Exhibit 10.4.1.
                                                            ---------------





                             AGREEMENT AND PLAN OF MERGER


                                        AMONG


                              AMERICAN ECO CORPORATION,
                           AN ONTARIO, CANADA CORPORATION,

                             SRS ACQUISITION CORPORATION
                              A CALIFORNIA CORPORATION,

                                         AND

                        SEPARATION AND RECOVERY SYSTEMS, INC.
                                 A NEVADA CORPORATION


          <PAGE>


                                  TABLE OF CONTENTS


                                                                       Page
                                                                       ----


          ARTICLE I
          ADOPTION OF AGREEMENT AND PLAN OF MERGER  . . . . . . . . . . -1-
               1.1  The Merger. . . . . . . . . . . . . . . . . . . . . -1-
               1.2  Effective Date of the Merger. . . . . . . . . . . . -2-
               1.3  Surviving Corporation; Articles of Incorporation
                    of Surviving Corporation. . . . . . . . . . . . . . -2-
               1.4  Merger Consideration; Conversion of SRS Common
                    Stock; Cancellation of Acquisition Corp. Common
                    Stock.  . . . . . . . . . . . . . . . . . . . . . . -2-
               1.5  Exchange of Certificates. . . . . . . . . . . . . . -3-
               1.6  No Fractional Shares. . . . . . . . . . . . . . . . -4-
               1.7  Certificates in Other Names.  . . . . . . . . . . . -5-
               1.8  Treatment of Options. . . . . . . . . . . . . . . . -5-
               1.9  Appraisal Rights. . . . . . . . . . . . . . . . . . -5-


          ARTICLE II
          CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
               2.1  Closing Date. . . . . . . . . . . . . . . . . . . . -6-
               2.2  Deliveries at the Closing.  . . . . . . . . . . . . -6-

          ARTICLE III
          REPRESENTATIONS AND WARRANTIES OF SRS . . . . . . . . . . . . -6-
               3.1  Due Incorporation.  . . . . . . . . . . . . . . . . -6-
               3.2  Due Authorization.  . . . . . . . . . . . . . . . . -7-
               3.3  Non-Contravention; Consents and Approvals.  . . . . -7-
               3.4  Capitalization. . . . . . . . . . . . . . . . . . . -8-
               3.5  Financial Statements; Undisclosed Liabilities;
                    Other Documents.  . . . . . . . . . . . . . . . . . -9-
               3.6  No Material Adverse Effects or Changes. . . . . . . -9-
               3.7  Tax Returns and Audits. . . . . . . . . . . . . .  -10-
               3.8  Litigation. . . . . . . . . . . . . . . . . . . .  -12-
               3.9  Compliance with Applicable Laws.  . . . . . . . .  -12-
               3.10 Contracts.  . . . . . . . . . . . . . . . . . . .  -12-
               3.11 Real Property.  . . . . . . . . . . . . . . . . .  -14-
               3.12 Personal Property.  . . . . . . . . . . . . . . .  -14-
               3.13 Employees.  . . . . . . . . . . . . . . . . . . .  -14-
               3.14 Insurance.  . . . . . . . . . . . . . . . . . . .  -15-
               3.15 Inventories.  . . . . . . . . . . . . . . . . . .  -15-
               3.16 Accounts Receivable.  . . . . . . . . . . . . . .  -15-
               3.17 Employee Benefits.  . . . . . . . . . . . . . . .  -15-
               3.18 Intellectual Property.  . . . . . . . . . . . . .  -16-
               3.19 Environmental Matters.  . . . . . . . . . . . . .  -16-
               3.20 Books and Records.  . . . . . . . . . . . . . . .  -16-
               3.21 Related Party Transactions. . . . . . . . . . . .  -17-
               3.22 Fees of Brokers, Consultants and Financial
                     Advisors.  . . . . . . . . . . . . . . . . . . .  -17-
               3.23 Required Vote.  . . . . . . . . . . . . . . . . .  -17-
               3.24 General Representation and Warranty.  . . . . . .  -17-

          ARTICLE IV
          REPRESENTATIONS AND WARRANTIES OF
          ACQUISITION CORP. AND ECO . . . . . . . . . . . . . . . . .  -18-
               4.1  Due Incorporation.  . . . . . . . . . . . . . . .  -18-
               4.2  Due Authorization.  . . . . . . . . . . . . . . .  -18-
               4.3  Non-Contravention; Consents and Approvals.  . . .  -19-
               4.4  Capitalization. . . . . . . . . . . . . . . . . .  -19-
               4.5  Financial Statements; Undisclosed Liabilities;
                    Other Documents.  . . . . . . . . . . . . . . . .  -20-
               4.6  Securities Law Filings. . . . . . . . . . . . . .  -21-
               4.7  No Material Adverse Effects or Changes. . . . . .  -21-
               4.8  Insurance.  . . . . . . . . . . . . . . . . . . .  -21-
               4.9  Labor Matters.  . . . . . . . . . . . . . . . . .  -21-
               4.10 Tax Returns and Audits. . . . . . . . . . . . . .  -22-
               4.11 Litigation. . . . . . . . . . . . . . . . . . . .  -22-
               4.12 Compliance with Applicable Laws.  . . . . . . . .  -23-
               4.13 Contracts; No Defaults. . . . . . . . . . . . . .  -23-
               4.14 Absence of Certain Changes or Events. . . . . . .  -23-
               4.15 Fees of Brokers, Finders and Investment Bankers.   -24-
               4.16 General Representation and Warranty.  . . . . . .  -24-

          ARTICLE V
          COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . .  -24-
               5.1  Implementing Agreement. . . . . . . . . . . . . .  -24-
               5.2  Access to Information and Facilities;
                     Confidentiality. . . . . . . . . . . . . . . . .  -24-
               5.3  Preservation of Business. . . . . . . . . . . . .  -25-
               5.4  SRS Stockholder Approval. . . . . . . . . . . . .  -26-
               5.5  California Permit.  . . . . . . . . . . . . . . .  -26-
               5.6  Consents and Approvals. . . . . . . . . . . . . .  -27-
               5.7  Periodic Reports. . . . . . . . . . . . . . . . .  -27-
               5.8  Publicity.  . . . . . . . . . . . . . . . . . . .  -27-
               5.9  No Negotiation. . . . . . . . . . . . . . . . . .  -27-
               5.10 Listing of Common Stock.  . . . . . . . . . . . .  -28-
               5.11 Blue Sky Approvals. . . . . . . . . . . . . . . .  -28-
               5.12 Principal Stockholders. . . . . . . . . . . . . .  -28-
               5.13 Rule 145 Affiliates.  . . . . . . . . . . . . . .  -28-
               5.14 Tax-Free Status.  . . . . . . . . . . . . . . . .  -28-

          ARTICLE VI
          CONDITIONS PRECEDENT TO OBLIGATIONS
          OF ACQUISITION CORP. AND ECO  . . . . . . . . . . . . . . .  -28-
               6.1  Warranties True as of Closing Date. . . . . . . .  -28-
               6.2  Compliance With Agreements and Covenants. . . . .  -29-
               6.3  SRS Certificate.  . . . . . . . . . . . . . . . .  -29-
               6.4  Secretary's Certificate.  . . . . . . . . . . . .  -29-
               6.5  Good Standing Certificates. . . . . . . . . . . .  -29-
               6.6  De Franco Employment Agreement. . . . . . . . . .  -29-
               6.7  Escrow Agreement. . . . . . . . . . . . . . . . .  -29-
               6.8  Opinion of Counsel. . . . . . . . . . . . . . . .  -29-
               6.9  Approval of Merger. . . . . . . . . . . . . . . .  -29-
               6.10 Permit. . . . . . . . . . . . . . . . . . . . . .  -29-
               6.11 Dissent and Appraisal.  . . . . . . . . . . . . .  -30-
               6.12 Consents and Approvals. . . . . . . . . . . . . .  -30-
               6.13 Resignations. . . . . . . . . . . . . . . . . . .  -30-
               6.14 Listing of Common Stock.  . . . . . . . . . . . .  -30-
               6.15 Rule 145 Letters. . . . . . . . . . . . . . . . .  -30-
               6.16 Actions or Proceedings. . . . . . . . . . . . . .  -30-
               6.17 Other Closing Documents.  . . . . . . . . . . . .  -30-

          ARTICLE VII
          CONDITIONS PRECEDENT TO OBLIGATIONS OF SRS  . . . . . . . .  -30-
               7.1  Warranties True as of Closing Date. . . . . . . .  -30-
               7.2  Compliance with Agreements and Covenants. . . . .  -31-
               7.3  Eco Certificate.  . . . . . . . . . . . . . . . .  -31-
               7.4  Opinion of Counsel. . . . . . . . . . . . . . . .  -31-
               7.5  Opinion of Tax Counsel. . . . . . . . . . . . . .  -31-
               7.6  Permit. . . . . . . . . . . . . . . . . . . . . .  -31-
               7.7  Consents and Approvals. . . . . . . . . . . . . .  -31-
               7.8  Listing of Common Stock.  . . . . . . . . . . . .  -31-
               7.9  Actions or Proceedings. . . . . . . . . . . . . .  -31-
               7.10 Other Closing Documents.  . . . . . . . . . . . .  -31-

          ARTICLE VIII
          TERMINATION . . . . . . . . . . . . . . . . . . . . . . . .  -32-
               8.1  Termination.  . . . . . . . . . . . . . . . . . .  -32-
               8.2  Effect of Termination and Abandonment.  . . . . .  -33-

          ARTICLE IX
          INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . .  -33-
               9.1  Indemnification by SRS Stockholders.  . . . . . .  -33-
               9.2  Indemnification by Eco. . . . . . . . . . . . . .  -34-
               9.3  Procedure.  . . . . . . . . . . . . . . . . . . .  -34-
               9.4  Remedies. . . . . . . . . . . . . . . . . . . . .  -35-

          ARTICLE X
          MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . .  -35-
               10.1 Expenses. . . . . . . . . . . . . . . . . . . . .  -35-
               10.2 Amendment.  . . . . . . . . . . . . . . . . . . .  -35-
               10.3 Notices.  . . . . . . . . . . . . . . . . . . . .  -35-
               10.4 Waivers.  . . . . . . . . . . . . . . . . . . . .  -36-
               10.5 Interpretation. . . . . . . . . . . . . . . . . .  -37-
               10.6 Applicable Law. . . . . . . . . . . . . . . . . .  -37-
               10.7 Assignment. . . . . . . . . . . . . . . . . . . .  -37-
               10.8 No Third Party Beneficiaries. . . . . . . . . . .  -37-
               10.9 Enforcement of the Agreement. . . . . . . . . . .  -37-
               10.10 Severability.  . . . . . . . . . . . . . . . . .  -37-
               10.11 Remedies Cumulative. . . . . . . . . . . . . . .  -38-
               10.12 Entire Understanding.  . . . . . . . . . . . . .  -38-
               10.13 Waiver of Jury Trial.  . . . . . . . . . . . . .  -38-
               10.14 Counterparts.  . . . . . . . . . . . . . . . . .  -38-


          <PAGE>
                                      SCHEDULES
                                      ---------

          NUMBER    DESCRIPTION

          3.1            SRS subsidiaries, joint ventures, etc.

          3.3            SRS Non-Contravention; Consents and Approvals.

          3.4            SRS Options.

          3.5            SRS Changes since February 29, 1996.

          3.7            Tax Powers of Attorney.

          3.8            SRS Litigation.

          3.9            SRS Permits.

          3.10           SRS Contracts.

          3.12           SRS Personal property valued over $1,000.

          3.13           SRS Employees.

          3.14           SRS Insurance.

          3.16           SRS Accounts receivable.

          3.17           SRS Employee Benefits.

          3.18           SRS Intellectual Property.

          3.20           SRS Corporate.

          3.21           SRS Related Party Transactions.

          4.4            ECO Derivative Securities.

          4.7            Changes to Eco since February 29, 1996.

          4.10           Eco Tax Returns.

          4.11           Eco Litigation.

          4.12           Eco Permits.

          4.14           Eco Changes since February 29, 1996.


          <PAGE>                       
                                       EXHIBITS
                                       --------


          A.        DeFranco Employment Agreement

          B.        Escrow Agreement.



          <PAGE>


                             AGREEMENT AND PLAN OF MERGER

                    AGREEMENT AND PLAN OF MERGER dated as of April 26,
          1996, among AMERICAN ECO CORPORATION, an Ontario, Canada
          corporation ("Eco"), SRS ACQUISITION CORPORATION, a California
          corporation ("Acquisition Corp."), and SEPARATION AND RECOVERY
          SYSTEMS, INC., a Nevada corporation ("SRS").


