ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into this
2nd day of May, 2007, by and between DELTA PROCESS EQUIPMENT, INC., a Louisiana
corporation (the “Seller”), DELTA COMPANIES CONSOLIDATED, INC., a Louisiana
corporation (the “DCCI”), the Persons signing this Agreement under the heading
“Shareholders” (the “Shareholders”), and DXP ENTERPRISES, INC., a Texas
corporation (the “Buyer”).

W I T N E S S E T H:

WHEREAS, the Seller desires to transfer to the Buyer the Business and certain of
the properties, assets and liabilities related to the Business, and the Buyer
desires to acquire such Business, properties and assets and assume such
liabilities, all upon the terms and subject to the conditions set forth herein;
and

WHEREAS, the parties hereto desire to set forth certain representations,
warranties and agreements, all as more fully set forth below.

NOW, THEREFORE, in consideration of the premises and the respective covenants
and agreements contained herein, the parties hereto agree as follows:
 
PURCHASE AND SALE OF ASSETS
 
Transferred Assets.
 
Subject to the terms and conditions of this Agreement and in consideration of
the obligations of the Buyer as provided herein, and except as otherwise
provided in Section 1.2 hereof, at the Closing, the Seller shall sell, assign,
transfer, grant, bargain, deliver and convey to the Buyer, free and clear of all
Liens other than Permitted Liens, the Seller’s entire right, title and interest
in, to and under any and all assets owned or used by the Seller in connection
with or arising out of the Business of every type and description, tangible and
intangible, wherever located and whether or not reflected on the books and
records of the Seller (all of such assets, properties, rights and business being
hereinafter sometimes collectively referred to as the “Transferred Assets”),
including, but not limited to:
 
the Equipment, including the Equipment set forth in Schedule 1.1(a)(i) hereto,
and all other tangible personal property (including supplies) held by Seller and
used or useful in the Business;
 
all Inventories, including the Inventories set forth in Schedule 1.1(a)(ii)
hereto;
 
all accounts receivable of the Seller and the Business (the “Accounts
Receivable”), including the accounts receivable set forth in
Schedule 1.1(a)(iii) hereto;
 
the Proprietary Information, including the name DELTA PROCESS EQUIPMENT or any
derivative thereof, and any service marks, trademarks, trade names, d/b/a names,
fictitious names, identifying symbols, logos, emblems or signs containing or
comprising the foregoing;
 
subject to Section 1.1(b) hereof, all customer contracts, distributor
agreements, unfilled or outstanding purchase orders, sales contracts, other
commitments, contracts and engagements to which the Seller is entitled at the
Closing and which relate to the Business (the “Assumed Contracts”), including
without limitation those contracts set forth in Schedule 1.1(a)(v);
 
subject to Section 1.1(b), the lease agreements listed in Schedule 1.1(a)(vi)
(the “Leases”);
 
all prepaid expenses and deposits made by the Seller, including those shown on
Seller’s financial statements relating to the Transferred Assets and the
Business and set forth in Schedule 1.1(a)(vii);
 
any goodwill associated with the Transferred Assets and the Business;
 
all Documents and Other Papers that are related to the Business or the other
Transferred Assets, including Documents and Other Papers relating to products,
services, marketing, advertising, promotional materials, Proprietary Rights,
personnel files for Transferred Employees, customer lists and files and
documents (including credit information to the extent legally transferable), and
supplier lists, records and correspondence;
 
subject to Section 1.1(b) hereof, all licenses, permits, concessions, warrants,
franchises and other governmental authorizations and approvals of all
Governmental Entities required or appropriate for the conduct of the Business
and the operation of the Transferred Assets as presently conducted or operated
by the Seller and all rights and incidents of interest therein;
 
subject to Section 1.1(b) hereof, all rights of Seller under non-disclosure or
confidentiality, non-compete or non-solicitation agreements with former
employees, employees and agents of Seller or with third Persons to the extent
relating to the Business or the Transferred Assets (or any portion thereof);
 
subject to Section 1.1(b) hereof, all rights of Seller under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers and
contractors to the extent relating to products sold or services provided to
Seller in connection with the conduct or operation of the Business or to the
extent affecting any other Transferred Assets;
 
all third Person property and casualty insurance proceeds, and all rights to
third Person property and casualty insurance proceeds, in each case to the
extent received or receivable in respect of the Business; and
 
Seller’s cash and cash equivalents on hand as of the Closing Date.
 
The Seller shall use its reasonable best efforts to obtain such consents of
third Persons as are necessary for the assignment of the Transferred Assets;
provided, however, that Seller shall not be required to pay any amounts in
respect of obtaining such consents. To the extent that any of the Transferred
Assets are not assignable by the terms thereof or consents to the assignment
thereof cannot be obtained as herein provided, the Transferred Assets shall be
held by the Seller in trust for the Buyer and shall be performed by the Buyer in
the name of the Seller and all benefits and obligations derived thereunder shall
be for the account of the Buyer, provided, however, that where entitlement of
the Buyer to such Transferred Assets hereunder is not recognized by any third
Person, the Seller shall, at the request of the Buyer, enforce in a reasonable
manner, at the cost of and for the account of the Buyer, any and all rights of
the Seller against such third Person. Seller shall promptly pay over to the
Buyer all money or other consideration received by it in respect of such
entitlement of the Buyer.
 
As of the Closing, except as may be identified by Seller in writing delivered to
Buyer at the Closing, all of the Transferred Assets shall be located at a
Facility. With respect to any Transferred Assets not located at a Facility as of
the Closing, the Seller shall notify each Person which may have possession of
such Transferred Assets of the ownership and other rights of the Buyer of such
Transferred Assets and shall inform them of their obligation to deliver
possession of such Transferred Assets to the Buyer.
 
Excluded Assets
 
. Notwithstanding anything contained in Section 1.1(a) to the contrary, Seller
is not selling, and Buyer is not buying, any of the following (collectively, the
“Excluded Assets”):
 
those assets of the Seller, DCCI or the Shareholders listed or described on
Schedule 1.2(a) hereto;
 
the bank account described on Schedule 1.2(b) hereto, and all cash in such
account;
 
Seller’s minute books, Tax Returns and other corporate organizational documents
and Seller’s financial statements and related documentation and bank records
relating to the bank account described in Section 1.2(b); provided, however,
that the Buyer shall be entitled to make and keep a copy of the foregoing at its
expense; provided, further, that any documentation relating to Acquired Assets
or Assumed Liabilities shall not be deemed Excluded Assets;
 
all rights, claims, counterclaims, credits, causes of action, lawsuits,
judgments, demands or rights of set-off in favor of Seller arising out of or
relating to the conduct of the Business prior to the date hereof other than with
respect to the Transferred Assets;
 
Seller’s insurance policies; and
 
the country club membership described on Schedule 1.2(f) hereto.
 
Purchase Price
 
. In consideration of the transfer to the Buyer of the Transferred Assets, the
Buyer shall at the Closing pay to the Seller $10,000,000 (the “Purchase Price”)
and assume the Assumed Liabilities. At the Closing, the Buyer shall pay to the
Seller by wire transfer of same day funds an amount equal to the Purchase Price.
 
Liabilities Assumed by the Buyer
 
. Subject to the terms and conditions contained in this Agreement, at the
Closing Buyer will assume and agrees to pay or perform as and when due the
following liabilities and obligations (the “Assumed Liabilities”):
 
accounts payable as of the Closing arising in the ordinary course and conduct of
the Business and of the same type as reflected on the balance sheet dated
February 28, 2007 (the “Reference Balance Sheet”);
 
all liabilities and obligations of Seller arising under the Assumed Contracts
and Leases that are first required to be paid or performed from and after the
Closing Date (but excluding any liabilities or obligations which are
attributable to Seller’s violation, breach or default in respect of any Assumed
Contract or Lease), including, without limitation, any amounts payable with
respect to utility charges and other items of expense attributable to the
conduct of the Business and first becoming due and owing on or after the Closing
Date (whether or not such charges or expenses arise in respect of periods
beginning prior to the Closing Date);
 
the obligations in respect of Transferred Employees as specifically set out in
Article 6 of this Agreement and the liabilities, costs and expenses (including
attorneys’ fees) for all employment claims that are filed by any Transferred
Employee who accepts employment with the Buyer relating to arbitrations, unfair
labor practice charges, employment discrimination charges, wrongful termination
claims, workers’ compensation claims, any employment-related tort claim or other
claims or charges of or by the Transferred Employees to the extent, but only to
the extent, that the same result from the employment relationship between the
Buyer and the Transferred Employee and conditions, actions or events or series
of actions or events occurring on or subsequent to the Closing Date;
 
all liabilities for payroll Taxes, sales Taxes and general property Taxes of the
Business or assessed against or pertaining to the Transferred Assets to the
extent such first become due and owing (and are not past due) on or after the
Closing Date (whether or not such Taxes arise in respect of periods beginning
prior to the Closing Date);
 
all product warranty liabilities and obligations of Seller relating to products
sold or services furnished by Seller prior to the Closing Date;
 
those liabilities and obligations specifically described on Schedule 1.4(f); and
 
all liabilities and obligations arising out of or related to the business,
operations or activities conducted by the Buyer or any of its affiliates in
connection with the Business or the Transferred Assets from and after the
Closing Date.
 
Liabilities Not Assumed by the Buyer
 
. Except for the Assumed Liabilities, the Seller shall pay and discharge in due
course all of its liabilities, debts and obligations, whether known or unknown,
now existing or hereafter arising, contingent or liquidated (the “Retained
Liabilities”), and the Buyer shall not assume, or in any way be liable or
responsible for, any of such Retained Liabilities. Without limiting the
generality of the foregoing, the Retained Liabilities shall include the
following:
 
any liability or obligation of the Seller arising out of or in connection with,
or the negotiation and preparation of this Agreement and any other agreement,
certificate, Schedule, Exhibit or writing delivered to the Buyer pursuant to
this Agreement and the consummation and performance of the transactions
contemplated hereby (including as provided in Article 12 hereof), whether or not
such transactions are consummated, including but not limited to any income Tax
liability of the Seller so arising and all liabilities and obligations for any
fees, commissions or like payments for having acted or claiming to have acted,
directly or indirectly, as a broker, finder or financial advisor for the Seller,
DCCI or the Shareholders in connection the transactions contemplated hereby;
 
all liabilities and obligations of Seller and the Business attributable to
Seller’s violation, breach or default in respect of any Assumed Contract or
Lease;
 
any liability or obligation for any and all Taxes of, or pertaining or
attributable to, the Seller or the Business for any period that ends prior to
the Closing Date and for which such Taxes became due and owing prior to the
Closing Date;
 
all liabilities and obligations in respect of Employee Benefits and employees
and former employees of the Seller and the Business except to the extent
specifically assumed by the Buyer in respect of Transferred Employees as set out
in Article 6 of this Agreement and all liabilities, costs and expenses
(including attorneys’ fees) for all existing employment claims that have been
filed by any employee or former employee of the Seller or the Business prior to
the Closing Date relating to arbitrations, unfair labor practice charges,
employment discrimination charges, wrongful termination claims, workers’
compensation claims, any employment-related tort claim or other claims or
charges of or by employees of the Seller, or any thereof filed after the Closing
Date, to the extent (and only to the extent) that the same result from the
employment relationship between the Seller and the employee and conditions,
actions or events or series of actions or events which occurred prior to the
Closing Date;
 
all liabilities and obligations of Seller and the Business under any and all
Contracts and Other Agreements between the Seller or the Business (other than
the Lease Agreements) and any one or more officers, directors, shareholders or
members of Seller or any of its affiliates; and
 
all product liabilities of Seller relating to products sold, distributed or
manufactured by Seller prior to the Closing Date.
 
Transfer Taxes; Recording Fees.
 
The Buyer and the Seller acknowledge and agree that the Purchase Price includes
and is inclusive of any and all sales, use, transfer or other similar Taxes
imposed as a result of the consummation of the transactions contemplated by this
Agreement. The Seller hereby agrees to indemnify the Buyer against, and agrees
to protect, save and hold the Buyer harmless from, any loss, liability,
obligation or claim (whether or not ultimately successful) for sales, use,
transfer or other similar Taxes (and any interest, penalties, additions to tax
and fines thereon or related thereto) imposed as a result of the consummation of
the transactions contemplated by this Agreement.
 
The Buyer shall pay any and all recording, filing or other fees relating to the
conveyance or transfer of the Transferred Assets from the Seller to the Buyer.
 
Allocation of Purchase Price.
 
Seller and Buyer have prepared an initial written statement setting forth the
allocation of the Purchase Price among the Transferred Assets based on the
Reference Balance Sheet and a copy of such written statement is attached hereto
as Exhibit A. Prior to the Closing, Seller and Buyer shall agree upon a final
allocation of the Purchase Price (the “Allocation”).
 
