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<SEC-DOCUMENT>0000899681-06-000356.txt : 20060601
<SEC-HEADER>0000899681-06-000356.hdr.sgml : 20060601
<ACCEPTANCE-DATETIME>20060601162052
ACCESSION NUMBER:		0000899681-06-000356
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060601
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060601
DATE AS OF CHANGE:		20060601

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SYSTEMAX INC
		CENTRAL INDEX KEY:			0000945114
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
		IRS NUMBER:				113262067
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13792
		FILM NUMBER:		06880334

	BUSINESS ADDRESS:	
		STREET 1:		22 HARBOR PARK DR
		CITY:			PORT WASHINGTON
		STATE:			NY
		ZIP:			11050
		BUSINESS PHONE:		5166087000

	MAIL ADDRESS:	
		STREET 1:		22 HARBOR PARK DRIVE
		CITY:			PORT WASHINGTON
		STATE:			NY
		ZIP:			11050

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GLOBAL DIRECTMAIL CORP
		DATE OF NAME CHANGE:	19950509
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>systemax-8k_060106.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>8-K</TITLE>
</HEAD>
<BODY>
<!-- MARKER FORMAT-SHEET="Stroock Head Minor Center" FSL="Workstation" -->
<P ALIGN=CENTER><FONT SIZE=3>SECURITIES AND EXCHANGE COMMISSION<BR>
WASHINGTON, D.C. 20549</FONT></P>

<!-- MARKER FORMAT-SHEET="Page Rule Single" FSL="Default" -->
     <HR ALIGN=CENTER WIDTH=30% SIZE=1 NOSHADE>

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<P ALIGN=CENTER><FONT SIZE=3><B>FORM 8-K</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Head Minor Center" FSL="Workstation" -->
<P ALIGN=CENTER><FONT SIZE=3>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(D) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Date of Report (Date of earliest event reported): June 1, 2006</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Systemax Inc.</B><BR>
(Exact Name of Registrant as Specified in Charter)</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=33% ALIGN=CENTER>
<B>Delaware</B><BR>
(State or Other Jurisdiction<BR>
of Incorporation)</TD>
<TD WIDTH=33% ALIGN=CENTER>
<B> 1-13792 </B><BR>
(Commission<BR>
 File Number)
</TD>
<TD WIDTH=34% ALIGN=CENTER>
<B>11-3262067</B><BR>
(IRS Employer<BR>
Identification No.)</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1" FSL="Default" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>11 Harbor Park Drive <BR>
Port Washington, New York 11050</B><BR>
(Address of Principal Executive offices, including Zip Code)</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Registrant&#146;s telephone number, including area code: <B>(516) 608-7000</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Head Major Center Bold" FSL="Workstation" -->
<P ALIGN=CENTER><FONT SIZE=3><B>N.A. </B><BR>
(Former Name or Former Address, if Changed Since Last Report)</FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Workstation" -->
<P><FONT SIZE=3>Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the following
provisions (<I>see</I> General Instruction A.2 below): </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Workstation" -->
<P><FONT SIZE=3>|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425) </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Workstation" -->
<P><FONT SIZE=3>|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14-12) </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Workstation" -->
<P><FONT SIZE=3>|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240-14d-2(b)) </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Default" -->
<P><FONT SIZE=3>|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CRF 240.13e-4(c)) </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Workstation" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>ITEM 7.01</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Regulation FD Disclosure</U> </FONT></H1>

<!-- MARKER FORMAT-SHEET="Stroock Para Flush" FSL="Workstation" -->
<P><FONT SIZE=3>As previously announced, on May 16,
2006, the Company, its directors and Chief Financial Officer entered into a stipulation of
settlement with all of the shareholder plaintiffs who had filed derivative complaints in
2005 alleging misconduct in connection with the Company&#146;s restatement of its 2004
financial results. Pursuant to such settlement, which is still subject to approval by the
United States District Court for the Eastern District of New York<B>,</B> the Company will
adopt certain changes to its corporate governance policies. As part of the settlement, the
Company has also agreed to pay $300,000 for the plaintiffs&#146; legal fees. As required
pursuant to such settlement, a copy of the Notice of Settlement Hearing is attached hereto
as Exhibit 99.1.</FONT></P>

