition of any lien,
encumbrance or other adverse claim or interest other than Permitted Encumbrances
under any (i) material agreement, contract, arrangement, understanding,
obligation, undertaking or commitment to which Buyer is a party or to which it
or any of its assets or properties are subject or bound, (ii)  material
judgment, decree or order of any Governmental Body to which Buyer or any of its
properties are subject or bound, (iii) applicable Laws or (iv) governing
documents of Buyer (including Buyer’s limited partnership agreement).
          (d) No Governmental Consents Required. No consent, approval, waiver,
order or authorization of, or registration, declaration or filing with, any
Governmental Body on the part of Buyer is required in connection with its
execution or delivery of this Agreement or the Other Agreements or the
consummation of the transactions contemplated by, or other compliance with or
performance under, this Agreement or such Other Agreements by Buyer.

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     3.2 Brokers and Commissions. No Person has asserted or is entitled to any
commission or broker’s or finder’s fee in connection with the transactions
contemplated by this Agreement by reason of any act or omission of Buyer, except
as provided in the letter agreement, dated February 11, 2008, between Buyer and
Miller Buckfire & Co., LLC.
     3.3 Available Funds. As of the Closing, Buyer will have sufficient funds
available to satisfy the obligation of Buyer to pay the Interim Purchase Price
and any Purchase Price Adjustment to be paid by Buyer and to pay all fees and
expenses of Buyer related to the transactions contemplated by this Agreement.
     3.4 Solvency.  Buyer is not insolvent and will not be rendered insolvent as
a result of any of the transactions contemplated by this Agreement.  For
purposes hereof, the term “Solvency” means that (i) the fair saleable value of
Buyer’s assets is in excess of the total amount of its liabilities (including,
for purposes hereof, all liabilities, whether or not reflected on a balance
sheet prepared in accordance with generally accepted accounting principles and
whether direct or indirect, fixed or contingent, secured or unsecured or
disputed or undisputed), (ii) Buyer is able to pay its debts or obligations in
the ordinary course as they mature and (iii) Buyer has capital sufficient to
carry on its business and all businesses which it is about to engage.
ARTICLE 4
COVENANTS OF SELLERS
     4.1 Conduct of Business by the Subsidiaries. From the date hereof to the
Closing Date, except as set forth in Schedule 4.1 and except for transactions
that are expressly approved in writing by Buyer, Sellers shall, and shall cause
each Subsidiary to, refrain from:
          (a) subjecting any Subsidiary’s assets, tangible or intangible, to any
lien, encumbrance, security interest or other claim of any kind, exclusive of
liens arising as a matter of Law in the ordinary course of business consistent
with past practice as to which there is no known default and except for
Permitted Encumbrances;
          (b) except for sales in the ordinary course of business consistent
with past practice, selling, assigning, transferring or otherwise disposing of
any Subsidiary’s assets or Properties;
          (c) modifying, amending, altering or terminating (whether by written
or oral agreement, or by any manner of action or inaction including by waiving,
releasing or assigning any material rights or claims thereunder) any of the Debt
Instruments, Contracts, Property Leases, Intellectual Property Licenses,
Employee Plans or Insurance Policies, or entering into any such arrangement
which is outside of the ordinary course of business consistent with past
practice or which involves the payment or receipt by any Subsidiary of an amount
in excess of $75,000;
          (d) incurring, assuming or otherwise becoming liable for any Debt;
          (e) taking or permitting any other action that, if taken or permitted
immediately prior to the execution of this Agreement, would constitute a breach
of or an exception to the representations and warranties in Section 2.2(b)
hereof;
          (f) (i) issuing, selling, authorizing, pledging or otherwise
permitting to become outstanding, or authorizing the creation of, any additional
shares of capital stock, quotas or other equity interests or any rights with
respect to the any shares of capital stock, quotas or other equity interests, in
each case of a Subsidiary, (ii) permitting any shares of capital stock, quotas
or other equity interests of a

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Subsidiary to become subject to stock options or other rights or similar
stock-based employee rights, (iii) repurchasing, redeeming or otherwise
acquiring, directly or indirectly, any shares of capital stock, quotas or other
equity interests of a Subsidiary or (iv) effecting any recapitalization,
reclassification, stock split or like change in capitalization of any
Subsidiary;
          (g) making, declaring, paying or setting aside for payment any
non-cash dividend on or in respect of, or declaring or making any non-cash
distribution on any shares of capital stock or quotas of a Subsidiary;
          (h) entering into, amending, modifying, renewing or terminating any
employment, consulting, severance or similar contracts, with any Participant,
granting any salary wage increase or increase any employee benefit (including
incentive or bonus payments) or taking any action that would entitle any
Participant to receive severance pay prior to the Closing Date, except for
normal general increases in salary to individual employees (other than members
of the management of the Business) in the ordinary course of business consistent
with past practice;
          (i) entering into, establishing, adopting, amending, modifying,
funding, securing or terminating any Employee Plan or other pension, retirement,
stock option, stock purchase, savings, profit sharing, employee stock ownership,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, any trust agreement
(or similar arrangement) related thereto, except for administrative amendments
adopted in the ordinary course of business and except for any amendments,
modifications or terminations required by Law, in each case in respect of any
Participant;
          (j) amending the articles of incorporation or by-laws (or similar
governing document) of any Subsidiary;
          (k) acquiring by merging or consolidating with or by purchasing equity
or voting interest in or assets of or by any other manner any Person or business
organization or division thereof, other than acquisitions or purchases by
Sellers or their Affiliates not involving any Subsidiary;
          (l) other than those directly related to services as an officer,
director or employee, entering into, amending, terminating or waiving any
provision of any contract, agreement or transaction between a Subsidiary and any
Seller Related Party or officer, director or employee of a Subsidiary;
          (m) (i) making, changing or revoking any Tax election applicable to a
Subsidiary, except as required by Law, (ii) adopting or changing any accounting
method in respect of Taxes for which a Subsidiary is liable, except as required
by Law, (iii) making any agreement or settlement with any Governmental Body with
respect to Tax matters involving a Subsidiary, (iv) failing to pay any material
Tax or any other liability or charge for which a Subsidiary is liable when due,
other than charges contested in good faith by appropriate proceedings or
(v) failing to file, on a timely basis, including allowable extensions, with the
appropriate Governmental Body, all Returns required to be filed by or with
respect to the Subsidiaries for taxable years or periods ending on or before the
Closing Date and due on or prior to the Closing Date;
          (n) making any individual capital expenditure or purchase of assets in
excess of $75,000 or capital expenditures and purchases of assets in the
aggregate in excess of $200,000, except for capital expenditures made or assets
purchased by Sellers or their Affiliates (and not a Subsidiary) not relating to
the Business;
          (o) making any material change to the pricing of products or services
sold or provided by any Subsidiary other than in the ordinary course of business
consistent with past practice;

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          (p) settling or consenting to any settlement of claims relating to any
Subsidiary in excess of, in the aggregate, $250,000 or entering into any
material consent decree relating to any Subsidiary;
          (q) taking any action, except as required by Law, which could
reasonably be expected to have a Material Adverse Effect; or
          (r) agreeing, whether in writing or otherwise, to do any of the
foregoing.
     4.2 Affirmative Covenants Relating to the Subsidiaries. From the date
hereof to the Closing Date, except as set forth in Schedule 4.1 and except as
expressly approved by Buyer in writing, Sellers shall cause each Subsidiary to:
          (a) maintain property and liability insurance in amounts and with
coverage at least as great as the amounts and coverage in effect on the date of
this Agreement;
          (b) maintain, consistent with past practice, its Properties in good
repair, order and condition, reasonable wear and tear excepted, and preserve its
possession and control of all of its assets and Properties;
          (c) use its commercially reasonable efforts to keep in faithful
service its key officers and professional staff and to preserve the goodwill of
those having business relations with the Subsidiary;
          (d) maintain the books, accounts and records of such Subsidiary in a
manner consistent with past practice and not implement or adopt any change in
the accounting principles, practices or methods used, other than as may be
required by Law or GAAP;
          (e) materially comply with all applicable Laws relating to the conduct
of the Business, and use commercially reasonable efforts to conduct the Business
in such a manner so that on the Closing Date the representations and warranties
contained in this Agreement shall be true as though such representations and
warranties were made on and as of such date, except for changes permitted or
contemplated by the terms of this Agreement;
          (f) provide Buyer with prompt written notice of any event, occurrence
or circumstance which, to the Knowledge of Sellers, could reasonably be expected
to have a Material Adverse Effect; and
          (g) operate the Business only in the ordinary course consistent with
past practice and use its commercially reasonable efforts to preserve its
business organization intact, including the goodwill of its suppliers, customers
and others having business relations with each such Subsidiary.
     4.3 Access Before Closing. From the date of this Agreement until the
Closing Date, Sellers will cause each Subsidiary to permit Buyer and its
representatives reasonable access on reasonable notice during normal business
hours to the Properties, personnel, books and records, contracts, analysis,
projections, plans, systems and commitments of the Business, including the right
to make copies of such books and records, contracts, analysis, projections,
plans, systems and commitments; provided, however, that (a) such access and
Buyer’s investigation shall not unreasonably disrupt the operations of the
Business and (b) Buyer shall not contact any counterparty to a Contract or other
agreement to which a Subsidiary is a party regarding such Contract or other
agreement without Sellers’ prior written consent. In addition, in the event that
any record or other information requested by Buyer is subject to a
confidentiality agreement with a third party, attorney-client privilege or other
legal restriction or privilege, Sellers and Buyer will endeavor to find means of
disclosing as much information as practicable

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that is needed by Buyer to prepare for the transfer of the Business. Buyer shall
return all copies of such books and records, contracts, analysis, projections,
plans, systems and commitments promptly upon the request of Seller if for any
reason this Agreement is terminated. All requests for access to information,
Properties, personnel or documents pursuant to this Section 4.3 shall be
directed to an executive officer or officers of the Subsidiary designated by
Sellers.
     4.4 Public Disclosure; Sellers’ Post-Closing Confidentiality Obligation.
          (a) Each Seller agrees that it will not, without the prior approval of
Buyer, issue any press release or written statement for general circulation
relating to the transactions contemplated hereby, except for any release or
statement that is required by Laws (including the rules of any self-regulatory
organization) and as to which Sellers have used commercially reasonable efforts
to discuss with Buyer in advance, provided, that such release or statement has
not been caused by, or is not the result of, a previous disclosure by or at the
direction of a Seller or any of its representatives that was not permitted by
this Agreement. Notwithstanding the foregoing, each Seller may make internal
statements and announcements to its employees that are consistent with prior
public disclosures made by the Parties with respect to the transactions
contemplated hereunder.
          (b) Each Seller acknowledges that (i) during the course of its
affiliation with the Subsidiaries, it has produced and had access to
confidential information relating to the Subsidiaries and not related to
Sellers’ and their Affiliates’ other businesses (“Confidential Information”) and
(ii) the unauthorized use or disclosure of any Confidential Information at any
time would constitute unfair competition with Buyer and would deprive Buyer of
the benefits of this Agreement and the transactions contemplated by this
Agreement. From and after the Closing Date and for a period of six years
thereafter, each Seller shall (and shall cause its representatives, officers,
directors, partners, employees, agents, members and Affiliates to) hold in
confidence the Confidential Information and will not, directly or indirectly,
disclose, publish or otherwise make available any of the Confidential
Information to the public or to any Person or use any of the Confidential
Information for its own benefit or for the benefit of any other Person, other
than Buyer and its Affiliates; provided, however, that such Seller may disclose
Confidential Information if, but only to the extent, required to do so by Laws,
provided, however, that in such case, to the extent practicable, such Seller
shall provide Buyer with prior written notice thereof so that Buyer may seek an
appropriate protective order or other appropriate remedy, and such Seller shall
cooperate with the Subsidiaries in connection therewith and provided, further,
that, in the event that a protective order or other remedy is not obtained, such
Seller shall furnish only that portion of such information which, in the opinion
of its counsel, such Seller is legally compelled to disclose and shall exercise
commercially reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded any such information so disclosed.
     4.5 Monthly and Quarterly Financial Statements. Sellers shall promptly (and
in any event, no later than 20 days following the end of any month or quarter)
provide Buyer with copies of unaudited (a) monthly income statements, which
(i) present the Subsidiaries in a form similar to the Financial Statements and
(ii) present such information on a standalone basis with respect to each of the
Subsidiaries’ plants and (b) quarterly financial statements, in each case for
each such period ending after the date hereof through the Closing Date on an
unconsolidated basis. Except for the absence of note disclosures and typical
year end adjustments and accruals, such unaudited quarterly financial statements
shall present fairly the financial condition of the Subsidiaries as of such
dates and the results of operations of the Subsidiaries for the period then
ended.
     4.6 Termination of Related Party Transactions. Sellers shall and shall
cause each Subsidiary to terminate all transactions between a Subsidiary and any
Seller Related Party or other Subsidiary prior to the Closing, except for such
transactions (a) set forth in Schedule 4.6 or (b) arising in the ordinary