                                W I T N E S S E T H :
                                - - - - - - - - - -  

                    WHEREAS, Acquisition Corp. is a newly-formed wholly-
          owned subsidiary of Eco;

                    WHEREAS, Eco desires to acquire all of the issued and
          outstanding shares of SRS Common Stock, par value $.01 per share
          (the "SRS Common Stock"), through the merger of Acquisition Corp.
          with and into SRS pursuant to the terms hereinafter set forth
          (the "Merger");

                    WHEREAS, the respective Boards of Directors of American
          Eco and Acquisition Corp. deem it advisable and in the best
          interests of Eco and Acquisition Corp. that Acquisition Corp. be
          merged with and into SRS upon the terms and conditions
          hereinafter specified; 

                    WHEREAS, the Board of Directors of SRS deems it
          advisable and in the best interests of SRS that Acquisition Corp.
          be merged with and into SRS upon the terms and conditions
          hereinafter specified;

                    WHEREAS, for Federal income tax purposes, it is
          intended that the Merger shall qualify as a reorganization within
          the meaning of Section 368(a) of the Internal Revenue Code of
          1986, as amended (the "Code");

                    NOW, THEREFORE, in consideration of the mutual
          covenants and agreements hereinafter contained, the parties
          hereto, intending to be legally bound hereby, agree as follows:

                                      ARTICLE I

                       ADOPTION OF AGREEMENT AND PLAN OF MERGER

                    1.1    The Merger.  At the Effective Time (as defined 
                           ----------
          in Section 1.2 herein), in accordance with this Agreement and the 
             -----------
          relevant provisions of the Nevada Revised Statutes (the "NRS"),
          Acquisition Corp. shall be merged with and into SRS.  SRS shall
          be the surviving corporation of the Merger and SRS shall
          continue, and be deemed to continue, for all purposes after the
          Merger, and the existence of Acquisition Corp. shall cease at the
          Effective Time.

                    1.2    Effective Date of the Merger.  This Agreement 
                           ----------------------------
          shall be submitted to the stockholders of SRS as provided in
          Section 5.4 hereof, and to the sole stockholder of Acquisition 
          -----------
          Corp., as provided in Section 5.4 hereof, for approval as soon as
                                -----------
          practicable after the execution of this Agreement.  Subject to
          the terms and conditions hereof and the authorization, approval
          and adoption hereof by the affirmative vote of Eco, in its
          capacity as the sole stockholder of Acquisition Corp., and of the
          holders of SRS Common Stock entitled to vote thereon holding at
          least a majority of the issued and outstanding shares of SRS
          Common Stock as provided by the NRS.  Articles of Merger (the
          "Articles of Merger") meeting the requirements of Chapter 92A,
          Section 200 of the NRS shall be executed, verified and
          acknowledged as required by the provisions of Chapter 92A,
          Section 230 of the NRS and shall be delivered to the Secretary of
          State of Nevada for filing (the time of such filing being the
          "Effective Time" and the date of such filing being the "Effective
          Date").

                    1.3    Surviving Corporation; Articles of Incorporation
                           ------------------------------------------------
          of Surviving Corporation.  Following the Merger, SRS shall 
          ------------------------
          continue to exist under, and be governed by, the laws of the
          State of Nevada, and Eco will own all of the issued and
          outstanding SRS Common Stock.  The Articles of Incorporation of
          SRS, as in effect on the Closing Date, shall continue in full
          force and effect as the Articles of Incorporation of SRS.

                    1.4    Merger Consideration; Conversion of SRS Common 
                           ----------------------------------------------
          Stock; Cancellation of Acquisition Corp. Common Stock.  (a)  At 
          -----------------------------------------------------
          the Effective Time, by virtue of the Merger and without any
          action on the part of Acquisition Corp., SRS or the holders of
          SRS Common Stock, the holders of SRS Common Stock immediately
          prior to the Effective Time shall receive one million (1,000,000)
          shares of common stock, no par value, of Eco ("Eco Common
          Stock"), which shall be the "Merger Consideration" subject to
          adjustment as provided in this Section 1.4 and subject to the 
                                         -----------
          Escrow Agreement, as described in Section 6.7 hereof.  Each SRS 
                                            -----------
          stockholder as of the Effective Date shall be entitled to receive
          a number of shares of Eco Common Stock equal to the product of
          (x) a fraction, the numerator of which being the number of shares
          of SRS Common Stock owned of record by such stockholder on the
          Effective Date and the denominator of which shall be the total
          issued and outstanding shares of SRS Common Stock on the
          Effective Date, multiplied by (y) the Merger Consideration. 
          Until surrendered in accordance with the provisions of Section 
                                                                 -------   
          1.5 hereof, each certificate of SRS Common Stock shall represent,
          ---
          for all purposes, only the right to receive the Merger
          Consideration or appraisal rights under Section 1.9 hereof.
                                                  -----------

                    (b)    No adjustment shall be made in the Merger
          Consideration if the average closing price (the "Average Closing
          Price") per share of Eco Common Stock on the Nasdaq National
          Market for the five (5) trading days immediately preceding the
          Closing Date (as defined in Section 2.1 hereof) is not less than
                                      -----------
          Six Dollars ($6.00) and not greater than Seven Dollars ($7.00). 
          In the event that the Average Closing Price per share is less
          than Six Dollars ($6.00), the Merger Consideration shall be
          increased to equal that number of shares of Eco Common Stock
          which, when multiplied by such Average Closing Price per share,
          equals Six Million Dollars ($6,000,000).  In the event that the
          Average Closing Price per share is greater than Seven Dollars
          ($7.00), the Merger Consideration shall be decreased to equal
          that number of shares of Eco Common Stock which, when multiplied
          by such Average Closing Price per share, equals Seven Million
          Dollars ($7,000,000).  The number of shares of Eco Common Stock
          constituting the Merger Consideration is also subject to
          reduction for payment of finders' fee on behalf of SRS pursuant
          to Section 3.22 herein.
             ------------

                    (c)    If between the date of this Agreement and the
          Effective Time the outstanding shares of Eco Common Stock shall
          have been changed into a different number of shares or a
          different class by reason of a stock dividend, subdivision,
          reclassification, recapitalization, split-up or combination, the
          Merger Consideration and the Nasdaq National Market closing price
          for Eco Common Stock shall be appropriately adjusted.

                    (d)    At the Effective Time, all shares of SRS Common
          Stock which are owned by SRS as treasury stock shall be canceled
          and retired and cease to exist.

                    (e)    At the Effective Time, each share of Acquisition
          Corp. Common Stock issued and outstanding immediately prior to
          the Effective Time shall, by virtue of the Merger and without any
          action the part of Eco, be canceled and cease to exist.

                    1.5  Exchange of Certificates.  (a)  Prior to the 
                         ------------------------
          Effective Time, Eco shall select an exchange agent (the "Exchange
          Agent") reasonably acceptable to SRS to effectuate the delivery
          of the Merger Consideration provided for in Section 1.4 hereof to
                                                      -----------
          holders of SRS Common Stock upon surrender of certificates which
          immediately prior to the Effective Time represented outstanding
          shares of SRS Common Stock ("Certificates").

                    (b)    As of the Effective Time, Eco shall provide, or
          shall take all steps necessary to provide, to the Exchange Agent,
          the aggregate number of shares of Eco Common Stock representing
          the Merger Consideration.  The Exchange Agent shall, pursuant to
          irrevocable instructions, make the deliveries of the Merger
          Consideration required in respect of the Merger.

                    (c)    Promptly after the Effective Time, the Exchange
          Agent shall mail to each record holder of an outstanding
          Certificate, determined as of the Effective Date, a form letter
          of transmittal (which shall specify that delivery shall be
          effected, and risk of loss and title to Certificates shall pass,
          only upon proper delivery of the Certificates to the Exchange
          Agent), advising such holder of the terms of the exchange
          effected by the Merger and the procedure for surrendering to the
          Exchange Agent such Certificate in exchange such holder's share
          of the Merger Consideration.

                    (d)    Upon surrender of a Certificate to the Exchange
          Agent, together with such letter of transmittal, duly executed,
          the holder of such Certificate shall be entitled to receive in
          exchange therefor such holder's share of Merger Consideration,
          less such holders' shares of Eco Common Stock that shall be
          delivered to the Escrow Agent to be held under the Escrow
          Agreement pursuant to Section 6.7 hereof, and the Certificate so
                                -----------
          surrendered shall forthwith be canceled.  Shares of Eco Common
          Stock shall be delivered to such holder as promptly as
          practicable and (except as hereinafter provided) in no event
          later than twenty (20) days after proper delivery of the
          applicable Certificates and letters of transmittal to the
          Exchange Agent.

                    (e)    All shares of Eco Common Stock issued upon
          exchange of the shares of SRS Common Stock in accordance with the
          terms hereof shall be deemed to have been issued in full
          satisfaction of all rights pertaining to such shares of SRS
          Common Stock.

                    (f)    Neither Acquisition Corp., Eco nor SRS shall be
          liable to any holder of shares of SRS Common Stock for any such
          shares of American Eco Common Stock delivered to a public
          official pursuant to any abandoned property, escheat or similar
          law. Until surrendered in accordance with the provisions of this
          Section 1.5, each Certificate shall represent, for all purposes,
          -----------
          only the right to receive the Merger Consideration or appraisal
          rights under Section 1.9 hereof.
                       -----------

                    (g)    Any shares of Eco Common Stock which remain
          undistributed to holders of SRS Common Stock for six (6) months
          after the Effective Time shall, except as provided by Section 
                                                                -------    
          1.5(d), be delivered to Eco, upon demand, and any holder of SRS 
          ------
          Common Stock who has not theretofore complied with this Section 
                                                                  -------  
          1.5 shall thereafter look to Eco for the Merger Consideration to
          ---
          which he is entitled.

                    1.6    No Fractional Shares. No certificates or scrip 
                           --------------------
          for fractional shares of Eco Common Stock will be issued. In lieu
          of issuing any such fractional shares to which a holder of SRS
          Common Stock would otherwise be entitled to receive, the Exchange
          Agent shall round up or down to the nearest whole share of Eco
          Common Stock.

                    1.7    Certificates in Other Names. If any certificate
                           ---------------------------
          evidencing shares of Eco Common Stock is to be issued in a name
          other than that in which the Certificate surrendered in exchange
          therefore is registered, it shall be a condition of the issuance
          thereof that the Certificate so surrendered shall be properly
          endorsed and otherwise in proper form for transfer and that the
          person requesting such exchange pay to the Exchange Agent or to
          Eco acting solely in its corporate capacity, as the case may be,
          any transfer or other taxes required by reason of the issuance of
          a certificate for shares of Eco Common Stock in any name other
          than that of the registered holder of the Certificate surrendered
          or otherwise required or establish to the satisfaction of the
          Exchange Agent or of Eco acting solely in its corporate capacity,
          as the case may be, that such tax has been paid or is not
          payable.

                    1.8    Treatment of Options. At the Effective Time, all
                           --------------------
          outstanding options to purchase SRS Common Stock ("SRS Options")
          as set forth on Schedule 3.4, shall be canceled, and Eco shall 
                          ------------
          grant to such holders options to purchase Eco Common Stock ("Eco
          Options"). The Eco Options to be granted pursuant to this Section
                                                                    -------
          1.8 shall have terms substantially equivalent to the SRS Options,
          ---
          except that all such options shall terminate upon the fifth
          anniversary of the Closing Date.

                    1.9    Appraisal Rights. (a)  Notwithstanding Section 
                           ----------------                       -------  
          1.4 hereof, shares of SRS Common Stock which are held by a holder
          ---
          of SRS Common Stock ("Dissenting Stockholder") who has properly
          preserved and perfected appraisal rights with respect to such
          shares pursuant to the applicable provisions of the NRS shall not
          be converted into the Merger Consideration pursuant to Section 
                                                                 -------   
          1.4 hereof, and instead shall be treated in accordance with those
          ---
          provisions of the NRS, as the case may be, unless and until the
          right of such Dissenting Stockholder under the applicable
          provisions of the NRS to payment for his shares of SRS Common
          Stock shall cease.

                    (b)    If any Dissenting Stockholder shall effectively
          withdraw or lose (through failure to perfect or otherwise) such
          Dissenting Stockholder's right to payment for any of such
          Dissenting Stockholder's shares of SRS Common Stock, such shares
          shall be automatically converted into the right to receive Merger
          Consideration in accordance with Section 1.4 hereof.
                                           -----------

                    (c)    Each Dissenting Stockholder who becomes entitled
          to payment of fair market value of any such Dissenting
          Stockholder's shares of SRS Common Stock shall receive payment
          thereof, less an amount to the product of (x) a fraction, the
          numerator of which being the number of shares of SRS Common Stock
          owned of record by the Dissenting Stockholder and the denominator
          of which shall be the total issued and outstanding shares of SRS
          Common Stock on the Effective Date, multiplied by (y) $500,000,
          and which withheld amount shall be held under the Escrow
          Agreement.

                                      ARTICLE II

                                       CLOSING

                    2.1    Closing Date. The closing of the Merger (the 
                           ------------
          "Closing") shall take place at the offices of Stradling, Yocca,
          Carlson & Rauth, 660 Newport Centre Drive, Suite 1600, Newport
          Beach, California at 11:00 a.m., local time, on that day on which
          the last of the conditions set forth in Articles VI and VII shall
          have been satisfied or, if permissible, waived (other than those
          conditions which by their terms are to occur only at the
          Closing), or on and at such other date, time and place as Eco,
          Acquisition Corp. and SRS may agree (the date of the Closing
          hereinafter being referred to as the "Closing Date").