<P ALIGN=LEFT><FONT SIZE=3><B>Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>Financial Statements and Exhibits</U>.</B> </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%></TD>
<TD WIDTH=90%>(c) Exhibits<BR>
<BR>
99.1 Notice of Settlement Hearing</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Stroock Head Major Center Bold" FSL="Default" -->
<P ALIGN=CENTER><FONT SIZE=3><B>SIGNATURES </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50% ALIGN=LEFT></TD>
<TD WIDTH=50%>
SYSTEMAX INC.<BR>
<BR>
<BR>
By: <U>/s/ Steven Goldschein&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name: Steven Goldschein<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title: Senior Vice President and CFO
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Stroock Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT SIZE=3>Dated: June 1, 2006</FONT></P>

<P ALIGN=CENTER><FONT SIZE=3>Exhibit Index</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=LEFT></TD>
<TD WIDTH=5% ALIGN=LEFT>99.1</TD>
<TD WIDTH=85%>Notice of Settlement Hearing</TD>
</TR>
</TABLE>
<BR>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>systemax-ex991_060106.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>Ex-99.1</TITLE>
</HEAD>
<BODY>

<P><FONT SIZE=3>UNITED STATES DISTRICT COURT<BR>
EASTERN DISTRICT OF NEW YORK</FONT></P>

<HR SIZE=1 ALIGN=LEFT WIDTH=50% NOSHADE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50% ALIGN=LEFT>
STEVE CLAYTON, Derivatively on  <BR>
Behalf of Nominal Defendant     <BR>
SYSTEMAX, INC.,
</TD>
<TD WIDTH=5% ALIGN=LEFT>:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
</TD>
<TD WIDTH=45%>Case No. 05-2513 (DGT)
</TD>
</TR>
</TABLE>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50% ALIGN=LEFT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plaintiff,  <BR>
<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
v.<BR>
<BR>
<BR>
</TD>
<TD WIDTH=5% ALIGN=LEFT>:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR></TD>
<TD WIDTH=45%>
</TD>
</TR>
</TABLE>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50% ALIGN=LEFT>
RICHARD LEEDS, ROBERT LEEDS,    <BR>
BRUCE LEEDS, GILBERT            <BR>
FIORENTINO, STACY S. DICK, ANN  <BR>
R. LEVEN, ROBERT D. ROSENTHAL,  <BR>
and STEVEN M. GOLDSCHEIN,      <BR>
<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defendants,    <BR>
<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
and
</TD>
<TD WIDTH=5% ALIGN=LEFT>:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
:<BR>
</TD>
<TD WIDTH=45%>
</TD>
</TR>
</TABLE>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=50% ALIGN=LEFT>
SYSTEMAX, INC.,
<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nominal Defendant.
</TD>
<TD WIDTH=5% ALIGN=LEFT>:<BR>
:<BR>
:<BR>
:<BR>
:<BR></TD>
<TD WIDTH=45%>
</TD>
</TR>
</TABLE>
<HR SIZE=1 ALIGN=LEFT WIDTH=50% NOSHADE>


<!-- MARKER FORMAT-SHEET="Stroock Head Major Center Bold" FSL="Default" -->
<P ALIGN=CENTER><FONT SIZE=3><B><U>NOTICE OF SETTLEMENT HEARING</U> </B></FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT><B>TO:</B></TD>
<TD WIDTH=95%>
<B>ALL SHAREHOLDERS OF SYSTEMAX, INC. AS OF MAY 15, 2006. PLEASE READ THIS NOTICE
CAREFULLY AND IN ITS ENTIRETY. IF YOU ARE A CURRENT SHAREHOLDER OF SYSTEMAX, THE
SETTLEMENT OF THE ACTIONS DESCRIBED HEREIN COULD AFFECT YOUR RIGHTS. THESE
ACTIONS ARE NOT SECURITES CLASS ACTIONS AND THERE IS NO SETTLEMENT FUND ON WHICH
TO MAKE A CLAIM.</B>
</TD>
</TR>
</TABLE>
<BR>