For federal income tax purposes (including, without limitation, the Buyer’s and
the Seller’s compliance with the reporting requirements of Section 1060 of the
Code), each of the Seller and the Buyer hereby agree to use the Allocation and
to cooperate in good faith with each other in connection with the preparation
and filing of any information required to be furnished to the Internal Revenue
Service under Section 1060 of the Code (including, without limitation, Section
1060(b) and (e) of the Code) and any applicable regulations thereunder. Without
limiting the generality of the preceding sentence, the Buyer and the Seller
agree to (i) report such allocations to the Internal Revenue Service on Form
8594 and, if required, supplemental Forms 8594, in accordance with the
instructions to Form 8594 and the provisions of Section 1060 of the Code and the
applicable regulations thereunder, and (ii) coordinate their respective
preparation and filing of each such Form 8594 and any other forms or information
statements or schedules required to be filed under Section 1060 of the Code and
the applicable regulations thereunder so that the Allocation and information
reflected on such forms, statements and schedules shall be consistent.
 
Notwithstanding the foregoing provisions to this Section 1.7, the Buyer shall
prepare and deliver to Seller from time to time revised statements of any
Allocation to the extent that any matters need updating (including, without
limitation, in respect of any adjustments under Section 10.8 hereof), which such
revised statements shall be substantially consistent with the manner of
Allocation previously agreed by the Seller and the Buyer.
 
 
CLOSING
 
Subject to the conditions set forth in this Agreement, the Closing shall take
place at the offices of Jones Walker, LLP, located at 8555 United Plaza
Boulevard, Suite 500 in Baton Rouge, Louisiana, at 10:00 a.m. on May 4, 2007 or
at such other time, date and place as the parties hereto shall mutually agree
upon in writing (the date the Closing actually occurs, the “Closing Date”).
Failure to consummate the transactions contemplated hereby on such date shall
not result in a termination of this Agreement or relieve any party hereto of any
obligation hereunder. Title to, ownership of, control over and risk of loss of
the Transferred Assets shall pass to the Buyer at 12:01 AM, in Baton Rouge,
Louisiana as of the Closing Date.
 
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
 
Except as otherwise set forth in the correspondingly numbered section of the
Disclosure Schedule attached hereto as Exhibit B, the Seller hereby represents
and warrants to the Buyer and covenants and agrees as follows:

Corporate Matters
 
.
 
The Seller is a corporation organized, validly existing and in good standing
under the laws of the State of Louisiana. The Seller is duly authorized,
qualified and licensed and has all requisite power and authority under all
applicable laws, ordinances and orders of public authorities to own, operate and
lease its properties and assets and to carry on its business in the places and
in the manner currently conducted. The Seller is qualified to transact business
as a foreign corporation and is in good standing in each jurisdiction where the
nature and extent of the Seller’s business or the character of its assets makes
such qualification necessary, except where any such failures to qualify as could
not reasonable be expected, individually or in the aggregate, to have a Material
Adverse Effect. The Seller has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations under this Agreement.
 
The Seller has no Subsidiaries.
 
Attached as Schedule 3.1(c) of the Disclosure Schedule is a true, correct and
complete copy of the Articles of Incorporation certified by the Secretary of
State of the State of Louisiana and the Bylaws certified by the corporate
secretary of the Seller, in each case as amended and in full force and effect as
of the date hereof and as of the Closing Date.
 
The Seller does not do business in any state or commonwealth under any name
other than the corporate name set forth in the first paragraph of this
Agreement.
 
DCCI holds of record and owns beneficially one hundred percent (100%) of all the
issued and outstanding shares of the stock of Seller. The Seller is not a party
to an option, warrant, purchase right, or other contract or commitment that
could require the Seller to issue, sell, transfer or otherwise dispose of any
stock of Seller.
 
Validity of Agreement and Conflict with Other Instruments.
 
This Agreement has been duly authorized by the Seller and DCCI. No further
corporate action is necessary on the part of the Seller to execute and deliver
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Seller, DCCI and the
Shareholders and is a legal, valid and binding obligation of the Seller, DCCI
and the Shareholders enforceable against each in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors’ rights generally and by legal and equitable limitations on the
availability of specific remedies.
 
The execution, delivery and performance of this Agreement and the other
agreements and documents to be delivered by the Seller, DCCI and the
Shareholders to the Buyer, the consummation of the transactions contemplated
hereby or thereby, and the compliance with the provisions hereof or thereof, by
the Seller, DCCI and the Shareholders will not, with or without the passage of
time or the giving of notice or both:
 
conflict with, constitute a breach, violation or termination of any provision
of, or give rise to any right of termination, cancellation or acceleration, or
loss of any right or benefit or both, under, any Contract and Other Agreement to
which the Seller is a party or by which any of its properties or assets is
bound;
 
result in an acceleration or increase of any amounts due with respect to the
Trade Payables constituting part of the Assumed Liabilities;
 
conflict with or violate the Articles of Incorporation or Bylaws of the Seller;
 
result in the creation or imposition of any Lien on any of the Transferred
Assets; or
 
violate any law, statute, ordinance, regulation, judgment, writ, injunction,
rule, decree, order or any other restriction of any kind or character applicable
to the Seller or any of Seller's properties or assets;
 
other than violations, defaults or conflicts that would not materially and
adversely affect the ability of the Seller to consummate the transactions
provided for in this Agreement.

Attached as Schedule 3.2(c) of the Disclosure Schedule are true, correct and
complete copies of the resolutions adopted by the Seller's Board of Directors
and DCCI approving this Agreement and the transactions contemplated hereby. Such
resolutions were adopted by unanimous written consents. Such resolutions are in
full force and effect without amendment or modification.
 
Approvals, Licenses and Authorizations.
 
Except as set forth on Schedule 3.3(a) of the Disclosure Schedule (as disclosed,
the “Required Consents”), no order, license, consent, waiver, authorization or
approval of, or exemption by, or the giving of notice to, or the registration
with, or the taking of any other action in respect of, any Person not a party to
this Agreement, including any Governmental Entity, and no filing, recording,
publication or registration in any public office or any other place is necessary
on behalf of the Seller to authorize the execution, delivery and performance of
this Agreement or any other agreement contemplated hereby to be executed and
delivered by them and the consummation of the transactions contemplated hereby
or thereby (including, but not limited to, assignment of the Transferred Assets
and the use and occupation of the Facilities by the Buyer in the same manner as
currently used and occupied by the Seller), or to effect the legality, validity,
binding effect or enforceability thereof.
 
Schedule 3.3(b) of the Disclosure Schedule contains a list of all material
licenses, permits, concessions, warrants, franchises and other governmental
authorizations and approvals of all Governmental Entities required or
appropriate for the conduct of the Business and the operation of the Transferred
Assets as presently conducted or operated. Except as set forth on Schedule
3.3(b) of the Disclosure Schedule, all of such licenses, permits, concessions,
warrants, franchises and other governmental authorizations and approvals have
been duly obtained and are in full force and effect and no violations are in
existence or have been recorded, and no proceeding is pending or, to the best
knowledge of the Seller, threatened with respect to the revocation or limitation
thereof. The Seller has complied with all laws, rules, regulations and orders
applicable to the operation, conduct and maintenance of the Business, except for
violations that would not have a Material Adverse Effect.
 
Title to and Condition of Transferred Assets.
 
The Seller leases all of the Facilities. Each of the Facilities is in reasonable
condition for the operation of the Business as the same is currently being
conducted by the Seller. Seller is not in default under any of the leases for a
Facility and, to the knowledge of the Seller, no event has occurred and no
circumstances exists which, if not remedied, and whether with or without notice
or the passage of time or both, would result in such a default. The Seller has
not received or given any notice of any default or event that with notice or
lapse of time, or both, would constitute a default by the Seller under any of
the leases for a Facility and no party to any of such leases has exercised any
termination rights with respect thereto.
 
All Equipment (excluding Equipment that does not have a cost basis of $10,000 or
more as of the date of this Agreement) is set forth in Schedule 1.1(a)(i)
hereto. Except as set forth in Schedule 3.4(b) of the Disclosure Schedule, the
Seller has good and marketable title to all of the Equipment and all of the
Equipment is in the Seller’s possession.
 
All Inventories as of the date of this Agreement are set forth in Schedule
1.1(a)(ii) hereto. The Seller has good and marketable title to all Inventories
free and clear of all Liens other than Permitted Liens and those Liens set forth
in Schedule 3.4(c) of the Disclosure Schedule, which Liens set forth on such
schedule shall be released on or prior to the Closing, and such Inventories are
in a good and marketable condition and are saleable in the ordinary course of
the Business. The Inventories constitute sufficient quantities for the normal
operation of the Business in the ordinary course in accordance with past
practice.
 
The Accounts Receivable are owned by the Seller free and clear of all Liens
other than Permitted Liens and those Liens set forth in Schedule 3.4(d) of the
Disclosure Schedule, which Liens set forth on such schedule shall be released on
or prior to the Closing. All Accounts Receivable were generated in the ordinary
course of business. Except as set forth on Schedule 3.4(d) of the Disclosure
Schedule, the Seller is unaware of any existing facts or circumstances that
could reasonably be expected to result in the Accounts Receivable not being
fully collected in accordance with their terms.
 
The Seller owns or possesses licenses or other rights to use, and will at the
Closing transfer to the Buyer, all rights to all Proprietary Rights necessary
for the conduct of the Business as currently conducted. Set forth in
Schedule 1.1(a)(iv) is a complete and accurate list of all patents, trademarks
and licenses the Seller owns or possesses or otherwise has rights to use
pertaining to the Business. No licenses, sublicenses, covenants or agreements
have been granted or entered into by the Seller in respect of the items listed
in Schedule 1.1(a)(iv) except as noted in Schedule 3.4(e) of the Disclosure
Schedule. The Seller has not received any notice of infringement,
misappropriation or conflict from any other Person with respect to such
Proprietary Rights, and the conduct of the Business has not infringed,
misappropriated or otherwise conflicted with any Proprietary Rights of any such
Person. The Seller has not given indemnification for patent, trademark, service
mark or copyright infringements except to licensees or customers in the ordinary
course of business. All of the Proprietary Rights that are owned by the Seller
are owned free and clear of all Liens except for Permitted Liens or as set forth
in Schedule 3.4(e) of the Disclosure Schedule and all such Proprietary Rights
will be transferred to the Buyer free and clear of all Liens other than
Permitted Liens. All Proprietary Rights that are licensed to the Seller by third
parties are licensed pursuant to valid and existing license agreements and such
interests are not subject to any Liens other than those under the applicable
license agreements. The consummation of the transactions contemplated by this
Agreement will not result in the loss of any Proprietary Rights, unless, with
respect to such Proprietary Rights licensed to the Seller by third parties a
Required Consent is necessary and is not obtained.
 
The Seller owns or has rights to use, and is transferring to the Buyer
hereunder, the Transferred Assets that, together with the Seller’s agreements
hereunder and the Lease Agreements, are necessary for the conduct of the
Business in the ordinary course consistent with past practices. The conduct of
the Business in the ordinary course is not dependent upon the right to use the
property of others, except such property as is leased or licensed to the Seller
pursuant to any of the Transferred Assets.
 
Contracts and Commitments.
 
Except as set forth in Schedule 3.5(a) of the Disclosure Schedule and except for
the Retained Liabilities, the Seller is not a party to or bound by:
 
any agreement, contract or commitment requiring the expenditure, or series of
related expenditures, of funds in excess of $10,000 (other than purchase orders
arising in the ordinary course of business);
 
to the best knowledge of Seller, any agreement, contract or commitment requiring
the provision of goods or services as a price less than the Seller’s cost of
producing such goods or providing such services;
 
any agreement, contract or commitment requiring the payment for goods or
services whether or not such goods or services are actually provided;
 
any loan or advance to, or investment in, any Person in an amount greater than
$5,000 (other than trade payables arising in the ordinary course of business) or
any agreement, contract, commitment or understanding relating to the making of
any such loan, advance or investment;
 
any contract, agreement, indenture, note or other instrument relating to the
borrowing of money or any guarantee or other contingent liability in respect of
any obligation of any other Person (other than the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business);
 
any management service, employment, consulting or other similar type contract or
agreement;
 
any agreement, contract or commitment that prohibits the Seller or the Business
from engaging in any line of business or competing with any Person or engaging
in any business or activity in any geographic area;
 
any agreement or contract obligating the Seller or any owner of the Business or
the Transferred Assets to provide for indemnification or contribution with
respect to any matter;
 
any agreement, contract or commitment, or series of related agreements,
contracts or commitments, not entered into in the ordinary course of business
for the Business;
 
any sales, distributorship or similar agreement relating to the products sold or
services provided by the Seller;
 
any license, royalty or similar agreement; or
 
any agreement, contract or commitment between, with or among the Seller and any
current or former officer, director, shareholder, partner, member or any member
of his or her immediate family or an of their respective affiliates.
 