                    2.2    Deliveries at the Closing. At the Closing SRS 
                           -------------------------
          will deliver to Eco the various certificates, instruments and
          document referred to in Article VI, and Eco and Acquisition Corp.
          will deliver to SRS the various certificates, instruments and
          documents referred to in Article VII.
                                   -----------

                                     ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF SRS

                     SRS hereby represents and warrants to American Eco and
          Acquisition Corp. as follows:

                    3.1    Due Incorporation. (a) SRS is a corporation duly
                           -----------------
          organized, validly existing and in good standing under the laws
          of the State of Nevada, with all requisite power and authority to
          own, lease and operate its properties and to carry on its
          business as they are now being owned, leased, operated and
          conducted. SRS is qualified to do business and is in good
          standing as a foreign corporation in the State of California
          (subject to Section 2115 of the California General Corporation
          Law) and Louisiana and Washington, which are the only
          jurisdictions where the nature of the properties owned, leased or
          operated by it and the business transacted by it require such
          qualification. (b)  Schedule 3.1 sets forth a complete and 
                              ------------
          correct list of all corporations, proprietorships, firms,
          partnerships, limited partnerships, limited liability companies,
          trusts, associations or other entities in which SRS has any
          record or beneficial interest (such entities collectively the
          "SRS Companies"). Each of the SRS Companies is duly organized,
          validly existing and in good standing in the jurisdiction of its
          formation and is duly qualified in all other jurisdiction where
          the nature of the properties owned, leased or operated by it and
          the nature of the business transacted by it require such
          qualification. Other than as set forth on Schedule 3.1, SRS has 
                                                    ------------
          no direct or indirect subsidiaries, either wholly or partially
          owned, and SRS does not hold any voting or management interest in
          any corporation, proprietorship, firm, partnership, limited
          partnership, limited liability company, trust, association,
          individual or other entity (a "Person") or own any security
          issued by any Person. For purposes of the information provided in
          this ARTICLE III and the Schedules furnished hereunder, where
          applicable SRS shall include each of the SRS Companies.

                    3.2    Due Authorization. SRS has full power and 
                           -----------------
          authority to enter into this Agreement and the Articles of Merger
          (the "Related Agreement") and, subject to obtaining the necessary
          approval of this Agreement and the Merger by the stockholders of
          SRS, to consummate the transactions contemplated hereby and
          thereby. The execution, delivery and performance by SRS of this
          Agreement and the Related Agreement have been duly and validly
          approved and authorized by the Board of Directors of SRS, and,
          subject to obtaining the necessary approval of the Merger by the
          SRS stockholders, the Related Agreement and the transactions
          contemplated hereby and thereby, SRS has duly and validly
          executed and delivered this Agreement and will duly and validly
          execute and deliver the Related Agreement. Subject to obtaining
          the necessary approval of the SRS stockholders, this Agreement
          constitutes the legal, valid and binding obligation of SRS and
          the Related Agreement to which SRS is a party, will, upon
          execution thereof by SRS, constitute the legal, valid and binding
          obligation of SRS, in each case enforceable against SRS in
          accordance with their respective terms, except as such
          enforceability may be limited by applicable bankruptcy,
          insolvency, fraudulent transfer, moratorium, reorganization or
          other laws from time to time in effect which affect creditors'
          rights generally and by general principles of equity (regardless
          of whether such enforceability is considered in a proceeding in
          equity or at law).

                    3.3    Non-Contravention; Consents and Approvals. (a) 
                           -----------------------------------------
          Except to the extent set forth on Schedule 3.3, the execution and
                                            ------------
          delivery of this Agreement by SRS does not, and the performance
          by SRS of its obligations hereunder and the consummation of the
          transactions contemplated hereby will not, conflict with, result
          in a violation or breach of, constitute (with or without notice
          or lapse of time or both) a default under, result in or give to
          any person any right of payment or reimbursement, termination,
          cancellation, modification or acceleration of, or result in the
          creation or imposition of any lien upon any of the assets or
          properties of SRS under, any of the terms, conditions or
          provisions of (i) the Articles of Incorporation or By-Laws of
          SRS, or (ii) subject to obtaining the necessary approval of this
          Agreement and the Merger by the SRS stockholders and the taking
          of the actions described in paragraph (b) of this Section 3.3, 
                                                            ------------   
          (x) any statute, law, rule, regulation or ordinance (together,
          "Laws"), or any judgment, decree, order, writ, permit or license,
          of any Governmental Entity (as defined in paragraph (b) below),
          applicable to SRS or any of its assets or properties, or (y) any
          contract, agreement or commitment to which SRS is a party or by
          which SRS or any of its assets or properties is bound.

                    (b)    No consent, approval, order or authorization of,
          or registration, declaration or filing with any court,
          administrative agency or commission or other governmental
          authority or instrumentality, domestic or foreign (a
          "Governmental Entity"), or any other Person, is required by SRS
          in connection with the execution and delivery of this Agreement
          and the Related Agreement or the consummation by SRS of the
          transactions contemplated hereby and thereby, except for:

                    (i)    the permit by the California Commissioner of
               Corporations approving the Merger after a fairness hearing
               thereon;

                    (ii)   the filing of the Articles of Merger with the
               Secretary of State of the State of Nevada in accordance with
               the requirements of the NRS; and

                    (iii)if applicable, the filing of the appropriate
               documents with the relevant authorities of other states in
               which SRS is qualified to transact business.

                    3.4    Capitalization. (a) The authorized capital stock
                           --------------
          of SRS consists of 5,000,000 shares of SRS Common Stock. On the
          date hereof, there are issued and outstanding 3,193,350 shares of
          SRS Common Stock. All of the issued and outstanding shares of SRS
          Common Stock are validly issued, fully paid and nonassessable and
          the issuance thereof was not subject to preemptive rights.

                    (b)    Schedule 3.4 is a correct and complete list of 
                           ------------
          all outstanding SRS Options. Except for shares issuable pursuant
          to SRS Options, there are no shares of SRS Common Stock or other
          equity securities (whether or not such securities have voting
          rights) of SRS issued or outstanding or any subscriptions,
          options, warrants, calls, rights, convertible securities or other
          agreements or commitments of any character obligating SRS to
          issue, transfer or sell any shares of capital stock or other
          securities (whether or not such securities have voting rights) of
          SRS, or agreements to enter into any of the foregoing.

                    3.5    Financial Statements; Undisclosed Liabilities; 
                           ---------------------------------------------
          Other Documents. (a) For purposes of this Agreement, "SRS 
          ---------------
          Financial Statements" shall mean (x) the audited consolidated
          financial statements of SRS as of June 30, 1995 and June 30, 1994
          and the fiscal years then ended (including all notes thereto),
          consisting of the balance sheets at such dates and the related
          statements of income, stockholders' equity and cash flows for the
          years then ended (the "SRS Audited consolidated Financial
          Statements"), and (y) the unaudited consolidated financial
          statements of SRS as of February 29, 1996 and February 28, 1995
          (including all notes thereto), consisting of the balance sheets
          at such dates and the results of operations for the eight months
          then ended (the "SRS Interim Financial Statements"). The Audited
          SRS Financial Statements have been prepared in accordance with
          U.S. GAAP consistently applied (except as may be indicated
          therein or in the notes thereto), present fairly the financial
          position of SRS as at the dates thereof and the results of
          operations, stockholders' equity and cash flows of SRS for the
          periods covered thereby (subject, in the case of any unaudited
          interim financial statements, to normal year-end adjustments),
          and are substantially in accordance with the financial books and
          records of SRS. The SRS Interim Financial Statements are in
          accordance with the books and records of SRS and have been
          prepared on a consistent basis with those of prior years. Except
          for the absence of adequate disclosure, relating to the absence
          of footnotes, and stockholders' equity and cash flow statements,
          the SRS Interim Financial Statements present fairly SRS'
          financial position as of the dates of the SRS Interim Financial
          Statements and the results of operations for the periods covered
          by these statements.

                    (b)    SRS does not have any liabilities or obligations
          of any nature, whether accrued, absolute, contingent or
          otherwise, which individually or in the aggregate could be
          reasonably expected to have an SRS Material Adverse Effect (as
          defined below) except (i) as set forth on or reflected in the
          balance sheet at February 29, 1996 (the "SRS Interim Balance
          Sheet") included in the SRS Financial Statements or (ii)
          liabilities and obligations incurred since February 29, 1996 in
          the ordinary and usual course of its business.

                    3.6    No Material Adverse Effects or Changes. Except 
                           --------------------------------------
          as listed on Schedule 3.6 or as contemplated by this Agreement, 
                       ------------
          since February 29, 1996, SRS has not suffered any damage,
          destruction or Loss to any of its assets or properties (whether
          or not covered by insurance) which is having or could reasonably
          be expected to have an SRS Material Adverse Effect. "Loss" shall
          mean liabilities, losses, costs, claims, damages (including
          consequential damages), penalties and expenses (including
          attorneys' fees and expenses and costs of investigation and
          litigation). An "SRS Material Adverse Effect" shall mean an
          effect on or circumstance involving the business, operations,
          assets, liabilities, results of operations, cash flows or
          condition (financial or otherwise) of SRS which is materially
          adverse to SRS. Except as disclosed in Schedule 3.6 or in the SRS
                                                 ------------
          Financial Statements, since February 29, 1996 SRS has not (i)
          declared, set aside or paid any dividend or other distribution in
          respect of its capital stock; (ii) made any direct or indirect
          redemption, purchase or other acquisition of any shares (other
          than purchases in connection with the exercise of options) of its
          capital stock or made any payment (other than dividends) to any
          of their stockholders (in their capacity as stockholders); (iii)
          issued or sold any shares of its capital stock or any options,
          warrants or other rights to purchase any such shares or any
          securities convertible into or exchangeable for such shares or
          taken any action to reclassify or recapitalize or split up their
          capital stock; (iv) mortgaged, pledged or subjected to any lien,
          lease, security interest, encumbrance or other restriction, any
          of their material properties or assets except in the ordinary and
          usual course of their business and consistent with past practice;
          (v) entered into any acquisition or merger agreement or
          commitment, (vi) except in the ordinary and usual course of its
          business and consistent with its past practices forgiven or
          canceled any material debt or claim, waived any material right;
          or (vii) adopted or amended any plan or arrangement (other than
          amendments that are not material or that were made to comply with
          laws or regulations) for the benefit of any director, officer or
          employee or changed the compensation (including bonuses) to be
          paid to any director, officer or employee, except for changes
          made consistent with the prior practice of SRS.

                    3.7    Tax Returns and Audits. "Taxes", as used in this
                           ----------------------
          Agreement, means any federal, state, county, local or foreign
          taxes, charges, fees, levies, or other assessments, including all
          net income, gross income, sales and use, ad valorem, transfer,
          gains, profits, excise, franchise, real and personal property,
          gross receipt, capital stock, production, business and
          occupation, disability, employment, payroll, license, estimated,
          stamp, custom duties, severance or withholding taxes or charges
          imposed by any governmental entity, and includes any interest and
          penalties (civil or criminal) on or additions to any such taxes
          and any expenses incurred in connection with the determination,
          settlement or litigation of any tax liability. "Tax Return", as 
                                                          ----------
          used in this Agreement, means a report, return or other
          information required to be supplied to a governmental entity with
          respect to Taxes, including where permitted or required, combined
          or consolidated returns for any group or entities.

                    (a)    Filing of Timely Tax Returns. SRS has duly filed
                           ----------------------------
          all Tax Returns required to be filed by it under applicable law
          and will file all Tax Returns required to be filed by it at or
          prior to the Effective Date under applicable law. All Tax Returns
          were in all material respects (and, as to Tax Returns not filed
          as of the date hereof, will be) complete and correct and filed on
          a timely basis. SRS has not requested any extension of time
          within which to file any Tax Return, which Tax Return has not
          since been filed.

                    (b)    Payment of Taxes. SRS has, within the time and 
                           ----------------
          in the manner prescribed by law, paid (and until the Effective
          Date will pay within the time and in the manner prescribed by
          law) all Taxes that are currently due and payable except for
          those contested in good faith and for which adequate reserves
          have been taken.

                    (c)    Tax Liens. There are no Tax liens upon the 
                           ---------
          assets of SRS except liens for Taxes not yet due.

                    (d)    Withholding Taxes. SRS has complied (and until 
                           -----------------
          the Effective Date will comply) in all respects with the
          provisions of the Code relating to the payment and withholding of
          Taxes, including, without limitation, the withholding and
          reporting requirements under Sections 1441 through 1464, 3401
          through 3606, and 6041 and 6049 of the Code, as well as similar
          provisions under any other laws, and has, within the time and in
          the manner prescribed by law, withheld from employee wages and
          paid over to the proper governmental authorities all amounts
          required .