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course of business consistent with past practice as a result of the purchase and
sale of goods and services on an arms-length basis.
     4.7 Bank Accounts. Prior to the Closing Date, Seller shall and shall cause
the Subsidiaries to change effective as of the Closing, the individuals
authorized to draw on, or having access to, the bank, savings, deposit or
custodial accounts and safe deposit boxes maintained by the Subsidiaries to the
individuals designated in writing by Buyer not less than three Business Days
prior to the Closing Date; provided, however, that in cases where, and to the
extent that, making such changes is impracticable, Sellers shall and shall cause
the Subsidiaries to change effective as of the Closing, the individuals
authorized to draw on, or having access to, the bank, savings, deposit or
custodial accounts and safe deposit boxes maintained by the Subsidiaries to
solely be Affected Employees.
     4.8 Resignations. Sellers shall cause the directors and such executive
officers of the Subsidiaries as Buyer shall request in writing not less than
five Business Days prior to the Closing Date to resign in such person’s capacity
as a director or an officer, effective as of the Closing. In connection with any
such resignation, Sellers shall cause such directors or executive officers to
duly execute and deliver to Buyer such executive officer’s or director’s
resignation, in a form reasonably acceptable to the Buyer, and a release, in a
form reasonably acceptable to the Buyer, with respect to any claims such
directors or executive officers may have against the Subsidiaries.
     4.9 Real Estate. Sellers shall cooperate with Buyer in obtaining title
commitments, title policies and surveys with respect to the owned real
Properties. Sellers shall or shall cause the Subsidiaries to execute any
reasonable documents necessary to procure such title commitments and title
policies, including, without limitation, ALTA statements, GAP affidavits, survey
affidavits and any other document reasonably necessary for the title insurer
under such commitments and policies to issue such title commitments and title
policies satisfactory to Buyer showing good and marketable fee simple title not
subject to liens, claims and encumbrances (other than Permitted Encumbrances)
not previously disclosed in the Financial Statements and to ensure that title in
the owned real Properties is vested in the Subsidiaries. All fees, costs and
other amounts in obtaining the title commitments and title policies shall be
incurred and borne by Buyer.
     4.10 Consents. Sellers shall and shall cause the Subsidiaries to use
commercially reasonable efforts to obtain such consents, approvals,
authorizations and waivers from third parties required to be obtained by them
and to take other actions as may be required in order to fulfill the closing
conditions which are within their control. Notwithstanding the foregoing, such
efforts shall not include any requirement that a Seller or Subsidiary offer or
grant financial accommodations or any requirement that a Seller assume or remain
secondarily liable for any obligation of a Subsidiary after the Closing Date.
     4.11 No Negotiation. From and after the date hereof and until the
termination of this Agreement, Sellers will not, and Sellers will cause the
Subsidiaries and their officers, employees and agents not to initiate, solicit
or encourage, directly or indirectly, any inquiries or the making of any
proposal with respect to, or engage in any negotiations concerning, provide any
confidential information or data to, have any discussions with or enter into any
agreements with or cooperate with, or take any action to knowingly facilitate or
enter into any merger, acquisition, option, joint venture, partnership or
similar agreements with, any Person relating directly or indirectly to any
acquisition, business combination, reorganization or purchase of all or any
portion of the capital stock or assets of the Subsidiaries, other than the sale
of inventory and other assets in the ordinary course of business consistent with
past practice. Following the execution of this Agreement, Sellers will, and
Sellers will cause the Subsidiaries to, promptly cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any such potential transactions involving
the Subsidiaries.

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     4.12 Cooperation.
          (a) Subject to the limitations set forth in Section 4.3, Sellers shall
provide Buyer all information or assistance reasonably requested by Buyer to
bring about the consummation of the transactions contemplated by this Agreement.
Sellers shall cooperate with Buyer and shall use commercially reasonable efforts
to assist Buyer in obtaining all consents or approvals required to be obtained
by Buyer with respect to the transactions contemplated by this Agreement.
Nothing in this Section 4.12(a) shall require Sellers to pay any consideration
to any other Person in order to obtain any consents or approvals required to be
obtained by Buyer with respect to the consummation of the transactions
contemplated by this Agreement.
          (b) If, in order to properly prepare its financial statements or
documents required to be filed with any Governmental Body or required under any
applicable Laws, it is necessary that Buyer (or any of its respective
Affiliates) or any successors be furnished with additional information relating
to the Subsidiaries and such information is in the possession of Sellers or any
of its Affiliates, Sellers agree to use their commercially reasonable efforts to
furnish such information to Buyer as soon as reasonably practicable, at the cost
and expense of Buyer.
     4.13 Other Assets. With respect to any assets which are determined after
Closing to be owned by Sellers or its Affiliates and which were primarily used
in the operation of the Business as was conducted as of the Closing (other than
those services and assets set forth in the Transition Services Agreement or in
Schedule 2.4(d)), Sellers shall transfer or cause to be transferred ownership of
such assets to Buyer (or a designee of Buyer) promptly and without charge. With
respect to any assets which are determined after Closing to be licensed to any
Seller or any of their Affiliates and which were primarily used in the operation
of the Business as was conducted as of the Closing, to the extent reasonably
practicable, Sellers shall sublicense or cause to be sublicensed or arrange for
an assignment of the primary license to Buyer (or a designee of Buyer) promptly
and without charge. Prior to the Closing, Sellers shall arrange for an
assignment of the license set forth in Schedule 4.13 to DP-US without charge.
     4.14 Release of Claims by Sellers. Effective upon the Closing, each Seller
irrevocably releases, acquits and forever discharges the Subsidiaries from any
and all claims, actions, causes of action, suits, rights, debts, agreements,
damages, injuries, losses, costs, expenses, (including legal fees) and demands
whatsoever and all consequences thereof, of every nature or description, whether
known or unknown, suspected or unsuspected, foreseen or unforeseen, actual or
potential that such Seller ever had, now has or may in the future have against
any Subsidiary, in law or in equity, as a result of any act, transaction,
agreement, event or omission, occurring or committed from the beginning of time
to the Closing (the “Released Claims”). Notwithstanding the foregoing, no claim
arising under this Agreement or any Other Agreement (including, without
limitation, the Transition Services Agreement) shall constitute a Released
Claim.
     4.15 Excluded Assets. Prior to the Closing, Sellers shall cause, at
Sellers’ sole cost and expense (including the cost and expense of the holding
and distribution thereof and Taxes relating thereto to the extent not included
in the Purchase Price Adjustment), the Subsidiaries to distribute to Sellers (or
a designee of Sellers), or otherwise transfer out of the Subsidiaries the assets
listed in Schedule 4.15 (the “Excluded Assets”).
ARTICLE 5
COVENANTS OF BUYER
     5.1 Consents and Closing Conditions. Buyer shall use commercially
reasonable efforts to obtain such consents, approvals, authorizations and
waivers from third parties required to be obtained by

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it and to take other actions as may be required in order to fulfill the closing
conditions which are within its control. Notwithstanding the foregoing, nothing
in this Agreement shall obligate Buyer or any of its Affiliates (including the
Subsidiaries following the Closing) to agree (a) to limit in any manner
whatsoever or not to exercise any rights of ownership of any securities
(including the Shares), or to divest, dispose of or hold separate any securities
or all or a portion of their respective businesses, assets or properties or
(b) to limit in any manner that is not de minimis the ability of such entities
to conduct, own, operate or control any of their respective business, assets or
properties.
     5.2 Affected Employees. For purposes of this Agreement, the term “Affected
Employees” shall refer to all persons actively employed by the Subsidiaries as
of the Closing Date and employees who are not actively at work due to being on
short-term disability as of the Closing Date (the “STD Employees”) or other
approved leave of absence, each of whom shall continue to be employed by the
applicable Subsidiary immediately following the Closing. Listed in Schedule 5.2
are the names, base salary and job title of each individual who would be an
Affected Employee if the Closing Date was the date hereof, which list shall be
updated by Sellers periodically prior to the Closing. Affected Employees shall
not include persons who are not actively employed due to being on approved
long-term disability leave as of the Closing Date (the “LTD Former Employees”).
Prior to the Closing, Sellers shall assume and be solely responsible for all
liabilities with respect to the LTD Former Employees (whether arising or
attributable to the period prior to, on or after the Closing) and including,
without limitation, any liabilities under any Employee Plan or related to such
transfer of employment. Buyer shall not be responsible for the employment of any
LTD Former Employee. Except to the extent otherwise specifically set forth in
this Agreement, Sellers shall assume at the Closing, and be solely responsible
for, all liabilities with respect to Affected Employees arising or attributable
to the period prior to or on the Closing. Nothing in this Agreement shall
require Buyer to retain any Affected Employees for any period of time on or
following the Closing and, subject to requirements of applicable Laws, Buyer
reserves the right, at any time following the Closing, to terminate such
employment and to amend, modify or terminate any term and condition of
employment including, without limitation, any employee benefit plan, program,
policy, practice or arrangement or the compensation or working conditions of
Affected Employees.
     5.3 Employee Plans.
          (a) Retention of Liabilities. Except as set forth in Schedule 5.3(a),
Sellers shall, prior to Closing, take all necessary and appropriate action to
provide that, immediately prior to the Closing, each Employee Plan is sponsored
or maintained by Federal Signal or an Affiliate of Sellers other than a
Subsidiary and is not sponsored or maintained by a Subsidiary. Following the
Closing, Sellers shall retain all liabilities of or related to such Employee
Plans, except as set forth in Section 5.3(e), and shall cause each such Employee
Plan to perform its obligations with respect to Affected Employees in accordance
with the terms of such Employee Plans. All Affected Employees shall cease active
participation in each Employee Plan covering individuals in the United States as
of the Closing Date, except to the extent (i) set forth below in Section 5.3(b)
or (ii) as otherwise specifically provided in the Transition Services Agreement.
Following the Closing, Affected Employees shall continue to be entitled to any
benefits accrued or payable as of the Closing Date under any Employee Plan in
accordance with the terms of such Employee Plans. Nothing in this Agreement,
whether express or implied, shall limit the right of Sellers or any of their
Affiliates to amend, terminate or otherwise modify any Employee Plans following
the Closing Date nor shall any provision of this Agreement be construed as
amending any Employee Plans.
          (b) Long-Term Disability Coverage. Sellers shall take all necessary
and appropriate action so that Affected Employees who are STD Employees as of
the Closing shall remain eligible following the Closing for long-term disability
benefits under the applicable Employee Plan with respect to the disability
giving rise to such leave of absence.