Seller is not in breach of any provision of, or is in default (or knows of any
event or circumstance that with notice, or lapse of time or both, would
constitute an event of default) under the terms of, any of the Contracts and
Other Agreements that constitute a part of the Transferred Assets. All of the
Contracts and Other Agreements that constitute a part of the Transferred Assets
are in full force and effect. The Seller is not aware of any pending or
threatened disputes with respect to any of the Contracts and Other Agreements.
 
Except for the Required Consents, each Contract and Other Agreement that
constitute a part of the Transferred Assets may be validly assigned by Seller to
Buyer without the consent, approval or waiver of any other party and without
resulting in any breach, violation or right of termination, or increase or
acceleration of any amounts due thereunder, of and from the Seller, the Business
and the Buyer in respect of such assignment and transfer.
 
Financial Statements.
 
Attached as Schedule 3.6(a) of the Disclosure Schedule are true, correct and
complete copies of (i) the audited balance sheet of the Seller as of December
31, 2004 and the unaudited balance sheet of the Seller as of December 31, 2005
and December 31, 2006, and (ii) the audited statement of income of the Seller
for the 12 month period ended December 31, 2004 and the unaudited statement of
income of the Seller for the 12 month period ended December 31, 2005 and
December 31, 2006; and (iii) the unaudited balance sheet of the Seller and the
unaudited statement of income for the Seller as of and for the three month
period ended March 31, 2007 (collectively, the “Financial Statements”). The
Financial Statements:
 
fairly present the financial position of the Seller as of their respective dates
and the results of operations of the Seller for the periods indicated therein;
 
have been prepared on a consistent basis throughout the periods covered thereby;
and
 
fairly present in all material respects the financial position of the Seller as
of the respective dates of the balance sheets and the results of its operations
for the respective periods indicated.
 
The values at which the Inventories are carried on the Financial Statements
reflect normal and consistent inventory valuation policies of the Seller.
 
Taxes.
 
All material Tax Returns that are required to be filed (taking into account all
extensions) on or before the Closing Date for, by or on behalf of the Seller,
the Business and the Transferred Assets have been or will be filed by the Seller
with the appropriate foreign, federal, state and local authorities at or prior
to the time they are due, and all Taxes shown to be due and payable on, or
otherwise related to, such Tax Returns, the failure to make payment of which
could be material to the Business or the Transferred Assets, have been or will
be timely paid in full by Seller.
 
All such Tax Returns and the information and data contained therein have been or
will be completed in all material respects, fairly present or will fairly
present in all material respects the information purported to be shown therein,
and reflect or will reflect all liabilities for Taxes for the periods covered by
such Tax Returns.
 
None of such Tax Returns are now under audit or examination by any foreign,
federal, state or local authority and there are no agreements, waivers or other
arrangements providing for an extension of time with respect to the assessment
or collection of any Tax or deficiency of any nature against the Seller, the
Business or the Transferred Assets or any suits or other actions, proceedings,
investigations or claims now pending or threatened against the Seller, the
Business or the Transferred Assets with respect to any Tax, or any material
matters under discussion with any foreign, federal, state or local authority
relating to any Tax or any claims for any additional Tax asserted by any such
authority.
 
All Taxes due and owing from the Seller or assessed and due and owing against
the Business or the Transferred Assets on or before the Closing Date have been
or will be timely paid by Seller.
 
All withholding Tax and Tax deposit requirements imposed on the Seller and
applicable to the Business for any and all periods prior to the Closing Date
have been or will be timely satisfied by Seller.
 
The Seller has made or will make adequate provision in Seller’s financial
statements for the payment in full of any and all unpaid Taxes which in any way
may affect the Transferred Assets or the Business for any and all periods or
portions thereof ending before the Closing Date.
 
No Violations or Litigation.
 
Seller has not materially violated, and is not currently in material violation
of, any order of any Governmental Entity or any law, ordinance, regulation,
order, requirement, statute, rule, permit, concession, grant, franchise, license
or other governmental authorization relating or applicable to the Seller, the
Business or to any of the Seller’s properties, assets or operations, including
without limitation, the Transferred Assets and the Facilities.
 
There is no action, suit, claim or legal, administrative, arbitration or other
proceeding, or any change in any zoning or building ordinance, pending or, to
the Seller’s knowledge, threatened against or affecting the Seller, the
Business, the Facilities or any of the Transferred Assets, at law or in equity,
before or by any Governmental Entity and, to the Seller’s knowledge, there is no
investigation and no basis otherwise exists for any such action, suit, claim,
investigation or proceeding.
 
No Adverse Changes or Events
 
. Since January 1, 2007, except as set forth on Schedule 3.9 of the Disclosure
Schedule, the Business has been consistently operated only in the ordinary
course and there has not been:
 
any adverse occurrence, event, circumstance, change or combination thereof in
the financial condition, assets, liabilities (contingent or otherwise), results
of operations or business of the Seller, except for such changes that,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect;
 
any damage, destruction or loss, whether or not covered by insurance, adversely
affecting any Transferred Asset or the Business having a replacement cost of
more than $25,000 for any single loss or $50,000 for all such losses;
 
any award or payment of any bonuses to directors, officers, employees or former
employees, agents or representatives of the Seller or the Business, except to
the extent accrued on the balance sheet as of December 31, 2006, or any increase
(or payment in respect of any increase) in the compensation or rate of
compensation or commissions or bonuses payable, or to become payable, by the
Seller or in respect of the Business to any employee of Seller, any payment or
accrual of, or commitment with respect to, any bonus plan, severance arrangement
or other Employee Benefits that is not consistent with past practice, or any
change or modification to any severance arrangement or other Employee Benefits;
 
any debt, obligation or liability issued, incurred or created by the Seller,
other than the incurrence of trade payables of the Business arising in a manner
consistent with the past practice of the Business and in the ordinary course, or
any assumption, guarantee, endorsement or other responsibility of or by the
Seller for the liability or obligation of any other Person (whether absolute,
accrued, contingent or otherwise) not arising in a manner consistent with the
past practice of the Business and in the ordinary course;
 
any mortgage, pledge or creation of any Lien with respect to any of the
Transferred Assets, and any discharge or satisfaction of any Lien or payment of
any obligation or liability of Seller except in a manner consistent with past
practice of the Business and in the ordinary course;
 
any sale, assignment, transfer, conveyance, license or sublicense or other
disposition or lapse of any Proprietary Rights or disclosure to any Person
(other than to the Buyer, employees of the Seller in the scope of their
employment or otherwise in the ordinary course of business consistent with past
practice) of any Proprietary Rights material to the Business;
 
any write up or write down in the value of any Equipment or Inventories;
 
any cancellation or compromise of any material claims, institution or settlement
of any material legal proceeding, or any waiver of any other material rights
relating to the Business, or any sale, transfer or other disposition of any
properties or assets, real, personal or mixed, tangible or intangible, material
to the Business (other than sales of Inventory in the ordinary course of
business consistent with past practice);
 
any change in the Seller’s method, principles or polices of accounting for
financial, Tax or other purposes;
 
any declaration, setting aside or payment of any dividend or other distribution
in respect of any shares of capital stock of Seller or any repurchase,
redemption or other acquisition by Seller of any outstanding shares of capital
stock or other securities of, or other ownership interest in, Seller;
 
any election or rescission of any election relating to Taxes, or settlement or
compromise of any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or except as may be
required by applicable law, any change made to any of Seller’s methods of
reporting income or deductions for federal income tax purposes from those
employed in the preparation of its most recently filed federal Tax Returns, in
each case, to the extent related to the Business or the Transferred Assets;
 
any failure to pay and discharge current liabilities in a manner consistent with
past practice of the Business and in the ordinary course;
 
any capital investment in, any loan to, or any acquisition of the securities or
assets of any other Person;
 
any capital expenditures or commitment to make any capital expenditures by the
Seller or in respect of the Business other than such expenditures arising in the
ordinary course consistent with past practice;
 
any loan to or other transaction with any of its shareholders (including,
without limitation, DCCI or the Shareholders), affiliates, officers, directors
or partners, except for advances and reimbursements to employees for business
expenses in the ordinary course of business;
 
any material change in the customary methods used in operating the Business
(including the pricing practices) or any material change in the sales
operations; or
 
any agreement, commitment, arrangement or entry into any understanding to do
anything set forth in subsections (a)-(p) above.
 
Environmental Matters.
 
Neither the Seller nor, to the knowledge of the Seller, any prior owner or
operator of the Business, any of the Facilities or the Transferred Assets has
caused or allowed the generation, use, treatment, storage, or disposal of
Hazardous Materials at any site (including any Facility) owned, leased or
operated by the Seller or used in the Business, except in accordance with all
applicable Environmental Laws or except to the extent the same would not result
in any material liability, contingent or otherwise, to the Buyer or its
affiliates.
 
The Seller does not own or lease any real property, improvements or related
assets that form a part of the Facilities, the Transferred Assets or the
Business and that have been subject to the release of any Hazardous Materials
except to the extent that the same would not result in any material liability,
contingent or otherwise, to the Buyer or its affiliates.
 
Except as set forth on Schedule 3.10 of the Disclosure Schedule, the Seller has
secured all Environmental Permits necessary to conduct and operate the Business
as currently conducted by the Seller and the Facilities and the Seller is in
material compliance with such permits.
 
Except as set forth on Schedule 3.10 of the Disclosure Schedule, the Seller has
not received any notice, nor is it aware, of any proposal to amend, revoke or
replace any Environmental Permit, or requiring the issuance of any additional
Environmental Permit.
 
The Seller has not received inquiry or notice nor does it have any reason to
believe that it is likely to receive inquiry or notice of any actual or
potential proceedings, claims, lawsuits or losses related to or arising under
any Environmental Law.
 
The Seller is not currently operating or required to be operating under any
compliance order, schedule, decree or agreement, any consent decree, order or
agreement, and/or corrective action decree, order or agreement issued or entered
into under any federal, state or local statute, regulation or ordinance
regarding the environment and/or health or safety in the work place.
 
Neither the Seller nor, to the knowledge of the Seller, any prior owner or
operator of the Business, any of the Facilities or the Transferred Assets has
transported, arranged for the transportation of or disposed of any substance in
a manner that may lead to claims against the Buyer for clean-up costs, remedial
work, damages to natural resources or for personal injury claims.
 
The Facilities, the Transferred Assets and the Business are in compliance in all
material respects with all applicable limitations, restrictions, conditions,
standards, prohibitions, requirements and obligations established under
Environmental Laws.
 
Condition of Inventories and Equipment
 
. Except as expressly provided herein (including Section 3.13 hereof), the
Inventories and Equipment included in the Transferred Assets are being sold,
transferred and conveyed “AS IS, WHERE IS,” and the Seller makes NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THEIR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. Without limiting the generality of the
foregoing, Seller makes no representations or warranties to Buyer with respect
to any projections, estimates or budgets heretofore delivered to or made
available to Buyer of future revenues, future results of operations (or any
component thereof), future cash flows or future financial condition (or any
component thereof) of Seller.
 
Undisclosed Liabilities
 
. The Seller does not have any material liabilities or obligations of any
nature, whether accrued, absolute, contingent, unliquidated, civil, criminal or
otherwise, and whether due or to become due, other than liabilities that (a) are
reflected or reserved against in the Reference Balance Sheet, (b) are disclosed
in any Schedule (or in any plan, instrument, lease or agreement referred to
therein) or Exhibit hereto, (c) are liabilities incurred since December 31,
2006, in the ordinary course of business that would not have a Material Adverse
Effect, and (d) liabilities under Contracts and Other Agreements that are not
due and have not arisen in respect of any breach or violation of, or default
under, any provision thereof.
 
Warranties and Product Liability
 
. Except for warranties implied by law or set forth in written agreements
between the Seller and its customers, the Seller has not given or made any
warranties in connection with the sale or rental of goods or services,
including, without limitation, warranties covering the customer’s consequential
damages. To the Seller’s knowledge, there are no facts or the occurrence of any
events forming the basis of any present claim against the Seller and the Seller
does not have any reason to believe the Business will likely be subject to any
such claim with respect to warranties relating to products manufactured, sold or
distributed by the Seller or services performed by the Seller, except any claim
that would not individually or in the aggregate with all such claims exceed
$100,000.
 
Employee Matters.
 
There are no collective bargaining or other labor union agreements to which the
Seller is a party or by which it or the Business is bound. To the best knowledge
of the Seller, it has not encountered any labor union organizing activity or had
any actual or threatened employee strikes, work stoppages, slowdowns or
walkouts.
 
Schedule 3.14 of the Disclosure Schedule sets forth all Employee Benefits. The
Seller does not contribute to or have an obligation to contribute to, and has
not at any time within six years prior to the Closing Date contributed to or had
an obligation to contribute to, a multi-employer plan within the meaning of
Section 3(37) of ERISA.
 