                    (e)    Statute of Limitations. SRS has not executed any
                           ----------------------
          outstanding waivers or comparable consents regarding the
          application of the statute of limitations with respect to any
          Taxes or Tax Returns. The statute of limitations for the
          assessment of all Taxes has expired for all applicable Tax
          Returns of SRS or those Tax Returns have been examined by the
          appropriate taxing authorities for all periods through the date
          hereof, and no deficiency for any Taxes has been proposed,
          asserted or assessed against SRS that has not been resolved and
          paid in full.

                    (f)    Audit, Administrative and Court Proceedings. No
                           -------------------------------------------
          audits or other administrative proceedings or court proceedings
          are presently pending or, to the knowledge of SRS, threatened
          with regard to any Taxes or Tax Returns of SRS. Except as
          disclosed in Schedule 3.7, no power of attorney currently in 
                       ------------
          force has been granted by SRS concerning any Tax matter. To the
          knowledge of SRS, no facts exist or have existed which would
          constitute grounds for the assessment of Taxes on SRS with
          respect to periods which have not been audited by the Internal
          Revenue Service (the "IRS") or other taxing authorities.

                    (g)    Code Section 341(f). SRS has not filed (and will
                           -------------------
          not file prior to the Closing) a consent pursuant to Code Section
          341(f) and has not agreed to have Code Section 341(f)(2) apply to
          any disposition of a subsection (f) asset (as that term is
          defined in Code Section 341(f)(4)) owned by SRS.

                    (h)    Code Section 168. No property of SRS is property
                           ----------------
          that SRS or any party to this transaction is or will be required
          to treat as being owned by another person pursuant to the
          provisions of Code Section 168(f)(8) (as in effect prior to its
          amendment by the Tax Reform Act of 1986) or is "tax-exempt use
          property" within the meaning of Code Section 168.

                    (i)    U.S. Real Property Holding Corporation. SRS is 
                           --------------------------------------
          not, and has not been, a United States real property holding
          corporation (as defined in Section 897(c)(2) of the Code) during
          the applicable period specified in section 897(c)(1)(A)(ii) of
          the Code.

                    3.8    Litigation. Except as described on Schedule 3.8,
                           ----------                         ------------
          there are no actions, suits, arbitrations, regulatory proceedings
          or other litigation, proceedings or governmental investigations
          pending or, to SRS' knowledge, threatened against or affecting
          SRS any of its officers or directors in their capacity as such,
          or any of its property or business which could reasonably be
          expected to have an SRS Material Adverse Effect. No event has
          occurred or circumstance exists that may give rise or serve as a
          basis for the commencement of any such proceeding. SRS is not
          subject to any order, judgment, decree, injunction, stipulation
          or consent order of or with any court or other Governmental
          Entity, other than orders of general applicability.

                    3.9    Compliance with Applicable Laws. SRS holds all 
                           -------------------------------
          permits, licenses, variances, exemptions, orders and approvals of
          all Governmental Entities which are required in the operation of
          its business (the "SRS Permits"), and is in compliance with the
          terms of the SRS Permits, except where the failure so to comply
          would not have an SRS Material Adverse Effect. Schedule 3.9 is a
                                                         ------------
          complete and correct list of all Permits. The entry into and
          consummation of this Agreement and the Merger will not require
          any modification, re-application, approval or other consent as to
          any SRS Permit. SRS is not in violation of any law, ordinance or
          regulation of any Governmental Authority, including environmental
          and labor laws and regulations, except for possible violations
          which individually and in the aggregate do not, and, insofar as
          reasonably can be foreseen by SRS, will not in the future have an
          SRS Material Adverse Effect.

                    3.10   Contracts. (a) Except for the contracts, 
                           ---------
          agreements, commitments, instruments, bids and proposals to which
          SRS is a party listed on Schedule 3.10, SRS is not a party to or
                                   -------------
          otherwise bound by any written or oral (i) mortgage, indenture,
          note, installment obligation or other instrument relating to the
          borrowing of money, (ii) guarantee of any obligation (excluding
          endorsements of instruments for collection in the ordinary course
          of business of SRS), (iii) letter of credit, bond or other
          indemnity, (iv) joint venture, partnership or other agreement
          involving the sharing of profits and losses, (v) performance of
          services or delivery of goods in an amount exceeding $1,000 or
          which would not be completed within three (3) months, (vi)
          agreement for the sale or lease by SRS to any person of any
          material amount of its assets other than the retirement or other
          disposition of assets no longer useful to SRS or the sale of
          assets in the ordinary course of the operation of SRS, (vi)
          agreement requiring the payment by SRS of more than $1,000 in any
          12-month period for the purchase or lease of any machinery,
          equipment or other capital assets, (viii) agreement providing for
          the lease or sublease by SRS (as lessor, sublessor, lessee or
          sublessee) of any real property, (ix) distributor, sales
          representative, broker or agent agreement, (x) collective
          bargaining agreement, employment or consulting agreement or
          agreement providing for severance payments or other additional
          rights or benefits (whether or not optional) in the event of the
          sale of SRS, (xi) agreement requiring the payment by SRS to any
          person of more than $1,000 in any 12-month period for the
          purchase of goods or services, (xii) material warranties relating
          to products distributed or services provided by SRS, (xiii)
          license or sublicense agreement (whether as licensor, licensee,
          sublicensor or sublicensee) with respect to any material item of
          Intellectual Property owned or licensed by SRS, and (xiv)
          agreement imposing non-competition, confidentiality or exclusive
          dealing obligations on SRS.

                    (b)    SRS has delivered or made available to Eco
          complete and correct copies of each written agreement listed on
          Schedule 3.10 each as amended to date and a summary of the terms
          -------------
          of each oral agreement listed on Schedule 3.10. Each agreement 
                                           -------------
          listed on Schedule 3.10 is a valid, binding and enforceable 
                    -------------
          obligation of SRS and, to SRS' knowledge, the other party or
          parties thereto (subject to applicable bankruptcy, insolvency,
          fraudulent conveyance, reorganization, moratorium and similar
          Laws affecting creditors' rights and remedies generally and
          subject as to enforceability to general principles of equity,
          including principles of commercial reasonableness, good faith and
          fair dealing) and is in full force and effect. Except as set
          forth on Schedule 3.10 (i) neither SRS nor, to SRS' knowledge, 
                   -------------
          any other party thereto is in material breach of any material
          term of any such agreement or has repudiated any material term of
          any such agreement, (ii) no event, occurrence or condition exists
          (including the transactions contemplated under this Agreement)
          which, with the lapse of time or the giving of notice or both,
          would become a default under any such agreement by SRS or, to
          SRS' knowledge, any other party thereto, and (iii) SRS has not
          released or waived any material right under any contract. SRS is
          not required to give any notice to any other person who is a
          party to an agreement listed on Schedule 3.10 regarding this 
                                          -------------
          Agreement or the Merger.

                    (c)    Schedule 3.10 sets forth a correct and complete
                           -------------
          list of the ten largest customers of SRS in terms of net revenues
          during each of the 1994 and 1995 fiscal years and the first six
          months of fiscal 1996, showing the approximately total net
          revenue received in each such period from each such customer.
          Except to the extent set forth on Schedule 3.10, since December
          31, 1995, there has not been any adverse change in the business
          relationship between SRS and any customer listed on such
          Schedule.

                    3.11   Real Property. SRS does not own, nor have any 
                           -------------
          right to acquire, any real property.

                    3.12   Personal Property. Schedule 3.12 is a complete 
                           -----------------  -------------
          and correct list of all personal property of SRS (other than
          inventory) not reflected or any other Schedule hereto and having
          a book value exceeding $1,000. Except as set forth on Schedule 
                                                                --------   
          3.12, SRS now has and on the Closing Date will have good and 
          ----
          marketable title to all personal property purported to be owned
          by it, free and clear of all Liens. The material, tangible assets
          of SRS taken as a whole, including all machinery and equipment,
          are, in all material respects, in good condition and repair,
          reasonable wear and tear excepted and have been well maintained.

                    3.13   Employees. Schedule 3.13 contains a complete and
                           ---------  -------------
          correct list of (i) all full-time and part-time employees of SRS,
          including their respective salaries, dates of hire, positions and
          last salary adjustment and (ii) all bonus, deferred compensation,
          severance or termination pay, insurance, medical, dental, drug,
          profit sharing, pension, retirement, stock option, stock
          purchase, hospitalization insurance or other material plans or
          arrangements providing employee benefits to any current or former
          director, officer, employee or consultant of SRS and all relevant
          vacation policies. SRS is not a party to any union, collective
          bargaining or similar agreement, and there are no controversies
          pending or, to SRS' knowledge, threatened between SRS and any
          current or former employee or any labor or other collective
          bargaining unit representing any current or former employee of
          SRS that could reasonably be expected to result in a material
          labor strike, dispute, slow-down or work stoppage or otherwise
          have a material adverse effect on the financial condition of SRS.
          SRS is not aware of any organizational effort presently being
          made or threatened by or on behalf of any labor union with
          respect to employees of SRS. SRS has paid or accrued in full all
          wages, salaries, commissions, bonuses and other compensation
          (including severance pay and vacation benefits) for all services
          performed by its employees and former employees, and has withheld
          such amounts as were required to be withheld therefrom and has
          paid the withheld amounts to the proper tax and other receiving
          officers within the time required under applicable law.

                    3.14   Insurance. Schedule 3.14 contains a complete and
                           ---------  -------------
          correct schedule of coverage and list of all policies of
          insurance owned by SRS under which SRS assets, properties,
          operations or employees are insured (including amount of
          coverage, type of insurance, amount of deductible, if any, the
          policy number and expiration date), and all claims made under any
          of such policies or prior policies since January 1, 1994. Since
          January 1, 1994, SRS has given due and timely notice of any claim
          and of any occurrence known to SRS which may be covered by any of
          such policies or prior policies. All scheduled policies are in
          full force and effect and are in amounts and coverage sufficient
          for compliance by SRS with all applicable requirements of Law and
          all agreements to which SRS is a party or subject and customary
          in its industry. All premiums in connection with such policies
          are fully paid. No event has occurred which, with notice or lapse
          of time, would constitute a breach or default thereunder or
          permit termination, modification or acceleration of any policy,
          and no party to any policy has repudiated any provisions thereof.

                    3.15   Inventories. The amounts at which the 
                           -----------
          inventories are carried on the SRS Interim Balance Sheet and on
          the books of SRS reflect the normal valuation policy of SRS in
          accordance with U.S. GAAP. The amount of repair parts and
          supplies maintained by SRS is consistent with its prior
          practices. The reserves estimated for obsolescence as of the
          Closing Date will be adequate to cover the diminution in value of
          inventories due to obsolescence.

                    3.16   Accounts Receivable. Schedule 3.16 sets forth a
                           -------------------  -------------
          complete and correct list of the work-in-process and accounts
          receivable of SRS as set forth on the SRS Interim Balance Sheet,
          including the degree of completion for each project and the
          amounts expended thereon. All accounts receivable which have
          arisen subsequent to the SRS Interim Balance Sheet represent
          sales or work performed made in the ordinary course of business,
          are current and collectible and, to SRS' knowledge, the same will
          be collected in full (net of reserve for bad debts) in the
          ordinary course of business and are not subject to any claims,
          offsets, allowances or adjustments.

                    3.17   Employee Benefits. (a) Schedule 3.17 is a 
                           -----------------      -------------
          complete and correct list of each employee benefit plan that SRS
          maintains with respect to its current or former employees or to
          which SRS contributes or is obligated to contribute with respect
          to any of its current or former employees. SRS does not have any
          benefit plan subject to the reporting requirements of the
          Employee Retirement Income Security Act of 1974, as amended
          ("ERISA"), the Code and other applicable Laws, nor has had such a
          plan since January 1, 1991.

                    3.18   Intellectual Property. Schedule 3.18 is a 
                           ---------------------  -------------
          complete and correct list of all of the trademarks, tradenames,
          service marks, and patents (including any registrations of or
          pending applications for any of the foregoing), know-how, data
          bases, trade secrets and confidentiality information
          (collectively, "Intellectual Property") used by SRS in the
          conduct of its business. Except as disclosed on Schedule 3.18:
                                                          -------------

                    (a)    all of such Intellectual Property is owned by
          SRS free and clear of all liens, and is not subject to any
          license, royalty or other agreement;

                    (b)    none of such Intellectual Property has been or
          is the subject of any pending or, to the best of SRS' knowledge,
          threatened litigation or claim of infringement;

                    (c) no license or royalty agreement to which SRS is a
          party is in breach or default by any party thereto except where
          such breach or default would not have an SRS Material Adverse
          Effect or is the subject of any notice of termination given or,
          to SRS' knowledge, threatened;

                    (d) to SRS' knowledge, SRS is not breaching or
          infringing any Intellectual Property of third parties; and

                    (e)    the Intellectual Property is sufficient for the
          conduct of the business of SRS as presently conducted.