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          (c) Seller Retirement Plan. Without limiting the generality of
Section 5.3(a), effective as of the Closing Date, each Affected Employee who is
eligible to participate in the Federal Signal Corporation Retirement Plan
(“Seller Retirement Plan”) shall cease accruing benefits under such plan and
shall be fully vested in his or her accrued benefit under the Seller Retirement
Plan. Sellers shall take all necessary and appropriate action, prior to the
Closing Date, to (i) transfer the sole sponsorship of the Seller Retirement Plan
to a Seller or an Affiliate of Sellers other than a Subsidiary, in accordance
with applicable Laws and (ii) have such entity assume or retain all liabilities
under or related to the Seller Retirement Plan, and hold Buyer and the
Subsidiaries harmless with respect to liabilities under or related to the Seller
Retirement Plan.
          (d) Seller Retiree Medical. Without limiting the generality of
Section 5.3(a), Sellers shall take all necessary and appropriate action, prior
to the Closing Date, to (i) transfer the sole sponsorship of any Employee Plan
providing post-termination welfare benefits to a Seller or an Affiliate of
Sellers other than a Subsidiary and (ii) assume or retain all liabilities under
or related to any such plan and hold Buyer and the Subsidiaries harmless with
respect to liabilities under or related to any such plan. Sellers shall cause
any such Employee Plan to provide that any eligible Affected Employees who, as
of the Closing Date, satisfied the eligibility requirements for such
post-termination welfare benefits will retain the right to elect to receive such
retiree medical benefits under the applicable Employee Plan following
termination of their employment with Buyer, the Subsidiaries and their
Affiliates, in accordance with the applicable Employee Plan, as it may be
amended by Sellers from time to time (provided that such amendments shall not
treat Affected Employees less favorably than other employees of Sellers).
          (e) Trust to Trust Transfer of 401(k) Accounts. Each Affected Employee
who has an account balance under an Employee Plan which is a tax-qualified
defined contribution plan (the “401(k) Plan”) shall be 100% vested in such
account effective as of the Closing Date. Within 90 days following the Closing
Date, Buyer shall establish or designate a defined contribution plan and trust
intended to qualify under Section 401(a) and Section 501(a) of the Code (the
“Buyer 401(k) Plan”). Promptly following the establishment of the Buyer 401(k)
Plan, Sellers shall direct the trustee of the 401(k) Plan to transfer directly
from the trust established under the 401(k) Plan to the trust established under
the Buyer 401(k) Plan an amount of assets equal to the aggregate account
balances under the 401(k) Plan of all Affected Employees, valued as of the day
immediately preceding the date of transfer. Upon such transfer, the Buyer 401(k)
Plan shall assume all liabilities for accrued benefits under the 401(k) Plan in
respect of Affected Employees and the 401(k) Plan shall be relieved of all such
liabilities and Buyer and Buyer’s 401(k) Plan shall indemnify and hold Sellers
and their Affiliates (other than the Subsidiaries) harmless with respect to
liabilities for accrued benefits under the 401(k) Plan. Assets shall be
transferred in cash or in kind, as applicable, other than stock of Federal
Signal, with the exception that outstanding loans of Affected Employees from the
401(k) Plan which shall be transferred in-kind. The Parties shall cooperate in
the filing of the documents required by the transfer of assets and liabilities
described herein.
     5.4 Severance. Sellers shall retain and be solely responsible for any
bonus, severance, change in control, redundancy or similar termination payments
or benefits that may become payable to any Participant as a result of or in
connection with the transactions contemplated under this Agreement. Prior to the
Closing, Sellers shall use their best efforts to cause the Affected Employees
who are participants in such plan to waive any rights they may have with respect
to such plan. If Buyer or a Subsidiary is required to provide severance payments
and benefits in excess of the severance payments and benefits described in
Schedule 5.4, Sellers shall reimburse Buyer or such Subsidiary for the cost of
any such excess. Except as set forth in the preceding sentence, Buyer or a
Subsidiary shall be solely responsible for any severance, change in control,
redundancy or similar termination payments or benefits that may become payable
to any Affected Employee due to an event occurring after the Closing (other than
pursuant to an Employee Plan).

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     5.5 Buyer Plans. Nothing in this Agreement shall require Buyer to, or
require Buyer to cause the Subsidiaries to, establish, maintain, operate or
administer any employee benefit plan or program. Affected Employees shall be
eligible to participate in the employee benefit plans and programs of Buyer in
accordance with, and subject to, the terms of each such employee benefit plan or
program (collectively, the “Buyer Plans”). Each Affected Employee shall be given
service credit for eligibility to participate and eligibility for vesting, but
not for benefit accrual purposes under Buyer Plans in which he or she is
eligible to participate following the Closing with respect to his or her length
of service with any Seller or Subsidiary (and their respective predecessors)
prior to the Closing Date to the extent that such crediting of service does not
result in the duplication of benefits. Buyer shall (a) waive all limitations as
to pre-existing conditions, exclusions and waiting period with respect to
participation and coverage requirements applicable to the Affected Employees
under any Buyer Plan that is a welfare benefit plan, other than limitations or
waiting period that are already in effect with respect to such Affected
Employees and that have not been satisfied as of the Closing Date under the
applicable Employee Plan and (b) provide each Affected Employee with credit for
any co-payments and deductibles paid prior to the Closing Date for any on-going
plan year in which transition to a Buyer Plan occurs in satisfying any
applicable deductible or out-of-pocket requirements under any Buyer Plan that is
a welfare benefit plan. Nothing in this Agreement, whether express or implied,
shall limit the right of Buyer or any of its Affiliates to amend, terminate or
otherwise modify any Buyer Plan following the Closing Date nor shall any
provision of this Agreement be construed as amending any Buyer Plan. Effective
as of the Closing Date, Buyer shall assume and discharge all obligations,
liabilities and costs under COBRA with respect to all Affected Employees and
their dependents with respect to COBRA “qualifying events,” as defined in Code
Section 4980B(f)(3), that occur on or following the Closing Date or as a result
of the consummation of the transactions contemplated by this Agreement.
     5.6 Vacation Benefits Accrued Through Closing Date. Buyer shall assume and
pay or otherwise discharge (or cause the Subsidiaries to pay or otherwise
discharge), in accordance with applicable Laws and each Subsidiary’s current
policies and practices all vacation pay, personal days, sick leave accrued at
Closing by the Affected Employees to the extent such pay has been accrued for on
the books and records of the Subsidiaries. Except as described in Schedule 5.6,
the employee manuals of the Subsidiaries previously provided by Sellers to Buyer
contain accurate descriptions of each Subsidiary’s current policies and
practices regarding vacation pay, personal days and sick leave.
     5.7 Public Disclosure. Buyer agrees that it will not, without the prior
approval of Sellers, issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except for any
release or statement that is required by Laws (including the rules of any
self-regulatory organization) and as to which Buyer has used commercially
reasonable efforts to discuss with Sellers in advance, provided, that such
release or statement has not been caused by, or is not the result of, a previous
disclosure by or at the direction of Buyer or any of its representatives that
was not permitted by this Agreement. Notwithstanding the foregoing, Buyer may
make internal statements and announcements to its employees that are consistent
with prior public disclosures made by the Parties with respect to the
transactions contemplated hereunder.
     5.8 Cooperation.
          (a) Buyer shall provide Sellers with all information or assistance
reasonably requested by Sellers to bring about the consummation of the
transactions contemplated by this Agreement. Buyer shall cooperate with Sellers
and shall use commercially reasonable efforts to assist Sellers in obtaining all
consents or approvals required for consummation of the transactions contemplated
by this Agreement. Nothing in this Section 5.8(a) shall require Buyer to pay any
consideration to any other Person in order to obtain any consents or approvals
required to be obtained by Sellers with respect to the consummation of the
transactions contemplated by this Agreement.

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          (b) If, in order to properly prepare its financial statements or
documents required to be filed with any Governmental Body or required under any
applicable Laws, it is necessary that Sellers (or any of their respective
Affiliates) or any successors be furnished with additional information relating
to the Subsidiaries and such information is in the possession of Buyer or any of
its Affiliates (including the Subsidiaries following the Closing), Buyer agrees
to use its commercially reasonable efforts to furnish such information to
Sellers as soon as reasonably practicable, at the cost and expense of Sellers.
     5.9 Books and Records. Buyer agrees that it shall preserve and keep all
books and records in respect of the Business prior to the Closing Date in
Buyer’s possession for a period of at least six years from the Closing Date. 
During such six-year period, duly authorized representatives of Sellers shall,
upon reasonable notice, have access thereto during normal business hours to
examine, inspect and copy such books and records; provided, however, that such
access shall not unreasonably disrupt the operations of the Subsidiaries or
Buyer or any successors thereto.
ARTICLE 6
TAX MATTERS
     6.1 Payment of Taxes; Preparation of Returns
          (a) Sellers shall prepare, or cause to be prepared, and file, or cause
to be filed, all Returns of, or which include, the Subsidiaries for all tax
periods ending on or prior to the Closing Date (a “Pre-Closing Period”);
provided, that except as required by Law, such Returns shall be prepared
consistent with past practice, and, with respect to such Returns, Sellers shall
be liable for and pay when due all Taxes due with respect to the Subsidiaries,
or as to which the Subsidiaries are otherwise liable, for the Pre-Closing
Period. Sellers shall furnish Buyer with a completed copy of any Returns
prepared pursuant to this Section 6.1(a) (and any work papers related thereto)
for Buyer’s review and approval (which shall not be unreasonably withheld,
conditioned, or delayed) not later than 20 days before the due date of such
Return (including extensions). Subject to the previous sentence, if any Returns
required to be filed by Sellers under this Section 6.1(a) are due after the
Closing Date, and Sellers are not authorized by Laws to file such Returns,
Sellers shall submit such Returns in final form to Buyer at least three days
prior to the due date for such Return with the amount of Taxes shown thereon to
be due and payable, and Buyer shall file such Returns with, and pay such Taxes
to, the appropriate Governmental Body.
          (b) Buyer shall prepare, or cause to be prepared, and file, or cause
to be filed, all Returns of, or which include, the Subsidiaries, for all taxable
periods ending after the Closing Date, and shall pay all Taxes with respect
thereto for all taxable periods ending after the Closing Date. Notwithstanding
the above, Sellers shall pay to Buyer, promptly upon request, such amounts as
shown as due and payable with respect to a Return filed by Buyer pursuant to
this Section 6.1(b) as Taxes attributable to a Pre-Closing Period pursuant to
Section 6.1(c).
          (c) For purposes of this Agreement, if, for any federal, state, local
or foreign Tax purpose, a taxable period of any of the Subsidiaries does not
terminate on the Closing Date, the Parties shall, to the extent permitted by
applicable Laws, elect with the relevant Governmental Body to treat such taxable
period for all purposes as a short taxable period ending as of the close of
business on the Closing Date and such short taxable period shall be treated as a
Pre-Closing Period for purposes of this Agreement. In any case where applicable
Laws do not permit such an election to be made, then, for purposes of this
Agreement, the taxable income of the Subsidiaries for the entire taxable period
shall be allocated between the period prior to the Closing and the remainder of
the taxable period using an interim-closing-of-the-books method, assuming that
such pre-closing taxable period ended at the close of business on the Closing
Date and treating such pre-closing taxable period as a Pre-Closing Period for