<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
THIS NOTICE IS GIVEN pursuant to an Order of the United States District Court
for the Eastern District of New York (the &#147;Court&#148;) in the
above-captioned putative derivative action. Plaintiffs brought this action and a
related state court action (collectively, the &#147;Actions&#148;) derivatively
on behalf of Systemax, Inc. (&#147;Systemax&#148; or the
&#147;Company&#148;).</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;<B>This Notice is given to advise you that a hearing (the
&#147;Settlement Hearing&#148;) will be held for the Actions on July 6, 2006 at
10:00 a.m. at the United States District Court for the Eastern District of New
York, 225 Cadman Plaza East, Brooklyn, New York 11201, before the Honorable
David G. Trager, to: (i) determine the fairness, reasonableness, and adequacy of
the terms and conditions of a proposed stipulated settlement between the parties
to the Actions (the &#147;Settlement&#148;) and whether the Court should finally
approve the Settlement and enter an Order and Final Judgment thereon; and (ii)
rule upon the agreed-to fee award for Representative Plaintiffs&#146; Counsel.
Even though you are receiving this Notice, the Court has not expressed any
opinion as to the merits of any claim or defense that has been or may be
asserted in the Actions.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Level 2" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT. IT IS
BASED ON THE STATEMENTS OF THE PARTIES AND SHOULD NOT BE UNDERSTOOD AS AN
EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR
DEFENSES RAISED BY ANY OF THE PARTIES.</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp; <U>BACKGROUND</U> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;The Actions were commenced on May 25, 2005, when Plaintiff Steve
Clayton filed the above-captioned shareholder&#146;s derivative action in the
United States District Court for the Eastern District of New York (the
&#147;Federal Action&#148;). Generally, Plaintiff in the Federal Action alleged
that the Company&#146;s officers and directors (collectively, the
&#147;Defendants&#148;) breached their fiduciary duties to the Company because,
among other things, they improperly managed the Company and failed to adopt
reasonable internal controls. Plaintiff in the Federal Action alleged that, as a
result of the foregoing, the Company was forced to restate its previously-issued
financial statements, which in turn caused the Company to suffer damages.
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;On June 3, 2005, Plaintiff Alan Korbin filed a shareholder&#146;s
derivative action against Defendants on the Company&#146;s behalf in the Supreme
Court of New York, Nassau County. On June 6, 2005, Plaintiff William Share filed
a substantially similar shareholder&#146;s derivative action against Defendants
on the Company&#146;s behalf in the Supreme Court of New York, Nassau County
(collectively, the Korbin and Share actions are referred to herein as the
&#147;State Court Action&#148;). The Korbin and Share actions were subsequently
consolidated. Generally, the Plaintiffs in the State Court Action alleged
substantially similar claims as Plaintiff in the Federal Action. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;On
or about August 15, 2005, Defendants filed and served their Answers to the Complaint in
the Federal Action, and the parties exchanged Initial Disclosures pursuant to rule
26(a)(1) of the Federal Rules of Civil Procedure. Thereafter, Plaintiff in the Federal
Action served discovery on Defendants. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;On
or about October 11, 2005, Plaintiffs in the State Court Action served discovery on
Defendants. It was at this same approximate time that counsel for Plaintiff in the Federal
Action first discussed the possibility of exploring a settlement of the Actions with
Defendants&#146; counsel. Thereafter, the parties in the Federal Action exchanged certain
information, and the settlement discussions began in earnest at the end of November 2005.
The parties&#146; initial settlement discussions showed promise, and by the end of
December 2005, the parties had agreed on numerous settlement terms; however, the parties
had marked differences of opinion regarding several settlement concepts, and they were
unable to reach an agreement at that time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Stroock Para Large Indent" FSL="Default" -->
<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties&#146; settlement discussions began again at the end of January 2006, but
despite their best efforts, they were unable to resolve the Actions at that
time. Finally, in the beginning of April 2006, the parties reached an agreement
to settle the Actions on the terms and conditions described herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Representative
Plaintiffs&#146; Counsel have conducted an extensive investigation during the development
and prosecution of the Actions. This investigation has included, among other things, (i)
inspecting, reviewing and analyzing the Company&#146;s financial filings; (ii) researching
corporate governance issues; (iii) participating in numerous telephonic meetings with
Defendants&#146; counsel; and (iv) researching the applicable law with respect to the
claims asserted in the Complaints filed in the Actions and the potential defenses thereto. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT><B>II.</B></TD>
<TD WIDTH=95%>
<B>THE PARTIES&#146; POSITIONS REGARDING THE DESIRABILITY OF THE<BR>
<B><U>PROPOSED SETTLEMENT</U></B></B>