                    3.19   Environmental Matters. The business and 
                           ---------------------
          operations of SRS, including the transportation, treatment,
          storage, handling, transfer, disposition, recycling or receipt of
          materials, complies with all applicable environmental statutes,
          regulations and decrees, whether federal, state or municipal (the
          "Environmental Laws"). SRS has not received any notices to the
          effect that the business carried on by SRS or the operation of
          any equipment or facilities of SRS (including the transportation,
          handling, treatment or storage of hazardous materials thereon) is
          not in compliance with the requirements of applicable
          Environmental Laws or is subject to any remedial control or
          action or any investigation or evaluation as to whether any
          remedial action is required to respond to a release or threatened
          which forms part of or is adjacent to any premises at which SRS's
          business is conducted. SRS has performed its services for
          customers in material compliance with all applicable
          Environmental Laws.

                    3.20   Books and Records. SRS has maintained and 
                           -----------------
          preserved complete and accurate books and records for its
          material transactions. The minute books of SRS include complete
          and correct minutes of all meetings of its directors committees
          and stockholders. The SRS Articles of Incorporation and By-laws
          previously delivered to ECO are current and complete. At the
          Closing Date, all of those books and records will be in the
          possession of SRS. Schedule 3.20 sets forth a complete and 
                             -------------
          correct list of (i) all officers and directors of SRS and (ii)
          the name and address of each bank, trust company or other
          financial institution in which SRS has an account and the names
          of all persons authorized to draw thereon as well as all powers
          of attorney granted by SRS.

                    3.21   Related Party Transactions. Schedule 3.21 sets 
                           --------------------------  -------------
          forth a complete and correct list of all transactions, loans,
          claims, or agreements between or involving SRS and an officer,
          director; employee, consultant or stockholder of SRS (or an
          affiliate of any such person) since July 1, 1994.(excluding
          employment agreements included on another SRS Schedule to this
          Agreement and benefits given to all employees of SRS). All
          transactions and agreements listed on Schedule 3.21 were on terms
                                                -------------
          to SRS no less favorable than what SRS would have had with
          unrelated third parties.

                    3.22   Fees of Brokers, Consultants and Financial
                           -------------------------------------------
          Advisors.  Neither SRS, nor any officer, director, or employee of
          --------
          SRS, has employed any broker, finder, consultant or investment
          banker or incurred any liability for any brokerage or investment
          banking fees, commissions or finders, fees in connection with the
          transactions contemplated by this Agreement, except to William
          Thompson Investment Co. and Sucsy Fischer & Co., investment
          bankers, whose fees aggregated $380,000 shall be payable from the
          Merger Consideration.

                    3.23   Required Vote.  The affirmative vote of the
                           -------------
          holders of a majority of the outstanding shares of SRS Common
          Stock, voting together as one class, is the only vote of the SRS
          stockholders required to approve this Agreement, the Merger and
          the transactions contemplated herein.

                    3.24   General Representation and Warranty.  Neither
                           -----------------------------------
          this Agreement nor any schedule attached hereto or other
          documents and written information furnished by or on behalf of
          SRS, its attorneys, auditors or insurance agents to Eco in
          connection with this Agreement contains any untrue statement of
          material fact or omits to state any material fact necessary to
          make the statements contained herein or therein not misleading.

                                      ARTICLE IV

                          REPRESENTATIONS AND WARRANTIES OF
                              ACQUISITION CORP. AND ECO

                    Acquisition Corp. and Eco, jointly and severally,
          hereby represent and warrant to SRS as follows:

                    4.1    Due Incorporation.   Each of Eco and
                           -----------------
          Acquisition Corp. is a corporation duly organized, validly
          existing and in good standing under the laws of its jurisdiction
          of incorporation, with all requisite power and authority to own,
          lease and operate its properties and to carry on its business as
          now being conducted. Eco is qualified to do business and is in
          good standing as a foreign corporation in each jurisdiction where
          the nature of the properties owned, leased or operated by it and
          the business transacted by it require such qualification, except
          where the failure to be so qualified could not have an Eco
          Material Adverse Effect (as defined in Section 4.7 herein).
                                                 -----------

                    4.2    Due Authorization.  Each of Eco and
                           -----------------
          Acquisition Corp. has full power and authority to enter into this
          Agreement and the Related Agreement to which it is a party and to
          consummate the transactions contemplated hereby and thereby. The
          execution, delivery and performance by Eco of this Agreement has
          been duly and validly approved by the Board of Directors of Eco,
          and no other actions or proceedings on the part of Eco are
          necessary to authorize this Agreement. The execution, delivery
          and performance by Acquisition Corp. of this Agreement and the
          Related Agreement have been duly and validly approved by the
          Board of Directors and the sole stockholder of Acquisition Corp.,
          and no other actions or proceedings on the part of Acquisition
          Corp. or its stockholder are necessary to authorize this
          Agreement and the Related Agreement. Each of Eco and Acquisition
          Corp. has duly and validly executed and delivered this Agreement
          and Acquisition Corp. has duly and validly executed and delivered
          (or will duly and validly execute and deliver on or prior to the
          Closing Date) the Related Agreement. This Agreement constitutes
          the legal, valid and binding obligations of each of Eco and
          Acquisition Corp., and the Related Agreement will, upon
          execution, constitute the legal, valid and binding obligation of
          Acquisition Corp., in each case enforceable in accordance with
          their respective terms, except as such enforceability may be
          limited by applicable bankruptcy, insolvency, fraudulent
          transfer, moratorium, reorganization or other laws from time to
          time in effect which affect creditors' rights generally and by
          general principles of equity (regardless of whether such
          enforceability is considered in a proceeding in equity or at
          law).

                    4.3    Non-Contravention; Consents and Approvals. (a)
                           -----------------------------------------  
          The execution and delivery of this Agreement by Eco and
          Acquisition Corp. does not, and the performance by Eco and
          Acquisition Corp. of their obligations hereunder and the
          consummation of the transactions contemplated hereby will not,
          conflict with, result in a violation or breach of, constitute
          (with or without notice or lapse of time or both) a default
          under, result in or give to any person any right of payment or
          reimbursement, termination, cancellation, modification or
          acceleration of, or result in the creation or imposition of any
          lien upon any of the assets or properties of any of the American
          Eco Companies under, any of the terms, conditions or provisions
          of (i) the charter documents or bylaws of each of the American
          Eco Companies, or (ii) subject to the taking of the actions
          described in paragraph (b) of this Section, (x) any statute, law,
          rule, regulation or ordinance (together, "Laws"), or any
          judgment, decree, order, writ, permit or license, of any
          Governmental Entity, or (y) any contract, agreement or commitment
          to which any Eco Company is a party or by which any American Eco
          Company or any of their respective assets or properties is bound.

                    (b)    No consent, approval, order or authorization of,
          or registration, declaration or filing with any Governmental
          Entity is required by Eco or Acquisition Corp. in connection with
          the execution and delivery of this Agreement and the Related
          Agreement or the consummation by each of Eco and Acquisition
          Corp. or each of their respective stockholders of the
          transactions contemplated hereby and thereby, except for:

                    (i)    the filing of the Articles of Merger with the
               Secretary of State of the State of Nevada in accordance with
               the requirements of the NRS;

                    (ii)   filings with various state securities "blue sky"
               authorities; and

                    (iii) the approval of the Toronto Stock Exchange (the
               "TSE") of this Agreement and the issuance of the Merger
               Consideration.

                    4.4    Capitalization.   (a) The authorized capital
                           --------------
          stock of Eco consists of 700,000 shares of Preferred Stock, no
          par value per share ("Eco Preferred Stock") and an unlimited
          number of shares of Eco Common Stock. On the date hereof, there
          are no shares of Eco Preferred Stock issued and outstanding and
          10,551,771 shares of Eco Common Stock issued and outstanding. The
          authorized capital stock of Acquisition Corp. consists of 1,000
          shares of Acquisition Corp. Common Stock, of which there are 100
          shares issued and outstanding on the date hereof. All of the
          issued and outstanding shares of Eco and Acquisition Corp. Common
          Stock are, and all shares of Eco Common Stock constituting the
          Merger Consideration to be issued to SRS stockholders in the
          Merger will be, validly issued, fully paid and nonassessable and
          the issuances thereof were not and will not be subject to

          preemptive rights. Schedule 4.4 is a correct and complete list of
                             ------------
          shares of Eco Common Stock reserved for issuance under Eco stock
          option plans and warrants (the "Eco Derivative Securities") as of
          March 31, 1996.

                    (b)    Except for the Eco Derivative Securities, there
          are no shares of Eco Common Stock and Acquisition Corp. Common
          Stock or other equity securities (whether or not such securities
          have voting rights) of Eco and Acquisition Corp. issued or
          outstanding or any subscriptions, options, warrants, calls,
          rights, convertible securities or other agreements or commitments
          of any character obligating Eco and/or Acquisition Corp. to
          issue, transfer or sell any shares of capital stock or other
          securities (whether or not such securities have voting rights) of
          Eco and Acquisition Corp. There are no outstanding contractual
          obligations of Eco or Acquisition Corp. which relate to the
          purchase, sale, issuance, repurchase, redemption, acquisition,
          transfer, disposition, holding or voting of any shares of capital
          stock or other securities of each of Eco and Acquisition Corp.

                    4.5    Financial Statements; Undisclosed Liabilities;
                           ----------------------------------------------
          Other Documents.  (a) For purposes of this Agreement, "Eco
          ---------------
          Financial Statements" shall mean (x) the audited consolidated
          financial statements of Eco as of November 30, 1995 and November
          30, 1994 and for the fiscal years then ended (including all notes
          thereto) which are included in the Eco SEC Documents (as defined
          in Section 4.6), and (y) the unaudited consolidated financial
             ------------
          statements of Eco as of February 29, 1996 and February 28, 1995
          and for the three months then ended consisting of the
          consolidated balance sheets at such dates and the related
          consolidated statements of operations, stockholders' equity and
          cash flows for the periods then ended. The Eco Financial
          Statements have been prepared in accordance with Canadian GAAP
          (together with notes thereto explaining the differences between
          Canadian GAAP and U.S. GAAP) consistently applied, present fairly
          the financial position, of Eco as at the dates thereof and the
          results of operations and cash flows of Eco for the periods
          covered thereby (subject, in the case of any unaudited interim
          financial statements, to normal year-end adjustments), and are
          substantially in accordance with the financial books and records
          of Eco.

                    (b)    Eco does not have any liabilities or obligations
          of any nature, whether accrued, contingent, absolute or
          otherwise, which individually or in the aggregate could be
          reasonably expected to have an Eco Material Adverse Effect (as
          defined below) except (i) as set forth in the February 29, 1996
          balance sheet (the "Eco Interim Balance Sheet") Eco or (ii)
          liabilities or obligations incurred since February 29, 1996 in
          the ordinary and usual course of its business.

                    4.6    Securities Law Filings.   The Eco Common Stock
                           ----------------------
          is listed on the TSE and the Nasdaq National Market. Eco as a
          "foreign private issuer", as defined in the U.S. Securities
          Exchange Act of 1934, as amended (the "Exchange Act"), has filed
          all required forms, reports and other documents with the U.S.
          Securities and Exchange Commission (the "SEC") since December 1,
          1994, all of which complied when filed, in all material respects,
          with all applicable requirements of the Exchange Act. Eco has
          heretofore delivered to SRS complete and correct copies of (i)
          its Annual Report on Form 20-F for the year ended November 30,
          1994, as filed with the SEC, (ii) its Annual Report to
          Stockholders for the 1995 fiscal year, (iii) all information
          circulars relating to Eco,s meetings of stockholders (whether
          annual or special) since December 1, 1994, and (iv) all other
          reports, forms and other documents filed by Eco with the SEC
          since December 1, 1994 (together, the "Eco SEC Documents").

                    4.7    No Material Adverse Effects or Changes. 
                           --------------------------------------
          Except as listed on Schedule 4.7, or as disclosed in or reflected
                              ------------
          in the Eco Financial Statements included in the Eco SEC
          Documents, or as contemplated by this Agreement, since February
          29, 1996, neither Eco nor any of its wholly-owned subsidiaries
          (ECO and such subsidiaries sometimes collectively, the "Eco
          Companies") has suffered any damage, destruction or Loss to any
          of its assets or properties (whether or not covered by insurance)
          which is having or could be expected to have an Eco Material
          Adverse Effect. An "Eco Material Adverse Effect" shall mean an
          effect on or circumstances involving the business, operations,
          assets, liabilities, results of operations, cash flows or
          condition (financial or otherwise) which is materially adverse to
          the Eco Companies, taken as a whole.

                    4.8    Insurance.  The Eco Companies are insured
                           ---------
          with reputable insurers against all risks and in such amounts
          normally insured against by companies of the same type and in the
          same line of business as the Eco Companies.

                    4.9    Labor Matters.  Each of the Eco Companies has
                           -------------
          conducted and currently is conducting, its respective business in
          full compliance with all laws relating to employment and
          employment practices, terms and conditions of employment, wages
          and hours and nondiscrimination in employment except where such
          failure to be in compliance would not have an Eco Material
          Adverse Effect. The relationship of the Eco Companies with its
          respective employees is generally satisfactory, and there is, and
          during the past three years there has been, no labor strike,
          dispute, slow-down, work stoppage or other labor difficulty
          pending or, to Eco's knowledge, threatened against or.involving
          the Eco Companies. None of the employees of the Eco Companies are
          covered by any collective bargaining agreement, no collective
          bargaining agreement is currently being negotiated by the Eco
          Companies and to Eco's knowledge, no attempt is currently being
          made or during the past three years has been made to organize any
          employees of the Eco Companies to form or enter a labor union or
          similar organization.