The Seller does not have any defined benefit plan or employee benefit plan.
Seller does have plan(s) established pursuant to Section 401(k) of the Code.
 
No lawsuit, complaint or investigation or governmental audit has been noticed,
initiated or filed with respect to any employee benefit plan. The Seller has not
incurred any liability to the PBGC or otherwise under Title IV of ERISA.
 
Attached as Schedule 3.14(e) to the Disclosure Schedule is a list of the current
employees and their respective total compensation paid by the Seller during 2006
and their respective rates of compensation for 2007.
 
Seller is in material compliance with all laws relating to the employment of
labor, including all such laws relating to wages, hours, the Worker and
Retraining Notification Act of 1988, as amended (“WARN”) and any similar state
or local “mass layoff” or “plant closing” law, collective bargaining,
discrimination, safety and health and the collection and payment of withholding
and/or social security Taxes and any similar Tax. There has been no “mass
layoff” or “plant closing” (as defined by WARN) with respect to the Seller or
the Business within the six months prior to Closing.
 
Finder’s Fees
 
. Neither the Seller nor any affiliate of the Seller has employed or retained
any investment banker, broker, agent, finder or other party, or incurred any
obligation for brokerage fees, finder’s fees or commissions, with respect to the
sale by the Seller of any of the Transferred Assets or with respect to the
transactions contemplated by this Agreement, or otherwise dealt with anyone
purporting to act in the capacity of a finder or broker with respect thereto
whereby any party hereto may be obligated to pay such a fee or commission.
 
Bank Accounts
 
. Schedule 3.16 of the Disclosure Schedule contains a complete and correct list
of (a) the names and locations of all banks at which the Seller maintains
accounts or safe deposit boxes of the Business, (b) the account numbers of all
such accounts and (c) the names of all persons authorized to draw thereon or to
have access thereto. Except as set forth on Schedule 3.16 of the Disclosure
Schedule, no person holds a power of attorney to act on behalf of Seller.
 
Insurance
 
. Seller has insurance policies in full force and effect (a) for such amounts as
are sufficient for all requirements of law and all Contracts and Other
Agreements to which Seller or the Business is a party or by which any of the
Transferred Assets is bound and (b) which are in such amounts, with such
deductibles and against such risks and losses, as are reasonable for the
maintenance of the Facilities, the Business and the Transferred Assets. Set
forth in Schedule 3.17 of the Disclosure Schedule is a list of all insurance
policies and all fidelity bonds held by or applicable to the Facilities, the
Business or the Transferred Assets setting forth, in respect of each such
policy, the policy name, policy number, carrier, term, type and amount of
coverage and annual premium.
 
 
REPRESENTATIONS AND WARRANTIES OF THE BUYER
 
The Buyer represents and warrants to the Seller as follows:

Corporate Matters
 
. The Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas. The Buyer has full corporate
power and authority to enter into this Agreement and to perform its obligations
under this Agreement. This Agreement has been duly authorized, executed and
delivered by the Buyer and is a legal, valid and binding obligation of the
Buyer, enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect that affect creditors’ rights generally
and by legal and equitable limitations on the availability of specific remedies.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Buyer will not violate any provision of,
or constitute a default under, any contract or other agreement to which the
Buyer is a party or by which it is bound, or conflict with its Articles of
Incorporation or Bylaws, other than violations, defaults or conflicts that would
not materially and adversely affect the ability of the Buyer to consummate the
transactions provided for in this Agreement.
 
Finder’s Fees
 
. Neither the Buyer nor any affiliate of the Buyer has employed or retained any
investment banker, broker, agent, finder or other party, or incurred any
obligation for brokerage fees, finder’s fees or commissions, with respect to the
transactions contemplated by this Agreement, or otherwise dealt with anyone
purporting to act in the capacity of a finder or broker with respect thereto
whereby any party hereto other than Buyer may be obligated to pay such a fee or
a commission.
 
 
ACCESS TO INFORMATION BY THE BUYER
 
Prior to Closing
 
. Prior to the Closing, Seller will furnish the Buyer and its employees,
officers, accountants, attorneys, agents, investment bankers and other
authorized representatives with all financial, operating and other data and
information concerning the Business, commitments and properties of the Seller as
the Buyer shall from time to time reasonably request and will afford the Buyer
and its employees, officers, accountants, attorneys, agents, investment bankers
and other authorized representatives reasonable access to the Seller’s offices,
properties, books, records, contracts and documents (including Tax Returns filed
and those in preparation) and will be given the opportunity to ask questions of,
and receive answers from, representatives of the Seller with respect to the
Business, the Contracts and Other Agreements, the Transferred Assets and the
other properties of the Seller. Notwithstanding the foregoing, Seller shall not
be required to disclose any information if such disclosure would contravene any
applicable law. No investigations by the Buyer or its employees, representatives
or agents shall reduce or otherwise affect the obligation or liability of the
Seller with respect to any representations, warranties, covenants or agreements
made herein or in any Exhibit, Schedule or other certificate, instrument,
agreement or document, including the Disclosure Schedule, executed and delivered
in connection with this Agreement.
 
Public Information
 
. Until the Closing or termination hereof, the Buyer and the Seller will consult
in advance on the necessity for, and the timing and content of, any
communications to be made to the public and to the form and content of any
application or report to be made to any Governmental Entity that relates to the
transactions contemplated by this Agreement and, except with respect to public
announcements or disclosures in response to legal requirements (including,
without limitation, requirements under the Federal securities laws in connection
with any registration, sale or purchase of securities), all such public
announcements and disclosures shall require the consent of the Buyer and the
Seller, which consent shall not be unreasonably withheld, delayed, denied or
conditioned. Each of the Buyer, the Seller, DCCI and the Shareholders agrees
that the terms of this Agreement shall not be disclosed or otherwise made
available to the public and that copies of this Agreement shall not be publicly
filed or otherwise made available to the public, except where such disclosure,
availability or filing is required by applicable law and only to the extent
required by such law. The Seller will reasonably cooperate with the Buyer and
its employees, officers, accountants, attorneys, agents and other authorized
representatives in the preparation of any documents or other materials that may
be required by any Governmental Entity.
 
 
EMPLOYEE MATTERS
 
Hiring of Transferred Employees
 
. The Buyer shall offer employment (on an “at will basis”) to all of the
Seller’s active hourly employees and other active salaried employees as of the
Closing (collectively, those accepting such employment, the “Transferred
Employees”). The Buyer will give credit, under the Buyer’s employee plans and
policies, for all unused vacation and sick days of the Transferred Employees
accrued as of and at the Closing Date under the employee plans and policies of
the Seller for calendar year 2007, and will, in accordance with and subject to
applicable laws, permit the Transferred Employees to “rollover” their benefits
in the Seller’s Section 401(k) plan (including any outstanding loans thereunder)
into the Section 401(k) plan maintained by the Buyer generally for the benefit
of the Buyer’s employees. Except for the foregoing, the Buyer shall not assume
any liabilities or obligations of the Seller with respect to its employees and
will have complete discretion as to the terms of employment (including wages and
position) that are offered to the Transferred Employees. Schedule 6.1 of the
Disclosure Schedule sets forth a list of all of the employees of the Seller as
of the date hereof and their respective accrued unused vacation and sick days
and outstanding balances of accounts under the Seller’s 401(k) plan and, if
applicable, any loan amounts outstanding from such respective employees under
the 401(k) plan. No later than two (2) Business Days prior to the Closing Date,
the Seller shall deliver an updated Schedule 6.1 and the Buyer will be entitled
to rely definitively on the information presented in the updated Schedule 6.1
for purposes of fulfillment of its obligations hereunder. Nothing contained in
this Section 6.1 is intended to confer upon any of the Seller’s employees any
right to continued employment after evaluation by the Buyer of its employment
needs after the Closing Date. Notwithstanding any other provision of this
Agreement, the parties hereto do not intend to create any third-party
beneficiary rights respecting any of the Seller’s employees or former employees
as a result of the provisions herein and specifically hereby negate any such
intention.
 
 Employee Benefits.
 
Except as expressly provided under Section 6.1, the Buyer shall not be liable or
obligated under any Employee Benefits of the Seller or its employees, and the
Seller expressly acknowledges that it has sole liability for all employee
benefit costs accrued as of the Closing whether or not any or all of such
employees are subsequently hired by the Buyer. Without limiting the generality
of the foregoing, the Seller acknowledges and agrees that the Buyer does not
assume the sponsorship of, the responsibility of contributions to, or any
liabilities in connection with any employee benefit plan maintained by the
Seller for active employees, retirees, former employees, their beneficiaries or
any other Person, including any employee pension benefit plan within the meaning
of Section 3(2) of ERISA, employee welfare plan within the meaning of Section
3(1) of ERISA and any personnel policy, stock option plan, bonus plan or
arrangement, incentive award plan or arrangement, vacation policy, severance pay
plan, policy or agreement, deferred compensation agreement arrangement,
executive compensation or supplemental income arrangement, consulting agreement,
employment agreement and each other employee benefit plan, agreement,
arrangement, program, practice or understanding.
 
With respect to Transferred Employees, the Seller will remain responsible for
medical expenses covered under its plans (i) actually incurred prior to the
Closing Date or (ii) actually incurred with respect to any hospitalization that
began prior to the Closing Date until such hospitalization ends (as required
under such plans), and the Buyer will be responsible for all other medical
expenses incurred on or after the Closing Date to the extent covered under its
plans without the application of any waiting period for coverage generally
applicable to newly hired employees. The Seller shall provide medical coverage
to the Transferred Employees with respect to any pre-existing medical conditions
to the extent required by applicable law. To the fullest extent permitted under
its applicable policies of insurance, the Seller shall maintain health,
hospitalization, life, travel and accident insurance coverage for the
Transferred Employees in effect for so long as Buyer shall request; provided,
that Buyer shall be responsible for all costs (if any) of maintaining such
policies for all periods beginning on the first day of the month following the
month in which the Closing Date falls. The cost of such insurance coverage from
and after the Closing Date shall be borne by the Buyer. The Seller shall
cooperate with the Buyer to provide continuity of such insurance coverage to
such employees. The Seller shall be exclusively responsible for complying with
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
with respect to its employees (including the Transferred Employees) and their
qualified beneficiaries by reason of any such employees’ termination of
employment with the Seller until the Closing Date, at which point the Buyer
shall be exclusively responsible for complying with COBRA with respect to the
Transferred Employees and any “M+A Qualified Beneficiaries” (as defined in
Treasury Regulation Section 54.4980B-9 Q/A-4), in accordance with the Treasury
Regulations governing asset sales in which the Seller ceases to provide any
group health plan, at Treasury Regulation Section 54.4980B-9 Q/A-8(c).
 
With respect to the Transferred Employees, the Buyer shall take all actions
necessary to cause Buyer’s 401(k) plan to recognize the service that the
Transferred Employees had in the Seller’s 401(k) plan, for purposes of
determining such Transferred Employees’ eligibility to participate in, and
vesting under, the Buyer’s 401(k) plan.
 
Reporting of Data
 
. The Buyer and the Seller shall complete and furnish to each other such other
employee data as shall be reasonably required from time to time for each party
to perform and fulfill its obligations under this Article 6. In addition to, and
not in limitation of, the obligations under the immediately preceding sentence,
pursuant to the “Standard Procedure” provided in Section 4 of Revenue Procedure
2004-53. 2004-34 IRB 320, (i) the Buyer and the Seller shall report on a
predecessor/successor basis as set forth therein, (ii) the Seller will not be
relieved from filing a Form W-2 with respect to any Transferred Employees, and
(iii) the Buyer will undertake to file (or cause to be filed) a Form W-2 for
each such Transferred Employee only with respect to the portion of the year
during which such Transferred Employees are employed by the Buyer that includes
the Closing Date, excluding the portion of such year that such Transferred
Employee was employed by the Seller.
 