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purposes of this Agreement, except that exemptions, allowances and deductions
calculated on an annual basis shall be apportioned on a per diem basis.
          (d) From and after the Closing Date, each of Buyer and Sellers shall
cooperate fully with each other in connection with the preparation of any
Return, any Tax Audit relating to any Tax regarding the Subsidiaries, and each
will retain and provide the other with any records or information that may be
reasonably relevant to such Return, Tax audit, proceeding or determination. The
Party requesting assistance hereunder shall reimburse the other for reasonable
direct expenses incurred in providing such assistance. No Party shall settle a
Tax audit assessment or determination related to a period ending on or before
the Closing Date without the prior written consent of the other Party which
shall not be unreasonably withheld or delayed.
     6.2 Tax Contest Provisions.
          (a) If any Governmental Body shall notify any Seller or Buyer
Indemnitee of any proposed or actual Tax Audit with respect to any Pre-Closing
Period, the Person so informed shall promptly (and in any event within 10
Business Days after receiving notice thereof) notify Federal Signal and Buyer
thereof in writing; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually and materially prejudiced as a
result of such failure.
          (b) Buyer shall initially be responsible for providing documents
requested by a Governmental Body in any Tax Audit regarding any Taxes or Return
of any Subsidiary for any Pre-Closing Period (determined without regard to in
the second sentence of Section 6.1(c) above) and, after giving notice of such
request for documents to Sellers, shall, if consented to by Sellers in writing,
handle any such Tax Audit until there is reason to believe that an adjustment
may be proposed. If Sellers do not provide such consent or once there is reason
to believe that an adjustment may be proposed, Sellers, at their own expense,
shall have the right, at their election, to control the conduct of any Tax Audit
described in this Section 6.2(b) to the extent it involves any indemnification
obligations of the Sellers under Section 11.2, but only if Sellers (i) agree in
writing to pay all Buyers’ Losses resulting from such Tax Audit; (ii) conduct
the Tax Audit diligently and in good faith; and (iii) consult in good faith with
Buyer and offer Buyer an opportunity to participate in such Tax Audit and the
opportunity to comment in advance of submission on any written materials
prepared or furnished in connection with such Tax Audit, which comments may be
accepted in sole discretion of Sellers acting in good faith. Sellers shall pay
to Buyer the amount of Taxes or other payments due in connection with the
contest or the settlement or other disposition of any Tax Audit described in
this Section 6.2(b) no later than one Business Day before the due date of the
payment of such amount. Notwithstanding the foregoing, if at any time Buyer
shall waive its right to indemnification with respect to a Tax Audit, Buyer, at
its sole expense, shall thereafter be entitled to control the resolution of such
Tax Audit, provided, however, that Buyer shall remain entitled to
indemnification under Section 11.2 to the extent Buyer or any Subsidiary is
materially prejudiced in conducting such Tax Audit by Sellers’ breach of this
Section 6.2(b).
          (c) Buyer shall initially be responsible for providing documents
requested by a Governmental Body in any Tax Audit of any Tax or Return of any
Subsidiary for any period ending after the Closing Date, and, after giving
notice of such request for documents to Sellers, shall handle any such Tax Audit
until there is reason to believe that an adjustment may be proposed. Thereafter,
Buyer shall have the right, at its election, to control the conduct of any Tax
Audit described in this Section 6.2(c), but only if Buyer (i) conducts the Tax
Audit diligently and in good faith and (ii) consults in good faith with Sellers
and offers Sellers an opportunity to participate in any such Tax Audit and the
opportunity to comment in advance of submission on any written materials
prepared or furnished in connection with such Tax Audit, which comments may be
accepted in sole discretion of Buyer acting in good faith.

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Sellers shall pay to Buyer their allocable share of the amount of Taxes or other
payments due pursuant to such disposition, and will reimburse Buyer for its
allocable share of the expenses associated with the conduct of such any Tax
Audit described in this Section 6.2(c), which allocable share shall be
determined based upon the origin of the relevant claim, within five Business
Days of receiving a statement evidencing Buyers’ payment of such amount.
Tax Sharing Agreements. Sellers shall cause any and all tax indemnity, tax
sharing or tax allocation agreements or arrangements between any of the
Subsidiaries on the one hand, and the Sellers or any Affiliate of the Sellers
(other than the Subsidiaries) on the other hand, to be terminated on or prior to
the Closing Date, and shall ensure that no Subsidiary shall any continuing
obligations thereunder.
Cooperation and Records Retention with Respect to Tax Matters. From time to
time, Sellers and Buyer shall provide, and shall cause their respective
accountants and other representatives to provide, to each other on a timely
basis, the information that they or their accountants or other representatives
have within their control and that may be reasonably necessary in connection
with the preparation of any Return or the conduct of any Tax Audit. Sellers and
Buyer shall (a) retain or cause to be retained, until the applicable statutes of
limitations (including any extensions and carryovers) have expired, copies of
all Returns relating to the Subsidiaries for all Tax periods beginning before
the Closing Date, together with supporting work schedules and other records or
information that may be relevant to such Taxes or Returns (“Tax Records”),
(b) give reasonable written notice to the other Parties prior to transferring,
destroying or discarding any such Tax Records and (c) if the another Party so
requests, allow such other Party to take possession of such Tax Records.
Tax Clearance under Section 116 of the ITA. Prior to the Closing, Sellers shall
apply for a clearance certificate under Section 116 of the Income Tax Act
(Canada), as amended (the “ITA”) in respect of the indirect sale of the stock of
DP-Canada and shall use reasonable efforts to obtain such certificate. If
Sellers fail to deliver to Buyer such certificate at or before (a) the Closing
Date, Buyer may withhold from the Interim Purchase Price an amount equal to
$12,500 and (b) the date on which the Purchase Price Adjustment, if any, is to
be paid to Sellers pursuant to Section 1.4(c)(i), Buyer may withhold from the
Purchase Price Adjustment an amount equal to 25% of the portion of the Purchase
Price Adjustment attributable (pursuant to Section 6.3(b)) to the Shares of
DP-Canada. Any amount withheld pursuant to this Section 0 shall be deposited
into an interest bearing trust account. Such amount shall be paid over to
Sellers upon their delivering such certificate (not to exceed 25% of any limit
specified thereon) to Buyer, except that Buyer may instead pay such amount to
the Receiver General of Canada if said certificate has not been delivered to
Buyer prior to the third day before payment is due to the Receiver General of
Canada. When said amount is paid, whether to Sellers or to the Receiver General,
the interest earned by the trust account will be paid over to Sellers.
     6.3 Purchase Price Allocation. To the extent permitted by Law, Buyer and
Sellers agree that (a) the Initial Purchase Price shall be allocated for all Tax
purposes as follows: (i) $3,000,000 to the shares of DP-Portugal directly owned
by FSBV, (ii) $50,000 to the shares of DP-Canada directly owned by Federal
Signal, (iii) $610,000 to the Non-Competition/Non-Solicitation Agreement and
(iv) the remainder to the shares of DP-US and (b) the Purchase Price Adjustment
shall be allocated for all Tax purposes among the Shares in accordance with the
Final Closing Statement or as Buyer and Sellers otherwise reasonably determine.
Buyer and Sellers shall report the purchase of the Shares and the execution of
the Non-Competition/Non-Solicitation Agreement consistent with the allocation
described above, and shall take no position to the contrary thereto in any
Return, in any Tax Audit or otherwise except to the extent required by Law.

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ARTICLE 7
BUYER’S CONDITIONS TO CLOSING
     The obligations of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment to Buyer’s reasonable
satisfaction of each of the following conditions:
     7.1 Continued Truth of Warranties. The representations and warranties of
Sellers herein contained shall be true and correct (without giving effect to any
qualification as to materiality or Material Adverse Effect contained in any
specific representation or warranty) as of the date hereof and as of the Closing
Date as if made on the Closing Date, except to the extent that the failure of
such representations and warranties of Sellers to be true and correct has not
had and could not reasonably be expected to have a Material Adverse Effect.
     7.2 Performance of Covenants. Sellers shall have performed or complied with
in all material respects all covenants and obligations required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
     7.3 No Litigation or Order. There shall not be (a) any suit, action or
proceeding pending or threatened (including, without limitation, any suit,
action or proceeding arising under the antitrust, competition, trade or
securities Laws) by any Governmental Body to restrain or invalidate the
transactions contemplated by this Agreement or (b) enacted, issued, promulgated,
enforced or entered any Laws or order (whether temporary, preliminary or
permanent) by any Governmental Body which is in effect and restrains or
invalidates the transactions contemplated by this Agreement.
     7.4 No Material Adverse Effect. There shall have been no event, occurrence
or circumstance from the date of this Agreement through the Closing Date that
has had or could reasonably be expected to have a Material Adverse Effect.
     7.5 Permits and Consents. Sellers shall have secured the orders, consents,
approvals and clearances set forth in Schedule 7.5.
     7.6 Authorization. All corporate action necessary to authorize the
execution, delivery and performance by Sellers of this Agreement, and the
consummation of the transactions contemplated hereby, shall have been duly and
validly taken by Sellers.
     7.7 Release of Encumbrances; Debt. All mortgages, pledges, liens,
encumbrances, claims, charges, security interests or other restrictions securing
the repayment of any Debt shall have been released in form and substance
reasonably satisfactory to Buyer and none of the Subsidiaries shall have
outstanding, or be liable in respect of, any Debt.
     7.8 Closing Documents. Sellers shall have delivered all documents required
to be delivered by them at Closing, as more specifically set forth in this
Agreement, in each case in form and substance reasonably satisfactory to Buyer.
     7.9 Key Employee Agreements. The key employee letters with each of the
individuals listed in Schedule 7.9 shall have been executed by each such
individual and shall continue to be in full force.

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ARTICLE 8
SELLERS’ CONDITIONS TO CLOSING
     The obligation of Sellers to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment to their reasonable
satisfaction of the following conditions:
     8.1 Continued Truth of Warranties. The representations and warranties of
Buyer herein contained shall be true and correct (without giving effect to any
qualification as to materiality contained in any specific representation or
warranty) as of the date hereof and as of the Closing Date as if made on the
Closing Date, except to the extent that the failure of such representations and
warranties of Buyer to be true and correct, individually or in the aggregate,
has not and could not reasonably be expected to prevent or materially impede the
ability of Buyer to consummate the transactions contemplated by this Agreement
in accordance with the terms hereof and applicable Laws.
     8.2 Performance of Covenants. Buyer shall have performed or complied with
in all material respects all covenants and obligations required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
     8.3 No Litigation or Order. There shall not be (a) any suit, action or
proceeding pending or threatened (including, without limitation, any suit,
action or proceeding arising under the antitrust, competition, trade or
securities Laws) by any Governmental Body to restrain or invalidate the
transactions contemplated by this Agreement or (b) enacted, issued, promulgated,
enforced or entered any Laws or order (whether temporary, preliminary or
permanent) by any Governmental Body which is in effect and restrains or
invalidates the transactions contemplated by this Agreement.
     8.4 Closing Documents. Buyer shall have delivered all documents required to
be delivered by it at Closing, as more specifically set forth in this Agreement,
in each case in form and substance reasonably satisfactory to Sellers.
ARTICLE 9
DOCUMENTS TO BE DELIVERED AT CLOSING
     9.1 Deliveries of Sellers. At the Closing, Sellers shall:
          (a) Deliver to Buyer a certificate of incumbency and copies of the
resolutions adopted by the Board of Directors of each Seller, authorizing the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, duly certified as of the Closing Date by the
Secretary or an Assistant Secretary of each such Seller;
          (b) Deliver to Buyer a certificate of an officer of each Seller, dated
as of the Closing Date, to the effect that the representations and warranties of
such Seller as contained in ARTICLE 2 of this Agreement are true and correct as
of the Closing Date as if made on the Closing Date, and that the covenants of
such Seller as contained in ARTICLE 4 and ARTICLE 6 of this Agreement required
to be performed or complied with on or prior to the Closing Date have been so
performed or complied with;
          (c) Deliver to Buyer certificates of good standing or their
equivalent, dated not more than (i) ten days prior to the Closing Date with
respect to Federal Signal and Subsidiaries incorporated or organized in the
United States or a state thereof and (ii) 30 days prior to the Closing Date with
respect to FSBV and Subsidiaries incorporated or organized outside of the United
States, attesting to the good