                    4.10   Tax Returns and Audits.   Except as set forth
                           ----------------------
          on Schedule 4.10, each of the Eco Companies has duly filed all
             -------------
          Canadian, United States, province, state, local and foreign Tax
          Returns required to be filed by it, except where the failure to
          so file would not have an Eco Material Adverse Effect. Eco has
          duly paid (except for Taxes being contested in good faith) or
          made adequate provisions on its books in accordance with Canadian
          GAAP for the payment of all Taxes which have been incurred or are
          due and payable, by the Eco Companies, and Eco will on or before
          the Effective Time of the Merger make adequate provision on its
          books in accordance with Canadian GAAP for all Taxes payable for
          any period through the Effective Time of the Merger for which no
          return is required to be filed prior to the Effective Time. Since
          December 1, 1994, the Tax Returns of the Eco Companies have not
          been examined by the Canadian tax authorities, the IRS or other
          taxing authority, respectively, nor has any of the Eco Companies
          granted or given any extensions or waivers of the statute of
          limitations with respect to any such federal and state income tax
          returns since December 1, 1994. Eco is not aware of any basis for
          the assertion of any deficiency against any of the Eco Companies
          for Taxes, which, if adversely determined, would have an Eco
          Material Adverse Effect.

                    4.11   Litigation. (a) Except as disclosed in Schedule
                           ----------                             --------
          4.11, there are no actions, suits, arbitrations, regulatory
          ----
          proceedings or other litigation, proceedings or governmental
          investigations pending or, to Eco's knowledge, threatened against
          or affecting any of the Eco Companies or any of their respective
          officers or directors in their capacity as such, or any of their
          respective properties or businesses which could reasonably be
          expected to have an Eco Material Adverse Effect. No Eco Company
          is subject to any order, judgment, decree, injunction,
          stipulation or consent order of or with any court or other
          Governmental Entity, other than orders of general applicability.
          Since December 1, 1994, none of the Eco Companies has entered
          into any agreement to settle or compromise any proceeding pending
          or threatened against it which has involved any obligation other
          than the payment of money or for which it has any continuing
          obligation.

                    (b)    There are no claims, actions, suits,
          proceedings, or investigations pending or, to Eco's knowledge,
          threatened by or against any of the Eco Companies with respect to
          this Agreement or the Related Agreement, or in connection with
          the transactions contemplated hereby or thereby.

                    4.12   Compliance with Applicable Laws. Except as
                           -------------------------------
          disclosed in Schedule 4.12, each of the Eco Companies holds all
                       -------------
          permits, licenses, variances, exemptions, orders and approvals of
          all Governmental Entities which are required in the operation of
          its respective business (the "Eco Permits") except for those the
          failure of which to hold would not have an Eco Material Adverse
          Effect. The Eco Companies are in compliance with the terms of the
          Eco Permits, except where the failure so to comply would not have
          an American Eco Material Adverse Effect. Except as disclosed in
          Schedule 4.12, to Eco's knowledge, none of the Eco Companies is
          -------------
          in violation of any law, ordinance or regulation of any
          Governmental Authority, including environmental laws and
          regulations, except for possible violations which individually
          and in the aggregate do not, and, insofar as reasonably can be
          foreseen by Eco, will not in the future have an Eco Material
          Adverse Effect.

                    4.13   Contracts; No Defaults. Neither any Eco Company
                           ----------------------
          nor to Eco's knowledge any other party thereto, is in breach or
          violation of, or in default in the performance or observance of
          any term or provision of, and no event has occurred or by reason
          of this Agreement or the Merger would occur which, with notice or
          lapse of time or both, could be reasonably expected to result in
          a default under, any contract, agreement or commitment to which
          any Eco Company is a party or by which any Eco Company or any of
          its assets or properties is bound, except for breaches,
          violations and defaults which are not having and could not be
          reasonably expected to have an American Eco Material Adverse
          Effect. None of the Eco Companies is required to give any notice
          to any person regarding this Agreement or the Related Agreement
          or the transactions contemplated hereby or thereby.

                    4.14   Absence of Certain Changes or Events.  Except as
                           ------------------------------------
          disclosed in the Eco SEC Documents filed prior to the date of
          this Agreement or in Schedule 4.14 hereto, since February 29,
                               -------------
          1996, Eco has not (i) declared, set aside or paid any dividend or
          other distribution in respect of its capital stock; (ii) made any
          direct or indirect redemption, purchase or other acquisition of
          any shares (other than purchases in connection with the exercise
          of options) of its capital stock or made any payment (other than
          dividends) to any of their stockholders (in their capacity as
          stockholders); (iii) issued or sold any shares of its capital
          stock or any options, warrants or other rights to purchase any
          such shares or any securities convertible into or exchangeable
          for such shares or taken any action to reclassify or recapitalize
          or split up their capital stock; (iv) mortgaged, pledged or
          subjected to any lien, lease, security interest, encumbrance or
          other restriction, any of their material properties or assets
          \except in the ordinary and usual course of their business and
          consistent with past practice; (v) entered into any acquisition
          or merger agreement or commitment, (vi) except in the ordinary
          and usual course of its business and consistent with its past
          practices forgiven or canceled any material debt or claim, waived
          any material right; or (vii) adopted or amended any plan or
          arrangement (other than amendments that are not material or that
          were made to comply with laws or regulations) for the benefit of
          any director, officer or employee or changed the compensation
          (including bonuses) to be paid to any director, officer or
          employee, except for changes made consistent with the prior
          practice of Eco.

                    4.15   Fees of Brokers, Finders and Investment Bankers.
                           ------------------------------------------------
          Neither Eco nor any officer, director, or employee of Eco has
          employed any brokers, finder or investment banker or incurred any
          liability for any brokerage or investment banking fees,
          commissions or finders' fees in connection with the transactions
          contemplated by this Agreement.

                    4.16   General Representation and Warranty.  Neither
                           -----------------------------------
          this Agreement nor any schedule attached hereto or other
          documents and written information furnished by or on behalf of
          Eco, its attorneys, auditors or insurance agents to SRS in
          connection with this Agreement contains any untrue statement of
          material fact or omits to state any material fact necessary to
          make the statements contained herein or therein not misleading.


                                      ARTICLE V

                                      COVENANTS

                    5.1    Implementing Agreement.     Subject to the terms
                           ----------------------
          and conditions hereof, each party hereto shall use its best
          efforts to take all action required of it to fulfill its
          obligations under the terms of this Agreement and to facilitate
          the consummation of the transactions contemplated hereby;

                    5.2    Access to Information and Facilities;
                           -------------------------------------
          Confidentiality. (a) From and after the date of this Agreement,
          ---------------
          SRS shall give Eco and Acquisition Corp. and their
          representatives access during normal business hours and upon
          reasonable notice to all of the facilities, properties, books,
          contracts, commitments and records of SRS and shall make the
          officers and employees of SRS available to Eco and Acquisition
          Corp. and their representatives as Eco or Acquisition Corp. or
          their representatives shall from time to time reasonably request.
          Eco and Acquisition Corp. and their representatives will be
          furnished with any and all information concerning SRS which Eco
          or Acquisition Corp. or their representatives reasonably request.
          The obligations set forth in this Section 5.2 shall also apply to
                                            -----------
          Eco and Acquisition Corp., mutatis mutandis. The investigation by
                                     ------- --------
          and knowledge of SRS or Eco and the furnishing of information to
          each other shall not affect the right of such party to rely on
          the representations, warranties, covenants and agreements of the
          other party hereto.

                    (b)    Each of SRS, on one hand, and Eco and
          Acquisition Corp., on the other hand, agrees for itself, and its
          respective representatives, to keep confidential all information
          furnished to it pursuant to this Section 5.2, except for
          information which is public or which is disclosed other than by a
          person subject to this Section 5.2(b).
                                 --------------

                    5.3    Preservation of Business.   (a) From the date of
                           ------------------------
          this Agreement until the Closing Date, each of SRS and Eco,
          (including the SRS Companies and the other Eco Companies,
          respectively) shall operate only in the ordinary and usual course
          of business consistent with past practice, and shall use
          reasonable commercial efforts to (i) preserve intact its business
          organization, (ii) preserve the good will and advantageous
          relationships with customers, suppliers, independent contractors,
          employees and other persons material to the operation of its
          business, and (iii) not permit any action or omission which would
          cause any of the representations or warranties contained herein
          to become inaccurate or any of the covenants to be breached in
          any material respect.

                    (b)    SRS further covenants that prior to the Closing
          Date SRS shall not, nor permit any of the SRS Companies.to,
          without the prior written consent of Eco (which shall not be
          unreasonably withheld):

                    (i)    take any action, incur any obligation or enter
               into or authorize any contract or transaction other than in
               the ordinary course of business;

                    (ii)   except pursuant to the terms of any SRS Options,
               issue, sell, deliver or agree or commit to issue, sell or
               deliver (whether through the issuance or granting or
               options, warrants, convertible or exchangeable securities,
               commitments, subscriptions, rights to purchase or otherwise)
               any shares of its capital stock or any other securities, or
               amend any of their terms of any such securities;

                    (iii)   split, combine, or reclassify any shares of its
               capital stock, declare, set aside or pay any dividend or
               other distribution (whether in cash, stock or property or
               any combination thereof) in respect of its capital stock, or
               redeem or otherwise acquire any of its securities; or

                    (iv)   make any changes in its accounting systems,
               policies, principles or practices except as may be required
               by law or U.S. GAAP;

                    (v)    make any material Tax election or settle or
               compromise any material federal, state, local or foreign
               income Tax liability, or waive or extend the statute of
               limitations in respect of any such Taxes; or

                    (vi)   terminate, or modify, amend or otherwise alter
               or change in any material respect, any of the terms or
               provisions of any material Contract.

                    (c)    Each of SRS and Eco will promptly notify the
          other in writing upon becoming aware of any fact or condition
          which would constitute a breach or non-compliance of this
          covenant.

                    5.4    SRS Stockholder Approval.   As soon as
                           ------------------------
          practicable after the date hereof, SRS shall prepare a proxy
          statement for a stockholders meeting (the "SRS Stockholders
          Meeting") at which approval of this Agreement and the Merger will
          be voted upon. SRS will convene the SRS Stockholders' Meeting as
          promptly as practicable after the proxy statement is available,
          subject to prior hearing as described in Section 5.5 hereof.
                                                   -----------
          Subject to fiduciary obligations of the SRS Board of Directors,
          the SRS Board of Directors shall recommend approval to its
          stockholders of this Agreement and the Merger and use its best
          efforts to obtain such approval. At the request of SRS, Eco shall
          furnish to SRS such information regarding Eco and Acquisition
          Corp. as may reasonably be necessary for inclusion in the proxy
          statement. SRS agrees to provide Eco with drafts of the proxy
          statement at least two business days prior to distribution of the
          final proxy statement to SRS stockholders.

                    5.5    California Permit.     As soon as practicable
                           -----------------
          after the date hereof SRS shall prepare and file an application
          (the "Application") with the California Commissioner of
          Corporations (the "COC") seeking a permit (the "Permit") under
          Section 25142 of the California Corporations Code for approval of
          the terms of the Merger on behalf of SRS stockholders after a
          hearing thereon. At the request of SRS, Eco shall furnish such
          information regarding Eco as may be reasonably required for
          inclusion in the Application. SRS shall provide Eco with a draft
          Application at least two business days prior to filing with the
          COC. SRS shall use its best efforts to cause the COC to grant the
          Permit, including appearing at any hearing required thereunder,
          in order that the approval by the COC would permit Eco to issue
          the Merger Consideration without registration under the
          Securities Act of 1933, as amended (the "Securities Act")
          pursuant to the exemption provided in Section 3(a)(10) thereof.

                    5.6    Consents and Approvals.   Subject to the terms
                           ----------------------
          and conditions provided herein, each of the parties hereto shall
          use reasonable commercial efforts to obtain all consents,
          approvals, certificates and other documents required in
          connection with the performance by it of this Agreement and the
          consummation of the transactions contemplated hereby, in addition
          to the approval of SRS Stockholders and the grant of the Permit
          pursuant to Sections 5.4 and 5.5 hereof. As soon as practicable
                      --------------------
          after the date hereof, each of the parties hereto shall make all
          filings, applications, statements and reports to all Governmental
          Authorities and other Persons which are required to be made prior
          to the Closing Date pursuant to any applicable law or contract in
          connection with this Agreement and the transactions contemplated
          hereby.

                    5.7    Periodic Reports.  Until the Effective Time, Eco
                           ----------------
          will, subject to the requirements of applicable laws, furnish to
          SRS all filings to be made with the TSE and the SEC and will
          solicit comments with respect thereto, in each case at least two
          business days (or as soon thereafter as is practicable) prior to
          the time of such filings and the time of such mailings of reports
          which refer to SRS.