 
ADDITIONAL AGREEMENTS
 
Conduct of the Business
 
. The Seller, DCCI and the Shareholders (as applicable) covenant and agree with
the Buyer that from and after the date hereof until the Closing, except as
expressly authorized by this Agreement or expressly consented to in writing by
the Buyer (such consent not to be unreasonably withheld in respect of any
request for the actions described in subsection (i) hereof to the extent that
such action would be in the ordinary course for the Business or otherwise would
not result in any adverse effect to the Business), the Seller shall:
 
operate the Business and the Transferred Assets only in the usual, regular and
ordinary manner with a view to maintaining the goodwill that the Seller now
enjoys and, to the extent consistent with such operation, will use all
reasonable efforts to preserve intact its present business organization, keep
available the services of its employees and preserve its relationship with its
customers, suppliers, jobbers, distributors and other Persons having business
relations with it;
 
use all reasonable efforts to maintain the Transferred Assets in a state of
repair, order and condition consistent with its usual practice in connection
with the Business;
 
maintain its books of account and records relating to the Business in the usual,
regular and ordinary manner, in accordance with the Seller’s usual accounting
practices applied on a consistent basis;
 
comply in all material respects with all statutes, laws, orders and regulations
applicable to it and to the conduct of the Business;
 
not sell, assign, transfer, lease or otherwise dispose of any Proprietary
Rights, Equipment or any of the other Transferred Assets, except for
dispositions of Inventories for value in the usual and ordinary course of
business;
 
preserve and maintain all rights that it now enjoys in and to the Proprietary
Rights;
 
not mortgage, pledge or otherwise create a security interest in any of the
Transferred Assets or permit there to be created or exist any Liens thereon that
would not be released upon the transfer of the Transferred Assets to the Buyer
pursuant to this Agreement;
 
not enter into any contract, commitment or lease in relation to the Business
that is not in the ordinary course of the Business;
 
not amend, modify or consent to the termination of any Assumed Contract or Lease
or waive any of the Seller’s rights with respect thereto;
 
not grant any increase in the compensation or rate of compensation or
commissions or bonuses payable to or severance obligations for any of the
Transferred Employees or in any bonus plan and not transfer or otherwise change
any of the terms or conditions of employment of any of the Transferred
Employees;
 
not permit any insurance policy naming it as a beneficiary or a loss payee
relating to the Business or the Transferred Assets to be canceled or terminated
or any of the coverage thereunder to lapse unless simultaneously with such
termination or cancellation replacement policies providing substantially the
same or better coverage are in full force and effect;
 
pay when due all trade payables and all payments required by any of the
Contracts and Other Agreements, and all Taxes of the Seller or with respect to
the Business or the Transferred Assets that are or become due and owing, other
than Taxes that are being contested in good faith and which would not result in
a Lien being imposed on any of the Transferred Assets;
 
not change or modify its credit or collection policies, procedures or practices,
including acceleration of collections or receivables (whether or not past due);
 
promptly notify the Buyer in writing if the Seller becomes aware of any change
that shall have occurred or that shall have been threatened (or any development
that shall have occurred or that shall have been threatened involving a
prospective change) in the Transferred Assets or the Business that would
reasonably be expected to have a Material Adverse Effect, whether or not
occurring in the ordinary course of business; and
 
not agree to anything prohibited by this Section 7.1 or which would make any of
the representations and warranties of Seller in this Agreement untrue or
incorrect.
 
Information
 
. During the period from the date of this Agreement to the Closing Date, the
Buyer and the Seller will promptly inform the other in writing of any claim,
action or any proceeding commenced against such party with respect to the
transactions contemplated by this Agreement or any assets or property of the
Seller or the Business.
 
Required Consents
 
. The Seller, DCCI and the Shareholders shall use their reasonable best efforts
to obtain those Required Consents described on Schedule 7.3 (the “Closing
Consents”). Notwithstanding anything in this Agreement to the contrary, in no
event shall the Seller, DCCI or the Shareholders have any liability to the Buyer
in the event Buyer is unable to obtain any Required Consent.
 
Delivery of and Access to Corporate Documents and Assistance.
 
At the Closing, the Seller shall deliver to the Buyer at the Facilities all
Documents and Other Papers constituting Transferred Assets or relating to the
Assumed Liabilities, including, without limitation, all files relating to the
Trade Payables, computer disks reflecting any books or records, documents or
other papers, or other information or data relating to the operation of the
Business or the Transferred Assets or customer records and sales history stored
on any electronic media, including computers. The Seller, however, shall be
entitled to retain all Documents and Other Papers constituting Excluded Assets.
For a period of four years after the Closing Date, each of Buyer and Seller will
retain such Documents and Other Papers retained or obtained by it pursuant to
this Section 7.4(a). During such period, each of Buyer and Seller will afford
duly authorized representatives of the other reasonable access during normal
business hours to all of such records and will permit such representatives, at
the requesting party’s expense, to make copies of any of such records as may be
reasonably required by the other; provided, however, that (i) any such access
shall be had or done in such a manner so as to not unreasonably interfere with
the normal conduct of the Business or the business of Buyer and its affiliates
or the Seller and its affiliates (as the case may be), (ii) neither the Buyer
nor the Seller shall be required to provide access to any confidential record or
records, the disclosure of which would violate any governmental statute or
regulation, and (iii) neither the Buyer nor the Seller shall be required to
provide access to any confidential record or records, the disclosure of which
would cause it or any of its respective affiliates to waive its attorney-client
privilege or attorney work product privilege.
 
In addition to, and not in limitation of subsection (a) above, the Seller, DCCI
and the Shareholders, if requested by the Buyer and at Buyer’s expense, shall
make available to Buyer and its representatives financial and accounting records
of the Business in the Seller’s, DCCI’s or the Shareholders’ custody or control,
including, without limitation, by causing its accountant to provide the Buyer
with access to such firm’s work papers in support of the Business, in order that
Buyer may prepare financial statements of the Business in connection with the
filing by the Buyer of a Current Report on Form 8-K (if necessary) with the
Securities and Exchange Commission in accordance with the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder in connection
with the transactions contemplated hereby, and to comply with any other
financial disclosure requirements with respect to the Business applicable to
Buyer under the Securities Exchange Act of 1934, as amended, the Securities Act
of 1933, as amended, and the rules and regulations thereunder. Notwithstanding
anything in this Section 7.4(b) to the contrary, in no event shall the Seller,
DCCI or the Shareholders have any liability to Buyer or any third party with
respect to any records made available to the Buyer or its representatives
pursuant to this Section 7.4(b), except for any claim or action based on fraud
or as otherwise expressly provided under the representations and warranties
contained in Article 3 hereof.
 
Further Assurances
 
. Each party hereto shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered to the any other party such bills of sale,
assignments, assumptions and other instruments of transfer, assignment and
conveyance, in form and substance reasonably satisfactory to counsel for the
requesting party, as shall be necessary to vest in the Buyer all the right,
title and interest in and to the Transferred Assets free and clear of all Liens
(including the release of all Liens of record) and all obligations for the
Assumed Liabilities, and shall use its reasonable best efforts to cause to be
taken such other action as a party reasonably may require to more effectively
implement and carry into effect the transactions contemplated by this Agreement.
 
Nondisclosure of Proprietary Information
 
. The Seller, DCCI and the Shareholders agree that, from and after the Closing
Date, they and their Subsidiaries and affiliates shall hold in confidence and
will not directly or indirectly at any time reveal, report, publish, disclose or
transfer to any Person other than the Buyer and its representatives any of the
Proprietary Information that is not generally known to the public or utilize any
of the Proprietary Information for pecuniary gain. Notwithstanding the
foregoing, the Seller and its affiliates may disclose information that is (i)
required to be disclosed by applicable laws to the extent, and only to the
extent, such laws require such disclosure and the Seller provides the Buyer
prior written notice of its intent to provide such disclosure and the general
text of such disclosure and such disclosure is consented to by the Buyer, which
consent shall not be unreasonably withheld, and (ii) required to be disclosed by
final order of a court of competent jurisdiction, provided that, in the event
Seller or such affiliate is served or threatened with litigation that would
require the Seller or such affiliate to disclose such information, the Seller or
such affiliate shall tender to the Buyer the opportunity to defend, at Buyer’s
cost, against such disclosure. Because of the unique nature of the Proprietary
Information, the Seller, DCCI and the Shareholders understand and agree that the
Buyer and its affiliates and their successors and assigns shall be entitled to
seek specific performance and injunctive relief in accordance with Section 15.7
(as well as any other legal and equitable remedies to which they may be
entitled) in respect of any breach or anticipated breach of their respective
obligations (as well as those of their respective affiliates) under this Section
7.6.
 
Covenant Not to Compete With the Business
 
. Each of the Seller, DCCI and the Shareholders agrees that, effective as of the
Closing Date and for a period of two (2) years thereafter, the Seller, DCCI, the
Shareholders and their respective affiliates shall not, directly or indirectly,
for itself or others, (i) own, manage, operate, control, be employed by, engage
or participate in, allow its or their skill, knowledge, experience or reputation
to be used by, or otherwise be connected in any manner with the ownership,
management, operation or control of, any company or other business enterprise
(other than Buyer or its affiliates) engaged in any aspect of the Business
within all of the Parishes and Counties set forth on Schedule 7.7(1), (ii) make
any contact with, for the purpose of transacting any business competitive to the
Business, with any Person which was a customer of Seller at any time in the six
(6) years prior to the Closing Date (“Company’s Customers”), (iii) attempt to
direct or take away the business or patronage from the Buyer or the Business of
any of the Business’ customers, (iv) solicit, hire away or attempt to solicit or
hire away to any firm or entity engaged in the Business, any person employed by
the Buyer or any of its affiliates, or (v) interfere with the business, trade,
goodwill or customers of the Buyer or the Business. Notwithstanding the
foregoing, the Seller, DCCI and the Shareholders shall be able to: (a) own in
the aggregate not more than five percent (5%) of a public company that engages
in the Business; provided, that the Seller, DCCI or the Shareholders, as
applicable, does not exert or possess the power to exert, directly or
indirectly, the direction of the management, policies or other control (whether
through ownership of voting securities, by contract or otherwise) over such
public company; and (b) participate in the activities specifically described on
Schedule 7.7(2). The Seller, DCCI and the Shareholders understand and agree
that, due to the unique nature of the obligations hereunder and inadequacy of a
remedy of law for a breach or attempted breach of this Section 7.7, the Buyer
and its affiliates and their successors and assigns shall be entitled to seek
specific performance and injunctive relief in accordance with Section 15.7 (as
well as any other legal and equitable remedies to which they may be entitled) in
respect of any such breach or attempted breach of their respective obligations
(as well as those of their respective affiliates) under this Section 7.7. The
Seller, DCCI and the Shareholders acknowledge that this covenant not to compete
is being provided as an inducement to the Buyer to acquire the Business and the
Transferred Assets and that this Section 7.7 contains reasonable limitations as
to time, geographical area and scope of activity to be restrained that do not
impose a greater restraint than is necessary to protect the goodwill or other
business interest of the Buyer. Whenever possible, each provision of this
Section 7.7 shall be interpreted in such a manner as to be effective and valid
under applicable law but if any provision of this Section 7.7 shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Section 7.7. If any provision of
this Section 7.7 shall, for any reason, be judged by any court of competent
jurisdiction to be invalid or unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this Section 7.7 but shall be confined in
its operation to the provision of this Section 7.7 directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this Section 7.7 should ever be deemed to exceed the time or
geographic limitations permitted by applicable laws, then such provision shall
be reformed to the maximum time or geographic limitations permitted by
applicable law.
 
Continuation of Business by the Buyer
 
. Nothing in this Section 7.8, in any other provision of this Agreement, in any
Exhibit or Section hereto, or in any agreement, instrument, or other document
executed or delivered in connection with this Agreement shall require the Buyer
to continue its business or operations or to manage and operate the Business
with any duty or standard of care to the Seller. The Seller acknowledges and
agrees that the Buyer in its sole discretion may continue, manage, modify or
discontinue its operations, liquidate or otherwise change or cease its
operations.
 
Collection of Accounts Receivable
 
. If the Seller shall receive payment in respect of Accounts Receivable that is
included in the Transferred Assets, then the Seller shall promptly, but in any
event within ten (10) days of Seller’s receipt thereof, forward such payment to
the Buyer.
 
Use of Name
 
. All uses of the names “Delta Process Equipment, Inc.” and any derivations
thereof (collectively, the “Names”) are being transferred to Buyer on the
Closing Date as part of the Transferred Assets. From and after the Closing Date,
Seller and its affiliates will not, directly or indirectly, use in any manner
the Names or any other trade name, trademark, service mark or logo used by
Seller, or any word or logo, that is similar in sound or appearance, in the
Business. Within fifteen (15) days after the Closing Date, Seller shall provide
Buyer with a certified copy of its organizational documents indicating that it
has changed its name in accordance with the foregoing sentence.
 
Tax Arrangements
 
. The Buyer, on the one hand, and the Seller, DCCI and the Shareholders, on the
other hand, shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Transferred Assets
and the Assumed Liabilities as is reasonably necessary for the preparation and
filing of any Tax Return, claim or refund or other filings relating to Tax
matters, for the preparation of any Tax audit, for the preparation of any Tax
protest, or for the prosecution or defense of any suit or other proceeding
relating to Tax matters.
 
 
CONDITIONS TO THE BUYER’S OBLIGATION TO CONSUMMATE THE TRANSACTIONS
 
The obligation of the Buyer to purchase the Transferred Assets and to assume the
Assumed Liabilities as contemplated hereby is subject to the satisfaction on or
before the Closing Date of the conditions set forth below, any of which may be
waived by the Buyer in writing; provided, however, the Buyer’s election to
proceed with the Closing of the transactions contemplated hereby shall not be
deemed a waiver of any breach of any representation, warranty or covenant herein
not known to the Buyer as of the Closing Date or existing on the Closing Date,
and such action shall not prejudice the Buyer’s right to recover damages for any
breach.