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standing of such Seller and each Subsidiary as a corporation or limited
liability company under the Laws of the state of its incorporation or
organization and each other jurisdiction listed in Schedule 2.1(b);
          (d) Deliver to Buyer the resignations designated by Buyer pursuant to
Section 4.8;
          (e) Deliver to Buyer copies of all written orders, consents, waivers,
approvals and clearances set forth in Schedule 7.5;
          (f) Deliver to Buyer (i) the current articles of incorporation of each
US-based Subsidiary, certified by the Secretary of State of the Subsidiary’s
state of incorporation, (ii) the current by-laws of each US-based Subsidiary,
certified as of the Closing Date by the Secretary or an Assistant Secretary of
the Subsidiary and (iii) for each non-US subsidiary, copies of the relevant
governing documents certified as of the Closing Date by the Secretary or an
Assistant Secretary (or similar officer) of the relevant Subsidiary;
          (g) Deliver to Buyer the original corporate minute books, stock
transfer books and corporate seal (if applicable) of each Subsidiary for which
such books or seals are not then held in an office or facility of a Subsidiary;
          (h) Deliver to Buyer certificate(s) representing the Shares duly
executed and valid stock powers (or similar instruments) attached in form for
transfer to Buyer and otherwise acceptable in form and substance to Buyer;
          (i) Deliver to Buyer a Transition Services Agreement (the “Transition
Services Agreement”) in the form set forth in Exhibit B attached hereto, duly
executed by Federal Signal and DP-US;
          (j) Execute and deliver to Buyer any and all instruments of sale,
assignment and transfer and other documents reasonably requested by Buyer in
order to facilitate the transactions contemplated hereby;
          (k) Deliver to Buyer an affidavit, signed under penalties of perjury,
in form and substance as required under Treasury Regulations Section 1.897-2(h),
that the Shares of DP-Portugal are not and have not been a “United States real
property interest;”
          (l) Deliver to Buyer an affidavit, signed under penalties of perjury,
in form and substance as required under Treasury Regulations
Section 1.1445-2(b), that Federal Signal is not a foreign Person;
          (m) Deliver to Buyer copies of the releases from all Debt Instruments;
          (n) Deliver to Buyer appropriate documentation reflecting the
distribution or transfer out of the Excluded Assets from the Subsidiaries; and
          (o) Deliver to Buyer a Non-Competition/Non-Solicitation Agreement (the
“Non-Competition/Non-Solicitation Agreement”) substantially in the form set
forth in Exhibit C attached hereto, duly executed by Sellers.
     9.2 Deliveries of Buyer. At the Closing, Buyer shall:
          (a) Deliver to Sellers a certificate of incumbency and a copy of the
action by written consent of the sole general partner of Buyer, authorizing the
execution and delivery of this Agreement

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and the consummation of the transactions contemplated hereby, duly certified as
of the Closing Date by the Secretary or an Assistant Secretary of Buyer;
          (b) Deliver to Seller a certificate of Buyer, dated as of the Closing
Date, to the effect that the representations and warranties of Buyer as
contained in ARTICLE 3 of this Agreement are true and correct as of such Closing
Date as if made on the Closing Date, and that the covenants of Buyer as
contained in ARTICLE 5 of this Agreement required to be performed or complied
with on or prior to the Closing Date have been so performed or complied with;
          (c) Deliver to Sellers a certificate of good standing dated not more
than ten days prior to the Closing Date, attesting to the good standing of Buyer
as a limited partnership under the Laws of the State of Delaware;
          (d) Deliver to Sellers the Interim Purchase Price as set forth in
Section 1.3 of this Agreement;
          (e) Deliver to Sellers the Non-Competition/Non-Solicitation Agreement,
duly executed by Buyer; and
          (f) Execute and deliver to Sellers any and all instruments of sale,
assignment and transfer and other documents reasonably requested by either
Seller in order to facilitate the transactions contemplated hereby.
ARTICLE 10
TERMINATION
     10.1 Termination by Mutual Consent. This Agreement may be terminated and
the transactions contemplated herein may be abandoned at any time prior to the
Closing by the mutual consent of Sellers, on the one hand, and Buyer, on the
other.
     10.2 Termination by Either Buyer or Sellers. This Agreement may be
terminated and the transactions contemplated herein may be abandoned at any time
prior to the Closing by Buyer or Sellers if (a) the transactions contemplated in
this Agreement shall not have been consummated by June 2, 2008 or (b) any
Governmental Body having jurisdiction over Sellers, Buyer or the Subsidiaries
has issued an order, decree or ruling or taken any other action permanently
restraining, enjoining, or otherwise prohibiting or materially restricting the
consummation of the transactions contemplated in this Agreement and such order,
decree, ruling or other action shall have become final and nonappealable;
provided, that, in each of the foregoing cases, the right to terminate this
Agreement pursuant to this Section 10.2 shall not be available to any Party that
is responsible for a breach of its obligations under this Agreement in any
manner that shall have proximately contributed to the occurrence of the failure
of a condition to the consummation of the transactions contemplated by this
Agreement on or prior to June 2, 2008.
     10.3 Termination by Buyer. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time prior to the
Closing by action of Buyer, if Sellers shall have breached any of their
representations or warranties (without giving effect to any qualification as to
materiality or Material Adverse Effect contained in any specific representation
or warranty) or failed to perform in any material respect any of their covenants
or agreements contained in this Agreement and such breach or failure (a) could
reasonably be expected to have a Material Adverse Effect and (b) shall not have
been cured within 15 Business Days after the receipt of written notice to
Sellers from Buyer of such breach or failure.

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     10.4 Termination by Sellers. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time prior to the
Closing by action of Sellers, if Buyer shall have breached any of its
representations or warranties (without giving effect to any qualification as to
materiality contained in any specific representation or warranty) or failed to
perform in any material respect any of its covenants or agreements contained in
this Agreement and such breach or failure (a) individually or in the aggregate,
could reasonably be expected to prevent or materially impede the ability of
Buyer to consummate the transactions contemplated by this Agreement in
accordance with the terms hereof and applicable Laws and (b) shall not have been
cured within 15 Business Days after the receipt of written notice by Sellers to
Buyer of such breach or failure.
     10.5 Effect of Termination and Abandonment. In the event of the termination
of this Agreement pursuant to any of the provisions of this ARTICLE 10, neither
of the Sellers nor Buyer (nor any of their respective directors or officers)
shall have any liability or further obligation to the other Party to this
Agreement, except that nothing herein will relieve any Party from liability for
breach of any representation or warranty or any failure to perform any covenant
and agreement. The terminating Party’s rights to pursue all legal remedies due
to such breach or failure to perform shall survive the termination of this
Agreement unimpaired.
ARTICLE 11
SURVIVAL; INDEMNIFICATION
     11.1 Survival.
          (a) All representations and warranties in this Agreement or in any
certificate delivered pursuant hereto shall survive the Closing Date for a
period of two years thereafter, except that the representations and warranties
set forth in (i) Sections 2.1(a) (corporate existence, status and
capitalization), 2.1(d) (ownership interests), 2.1(e) (authorization), 2.12
(broker fees) and 2.13 (related party transactions) shall indefinitely survive
the Closing Date, (ii) Sections 2.10(c) (environmental) and 2.7 (employee plans)
shall survive the Closing Date for a period of five years thereafter and
(iii) Section 2.3 (taxes) shall survive the Closing Date until 60 days following
the expiration of the applicable statute of limitations. Each of the covenants
and agreements contained herein shall survive the Closing and continue in full
force and effect until performed in accordance with their terms.
          (b) Neither Sellers nor Buyer shall be liable for any Buyer’s Loss or
Sellers’ Loss, respectively, resulting from any inaccuracy in any representation
or warranty of such Party contained in this Agreement or in any certificate
delivered pursuant hereto unless written notice of entitlement to make a claim
(whether or not any monetary losses have actually been suffered) with respect to
such losses is given by Buyer or Sellers, respectively, on or prior to the
expiration of the survival of the particular representation or warranty at
issue, as set forth in Section 11.1(a) above.
     11.2 Indemnification by Sellers.
          (a) Sellers will jointly and severally indemnify, hold harmless,
defend and bear all reasonable costs of defending Buyer and following the
Closing, the Subsidiaries, together with their respective successors and assigns
(the “Buyer Indemnitees”), from, against and with respect to any and all damage,
loss, deficiency, expense (including any reasonable attorney and accountant
fees, legal costs or expenses), action, suit, proceedings, demand, assessment or
judgment to or against Buyer or the Subsidiaries, including any punitive,
exemplary or consequential damages but only to the extent such punitive,
exemplary or consequential damages are contained as part of an award to a third
party (collectively, “Buyer’s Loss”), as a result of, arising out of or in
connection with:

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               (i) any breach or violation by Sellers of any of the
representations or warranties (without giving effect to any qualification as to
materiality or Material Adverse Effect contained in any specific representation
or warranty) contained in this Agreement or in any certificate required to be
furnished pursuant to this Agreement;
               (ii) any breach, violation, or nonperformance by Sellers of any
of its covenants or agreements contained in this Agreement;
               (iii) any Debt incurred prior to the Closing that is outstanding
or for which any of the Subsidiaries is liable after the Closing;
               (iv) fees and expenses of any accountant, agent, attorney,
broker, investment banker or other advisor engaged by Sellers in connection with
the execution of this Agreement or consummation of the transactions contemplated
hereby;
               (v) any liability or obligation of any nature whatsoever arising
from or relating to the environmental matters identified in Schedule 11.2(a)(v)
(notwithstanding any disclosures set forth in Schedules 2.10(c)(i), 2.10(c)(ii),
2.10(c)(iii) or 2.10(c)(v));
               (vi) the Excluded Assets (including the holding and distribution
thereof and Taxes relating thereto);
               (vii) any liability or obligation of any nature whatsoever
arising from or relating to the Executive General Severance Plan;
               (viii) all Taxes imposed on any Subsidiary for all Pre-Closing
Periods (including any portion of a taxable period treated as a Pre-Closing
Period under Section 6.1(c));
               (ix) all Taxes imposed on any Subsidiary under Treasury
Regulations Section 1.1502-6 (or any corresponding state, local or foreign Law)
as a result of being a member of nay consolidated, unitary, combined or similar
group for any Pre-Closing Period; and
               (x) all Taxes attributable to (A) the ownership or operation of
the Excluded Assets and any business related thereto, whether prior or
subsequent to the Closing or (B) the transfer of the Excluded Assets pursuant to
Section 4.15.
          (b) Notwithstanding the above Section 11.2(a), Sellers shall not have
any obligation to indemnify the Buyer Indemnitees with respect to
Section 11.2(a)(i) above: (i) until Buyer Indemnitees have suffered Buyer’s Loss
by reason of all such breaches in excess of $380,000 (“Sellers’ Floor”) (upon
such Buyer’s Loss exceeding the Sellers’ Floor, Sellers shall indemnify the
Buyer Indemnitees to the extent that the aggregate amount of Buyer’s Loss
exceeds the Sellers’ Floor) and (ii) to the extent the Buyer’s Loss by reason of
all such breaches exceeds an amount equal to $9,150,000 (“Sellers’ Cap”) (after
which point the Seller will have no obligation to indemnify Buyer Indemnitees
from and against further Buyer’s Loss). Provided, however, that any claim or
portion thereof by Buyer Indemnitees based upon (i) any representation or
warranty (or portion thereof) relating to Sections 2.3 (taxes) and 2.10(c)
(environmental), (ii) any cases of fraud or deceit committed by Sellers or
(iii) the representations and warranties in Sections 2.1(a), 2.1(d), 2.1(e),
2.7, 2.12 and 2.13, shall not be subject to any of the limitations contained in
the preceding sentence of this Section 11.2(b).