                    5.8    Publicity.    Prior to issuing any public
                           ---------
          announcement or statement with respect to the transactions
          contemplated hereby and prior to making any filing with any
          Federal or state governmental or regulatory agency or with the
          TSE or Nasdaq with respect thereto, Eco and SRS will, subject to
          their respective legal obligations, consult with each other and
          will allow each other to review the contents of any such public
          announcement or statement and any such filing. Subject to the
          preceding sentence, Eco and SRS each agree to furnish to the
          other copies of all other public announcements they may make
          concerning their respective business and operations promptly
          after such public announcements are made.

                    5.9    No Negotiation.   SRS agrees that it shall not,
                           --------------
          after the date hereof and prior to the Effective Time, seek,
          directly or through agents, representatives or affiliates (as
          defined in the Exchange Act), or permit any of its officers or
          directors to seek (whether in their capacities as officers or
          directors or in their individual capacities) any person or
          persons, (other than Eco or its affiliates), to acquire or
          purchase all or substantially all of its assets or to purchase or
          exchange for any of its capital stock, or SRS to acquire or
          purchase in one or more related transactions the capital stock or
          related assets of persons (other than Eco or its affiliates) or
          to effect a consolidation or merger (other than the Merger) or
          other business combination or recapitalization, or to enter into
          any discussions or agreements with respect to any of the
          foregoing transactions.

                    5.10   Listing of Common Stock.   Eco shall cause to
                           -----------------------
          be prepared and submitted applications to the TSE and Nasdaq
          covering the listing of the shares of Eco Common Stock on the TSE
          and NASDAQ National Market issuable in connection with the Merger
          and will use its reasonable best efforts to obtain approval for
          the listing of such additional shares.

                    5.11   Blue Sky Approvals.    Eco and SRS shall obtain
                           ------------------
          all necessary state securities law or "Blue Sky" permits and
          approvals required to carry out the transactions contemplated by
          this Agreement and the Merger.


                    5.12   Principal Stockholders.     SRS shall cause the
                           ----------------------
          Joseph and Barbara DeFranco Trust, Francis J. Sorg, Jr. and John
          H. Van Kirk to enter into agreements agreeing to vote all of
          their respective shares of SRS Common Stock, and shall cause
          members of their respective immediate families to vote all of
          their shares of SRS Common Stock, at the SRS Stockholders Meeting
          in favor of approval of this Agreement and the Merger.

                    5.13   Rule 145 Affiliates.   Prior to the Closing
                           -------------------
          Date, SRS shall deliver to Eco a letter representing that other
          than Joseph DeFranco, Francis J. Sorg, Jr., Donna L. Dominiquez,
          William Sheehan and John H. Van Kirk and to its best knowledge,
          SRS has no other "affiliates" for purposes of Rule 145 under the
          Securities Act.

                    5.14   Tax-Free Status.  No party hereto shall, nor
                           ---------------
          shall any party permit any of its subsidiaries to, take any
          actions which would, or would be reasonably likely to, adversely
          affect the status of the Merger as a tax-free transaction (except
          as to dissenters' rights and fractional shares) under Code
          Section 368(a).

                                      ARTICLE VI

                         CONDITIONS PRECEDENT TO OBLIGATIONS
                             OF ACQUISITION CORP. AND ECO

                    The obligations of Acquisition Corp. and Eco to
          consummate the Merger are subject to the fulfillment at or before
          the Closing of each of the following conditions:

                    6.1    Warranties True as of Closing Date.   Each of
                           ----------------------------------
          the representations and warranties of SRS contained herein shall
          be true and correct in all material respects on and as of the
          Closing Date with the same force and effect as though made on and
          as of the Closing Date, without giving effect to any notification
          pursuant to Section 5.3(c) hereof.
                      --------------

                    6.2    Compliance With Agreements and Covenants.  SRS
                           ----------------------------------------  
          shall have performed and complied with in all material respects
          all of its covenants, obligations and agreements contained in
          this Agreement to be performed and complied with by SRS on or
          prior to the Closing Date, without giving effect to any
          notification pursuant to Section 5.3(c) hereof.
                                   --------------

                    6.3    SRS Certificate.  SRS shall have delivered to
                           ---------------
          Eco a certificate, dated the Closing Date, from its Chief
          Executive Officer and Chief Financial Officer certifying that
          each of the conditions specified in Section 6.1 and Section 6.2
                                              -----------     -----------
          hereof are satisfied in all respects.

                    6.4    Secretary's Certificate.    SRS will have
                           -----------------------
          delivered to Eco a certificate of the duly authorized Secretary
          of SRS, dated the Closing Date, certifying resolutions of SRS
          Board of Directors and stockholders authorizing the execution,
          delivery and performance of this Agreement, the Related Agreement
          and the Merger.

                    6.5    Good Standing Certificates.  SRS will have
                           --------------------------
          delivered to Eco at the Closing certificates of good standing and
          tax status from the States of Nevada, California, Louisiana and
          Washington as to SRS, which Certificates shall be dated a date
          not more than five (5) business days prior to the Closing Date.

                    6.6    De Franco Employment Agreement.  SRS will have
                           ------------------------------
          delivered to Eco a fully executed employment agreement between
          SRS and Joseph De Franco. The De Franco employment agreement
          shall be substantially in the form of Exhibit A attached hereto.
                                                ---------

                    6.7    Escrow Agreement. SRS will have delivered to Eco
                           ----------------
          Escrow Agreement executed by the escrow agent and Joseph
          DeFranco, as the agent of the SRS stockholders, as provided for
          in Sections 1.4(d) and 1.9(c) hereof. The Escrow Agreement shall
             --------------------------
          be substantially in the form of Exhibit B attached hereto.
                                          ---------

                    6.8    Opinion of Counsel.   SRS will have delivered
                           ------------------
          to American Eco a legal opinion of Stradling, Yocca, Carlson &
          Rauth in form and substance reasonably satisfactory to Eco and
          its counsel.

                    6.9    Approval of Merger.   The SRS stockholders
                           ------------------
          shall have approved this Agreement and the Merger contemplated
          hereby in accordance with its Articles of Incorporation and
          by-laws and the NRS [and California law?].

                    6.10   Permit.  The COC shall have issued the Permit as
                           ------
          contemplated in Section 5.5 hereof, and no action shall have been
                          -----------
          taken or threatened to modify or revoke the Permit.

                    6.11   Dissent and Appraisal.  The holders of not more
                           ---------------------
          than 5% of the issued and outstanding shares of SRS Common Stock
          have dissented from the Merger and sought appraisal rights
          pursuant to the applicable provisions of the NRS.

                    6.12   Consents and Approvals.  Eco shall have received
                           ----------------------
          written evidence satisfactory to it that all consents and
          approvals required for the consummation of the transactions
          contemplated hereby have been obtained, and all required filings
          have been made, except where the failure to obtain any such
          consent or approval or to make any such filing would not have an
          SRS Material Adverse Effect or an Eco Material Adverse Effect.

                    6.13   Resignations.    Such officers and directors of
                           ------------
          SRS as requested by Eco shall have delivered letters of
          resignation of their positions with SRS.

                    6.14   Listing of Common Stock.   The TSE and NASDAQ
                           -----------------------
          shall have approved the listing of all shares of Eco Common Stock
          to be issued in the Merger.

                    6.15   Rule 145 Letters.  The persons listed in Section
                           ----------------                         -------
          5.13 hereof shall have delivered to Eco letters regarding the
          ----
          resale of the Eco Common Stock they are to receive on the Merger
          in accordance with Rule 145 under the Securities Act.

                    6.16   Actions or Proceedings.    No preliminary or
                           ----------------------
          permanent injunction or other order by any federal or state court
          preventing consummation of the Merger shall have been issued and
          shall be continuing in effect, and the Merger and the other
          transactions contemplated hereby shall not be prohibited under
          any applicable federal or state law or regulation.

                    6.17   Other Closing Documents.   Eco shall have
                           -----------------------
          received the executed Articles of Merger and such other
          agreements and instruments as Eco shall reasonably request, in
          each case in form and substance reasonably satisfactory to Eco.

                                     ARTICLE VII

                      CONDITIONS PRECEDENT TO OBLIGATIONS OF SRS

                    The obligations of SRS to consummate the Merger are
          subject to the satisfaction or waiver by SRS of the following
          conditions precedent on or before the Closing Date:

                    7.1    Warranties True as of Closing Date.   Each of
                           ----------------------------------
          the representations and warranties of Acquisition Corp. and Eco
          contained herein shall be true and correct in all material
          respects on and as of the Closing Date with the same force and
          effect as though made by Acquisition Corp. and Eco on and as of
          the Closing Date, without giving effect to any notification
          pursuant to Section 5.3(c) hereof.
                      -------------

                    7.2    Compliance with Agreements and Covenants.
                           ----------------------------------------
          Acquisition Corp. and Eco shall have performed and complied with
          in all material respects all of their covenants, obligations and
          agreements contained in this Agreement, to be performed and
          complied with by them on or prior to the Closing Date, without
          giving effect to any notification pursuant to Section 5.3(c)
                                                        --------------
          hereof.

                    7.3    Eco Certificate.  Eco shall have delivered to
                           ---------------
          SRS a certificate, dated the Closing Date, from its Chief
          Executive Officer and Chief Financial Officer certifying that
          each of the conditions specified in Section 7.1 and Section 7.2
                                              -----------     -----------
          hereof are satisfied in all respects.

                    7.4    Opinion of Counsel.   Eco shall have delivered
                           ------------------
          to SRS a legal opinion of Cassels Brock & Blackwell in form and
          substance reasonably satisfactory to SRS.

                    7.5    Opinion of Tax Counsel. Eco shall have delivered
                           ----------------------
          to SRS a legal opinion of Reid & Priest LLP to the effect that
          the Merger will be treated for federal income tax purposes as a
          reorganization within Section 368(a) of the Code.

                    7.6    Permit. The COC shall have issued the Permit as
                           ------
          contemplated in Section 5.5 hereof, and no action shall have been
                          -----------
          taken or threatened to modify or revoke the Permit.

                    7.7    Consents and Approvals.  SRS shall have received
                           ----------------------
          written evidence satisfactory to it that all consents and
          approvals required for the consummation of the transactions
          contemplated hereby have been obtained, and all required filings
          have been made, except where the failure to obtain any such
          consent or approval or to make any such filing would not have an
          SRS Material Adverse Effect or an Eco Material Adverse Effect.

                    7.8    Listing of Common Stock.  The TSE and NASDAQ
                           -----------------------
          shall have approved the listing of all shares of American Eco
          Common Stock to be issued in the Merger.

                    7.9    Actions or Proceedings.   No preliminary or
                           ----------------------
          permanent injunction or other order by any federal or state court
          preventing consummation of the Merger shall have been issued and
          shall be continuing in effect, and the Merger and the other
          transactions contemplated hereby shall not be prohibited under
          any applicable federal or state law or regulation.

                    7.10   Other Closing Documents.   SRS shall have
                           -----------------------
          received such other agreements and instruments as SRS shall
          reasonably request, in each case in form and substance reasonably
          satisfactory to SRS.

                                     ARTICLE VIII

                                     TERMINATION

               8.1  Termination.  This Agreement may be terminated and the
                    -----------
          Merger may be abandoned at any time prior to the Effective Time,
          whether before or after approval by the SRS stockholders:

                    (a)    by mutual written consent of the Board of
          Directors of American Eco and the Board of Directors of SRS;

                    (b)    by either American Eco or SRS, by written notice
          to the other, if (i) the Effective Time shall not have occurred
          on or before June 1, 1996, or (ii) any court of competent
          jurisdiction in Canada or any province or in the United States or
          any state shall have issued an order, judgment or decree (other
          than a temporary restraining order) restraining, enjoining or
          otherwise prohibiting the Merger and such order, judgment or
          decree shall have become final and non-appealable; provided,
          however, that the right to terminate this Agreement (X) under
          clause (i) shall not be available to any party whose failure to
          fulfill any obligation under this Agreement has been the cause
          of, or resulted in, the failure of the Effective Time to occur on
          or before such date or (Y) under clause (ii) shall not be
          available to any party unless such party shall have used all
          reasonable efforts to remove such order, judgment or decree;

                    (c)    by Eco, by written notice to SRS, if:

                    (i)    there shall have been any breach of any
               representation, warranty, covenant or agreement of SRS
               hereunder which, if not remedied prior to the Closing Date,
               would have an SRS Material Adverse Effect and such breach
               shall not have been remedied, or SRS shall not have provided
               Eco with reasonable assurance that such breach will be
               remedied prior to the Closing Date, within five (5) business
               days after receipt by SRS of notice in writing from Eco,
               specifying the nature of such breach and requesting that it
               be remedied; or

                    (ii)   the Board of Directors of SRS shall withdraw or
               modify in any manner adverse to Eco its approval or
               recommendation of this Agreement or the Merger.