Representations, Warranties and Covenants
 
. The representations and warranties of the Seller, DCCI and the Shareholders
contained in this Agreement qualified as to materiality (including as to any
Material Adverse Effect) shall be true, correct and complete in all respects,
and those not so qualified shall be true, correct and complete in all material
respects, on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made or given on and as of such
date; each and all of the agreements and covenants of the Seller, DCCI and the
Shareholders to be performed or complied with by it on or before the Closing
Date pursuant to this Agreement shall have been performed or complied with in
all material respects; and the Seller shall have delivered to the Buyer a
certificate signed by one of its duly authorized officers, dated the Closing
Date, to all such effects.
 
Good Standing
 
. The Seller shall have delivered to the Buyer certificates issued by
appropriate Governmental Entities evidencing the good standing of the Seller, as
of a date not more than ten calendar days prior to the Closing Date, in
Louisiana and the states or commonwealths in which it is qualified to do
business as a foreign corporation. To the extent provided for under applicable
law, the Seller shall also have delivered to the Buyer certificates or other
writings issued by appropriate Governmental Entities evidencing that all
applicable state franchise Taxes have been paid.
 
Instruments of Transfer
 
. (i) The Seller shall have executed and delivered to the Buyer (a) the General
Conveyance, Transfer, Assignment and Assumption, in substantially the form
attached hereto as Exhibit C hereto (the “General Conveyance, Transfer,
Assignment and Assumption”), as shall be necessary to vest in the Buyer all the
right, title and interest in and to the Transferred Assets and assumption of all
Assumed Liabilities, and (b) a power of attorney in the form of Exhibit D
hereto, and (ii) Stone Flower, L.L.C., an affiliate of Seller (“Stone Flower”),
shall have executed Lease Agreements, in substantially the forms attached hereto
as Exhibits E-1 and E-2 hereto (the “Lease Agreements”), for the Facilities
described on Schedule 8.3.
 
No Litigation.
 
No preliminary or permanent injunction or other order of any court or other
Governmental Entity shall be in effect nor shall there be in effect any statute,
rule, regulation or executive order promulgated or enacted by any Governmental
Entity that, in any such case, prevents the consummation of the transactions
contemplated by this Agreement.
 
No suit, action, claim, proceeding or investigation before any Governmental
Entity shall have been commenced or threatened seeking to prevent the sale of
the Transferred Assets or the Business or asserting that the sale of all or a
portion of the Transferred Assets or the Business would be unlawful.
 
Receipt of Closing Consents
 
. The Buyer shall have obtained the Closing Consents.
 
Receipt of Approvals and Authorizations
 
. The Buyer shall have received each of the licenses, consents, approvals and
other authorizations from Governmental Entities necessary or appropriate for the
Buyer to consummate the transactions contemplated by this Agreement and to
conduct the Business and operate the Transferred Assets on and after the Closing
Date.
 
No Liens
 
. The Seller shall have delivered to the Buyer releases of all Liens (other than
Permitted Liens) and/or other evidence reasonably satisfactory to the Buyer to
show that the Transferred Assets are being transferred, sold, assigned,
delivered and conveyed to the Buyer hereunder free and clear of all Liens (other
than Permitted Liens).
 
 
CONDITIONS TO THE SELLER’S OBLIGATION TO CONSUMMATE THE TRANSACTIONS
 
The obligation of the Seller to transfer the Transferred Assets as contemplated
hereby is subject to the satisfaction on or before the Closing Date of the
conditions set forth below, any of which may be waived by the Seller in writing;
provided, however, the Seller’s election to proceed with the Closing of the
transactions contemplated hereby shall not be deemed a waiver of any breach of
any representation, warranty or covenant herein, not known to the Seller as of
the Closing Date or existing on the Closing Date, and such action shall not
prejudice the Seller’s right to recover damages for any breach.

Representations and Warranties and Covenants
 
. The representations and warranties of the Buyer contained in this Agreement
qualified as to materiality (including as to any Material Adverse Effect) shall
be true, correct and complete in all respects, and those not so qualified shall
be true, correct and complete in all material respects, on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made or given on and as of such date; each and all of the
agreements and covenants of the Buyer to be performed or complied with by it on
or before the Closing Date pursuant to this Agreement shall have been performed
or complied with in all material respects; and the Buyer shall have delivered to
the Seller a certificate signed by one of its duly authorized officers, dated
the Closing Date, to such effects.
 
Receipt of the Purchase Price; Instruments of Transfer
 
. The Seller shall have received the Purchase Price. The Buyer shall have
executed and delivered to (i) the Seller, the General Conveyance, Transfer,
Assignment and Assumption and (ii) Stone Flower, the Lease Agreements.
 
No Litigation.
 
No preliminary or permanent injunction or other order of any Governmental Entity
shall be in effect nor shall there be any statute, rule, regulation or executive
order promulgated or enacted by any Governmental Entity that, in any such case,
prevents the consummation of the transactions contemplated by this Agreement.
 
No suit, action, claim, proceeding or investigation before any court or other
Governmental Entity shall have been commenced or threatened seeking to prevent
the sale of the Transferred Assets or the Business or asserting that the sale of
all or a portion of the Transferred Assets or the Business would be unlawful.
 
 
INDEMNIFICATION
 
Indemnification by the Seller
 
. Except as otherwise limited by this Article 10 and Article 11 hereof, the
Seller agrees to indemnify, defend and hold the Buyer and each of its officers,
directors, employees, agents, stockholders and controlling Persons and their
respective successors and assigns harmless from and against and in respect of
Damages actually suffered, incurred or realized by such party (collectively,
“General Buyer Losses”), arising out of or resulting from or relating to:
 
the failure of any representation or warranty made by the Seller, DCCI or the
Shareholders in this Agreement or in any other agreement, certificate, Schedule,
Exhibit or writing delivered to the Buyer pursuant to this Agreement to be true
and correct;
 
the breach of any covenant or other agreement made or undertaken by the Seller,
DCCI or the Shareholders in this Agreement or in any other agreement,
certificate, Schedule, Exhibit or writing delivered to the Buyer pursuant to
this Agreement; and
 
any Retained Liability.
 
Indemnification by the Buyer
 
. Except as otherwise limited by this Article 10 and Article 11 hereof, the
Buyer agrees to indemnify, defend and hold the Seller and each of its officers,
directors, employees, agents, stockholders and controlling Persons and
successors and assigns (including DCCI and the Shareholders) harmless from and
against and in respect of Damages actually suffered, incurred or realized by
such party (collectively, “Seller Losses”), arising out of or resulting from:
 
the failure of any representation or warranty made by the Buyer in this
Agreement or in any other agreement, certificate, Schedule, Exhibit or writing
delivered to the Seller pursuant to this Agreement to be true and correct;
 
the breach of any covenant or other agreement made or undertaken by the Buyer in
this Agreement or in any other agreement, certificate, Schedule, Exhibit or
writing delivered to the Seller pursuant to this Agreement; and
 
any Assumed Liability.
 
Limitations on Indemnifications
 
. An indemnified party shall not have any liability under Sections 10.1 and 10.2
hereof unless the aggregate amount of Damages incurred by the indemnified
parties exceeds $50,000, and then only to the extent such Damages exceed
$50,000. For purposes of calculating the Damages hereunder arising out of or
resulting from or relating to any failure of representations to be true and
correct or the breach of any covenants or agreements, any materiality or
Material Adverse Effect qualifications in the representations, warranties,
covenants and agreements shall be disregarded. The aggregate amount of all
Damages for which the Seller shall be required to indemnify an indemnified party
under Section 10.1(a) shall not exceed $5,000,000; provided, however, that such
limitation shall not apply in respect of indemnification for the failure of any
representations or warranties made by the Seller in Sections 3.1(a), 3.2(a),
3.4(b), 3.4(c), 3.4(d), 3.4(e), 3.7, 3.10 and 3.15, for which the Seller’s
obligation to indemnify shall not exceed the Purchase Price.
 
Procedure
 
. All claims for indemnification under this Article 10 shall be asserted and
resolved as follows:
 
An Indemnitee shall promptly give the Indemnitor notice of any matter which an
Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement, stating the amount of the Loss, if known,
and method of computation thereof, all with reasonable particularity, and
stating with particularity the nature of such matter. Failure to provide such
notice shall not affect the right of the Indemnitee to indemnification except to
the extent such failure shall have resulted in liability to the Indemnitor that
could have been actually avoided had such notice been provided within such
required time period.
 
The obligations and liabilities of an Indemnitor under this Article 10 with
respect to Losses arising from claims of any third party that are subject to the
indemnification provided for in this Article 10 (“Third Party Claims”) shall be
governed by and contingent upon the following additional terms and conditions:
if an Indemnitee shall receive notice of any Third Party Claim, the Indemnitee
shall give the Indemnitor prompt notice of such Third Party Claim and the
Indemnitor may, at its option provided that it shall acknowledge in writing to
Indemnitee its unqualified obligation to indemnify the Indemnitee as provided
hereunder with respect to such Third Party Claim, assume and control the defense
of such Third Party Claim at the Indemnitor’s expense and through counsel of the
Indemnitor’s choice reasonably acceptable to Indemnitee. In the event the
Indemnitor assumes the defense against any such Third Party Claim as provided
above, the Indemnitee shall have the right to participate at its own expense in
the defense of such asserted liability (provided that such Indemnitee shall be
entitled to participate in any such defense with separate counsel at the expense
of the Indemnitor if, in the reasonable opinion of counsel to the Indemnitee a
conflict or potential conflict exists between the Indemnitor and the Indemnitee
that would make such separate representation advisable), shall reasonably
cooperate with the Indemnitor in such defense and will attempt to make available
on a reasonable basis to the Indemnitor all witnesses, pertinent records,
materials and information in its possession or under its control relating
thereto as is reasonably required by the Indemnitor. In the event the Indemnitor
does not elect to conduct the defense against any such Third Party Claim, but it
is ultimately determined that such Indemnitor is liable for any Losses under
this Article 10, the Indemnitor shall pay all costs and expenses of such defense
and shall cooperate with the Indemnitee (and be entitled to participate) in such
defense and attempt to make available to it on a reasonable basis all such
witnesses, records, materials and information in its possession or under its
control relating thereto as is reasonably required by the Indemnitee. Except for
the settlement of a Third Party Claim that involves the payment of money only
and for which the Indemnitee is totally indemnified by the Indemnitor and
provided with an unqualified release from all liability in respect of such Third
Party Claim, no Third Party Claim may be settled without the written consent of
the Indemnitee.
 
Payment
 
. Payment of any amounts due pursuant to this Article 10 shall be made within
ten Business Days after notice of a final determination of Losses, including,
without limitation, in respect of any Third Party Claims, is sent by the
Indemnitee.
 
Failure to Pay Indemnification
 
. If and to the extent the Indemnitee shall make written demand upon the
Indemnitor for indemnification and the Indemnitor shall refuse or fail to pay in
full within ten (10) Business Days of such written demand the amounts demanded
pursuant hereto and in accordance herewith, then the Indemnitee may utilize any
legal or equitable remedy to collect from the Indemnitor the amount of its
Losses. Nothing contained herein is intended to limit or constrain the
Indemnitee’s rights against the Indemnitor for indemnity, the remedies herein
being cumulative. In the event the Seller is obligated to provide
indemnification pursuant to this Agreement and the Seller shall refuse or fail
to pay any such claim therefor in full within ten (10) Business Days after
written demand upon Seller, then each of DCCI and the Shareholders, jointly and
severally, agree (subject to the terms and conditions of this Article 10 and
Article 11 hereof, including the limitations contained in Section 10.3) to pay
to the Indemnitee any amount equal to such General Buyer Losses (which shall
include any additional losses, costs and expenses incurred by the Indemnitee in
seeking and obtaining such recovery from DCCI and the Shareholders pursuant
hereto) less any amount(s) paid by the Seller in respect of such claim.
 
Adjustment of Liability
 
. The amount which an Indemnitee shall be entitled to receive from an Indemnitor
with respect to any indemnifiable Loss under this Article 10 shall be net of any
actual insurance recovery received by the Indemnitee at the time of such
indemnification on account of such Loss under any Third Party Claim; provided,
however, that any costs of obtaining such recovery shall further constitute
Losses that are indemnifiable under this Article 10.
 
Tax Treatment of Indemnity Payments
 
. Each of the Seller, DCCI, the Shareholders and the Buyer agrees to treat any
indemnity payment made pursuant to this Article 10 as an adjustment to the
Purchase Price for all income Tax purposes.
 