38

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     11.3 Indemnification by Buyer.
          (a) Buyer will indemnify, hold harmless, defend and bear all costs of
defending Sellers, together with their respective successors and assigns, from,
against and with respect to any and all damage or loss, deficiency, expense
(including any reasonable attorney and accountant fees, legal costs or
expenses), action, suit, proceeding, demand, assessment or judgment to or
against Sellers, including any punitive, exemplary or consequential damages but
only to the extent such punitive, exemplary or consequential damages are
contained as part of an award to a third party (collectively, the “Sellers’
Loss”), arising out of or in connection with:
               (i) any liability or obligation of any nature whatsoever (whether
accrued, absolute, contingent, unasserted or otherwise) arising out of or
resulting from the assets, business, activities and operations of the
Subsidiaries after the Closing, except to the extent the Seller is required to
provide indemnification for such liabilities and obligations pursuant to
Section 11.2 or other than those arising out of or in connection with any
breach, violation or nonperformance covered by Section 11.2;
               (ii) any breach or violation by Buyer of any of its
representations or warranties (without giving effect to any qualification as to
materiality contained in any specific representation or warranty) contained in
this Agreement or in any certificate required to be furnished pursuant to this
Agreement; and
               (iii) any nonperformance by Buyer of any of its respective
covenants or agreements contained in this Agreement.
          (b) Notwithstanding the above Section 11.3(a), Buyer shall not have
any obligation to indemnify Sellers with respect to Section 11.3(a)(ii) above:
(i) until Sellers have suffered Sellers’ Loss by reason of all such breaches in
excess of $380,000 (“Buyer’s Floor”) (upon such Sellers’ Loss exceeding the
Buyer’s Floor, Buyer shall indemnify Sellers to the extent that the aggregate
amount of Sellers’ Loss exceeds the Buyer’s Floor) and (ii) to the extent the
Sellers’ Loss by reason of all such breaches exceeds an amount equal to
$9,150,000 (“Buyer’s Cap”) (after which point Buyer will have no obligation to
indemnify Sellers from, against and with respect to further Sellers’ Loss).
Provided, however, that any claim or portion thereof based upon any cases of
fraud or deceit committed by Buyer shall not be subject to any of the
limitations contained in the preceding sentence of this Section 11.3(b).
     11.4 Notice of Claims.
          (a) Third Party Claims.
               (i) If any third party shall notify any Seller or Buyer
Indemnitee (each, an “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) which may give rise to a claim for indemnification against another
Party (the “Indemnifying Party”) under this ARTICLE 11, then the Indemnified
Party shall promptly (and in any event within 10 Business Days after receiving
notice of the Third Party Claim) notify the Indemnifying Party thereof in
writing; provided, however, that failure to give such notification shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually and materially prejudiced as a
result of such failure.
               (ii) The Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with counsel
of its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be withheld
or delayed unreasonably) unless the judgment or proposed settlement releases the
Indemnified Party

39

--------------------------------------------------------------------------------

 

completely in connection with such Third Party Claim and that would not
otherwise adversely affect the Indemnified Party. Notwithstanding the foregoing,
the Indemnifying Party shall not be entitled to assume the defense of any Third
Party Claim (and shall be liable for the reasonable fees and expenses of counsel
incurred by the Indemnified Party in defending such Third Party Claim) if the
Third Party Claim seeks an order, injunction or other equitable relief or relief
for other than money damages against the Indemnified Party that the Indemnified
Party reasonably determines, after conferring with its outside counsel, cannot
be separated from any related claim for money damages. If such equitable relief
or other relief portion of the Third Party Claim can be so separated from that
for money damages, the Indemnifying Party shall be entitled to assume the
defense of the portion relating to money damages.
               (iii) Unless and until the Indemnifying Party assumes the defense
of the Third Party Claim as provided above, however, the Indemnified Party may
defend against the Third Party Claim in any manner it reasonably may deem
appropriate. Notwithstanding the above, the Indemnified Party will not consent
to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party
(not to be withheld or delayed unreasonably).
               (iv) The Party defending a Third Party Claim shall conduct the
defense actively and diligently, and all Parties shall cooperate in the defense
of such claim. Such cooperation shall include the provision and access to the
defending Party of documents, information, books and records reasonably
requested by the defending Party and material to such claim, and making
available employees as may be reasonably requested by the Party defending such
claim and as shall be reasonably required in connection with the defense of such
claim and any litigation resulting therefrom.
          (b) Other Claims. In the event any Indemnified Party should have a
claim against any Indemnifying Party that does not involve a Third Party Claim
being asserted against or sought to be collected from such Indemnified Party,
the Indemnified Party shall deliver notice of such claim with reasonable
promptness and detailing the basis for such claim or claims to the Indemnifying
Party. As long as the notice is provided within the relevant survival period, if
any, set forth in Section 11.1(a) above, the failure by any Indemnified Party so
to notify the Indemnifying Party shall not relieve the Indemnifying Party from
any liability that it may have to such Indemnified Party, except to the extent
that the Indemnifying Party shall have been actually and materially prejudiced
as a result of such failure. The Indemnifying Party shall notify the Indemnified
Party within 10 Business Days following its receipt of such notice if the
Indemnifying Party disputes its liability to the Indemnified Party, provided,
that the failure by any Indemnifying Party so to timely notify the Indemnified
Party shall not affect any defense the Indemnifying Party may have to such
Indemnified Party, except to the extent that the Indemnified Party shall have
been actually and materially prejudiced as a result of such failure. If the
Indemnifying Party and the Indemnified Party fail to resolve any such dispute
within 90 days following the receipt of the notice of claim by the Indemnified
Party, the dispute shall be referred to binding arbitration in such manner as
the parties with reasonable promptness may agree or, if the parties do not so
agree, shall be determined by an Illinois court.
     11.5 Indemnification Payments as Adjustment to Final Purchase Price. Any
payments made by Buyer or the Sellers under this ARTICLE 11 shall be considered
an adjustment to the Final Purchase Price.
     11.6 Exclusive Remedy. Except as set forth in Section 12.15 or in the case
of fraud or deceit, Buyer, Sellers and, following the Closing, the Subsidiaries,
acknowledge and agree that the foregoing indemnification provisions in this
ARTICLE 11 shall be the exclusive remedy of Buyer, Sellers and the Subsidiaries
with respect to the transactions contemplated by this Agreement.

40

--------------------------------------------------------------------------------

 

ARTICLE 12
MISCELLANEOUS
     12.1 Notices. Any notices or other communications required or permitted
hereunder (including, by way of illustration and not limitation, any notice
permitted or required under ARTICLE 11 hereof) to any Party shall be
sufficiently given when delivered in person, or when sent by certified or
registered mail, postage prepaid, or one Business Day after dispatch of such
notice with an overnight delivery service, or when transmitted by facsimile or
other form of electronic communication if a confirmation back is received by the
sender, in each case addressed as follows:
     In the case of Buyer, care of:
Connell Limited Partnership
One International Place
Boston, MA 02110
Attention: John V. Curtin, Esq.
Fax: (617) 737-1617
     With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
Fax: (617) 573-4822
     In the case of any Seller:
Federal Signal Corporation
1415 West 22nd Street
Oak Brook, Illinois 60523
Attention: John Gruber, Vice President — Corporate Development
Facsimile: (630) 954-2138
     With a copy to:
Federal Signal Corporation
1415 West 22nd Street
Oak Brook, Illinois 60523
Attention: Jennifer Sherman, General Counsel
Facsimile: (630) 954-2138
     and

41

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Thompson Coburn LLP
One US Bank Plaza
Suite 3400
St. Louis, Missouri 63101
Attention: Robert M. LaRose
Facsimile: (314) 552-7078
or such substituted address or attention as any Party shall have given notice to
the others in writing in the manner set forth in this Section 12.1.
     12.2 Amendment. This Agreement may be amended or modified in whole or in
part only by an agreement in writing executed by all Parties and making specific
reference to this Agreement.
     12.3 Counterparts. This Agreement may be executed in any number of
counterparts and by facsimile or other electronic transmission, each of which
shall be deemed an original, but all of which shall constitute one instrument,
and shall become effective when such separate counterparts have been exchanged
between the Parties.
     12.4 Binding on Successors and Assigns. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by and against the Parties and
their respective successors and assigns in accordance with the terms hereof. No
Party may assign its interest under this Agreement without the prior written
consent of the other Parties; provided, however, that Buyer may, without the
prior written consent of Sellers (a) assign any or all of its rights hereunder
to one or more of its Affiliates or (b) designate one or more of its Affiliates
to perform its obligations hereunder (in either of the cases described in
subclauses (a), or (b), Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
     12.5 Severability. In the event that any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application thereof shall
not in any way be affected or impaired thereby; provided, however, that to the
extent permitted by applicable Laws, any invalid, illegal, or unenforceable
provision may be considered for the purpose of determining the intent of the
Parties in connection with the other provisions of this Agreement.
     12.6 Waivers. The Party to whose benefit any of the representations,
warranties, covenants, conditions or obligations contained in this Agreement run
may (a) extend the time for the performance of any of the obligations or other
acts of the Parties, (b) waive any inaccuracies in the representations contained
in this Agreement or in any document delivered pursuant to this Agreement,
(c) waive compliance with, or modify, any of the covenants or conditions
contained in this Agreement and (d) waive or modify performance of any of the
obligations of any of the Parties; provided, that no such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall operate as a waiver of, or an estoppel with respect to, any
subsequent insistence upon such strict compliance other than with respect to the
matter so waived or modified.
     12.7 Headings. The headings in the sections and subsections of this
Agreement and in the Schedules are inserted for convenience only and in no way
alter, amend, modify, limit or restrict the contractual obligations of the
Parties.
     12.8 List of Schedules and Exhibits. As mentioned in this Agreement, there
are attached hereto or delivered herewith, the following Schedules and Exhibits:

42

--------------------------------------------------------------------------------

 

SCHEDULES

      Schedule No.   Schedule Caption
1.2
  Non-GAAP Items / Exceptions to MAE
2.1(a)(ii)
  Capital Stock/Outstanding Shares
2.1(b)
  Foreign Qualifications
2.1(d)
  Ownership Interests and Loans
2.1(f)
  Sellers’ Conflicts
2.1(g)
  Required Governmental Consents
2.2(a)
  Financial Statement Matters
2.2(b)
  Interim Events Affecting Financial Statements
2.2(c)
  Undisclosed Liabilities
2.3(b)
  Tax Matters
2.4(a)
  Owned Property
2.4(b)
  Leases
2.4(c)
  Condition of Assets
2.4(d)
  Sufficiency of Assets
2.5
  Intellectual Property
2.6(a)
  Debt Instruments
2.6(b)
  Other Contracts
2.6(c)
  Insurance
2.7(a)
  Employee Plans
2.7(e)
  Domestic Employee Plan Compliance
2.7(f)
  Foreign Benefit Plan Compliance
2.7(g)
  Accelerations or Other Material Changes to Plans
2.7(h)
  409A Plan Compliance
2.8
  Labor Relations
2.9
  Litigation and Other Proceedings
2.10(a)
  Compliance with Laws (Non-Environmental)
2.10(b)
  Permits (Non-Environmental)
2.10(c)(i)
  Environmental Claims
2.10(c)(ii)
  Environmental Law Compliance
2.10(c)(iii)
  Environmental Permits
2.10(c)(v)
  Underground Tanks and Other Conditions
2.11
  Bank Accounts
2.13(a)
  Related Party Arrangements — Property, Ownership Interests and Contracts
2.13(b)
  Related Party Transactions — Debts and Other Loans
2.16
  Inventory Policies and Procedures
2.17(a)
  Material Customers
2.17(b)
  Material Suppliers
4.1
  Conduct of Business Prior to Closing
4.6
  Continuing Related Party Arrangements
4.13
  Other Assets
4.15
  Excluded Assets
5.2
  Affected Employees
5.3(a)
  Employee Plans to be Retained by the Subsidiaries at Closing
5.4
  Severance Arrangements
5.6
  Accrued Vacation Benefits
7.5
  Closing Consents Required by Buyer
7.9
  Key Employee Agreements
11.2(a)(v)
  Other Matters

43

--------------------------------------------------------------------------------

 