                    (d)    by SRS, by written notice to Eco, if:

                    (i)    there shall have been any breach of any
               representation, warranty, covenant or agreement of Eco
               hereunder which, if not remedied prior to the Closing Date,
               would have an Eco Material Adverse Effect and such breach
               shall not have been remedied or Eco shall not have provided
               SRS with reasonable assurance that such breach will be
               remedied prior to the Closing Date, within five (5) business
               days after receipt by Eco of notice in writing from SRS,
               specifying the nature of such breach and requesting that it
               be remedied; or

                    (ii)   the Board of Directors of Eco or any committee
               thereof shall withdraw or modify in any manner adverse to
               SRS its approval or recommendation of this Agreement or the
               Merger.

                    8.2    Effect of Termination and Abandonment.  In the
                           -------------------------------------
          event of termination of this Agreement and abandonment of the
          Merger pursuant to this Article VIII, this Agreement shall
                                  ------------
          forthwith become void and no party hereto (or any of its
          directors, officers or stockholders) shall have any liability or
          further obligation to any other party to this Agreement, except
          that nothing herein will relieve any party from liability for any
          breach of any of its representations or warranties under this
          Agreement or its failure to comply with one of its covenants,
          agreements or obligations under this Agreement.

                                      ARTICLE IX

                                   INDEMNIFICATION

                    9.1 Indemnification by SRS Stockholders.
                        ------------------------------------

                    (a)    In consideration of the receipt of the Merger
          Consideration, the SRS Stockholders shall indemnify and hold
          harmless Eco from and against any claims, demands, debts, suits,
          actions, obligations, proceedings, losses, damages, liabilities,
          deficiencies, costs and expenses (including without limitation,
          all reasonable legal and other professional fees and
          disbursements, interest, penalties and amounts paid in
          settlement) (collectively, "Claims") arising out of, based upon
          or by reason of (A) any breach of any representation or warranty
          of SRS contained in this Agreement or in any Schedule or
          certificate delivered pursuant to this Agreement or (B) any
          breach or non-fulfillment of, or failure to perform, any of the
          covenants, agreements or understandings of SRS which are
          contained in or made pursuant to this Agreement.

                    (b)    Notwithstanding anything to the contrary herein,
          any claim by Eco against the SRS Stockholders under this Section
          9.1 shall be payable.by the SRS Stockholders only to the extent
          that Eco's damages (the "Damages") shall exceed in the aggregate
          525,000 (the "Threshold Amount"). At such time as the aggregate
          amount of Eco Damages exceed the Threshold Amount, the SRS
          Stockholders shall be liable on a dollar-for-dollar basis for the
          full amount of all Eco Damages, including the Threshold Amount.
          Any payments to be made by the SRS Stockholders under this
          Section 9.1 shall be from shares of Eco Common Stock and/or funds
          held under the Escrow Agreement, and shall be pro-rata based upon
          their respective ownership of SRS Common stock as of the
          Effective Time. In no event shall the aggregate liability of the
          SRS Stockholders under this Section 9.1 exceed the amount of
          funds and/or shares of Eco Common Stock and/or funds ($500,000)
          held under the Escrow Agreement.

                    9.2    Indemnification by Eco.
                           -----------------------

                    (a)    Eco shall indemnify and hold harmless the
          persons who are SRS Stockholders immediately prior to the
          Effective Time (the "Indemnified Stockholders") from and against
          any claims, demands, debts, suits, actions, obligations,
          proceedings, losses, damages, liabilities, deficiencies, costs
          and expenses (including without limitation, all reasonable legal
          and other professional fees and disbursements, interest,
          penalties and amounts paid in settlement) (collectively,
          "Claims") arising out of, based upon or by reason of (A) any
          breach by Eco of any representation or warranty by Eco contained
          in this Agreement or (B) any breach or non-fulfillment of, or
          failure to perform, any of the covenants, agreements or
          undertakings of Eco which are contained in or made pursuant to
          this Agreement. It is acknowledged that the person who is acting
          as the agent of the Indemnified Stockholders pursuant to the
          Escrow Agreement shall also act as agent on behalf of the
          Indemnified Stockholders pursuant to this Section 9.2 (the
                                                    -----------
          "Stockholders' Agent").

                    (b)    Notwithstanding anything to the contrary herein,
          any claim by the Indemnified Stockholders against Eco under this
          Section 9.2 shall be payable by Eco only to the extent that the
          Indemnified Stockholders damages ("Damages") shall exceed the
          Threshold Amount. At such time as the aggregate amount of the
          Indemnified Stockholders Damages exceed the Threshold Amount, Eco
          shall thereafter be liable on a dollar-for-dollar basis for the
          full amount of all Indemnified Stockholders Damages, including
          the Threshold Amount. Eco may make payments of amount payable
          under this Section 9.2 in U.S. currency and/or shares of Eco
          Common Stock, which shares be valued at the Average Closing Price
          per share for the five trading days immediately prior to the
          payment date, as provided in the Escrow Agreement. In no event
          shall the aggregate liability of Eco under this Section 9.2
          exceed $500,000.

                    9.3    Procedure.  (a)  Any Claim brought by Eco
                           ---------
          or the SRS Stockholders under this ARTICLE IX must be in writing,
          specifying the nature of the Claim and the estimated amount of
          damages, and be received by the party against whom
          indemnification is being sought within one year after the
          Effective Date (the "Indemnity Termination Date").

                    (b)    In the event that subsequent to the Effective
          Time, and not prior to the Indemnity Termination Date, Eco
          receives written notice of the assertion of a claim or the
          commencement of any action or proceeding by any person who is not
          a party to this Agreement (including any Governmental Entity) (a
          "Third Party Claim"), against Eco, SRS or one of their affiliates
          against which ECO may be entitled to indemnification hereunder,
          Eco shall give written notice of the Third Party Claim to the
          Stockholders' Agent. Eco shall have the right to conduct the
          defense of the Third Party Claim, and the cost of such defense
          shall be part of Eco Damages. If an offer is made to settle a
          Third Party Claim and Eco desires to accept such offer, Eco shall
          give written notice of the offer of settlement to the
          Stockholders' Agent who shall have fifteen (15) days from receipt
          thereof to accept or reject the offer, which rejection must be on
          a reasonable basis. The failure of the Stockholders Agent to
          respond to a desired offer of settlement shall be deemed
          acceptance thereof.

                    9.4    Remedies.  Each of Eco and Acquisition Corp, on
                           --------
          one hand, and SRS (until the Effective Time) and the SRS
          Stockholders (after the Effective Time), on the other hand, shall
          not be liable or responsible in any manner whatsoever to the
          other, whether for indemnification or otherwise, with respect to
          any matter arising out of the representations, warranties or
          covenants of this Agreement or any Schedule hereto or any
          certificate delivered in connection herewith except for (i)
          equitable relief, (ii) pursuant to remedies expressly provided
          for elsewhere in this Agreement and (iii) indemnity as expressly
          provided in this ARTICLE IX, all of which provide the exclusive
          remedy of the parties hereto.

                                      ARTICLE X

                                    MISCELLANEOUS

                    10.1   Expenses.  Each party hereto shall bear its own
                           --------
          expenses with respect to the transactions contemplated hereby.

                    10.2   Amendment.  This Agreement may not be amended,
                           ---------
          modified or supplemented except by a writing executed by
          Acquisition Corp., American Eco and SRS.

                    10.3   Notices.  Any notice, request, instruction or
                           -------
          other document to be given hereunder by a party hereto shall be
          in writing and shall be deemed to have been given, (a) when
          received if given in person, (b) on the date of transmission if
          sent by telex, facsimile or other wire transmission (with receipt
          confirmed) or (c) three business days after being deposited in
          the U.S. mail, certified or registered mail, postage prepaid:

                    (a)    If to SRS:

                           Separation and Recovery Systems, Inc.
                           1762 McGaw Avenue
                           Irvine, California 92714
                           Attn: Joseph De Franco, President
                           Facsimile No.: 714-261-7676

                    with a copy to:

                           Stradling, Yocca, Carlson & Rauth
                           660 Newport Centre Dr., Suite 1600
                           P.O. Box 7680
                           Newport Beach, California 92660-6441
                           Attn: R.C. Shepard, Esq.
                           Facsimile No.: 714-725-4100

                    (b)    If to American Eco or Acquisition Corp.:

                           American Eco Corporation
                           1325 South Creek Drive
                           Suite 100
                           Houston, Texas 77084
                           Attention: Michael E. McGinnis, President
                           Facsimile No.: (713) 647-0080

                    with a copy to:

                           Reid & Priest LLP
                           40 West 57th Street
                           New York, New York 10019
                           Attn: Bruce A. Rich, Esq.
                           Facsimile No.: (212) 603-2001

          or to such other individual or address as a party hereto may
          designate for itself by notice given as herein provided.

                    10.4   Waivers.  The failure of a party hereto at any
                           -------
          time or times to require performance of any provision hereof
          shall in no manner affect its right at a later time to enforce
          the same. No waiver by a party of any condition or of any breach
          of any term, covenant, representation or warranty contained in
          this Agreement shall be effective unless in writing, and no
          waiver in any one or more instances shall be deemed to be a
          further or continuing waiver of any such condition or breach in
          other instances or a waiver of any other condition or breach of
          any other term, covenant, representation or warranty.

                    10.5   Interpretation.  The headings preceding the
                           --------------
          text of Articles and Sections included in this Agreement and the
          headings to Schedules attached to this Agreement are for
          convenience only and shall not be deemed part of this Agreement
          or be given any effect in interpreting this Agreement. The use of
          the masculine, feminine or neuter gender herein shall not limit
          any provision of this Agreement. The use of the terms "including"
          or "include" shall in all cases herein mean "including, without
          limitation" or "include, without limitation," respectively.
          Underscored references to Articles, Sections, Paragraphs,
          Subsections, Subparagraphs, Schedules or Exhibits shall refer to
          those portions of this Agreement. Prior drafts of this Agreement
          shall not be considered in interpreting the rights and
          obligations of the parties hereunder.

                    10.6   Applicable Law.  This Agreement shall be
                           --------------
          governed by and construed and enforced in accordance with the
          internal laws of the State of California without giving effect to
          the principles of conflicts of law thereof.

                    10.7   Assignment.  This Agreement shall be binding
                           ----------
          upon and inure to the benefit of the parties hereto and their
          respective successors and assigns; provided, however, that no
          assignment of any rights or obligations shall be made by any
          party without the prior written consent of all the other parties
          hereto.

                    10.8   No Third Party Beneficiaries.  This Agreement
                           ----------------------------
          is solely for the benefit of the parties hereto and, to the
          extent provided herein, and their respective directors, officers,
          employees, agents and representatives, and no provision of this
          Agreement shall be deemed to confer upon other third parties any
          remedy, claim, liability, reimbursement, cause of action or other
          right.

                    10.9   Enforcement of the Agreement.   The parties
                           ----------------------------
          hereto agree that irreparable damage would result in the event
          that any provision of this Agreement is not performed in
          accordance with specific terms or is otherwise breached. It is
          accordingly agreed that the parties hereto will be entitled to
          equitable relief including an injunction or injunctions to
          prevent breaches of this Agreement and to enforce specifically
          the terms and provisions hereof.

                    10.10  Severability.  If any provision of this
                           ------------
          Agreement shall be held invalid, illegal or unenforceable, the
          validity, legality or enforceability of the other provisions
          hereof shall not be affected thereby, and there shall be deemed
          substituted for the provision at issue a valid, legal and
          enforceable provision as similar as possible to the provision at
          issue.

                    10.11  Remedies Cumulative.   The remedies provided in
                           -------------------
          this Agreement shall be cumulative and shall not preclude the
          assertion or exercise of any other rights or remedies available
          by law, in equity or otherwise.

                    10.12  Entire Understanding.  This Agreement and the
                           --------------------
          Related Agreement set forth the entire agreement and
          understanding of the parties hereto and supersede all prior
          agreements, arrangements and understandings among the parties
          hereto, including, without limitation, the First Amended Letter
          of Intent, dated April 3, 1996.

                    10.13  Waiver of Jury Trial.  Each party hereto waives
                           --------------------
          the right to a trial by jury in any dispute in connection with
          the transactions contemplated by this Agreement and the Related
          Agreement, and agrees to take any and all action necessary or
          appropriate to effect such waiver.

                    10.14  Counterparts.   This Agreement may be executed
                           ------------
          in counterparts, each of which shall be deemed an original, but
          all of which together shall constitute one and the same
          instrument.

                    IN WITNESS WHEREOF, the parties hereto have caused this
          Agreement to be executed and delivered on the date first above
          written.

                                      AMERICAN ECO CORPORATION

                                      By:  /s/Michael McGinnis      
                                         ----------------------------
                                      Name:  Michael McGinnis
                                      Title:  President

                                      SRS ACQUISITION CORPORATION

                                      By:  /s/ Michael McGinnis   
                                         --------------------------
                                      Name:  Michael McGinnis
                                      Title:  President

                                      SEPARATION AND RECOVERY
                                        SYSTEMS, INC.

                                      By:  /s/ Joesph DeFranco      
                                         ----------------------------
                                             Name:  Joseph DeFranco
                                             Title:  President