 
SURVIVAL OF COVENANTS, REPRESENTATIONS, WARRANTIES AND AGREEMENTS
 
The representations and warranties of the parties to this Agreement shall
survive the Closing Date and shall remain in full force and effect for a period
of twelve (12) months following the Closing Date (except that (i) the
representations and warranties set forth in the second sentence in each of
Sections 3.4(b) and 3.4(c) and the first sentence of Section 3.4(d) shall
survive the Closing Date without limitation and (ii) the representations and
warranties contained in Sections 3.7, 3.10 and 3.14 hereof shall survive the
Closing Date and shall not terminate until twenty (20) days after the expiration
of all applicable statutes of limitations) (the period during which the
representations and warranties shall survive being referred to herein with
respect to such representations and warranties respectively as the “Survival
Period”), and shall be effective with respect to any inaccuracy therein or
breach thereof (and a claim for indemnification under Article 10 hereof may be
made thereon) if a written notice asserting the claim shall have been duly given
in accordance with Article 10 hereof within the Survival Period with respect to
such matter. Any claim for indemnification made in writing during the Survival
Period shall be valid and the representations and warranties relating thereto
shall remain in effect for purposes of such indemnification notwithstanding that
such claim may not be resolved within the Survival Period. All representations,
warranties and covenants and agreements made by the parties shall not be
affected by any investigation heretofore or hereafter made by and on behalf of
any of them and shall not be deemed merged into any instruments or agreements
delivered in connection with the Closing or otherwise in connection with the
transactions contemplated hereby.
 
EXPENSES
 
Except as otherwise expressly set forth herein, and whether or not the
transactions contemplated by this Agreement shall be consummated, each party
agrees to pay, without assumption of liability or right of reimbursement from
any other party, the costs and expenses incurred by such party incident to or in
connection with the preparation, negotiation and execution of this Agreement,
the transactions contemplated hereby and performance of its obligations
hereunder, including without limitation the fees and disbursements of legal
counsel, accountants and consultants employed by such party in connection with
such preparation, negotiation, execution and performance.

 
TERMINATION
 
Reasonable Best Efforts to Satisfy Conditions
 
. Subject to the provisions of this Agreement, the Buyer, on the one hand, and
the Seller, DCCI and the Shareholders, on the other hand, agree to use their
reasonable best efforts to bring about the satisfaction of the conditions
specified in Articles 9 and 8 hereof, respectively.
 
Termination
 
. The obligation to close the transactions contemplated by this Agreement may be
terminated by:
 
mutual written agreement of the Buyer and the Seller;
 
the Buyer, if a material default shall be made in the observance or in the due
and timely performance by the Seller, DCCI or the Shareholders of any agreements
and covenants of the Seller, DCCI or the Shareholder herein contained, or if
there shall have been a material breach by the Seller, DCCI or the Shareholders
of any of their respective warranties and representations herein contained, and
such default or breach is incapable of being cured or, if capable of being
cured, shall not have been cured within ten (10) days following receipt by the
Seller, DCCI or the Shareholders (as the case may be) of notice of such default
or breach;
 
the Seller, if a material default shall be made in the observance or in the due
and timely performance by the Buyer of any agreements and covenants of the Buyer
herein contained, or if there shall have been a material breach by the Buyer of
any of the warranties and representations of the Buyer herein contained, and
such default or breach is incapable of being cured or, if capable of being
cured, shall not have been cured within ten (10) days following receipt by the
Buyer of notice of such default or breach; or
 
the Buyer or the Seller (provided the terminating party has not materially
breached any of its agreements, covenants, representations or warranties) if the
Closing shall not have occurred on or before April 30, 2007.
 
Liability Upon Termination
 
. If the obligation to close the transactions contemplated by this Agreement is
terminated pursuant to Section 13.2(a) or 13.2(d), then this Agreement shall,
forthwith become void and there shall not be any liability or obligation with
respect to the terminated provisions of this Agreement on the part of the
Seller, DCCI, the Shareholders or the Buyer. If this Agreement is terminated
pursuant to Section 13.2(b) or 13.2(c), then the breaching party, as applicable,
shall remain liable for any breach of this Agreement prior to the effective date
of such termination. The exercise of any rights or remedy shall not be an
election of remedies.
 
Notice of Termination
 
. The parties hereto may exercise their respective rights of termination under
this Article 13 only by delivering written notice to that effect to the other
party or parties, and such notice is received on or before the Closing Date.
 
 
DEFINITIONS OF CERTAIN TERMS
 
In addition to terms defined elsewhere in this Agreement, the following terms
shall have the meanings assigned to them herein, unless the context otherwise
indicates, both for purposes of this Agreement and all Exhibits and Schedules
hereto:

“AAA” shall have the meaning given such term in Section 15.6(c) hereof. 

“Accounts Receivable” shall have the meaning given such term in Section
1.1(a)(iii).

“Agreement” shall have the meaning given such term in the preamble hereof, as
the same may be amended from time to time by the parties hereto, and including
the Exhibits and Schedules hereto.

“Allocation” shall have the meaning given such term in Section 1.7(a).

“Assumed Contracts” shall have the meaning given such term in Section 1.1(a)(v)
hereof.

“Assumed Liabilities” shall have the meaning given such term in Section 1.4
hereof. 

“Business” shall mean the businesses and operations of the Seller including,
without limitation, the distribution and installation of equipment used in the
industrial and municipal markets and the representation of industrial and
municipal equipment manufacturers, the distribution and installation of water
and wastewater treatment plants and the representation of water and wastewater
treatment plant manufacturers, the repair and remanufacturing of industrial
equipment, and the fabrication of equipment packaging.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in Baton Rouge, Louisiana or Houston, Texas are
authorized by law to close.

“Buyer” shall have the meaning given such term in the preamble hereof, or one or
more of such Person’s designees.

“Closing” shall mean the transfer by the Seller to the Buyer of the Transferred
Assets, the assumption by the Buyer of the Assumed Liabilities and the transfer
by the Buyer to the Seller of the Purchase Price.

“Closing Consents” shall have the meaning given such term in Section 7.3 hereof.

“Closing Date” shall mean the time and date of the Closing as specified in
Article 2 hereof.

“COBRA” shall have the meaning given such term in Section 6.2(b) hereof.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, or similar provisions of legislation replacing such law from time to time.

“Contracts and Other Agreements” shall mean all contracts, agreements,
understandings, indentures, notes, bonds, loans, instruments, leases, mortgages,
franchises, licenses, commitments or binding arrangements, whether express or
implied, oral or written, to which the Seller is a party or bound or to which
its properties or assets are subject.

“Damages” shall mean any and all liabilities, losses, damages, demands,
assessments, claims, costs and expenses (including interest, awards, judgments,
penalties, settlements, fines, costs of remediation, costs and expenses incurred
in connection with investigating and defending any claims or causes of action,
including, without limitation, reasonable attorneys’ fees and expenses and all
fees and expenses of consultants and other professionals).

“DCCI” shall have the meaning given such term in the preamble hereof.

“Disclosure Schedule” shall mean the disclosure schedule delivered to the Buyer
attached hereto as Exhibit B.

“Documents and Other Papers” shall mean and include any document, agreement,
instrument, certificate, writing, notice, consent, affidavit, letter, telegram,
telex, financial record, statement, file, computer disk, microfiche or other
document in electronic format, schedule, exhibit or any other paper or record
whatsoever.

“Employee Benefits” shall mean any and all pension or welfare benefit programs,
payroll practices, fringe benefits, or other plans, arrangements, agreements and
understandings for employees or other service providers, groups of employees or
other service providers or specific individual employees or other service
providers to which the Seller contributes or is a party, by which it may be
bound or under which it may have liability, other than benefits required by
applicable law (e.g., social security benefits and payroll taxes related
thereto), including without limitation pension or retirement plans, deferred
compensation plans, bonus or incentive plans, early retirement programs,
severance pay policies, support funds, medical or dental insurance, short-term
and long-term disability, educational reimbursement plans, sick leave, vacation
policy, and any other payment or reimbursement plans.

“Environmental Laws” shall mean all federal, state, or municipal laws, rules,
regulations, statutes, ordinances, or orders of any Governmental Entity relating
to (a) the control of any potential pollutant or protection of the air, water,
or land, (b) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation and (c) exposure to hazardous, toxic or
other substances alleged to be harmful. “Environmental Laws” shall include, but
not be limited to, the Clean Air Act, 42 U.S.C. § 7401 et seq., the Clean Water
Act, 33 U.S.C. § 1251 et seq., the Resource Conservation Recovery Act (“RCRA”),
42 U.S.C. § 6901 et seq., the Superfund Amendments and Reauthorization Act, 42
U.S.C. § 11001, et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et
seq., the Water Pollution Control Act, 33 U.S.C. § 1251 et seq., the Safe
Drinking Water Act, 42 U.S.C. § 300f et seq. and the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq.
The term “Environmental Laws” shall also include all state, local and municipal
laws, rules, regulations, statutes, ordinances and orders dealing with the same
subject matter or promulgated by any governmental or quasi-governmental agency
thereunder or to carry out the purposes of any federal, state, local and
municipal law.

“Environmental Permit” shall mean any permit, license, approval, registration,
identification number or other authorization with respect to the Transferred
Assets or the operation of the Business under any applicable law, regulation or
other requirement of the United States or any other country or of any state,
municipality or other subdivision thereof relating to the control of any
pollutant or protection of health or the environment, including laws,
regulations or other requirements relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic materials
or wastes into ambient air, surface water, groundwater or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of chemical substances, pollutants,
contaminants or hazardous or toxic materials or wastes.

“Equipment” shall mean all machinery, transportation equipment, tools,
equipment, furnishings and fixtures owned, leased or subject to a contract of
purchase and sale, or lease commitment that is used in the Business as operated
by the Seller.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the
related regulations, as amended from time to time.

“Excluded Assets” shall have the meaning given such term in Section 1.2 hereof.

“Facilities” shall collectively mean the real property that is leased by Seller
and is described in Exhibit F (including, without limitation, that real property
to be leased in connection with the consummation of the transactions under this
Agreement to the Buyer by Stone Flower under the Lease Agreements). Facilities
shall include all fixtures and improvements erected or located on or affixed to
the Facilities.

“Financial Statements” shall have the meaning given such term in Section 3.6
hereof.

“General Buyer Losses” shall have the meaning given such term in Section 10.1
hereof.

“General Conveyance, Transfer, Assignment and Assumption” shall have the meaning
given such term in Section 8.3 hereof.
“Governmental Entity” shall mean any arbitrator, court, administrative or
regulatory agency, commission, department, board or bureau or body or other
government or authority, instrumentality or subdivision or any entity or Person
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

“Hazardous Materials” shall mean any (a) petroleum or petroleum products, (b)
hazardous substances as defined by § 101(14) of CERCLA and (c) any other
chemical, substance or waste that is regulated by any Governmental Entity under
any Environmental Law.

“Indemnitee” shall mean the Person or Persons indemnified, or entitled, or
claiming to be entitled to be indemnified, pursuant to the provisions of
Sections 10.1 or 10.2 hereof, as the case may be.

“Indemnitor” shall mean the Person or Persons having the obligation to
indemnify, or alleged to have the obligation to indemnify, pursuant to the
provisions of Sections 10.1 or 10.2 hereof, as the case may be.

“Inventories” shall mean all inventories of finished goods, tooling inventory,
work in progress, raw materials and other inventories relating to the Business,
wherever situated.

“Lease Agreements” shall have the meaning given such term in Section 8.3 hereof.

“Leases” shall have the meaning given such term in Section 1.1(a)(vi) hereof.

“Lien” shall mean any lien, pledge, claim, charge, security interest, right of
first refusal or other encumbrance, option or other rights of any third Person
of any nature whatsoever.

“Losses” shall mean Seller Losses or General Buyer Losses, as the case may be.

“Material Adverse Effect” shall mean any change, circumstance or effect that,
individually or in the aggregate with all other changes, circumstances and
effects, is or could reasonably be expected to be materially adverse to the
assets, business, operations or financial condition of Seller or the Business,
other than adverse effects arising from events or conditions relating to the
economy or the water or wastewater treatment plants industry in general and not
disproportionately impacting the Transferred Assets or the results of operations
and financial condition of the Business.

“Names” shall have the meaning given such term in Section 7.11 hereof.

“Permitted Liens” shall mean (a) liens or encumbrances created by this
Agreement, (b) mechanics’, carriers’, workmen’s, warehousemen’s, repairmen’s or
other like statutory liens arising in the ordinary course of business and
securing obligations not yet due and not resulting from a breach, default or
violation by Seller, (c) liens or encumbrances for Taxes or other governmental
obligations not yet due and payable (without taking into account any extensions
therefore), provided an appropriate reserve has been established therefore in
the Financial Statements and (d) those Liens listed on Schedule 14.40.

“Person” shall mean a corporation, an association, a partnership, a limited
liability company, a trust, an organization, a business, an individual or a
Governmental Entity.