EXHIBITS

     
Exhibit A
  Target Net Assets
Exhibit B
  Form of Transition Services Agreement
Exhibit C
  Form of Non-Competition/Non-Solicitation Agreement

Each of the foregoing Schedules and Exhibits is incorporated herein by this
reference and expressly made a part hereof.
     12.9 Entire Agreement; Law Governing; Waiver of Jury Trial. This Agreement,
the Transition Services Agreement, the Non-Solicitation/Non-Competition
Agreement and the Other Agreements constitute the entire agreement among the
Parties and supersede any prior negotiations and agreements between the Parties
(except with respect to the Confidentiality Agreement described in Section 12.16
of this Agreement), and there are no representations, warranties, understandings
or agreements other than those expressly set forth herein or in an Exhibit or
Schedule delivered pursuant hereto, except as modified in writing concurrently
herewith or subsequent hereto. This Agreement shall be governed by and construed
and interpreted according to the internal Laws of the State of Illinois,
determined without reference to conflicts of law principles. Each Party agrees
to personal jurisdiction in any action brought in any court, Federal or State,
within the State of Illinois having subject matter jurisdiction over the matters
arising under to this Agreement. Any suit, action or proceeding arising out of
or relating to this Agreement shall only be instituted in the State of Illinois.
Each Party waives any objection which it may have now or hereafter to the laying
of the venue of such action or proceeding and irrevocably submits to the
jurisdiction of any such court in any such suit, action or proceeding. Each
Party waives any right to a trial by jury, to the extent lawful, and agrees that
any of them may file a copy of this paragraph with any court as written evidence
of the knowing, voluntary and bargained-for agreement among the Parties
irrevocably to waive its right to trial by jury in any claim, suit, action or
proceeding whatsoever between them relating to this Agreement or the
transactions contemplated hereby.
     12.10 No Third-Party Rights. Except as expressly provided in ARTICLE 11,
this Agreement is not intended and shall not be construed to create any rights
in any Persons other than Buyer and Sellers, and no Person shall assert any
rights as third-party beneficiary hereunder.
     12.11 Sales and Transfer Taxes. All applicable sales, transfer,
documentary, use, filing and other taxes and fees that may become due or payable
as a result of the sale, conveyance, assignment, transfer or delivery of the
Shares or the Business shall be borne equally by Buyer, on the one hand, and
Sellers, on the other hand.
     12.12 Expenses. Except as expressly provided otherwise herein, Sellers, on
the one hand, and Buyer, on the other, shall pay all costs and expenses incurred
by it or on its behalf in connection with this Agreement and the transactions
contemplated hereby, including, without limiting the generality of the
foregoing, fees and expenses of its own financial consultants, accountants and
counsel.
     12.13 No Presumption Against Drafting Party. Each Party acknowledges that
each Party has been represented by counsel in connection with this Agreement and
the transactions contemplated herein. Accordingly, any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this
Agreement against the drafting party has no application and is expressly waived.
     12.14 Computation of Time. Whenever the last day for the exercise of any
privilege or the discharge of any duty hereunder shall fall upon a day that is
not a Business Day, the Party having such

44

--------------------------------------------------------------------------------

 

privilege or duty may exercise such privilege or discharge such duty on the next
succeeding day which is a Business Day.
     12.15 Specific Performance. The Parties stipulate and agree that the rights
under this Agreement of Buyer, on the one hand, and Sellers, on the other hand,
are of a specialized and unique character and that immediate and irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that in addition to any other remedies and
damages available, Buyer, on the one hand, and Sellers, on the other hand, shall
be entitled to seek an injunction in a court of competent jurisdiction to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement. In the event Buyer or Sellers, as the case may be,
obtain(s) any such injunction, order, decree or other relief, in law or in
equity, the Party or Parties not obtaining such relief shall be responsible for
all costs associated with obtaining the relief, including reasonable attorney’s
fees and expenses and costs of suit.
     12.16 Confidentiality. The terms of the Confidentiality Agreement, dated
November 9, 2007, between Federal Signal and Buyer are hereby incorporated
herein by reference and shall continue in full force and effect until the
Closing, at which time such Confidentiality Agreement and the obligations of the
Parties under this Section 12.16 shall terminate. If this Agreement is, for any
reason, terminated prior to the Closing, the Confidentiality Agreement shall
continue in full force and effect.
     12.17 Survivability of Provisions After Termination. If this Agreement is
terminated pursuant to ARTICLE 10 hereof, it shall become null and void and have
no further force and effect, except as provided in Sections 10.5, 12.1, 12.9,
12.12, 12.13 and this 12.17 which shall survive termination and except that
nothing herein shall relieve any Party for a breach by such Party of the terms
of this Agreement. Upon any termination of this Agreement, each Party will
return all documents work papers and all other material of the other Party
relating to the transactions contemplated hereby and all covers at such
materials, where so obtained before or after the execution hereof, to the Party
furnishing the same.
[the remainder of the page is intentionally left blank]

45

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the day and year first
above written.

          BUYER:    
 
        CONNELL LIMITED PARTNERSHIP    
 
        By: Connell Industries, Inc., its General Partner    
 
       
By:
       
 
 
 
    Name: John V. Curtin     Title: Vice President    
 
        SELLERS:    
 
        FEDERAL SIGNAL CORPORATION    
 
       
By:
       
 
        Name: John Gruber     Title: Vice President, Corporate Development    
 
        FEDERAL SIGNAL OF EUROPE B.V.    
 
       
By:
       
 
        Name: Karel Goedkoop     Title: Managing Director    

[signature page to Stock Purchase Agreement]

 

--------------------------------------------------------------------------------

 

EXHIBIT A
TARGET NET ASSETS (1)

                      March 2, 2008         BALANCE All numbers in USD   SHEET
102100
  Notes Receivable-Trade   $ 2,025,005  
103200
  Accounts Receivable-Trade     16,863,182  
103210
  A/R Trade — VAT/GST Valuation     720,201  
103290
  A/R Sold     (43,843 )
103810
  A/R-Other     13,200  
103830
  A/R-Employee     32,819  
104100
  Allowance For Doubtful Account     (291,586 )
105100
  Finished & Semi-Finished Inv     10,610,536  
105120
  Finished Goods — Burden     609,537  
105150
  Finished Goods — Consigned   —  
105200
  Physical Inventory From DPI     340,349  
105205
  LKM Intransit     82,869  
105250
  Inventory — Transit Domestic     31,080  
105300
  Transient Inventory From DPI     98,583  
105500
  Physical Inventory From Other     1,008,031  
105560
  Transient Inventory From Other     3,311  
105590
  Profit in Inventory     (168,828 )
105700
  Work In Process     1,514,012  
105800
  Raw Material     1,104,492  
106100
  Allowance For Obsolesce     (839,778 )
106200
  Allowance For Shrink Reserve     (16,966 )
106300
  Allowance For LIFO Reserve     (3,385,000 )
106400
  Allowance For Inventory Reval     (2,555 )
107100
  Perishable Tools     441,200  
107120
  Special Tools     101,766  
107150
  Prepaid Insurance     9,740  
107300
  Catalogs     575,488  
107400
  Goods And Service Tax     7,912  
107500
  Prepaid Rates And Water Rates     1,374  
107900
  Other     778,429  
112100
  Land     876,317  
112150
  Land Improvements     604,835  
112200
  Building     5,327,446  
112250
  Building Equipment     2,541,886  
112280
  Leasehold Improvements     1,803,629  
112300
  Shop Machinery     41,957,853  
112400
  Shop Equipment     4,624,078  
112450
  Necessity Certificate Equip     4,943  
112500
  Shop Tooling     1,615,971  
112600
  Autos And Truck     96,215  
112700
  Office Equipment     4,167,830  
112710
  Computer Equipment     10,078,208  
112900
  Capital Projects In Process     944,107  
113150
  Amort-Land Improvements     (484,396 )
113200
  Depre-Buildings     (2,667,351 )
113250
  Depre-Building Equipment     (1,445,616 )
113290
  Amort-Leasehold Improvements     (1,172,679 )
113300
  Depre-Shop Machinery     (32,744,921 )
113400
  Depre-Shop Equipment     (3,746,189 )
113450
  Depre-Necessity Equipment     (4,943 )
113500
  Depre-Shop Tooling     (1,485,978 )

A-1

--------------------------------------------------------------------------------

 

                      March 2, 2008         BALANCE All numbers in USD   SHEET
113600
  Depre-Autos And Trucks     (90,787 )
113700
  Depre-Office Equipment     (3,616,609 )
113710
  Depre-Computer Equipment     (5,442,283 )
114100
  Lease Deposit-Building & Phone     121,547  
114200
  Deposits-Deposits/Leases     37,556  
114300
  Deposits-UPS     (2 )
114400
  Deferred Charges-Other     53,015  
201100
  Notes Payable-S/T     (581,458 )
202100
  Accounts Payable-Trade     (3,203,504 )
202200
  Accounts Payable-Unvouched     (558,038 )
202210
  Account Payable Unv — Macola   —  
202300
  Accounts Payable-Other     (408,667 )
202400
  Accounts Payable-Perm Unvouch     (40,000 )
202450
  Accounts Payable-Purch Card     (137,219 )
202470
  Obligation Under Capital Lease   —  
203100
  Salaries And Wages     (631,259 )
203200
  Salaries And Wages-Other     (87,815 )
203400
  Profit Sharing And Bonus     0  
203500
  Vacation Pay     (2,525,376 )
203600
  Holiday Pay     (194,723 )
203750
  Pension Costs     (70,280 )
203800
  Commissions-Regional Managers     (64,504 )
204100
  Federal Tax Withheld     (30,934 )
204200
  FICA Tax Withheld     (35,863 )
204300
  State Income Tax Withheld     (722 )
204400
  City Inc Tax WH-WestCarrollton     (17,234 )
204500
  Local Taxes Withheld     (3,636 )
205100
  Deposits WH-United Way     (4,085 )
205300
  Deposits Held-Insurance     (80 )
205400
  Deposits Held-Child Support     (397 )
205450
  Deposits Held-Opt Life Insuran     124  
205500
  Deposits Held-Other     (6,066 )
205600
  Deposits Held-Calif Taxes   —  
206100
  Federal Income Tax-Corporation     (78,566 )
206110
  Fed Inc Tax-Corp Czeck Lease   —  
206150
  Canada Non-Resident Tax   —  
206200
  State Income Tax-Corporation     197,435  
206300
  Provincial Tax-Corporation     35,562  
206400
  City Income Tax-Corporation   —  
206500
  Deferred Income Tax Current     1,312,256  
206550
  Deferred State IncTax Current     33,636  
206900
  Income Tax Profit in Inventory     59,090  
207100
  Accrued Sales And Use Taxes     (19,203 )
207150
  Accrued Sales Tax — Calif     (1,362 )
207200
  Personal Property Taxes     (219,601 )
207300
  Real Estate Taxes     (51,787 )
207400
  FICA Tax Expense-Company     (39,114 )
207600
  State Employment Taxes     (88,954 )
207650
  Federal Employment Taxes     24,105  
207800
  Goods And Service Taxes     (25,268 )
207900
  Value Added Tax     169,173  
208200
  Commissions-Trade     17,774  
208300
  Other Professional Fees     (110,991 )
208350
  Attorney Fees   —  
208400
  Other     (313,402 )
208500
  Product Warranty   —  
208700
  Self Insurance-Vehicle Repairs     (25,000 )
209110
  Withholdings-After Tax Savings     (4,739 )
209120
  Withholdings-Pre Tax Savings     9,597  

A-2

--------------------------------------------------------------------------------

 

                      March 2, 2008         BALANCE All numbers in USD   SHEET
209130
  Withholdings-Pre Tax SavingsEx   —  
209140
  Savings Plan-Employee Loans   —  
209150
  Withholdings-Pre Tax Extended   —  
209200
  Employee Benefits     (45,057 )
209250
  Employee Benefits-Other     (13,001 )
209300
  Employee Benefits-Savings Plan   —  
209400
  Emp Benefits-Flex FSA Health     (64,792 )
209450
  Emp Benefits-Flex FSA Depend     (5,450 )
211300
  Pension Plan Costs     (131,986 )
211400
  Long Term Liabilities-Other   —  
216100
  LT Deferred Income Taxes     (5,448,918 )
216200
  Deferred State Income Taxes   —  
216300
  LT Deferred State Income Taxes     (185,837 )
 
         
 
  Net Assets Included   $ 40,562,106  
 
         

 

(1)   To the extent that any item in this Exhibit A conflicts with any express
provision of the Agreement, the provision of the Agreement shall govern.