“Proprietary Information” shall mean collectively (a) the Seller’s Proprietary
Rights and (b) any and all other information and material proprietary to the
Seller, owned, possessed or used by the Seller, whether or not such information
is embodied in writing or other physical form, and which is not generally known
to the public, that (i) relates to financial information regarding the Business,
including, without limitation, (y) business plans and (z) sales, financing,
pricing and marketing procedures or methods of the Business or (ii) relates to
specific matters concerning the Seller or the Business, including, without
limitation, the identity of or other information regarding sales personnel or
customers of the Seller.

“Proprietary Rights” means all patents, inventions, shop rights, trade secrets,
designs, plans, user manuals, including training documentation, computer
software and programs, whether in source code or object code, including licenses
related thereto, databases and compilations, whether machine readable or
otherwise, specifications, flow charts and other work products used to design,
plan or organize and develop any of the foregoing, confidentiality agreements,
confidential information and other proprietary technology and similar
information; all registered and unregistered trademarks, service marks, logos,
corporate names, trade names and all other trademark rights; all registered and
unregistered copyrights; and all registrations for, and applications for
registration of, any of the foregoing, that are used in the conduct of the
Business.

“Purchase Price” shall have the meaning given such term in Section 1.3 hereof.

“Reference Balance Sheet” shall have the meaning given such term in Section
1.4(a) hereof.

“Required Consents” shall have the meaning given such term in Section 3.3(a)
hereof.

“Retained Liabilities” shall have the meaning given such term in Section 1.5
hereof.

“Seller” shall have the meaning given such term in the preamble hereof.

“Seller Losses” shall have the meaning given such term in Section 10.2 hereof. 

“Shareholders” shall have the meaning given such term in the preamble hereof.

“Stone Flower” shall have the meaning given such term in Section 8.3 hereof.

“Subsidiary” shall mean, as to a Person, any corporation, partnership, limited
liability company, joint venture, association or other entity or organization in
which such Person owns (directly or indirectly) any equity or other similar
capital interest (other than obligations under trade payables arising in the
ordinary course of business of such Person).

“Survival Period” shall have the meaning given such term in Article 11 hereof.

“Tax Returns” shall mean all returns, declarations, reports, statements and
other documents of, relating to, or required to be filed in respect of, any and
all Taxes, and the term “Tax Return” means any one of the foregoing Tax Returns.

“Taxes” shall mean all federal, state, local, foreign and other taxes, charges,
fees, duties, levies, imposts, customs or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, profit share, license, lease, service,
service use, value added, withholding, payroll, employment, excise, estimated,
severance, stamp, occupation, premium, property, windfall profits, or other
taxes, fees, assessments, customs, duties, levies, imposts, or charges of any
kind whatsoever, together with any interests, penalties, additions to tax, fines
or other additional amounts imposed thereon or related thereto, and the term
“Tax” means any one of the foregoing Taxes. 

“Third Party Claims” shall have the meaning given such term in Section 10.4(b)
hereof.

“Trade Payables” shall mean those obligations of the Seller relating to the
provision of goods and services to the Seller for the conduct of the Business in
the ordinary course of business of the Seller that relate to the Transferred
Assets and that are classified as Trade Payables and are shown on Seller’s
financial statements delivered to Buyer.

“Transferred Assets” shall have the meaning given such term in Section 1.1
hereof.

“Transferred Employees” shall have the meaning given such term in Section 6.1
hereof.
“WARN” shall have the meaning given such term in Section 3.14(f) hereof.
 
MISCELLANEOUS
 
Notices
 
. All notices, requests, consents, directions and other instruments and
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person,
by courier, by overnight delivery service with proof of delivery or by prepaid
registered or certified United States first-class mail, return receipt
requested, addressed to the respective party at the address set forth below, or
if sent by facsimile or other similar form of communication (with receipt
confirmed) to the respective party at the facsimile number set forth below:
 
If to the Seller, DCCI

 
or the Shareholders, to:    
    M. Wayne Guy

                            17732 Highland Rd., Suite G-113
                            Baton Rouge, La. 70810
                            (V) (225) 753-7279
                            (F) (225) 751-3867

 
Copies to:
    B. Michael Mauldin

                            Jones, Walker, Waechter, Poitevent,
                              Carrere & Denegre L.L.P.
                            8555 United Plaza Blvd., 5th Floor
                            Baton Rouge, LA 70809
                            (V) (225) 248-2034
                            (F) (225) 248-3034

 
If to the Buyer, to:
  DXP Enterprises, Inc.

                            7272 Pinemont
                            Houston, Texas 77040
                            Attn: David R. Little, CEO
                            (V) (713) 996-4755
                            (F) (713) 996-6570

 
Copies to:
    Gary A. Messersmith

                            Looper, Reed & McGraw, P.C.
                            1300 Post Oak Blvd., Suite 2000
                            Houston, Texas 77056
                            (V) (713) 986-7216
                            (F) (713) 986-7100

or to such other address or facsimile number and to the attention of such other
Person(s) as either party may designate by written notice. Any notice mailed
shall be deemed to have been given and received on the third Business Day
following the day of mailing.

Assignment
 
. Prior to the Closing Date, no party to this Agreement may sell, transfer,
assign, pledge or hypothecate its rights, interests or obligations under this
Agreement, except that the Buyer may assign its rights to any affiliate of the
Buyer. Subsequent to the Closing Date, the parties may, from time to time,
without the consent of the other parties hereto assign any or all of their
respective rights (but not their obligations) under this Agreement.
Notwithstanding the foregoing, no assignment of this Agreement or any of the
rights, interests or obligations hereof by the Buyer shall relieve the Buyer of
its obligations under this Agreement and, upon any such assignment occurring
prior to the Closing, the representations, warranties, covenants and agreements
contained in this Agreement shall be deemed to have been made by the Buyer’s
assignee as well as by the Buyer. The Buyer and the Seller agree that in
connection with any sale or other disposition or series of sales or dispositions
of all or substantially all of such party’s assets to an affiliate of such party
or any merger or liquidation of such party, the acquiring Person or other
recipient of substantially all of such party’s assets, as the case may be, shall
assume the obligations of such party under this Agreement. Such obligation shall
apply to successive sales, dispositions, mergers and liquidations. 
 
Successors
 
. This Agreement shall inure to the benefit of, be binding upon and be
enforceable by the parties hereto and their respective successors and permitted
assigns. Each of DCCI and the Shareholders represents and warrants to the Buyer
that (i) DCCI holds of record and owns beneficially one hundred percent (100%)
of all of the issued and outstanding shares of stock of Seller, (ii) the
Shareholders hold of record and own beneficially ninety eight and two tenths
percent (98.2%) of the issued and outstanding shares of stock of DCCI, (iii)
DCCI is not a party to an option, warrant, purchase right or other contract or
commitment that could require DCCI to issue, sell, transfer or otherwise dispose
of any stock of DCCI, (iv) this Agreement has been duly authorized by DCCI and
is a legal, valid and binding obligation of DCCI and the Shareholders,
enforceable against each of them in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors’ rights generally and by legal and equitable limitations on the
availability of specific remedies.
 
Entire Agreement
 
. This Agreement and the Exhibits and Schedules hereto and the Disclosure
Schedule constitute the entire agreement and understanding between the parties
relating to the subject matter hereof and thereof and supersede all prior
representations, endorsements, premises, agreements, memoranda communications,
negotiations, discussions, understandings and arrangements, whether oral,
written or inferred, between the parties relating to the subject matter hereof.
This Agreement may not be modified, amended, rescinded, canceled, altered or
supplemented, in whole or in part, except upon the execution and delivery of a
written instrument executed by a duly authorized representative of each of the
parties hereto.
 
Governing Law
 
. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Texas without giving effect to choice of law
principles.
 
Dispute Resolution; Mediation; Arbitration.
 
Except with respect to any dispute, breach or attempted breach arising out of or
relating to this Agreement or the transactions contemplated hereby in respect of
which a party or parties shall seek or be entitled to obtain specific
performance or injunctive relief hereunder, any dispute arising out of or
relating to this Agreement or the transactions contemplated hereby (including
without limitation any questions regarding the existence, validity,
interpretation or termination hereof) shall be resolved in accordance with the
procedures specified in this Section 15.6, which shall be the sole and exclusive
procedures for the resolution of any such disputes.
 
Any dispute arising out of or relating to this Agreement or the transactions
contemplated hereby shall first be submitted to mediation by a mutually
acceptable mediator in a non-binding mediation after written notice by a party
of such dispute. The fee of such mediator shall be paid one-half by the Seller
and one-half by the Buyer.
 
Any part of a dispute which is not resolved by mediation within sixty (60) days
from the notice of such dispute provided under Section 15.6(b) shall be referred
to and finally resolved by binding arbitration under the auspices and the then
applicable Commercial Arbitration Rules of the American Arbitration Association
(the “AAA”) as herein modified or supplemented or otherwise agreed to by the
parties hereto. At any time, by express written agreement the parties may
modify, limit the application of, add to or avoid the operation of one or more
rules of the AAA.
 
The arbitrator shall be selected in accordance with the rules of the AAA. The
location of the arbitration proceedings shall be in Houston, Texas. The AAA
shall arrange for a prehearing conference as soon as practicable after the
appointment of the arbitrator. At the prehearing conference, the arbitrator
shall set a hearing date, which shall commence not later than sixty (60) days
after the prehearing conference.
 
The parties agree that the arbitrator may call and question any witness,
including any expert witness, and may require a party to produce any relevant
documents or evidence prior to or at any hearing. The parties and the arbitrator
shall proceed expeditiously so that the arbitral award is issued as soon as
practicable. The arbitrator will be empowered to grant injunctive relief in the
form of interim orders pending the outcome of the arbitration and in the final
arbitral award. The costs, expenses and fees of a party incurred in connection
with any arbitration proceeding shall be borne by that party. Costs, expenses
and fees of the arbitrator shall be borne equally by the Seller and the Buyer,
unless the arbitral award otherwise provides.
 
Any award may, in the discretion of the arbitrators, include interest from the
date of the breach or other violation of the Agreement until the award is fully
paid. Judgment upon the award rendered by the arbitrator may be entered by any
court having jurisdiction thereof. Judgment may be entered on the award of the
arbitrators and may be enforced in any court having competent jurisdiction. Any
additional costs, fees or expenses incurred in enforcing the arbitral award will
be charged against the party that resists enforcement.
 
Waiver
 
. The waiver of any breach of any term or condition of this Agreement shall not
be deemed to constitute the waiver of any other breach of the same or any other
term or condition. No failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. Each of Seller, DCCI and the Shareholders
acknowledges and agrees that the breach of this Agreement would cause
irreparable damage to Buyer and that Buyer will not have an adequate remedy at
law. Therefore, the obligations of Seller, DCCI and the Shareholders under this
Agreement, including Seller’s obligation to sell the Transferred Assets to
Buyer, shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith.
 
Severability
 
. Without limitation to the terms and provisions contained in Section 7.8 hereof
and except as provided therein, any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
 
No Third Party Beneficiaries
 
. Any agreement contained, expressed or implied in this Agreement shall be only
for the benefit of the parties hereto and their respective legal
representatives, successors and permitted assigns, and such agreements shall not
inure to the benefit of the obligees of any indebtedness of any party hereto, it
being the intention of the parties hereto that no Person shall be deemed a third
party beneficiary of this Agreement, except to the extent a third party is
expressly given rights herein.
 
Counterparts
 
. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
 
Headings
 
. Each statement set forth in the Disclosure Schedule with respect to a
particular section herein shall be deemed made with respect to such section and
with respect to any other section hereof where such statement would be
appropriate and the relevance of such statement to such other section is readily
apparent. The Table of Contents and the headings of the Articles and Sections of
this Agreement have been inserted for convenience of reference only and shall in
no way restrict or otherwise modify any of the terms or provisions hereof or
affect in any way the meaning or interpretation of this Agreement.
 
Negotiated Transaction
 
. The provisions of this Agreement were negotiated by the parties hereto, and
this Agreement shall be deemed to have been drafted by all of the parties
hereto.
 
Negotiation with Others
 
. The Seller agrees that from the date hereof until the Closing Date or the
termination of this Agreement pursuant to Article 13, it will not, directly or
indirectly, negotiate with any Person not a party hereto or not affiliated with
a party hereto with respect to a merger, consolidation, asset purchase or any
similar transaction with any such Person.
 

[Signature page follows.]

 
 

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

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

SELLER:

DELTA PROCESS EQUIPMENT, INC.

By: /s/ M. Wayne Guy    
M. Wayne Guy, President

DCCI:

DELTA COMPANIES CONSOLIDATED, INC.

By: /s/ M. Wayne Guy    
M. Wayne Guy, President

SHAREHOLDERS:

/s/ M. Wayne Guy    
M. Wayne Guy

/s/ Brenda Guy     
Brenda Guy

BUYER:

DXP ENTERPRISES, INC.

By: /s/ David R. Little    
David R. Little, CEO