A-3

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EXHIBIT B
FORM OF
TRANSITION SERVICES AGREEMENT

B-1

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EXHIBIT C
FORM OF
NON-COMPETITION/NON-SOLICITATION AGREEMENT
          This Non-Competition/Non-Solicitation Agreement (this “Agreement”) is
made and entered into this 21st day of April, 2008, by and among CONNELL LIMITED
PARTNERSHIP, a Delaware limited partnership having its principal place of
business at One International Place, Boston, MA 02110 (“Connell”), on the one
hand, and FEDERAL SIGNAL CORPORATION, a Delaware corporation having its
principal place of business at 1415 West 22nd Street, Oak Brook, IL 60523
(“FSC”) and FEDERAL SIGNAL OF EUROPE B.V., a Dutch corporation (“FSBV”), on the
other hand.
          WHEREAS, pursuant to the terms of that certain Stock Purchase
Agreement (the “Stock Purchase Agreement”) dated April 3, 2008, by and among
Connell, FSC and FSBV, Connell is, as of the date hereof, acquiring all of the
issued and outstanding equity interests of (a) Dayton Progress – Perforadures,
LDA, a Portuguese corporation (“DP-Portugal”), (b) Dayton Progress Canada Ltd.,
a Canadian corporation (“DP-Canada”), (c) Dayton Progress Corporation, an Ohio
corporation (“DP-US”), and (d) each of those entities identified in
Schedule 2.1(a)(ii) of the Stock Purchase Agreement (DP-Portugal, DP-US,
DP-Canada and each other entity identified Schedule 2.1(a)(ii) of the Stock
Purchase Agreement being a “Subsidiary,” and, collectively the “Subsidiaries”);
          WHEREAS, the Subsidiaries are engaged in the business of
manufacturing, selling and reselling a broad range of tooling components, mold
bases and accessories for plastic injection molding and tooling components,
punches and die components for metal stamping and other material forming
applications (the “Business”); and
          WHEREAS, as a material inducement and condition to Connell’s
obligations under the Stock Purchase Agreement, Federal Signal agreed to enter
into this Agreement with Connell.
     NOW, THEREFORE, in consideration of the promises contained herein and for
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto, intending to be legally bound hereby, covenant and agree as
follows:
          1. Definitions. For purposes of this Agreement:
          “Closing” means the closing pursuant to the Stock Purchase Agreement.
          “Covered Employee” means any Affected Employee who is at the time
employed by any of the Subsidiaries or by Connell or any of its Affiliates.
          “Covered Period” means the three year period immediately following the
Closing.
          “Federal Signal” means, except where the context otherwise requires,
each of FSC, FSBV and each of their respective Subsidiaries and Affiliates.
          “Parties” means Connell, FSC and FSBV and “Party” shall mean Connell,
on the one hand, and FSC and FSBV, on the other hand, as the context requires.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Stock Purchase Agreement.

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          2. Agreement Not to Solicit. As an inducement for Connell to enter
into the Stock Purchase Agreement and as additional consideration for the
consideration inuring to FSC and FSBV under the Stock Purchase Agreement,
Federal Signal agrees throughout the Covered Period, not to, directly or
indirectly, (i) solicit, induce or attempt to induce any Covered Employee to
leave the employ of any Subsidiary, Connell or any of its Affiliates, as the
case may be; (ii) in any way interfere with the relationship between any
Subsidiary or Connell or any of its Affiliates, as the case may be and any
Covered Employee; or (iii) employ or otherwise engage as an employee,
consultant, independent contractor or otherwise any such Covered Employee.
Notwithstanding the foregoing, Federal Signal shall not be prohibited from
(i) hiring former employees of the Subsidiaries or Connell who have left the
employ of the Subsidiaries or Connell or any of its Affiliates without
inducement by Federal Signal, (ii) employing any Covered Employee who contacts
Federal Signal on his or her own initiative and without any direct or indirect
solicitation by Federal Signal or (iii) conducting generalized solicitations for
employees (which solicitations are not specifically targeted at any Subsidiary’s
or Connell’s or any of its Affiliates’ employees) through the use of media
advertisements or otherwise.
          3. Agreement Not to Compete. As a further inducement for Connell to
enter into the Stock Purchase Agreement, throughout the Covered Period, Federal
Signal agrees that it will not: (i) directly or indirectly, engage or invest in,
own, manage, operate, finance, control or participate in the ownership,
management, operation, financing or control of, or guarantee any obligation of,
any Person engaged in or, to Federal Signal’s actual knowledge, planning to
become engaged in, the Business anywhere in the world; provided, however, that
Federal Signal may purchase or otherwise acquire up to (but not more than) two
percent of any class of securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if such securities are
listed on any national or regional securities exchange or have been registered
under Section 12(g) of the Securities Exchange Act of 1934; and (ii) directly or
indirectly, solicit the business of any Person known to Federal Signal to be a
customer of the Subsidiaries, whether or not Federal Signal had contact with
such Person, with respect to products or activities which compete in whole or in
part with the Business.
          Federal Signal acknowledges and agrees that the covenant in (i) above
is reasonable with respect to its duration, geographical area and scope.
          4. Extension. In the event of a breach by Federal Signal of either
covenant (non-solicitation/non-compete) set forth in Section 2 and 3, above, the
term of such covenant will be extended by the period from the beginning of the
Covered Period to the cure of such breach.
          5. Equitable Relief. Federal Signal stipulates and agrees that the
rights of Connell under this Agreement are of a specialized and unique character
and that immediate and irreparable damage will result to Connell if Federal
Signal fails to or refuses to perform its obligations under this Agreement and,
notwithstanding any election by Connell to claim damages from Federal Signal as
a result of any such failure or refusal Connell may, in addition to any other
remedies and damages available, seek an injunction in a court of competent
jurisdiction to restrain any such failure or refusal. In the event Connell
obtains any such injunction, order, decree or other relief, in law or in equity,
Federal Signal shall be responsible for all costs associated with obtaining the
relief, including reasonable attorney’s fees and expenses and costs of suit.
          6. Severability. The covenants, provisions and paragraphs of this
Agreement are severable. If any provisions of this Agreement as applied to
either Party or to any circumstances shall be adjudged by a court to be invalid
or unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstances, or the
validity or enforceability of this Agreement. The Parties intend this Agreement
to be enforced as written. If any provision or any part thereof is held to be
invalid or unenforceable because of the duration thereof, the Parties agree that
the court making such determination shall have the power to reduce the duration
and/or to delete specific

C-2

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words or phrases, and in its modified form such provision shall then be
enforceable. The Parties expressly agree that this Agreement shall be given the
construction that renders its provisions valid and enforceable to the maximum
extent permitted by Laws.
          7. Consent to Jurisdiction; Venue; Waiver of Jury Trial. Any action or
proceeding seeking to enforce any provision of, or based upon any right arising
out of, this Agreement may be brought against either of the Parties hereto in
any court, Federal or State, within the State of Illinois, having subject matter
jurisdiction over the matters arising under this Agreement, and each of the
Parties hereto consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding. Each of the
Parties hereto hereby irrevocably waives any objection which it may now or
hereafter have to the venue of any such action or proceeding brought in such
court and any claim that such action or proceeding brought in such court has
been brought in an inconvenient forum. Process in any action or proceeding
referred to in this Section 7 may be served on either Party anywhere in the
world. Each Party waives any right to a trial by jury, to the extent lawful, and
agrees that any of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary and bargained-for agreement among the
Parties irrevocably to waive its right to trial by jury in any claim, suit,
action or proceeding whatsoever between them relating to this Agreement or the
transactions contemplated hereby.
          8. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered by any of the following
methods: (i) personally; (ii) by registered or certified mail (postage prepaid);
(iii) by legible facsimile transmission; or (iv) by overnight courier (fare
prepaid), in all cases addressed as follows:

              If to Connell, to:
 
       
 
      Connell Limited Partnership
 
      One International Place
 
      Boston, MA 02110
 
      Attention: John V. Curtin, Esq.
 
      Fax: (617) 737-1617
 
            With a copy to:
 
       
 
      Skadden, Arps, Slate, Meagher & Flom LLP
 
      One Beacon Street
 
      Boston, MA 02108
 
      Attention: David T. Brewster, Esq.
 
      Fax: (617) 573-4822
 
            if to FSC or FSBV, to:
 
       
 
      Federal Signal Corporation
 
      1415 West 22nd Street
 
      Oak Brook, IL 60523
 
      Attention: Jennifer Sherman, General Counsel
 
      Facsimile: (630) 954-2138

C-3

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                  With a copy to:  
 
  Thompson Coburn LLP
 
  One US Bank Plaza
 
  Suite 3400
 
  St. Louis, MO 63101
 
  Attention: Robert M. LaRose
 
  Facsimile: (314) 552-7078

or to such address as such Party may indicate by a notice delivered to the other
parties hereto in the manner provided above. Notice shall be deemed received the
same day (when delivered personally), five (5) days after mailing (when sent by
registered or certified mail), or the next Business Day (when sent by facsimile
transmission or when delivered by overnight courier).
          9. Descriptive Headings. The descriptive headings of the Sections
hereof are for convenience of reference only and shall in no way affect or be
used to construe or interpret this Agreement.
          10. Entire Agreement. This Agreement is an integrated document,
contains the entire agreement between the Parties regarding the subject matter
hereof, wholly cancels, terminates and supersedes any and all previous and/or
contemporaneous oral agreements, negotiations, commitments and writings between
the Parties hereto with respect to such subject matter. No change, modification,
extension, termination, discharge, abandonment or waiver of this Agreement or
any of the provisions hereof, nor any representation, promise or condition
relating to this Agreement, shall be binding upon the parties hereto unless made
in writing and signed by the Parties.
          11. Remedies Cumulative. It is agreed that the rights and remedies
herein provided in case of any default or breach by either Party to this
Agreement are cumulative and shall not affect in any manner any other remedies
that the other Party may have by reason of such default or breach. The exercise
of any right or remedy herein provided shall be without prejudice to the right
to exercise any other right or remedy provided herein, by law or by equity.
          12. Waiver. No waiver of any right or remedy allowed hereunder shall
be implied by the failure to enforce any such right or remedy. No express waiver
shall affect any such right or remedy other than that to which the waiver is
applicable and only for that occurrence.
          13. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of each of the Parties hereto and its successors and
permitted assigns.
          14. Assignment. Neither Party shall have the right to assign this
Agreement without the prior written consent of the other Party.
          15. Governing Law. This Agreement and the rights and the obligations
of the Parties hereto shall be governed by and construed and enforced in
accordance with the Laws of the State of Illinois without regard to any
jurisdiction’s conflicts of law provisions.
          16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when taken together shall comprise one instrument.
Delivery of executed signature pages hereof by facsimile transmission shall
constitute effective and binding execution and delivery hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

C-4

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          CONNELL:    
 
        CONNELL LIMITED PARTNERSHIP    
 
       
By:
       
Name:
 
 
   
 
       
Title:
       
 
       
 
        FEDERAL SIGNAL:    
 
        FEDERAL SIGNAL CORPORATION    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       
 
        FEDERAL SIGNAL OF EUROPE B.V.    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       

C-5