</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Plaintiffs believe that the claims asserted in the
Actions have merit and that their investigation supports the claims asserted.
However, Representative Plaintiffs&#146; Counsel recognize and acknowledge the
expense and length of continued proceedings necessary to prosecute the Actions
against Defendants through trial and appeals. Representative Plaintiffs&#146;
Counsel have also taken into account the uncertain outcome and the risk of any
litigation, especially in complex shareholder litigation such as the Actions, as
well as the difficulties and delays inherent in such litigation. Representative
Plaintiffs&#146; Counsel also are mindful of the inherent problems of proof
under, and possible defenses to, the violations asserted in the Actions. Based
on these considerations, among others, Representative Plaintiffs&#146; Counsel
believe that the Settlement described herein confers substantial benefits upon
Plaintiffs, Systemax and current Systemax stockholders. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;Defendants
have denied and continue to deny each and all of the claims and contentions alleged by the
Plaintiffs in the Actions. Defendants also have denied and continue to deny, among other
things, the allegations that Plaintiffs or Systemax have suffered any damages. Defendants
expressly have denied and continue to deny all charges of wrongdoing or liability against
them arising out of any of the conduct, statements, acts or omissions alleged, or that
could have been alleged, in the Actions. Each of the Defendants denies and continues to
deny the allegations concerning any alleged breach of fiduciary duty. Defendants have
further asserted and continue to assert that at all relevant times they acted in good
faith and in a manner they reasonably believed to be in the best interests of the Company
and its stockholders. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Nonetheless,
Defendants have concluded that further litigation would be protracted and expensive, and
that it is desirable that the Actions be fully and finally settled in the manner and upon
the terms and conditions described herein. Defendants also have taken into account the
uncertainty and risks inherent in any litigation, especially in complex shareholder
litigation like the Actions. Defendants have, therefore, determined that it is desirable
and beneficial to them that the Actions be settled in the manner and upon the terms and
conditions described herein. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>III.&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>THE TERMS OF THE PROPOSED SETTLEMENT</U>
</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;As
a result of the initiation, prosecution and settlement of the Actions, Systemax, and/or
its Board of Directors, have agreed to adopt the following corporate governance
principles: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT></TD>
<TD WIDTH=5% ALIGN=LEFT><B>A.</B></TD>
<TD WIDTH=90%><B> <U>The Board of Directors</U></B>
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Stroock Para (List) Deep Ind" FSL="Workstation" -->
<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Board&#146;s Nominating &amp; Corporate Governance Committee (the
&#147;NCGC&#148;) shall transition its membership so that it is comprised
exclusively by independent directors by the end of 2006. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN=LEFT></TD>
<TD WIDTH=5% ALIGN=LEFT></TD>
<TD WIDTH=90%>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Stroock Para (List) Deep Ind" FSL="Workstation" -->
     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board&#146;s Compensation Committee shall transition its membership so that
          it is comprised exclusively by independent directors by the end of 2006. </FONT></P>


<!-- MARKER FORMAT-SHEET="Stroock Para (List) Deep Ind" FSL="Workstation" -->
     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Upon consummation of the settlement of the Actions, the Board shall cause the
          Company to amend its by-laws to create the new position of &#147;Lead
          Independent Director.&#148; Thereafter, the board&#146;s independent directors
          shall nominate an independent director to serve as the Board&#146;s Lead
          Independent Director. The Lead Independent Director&#146;s specific duties and
          responsibilities are explained in detail below. Among other things, the Lead
          Independent Director shall, after having been elected to this position, be
          immediately appointed to the Board&#146;s Executive Committee. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Directors standing for re-election at the next Company&#146;s Annual Meeting
          shall be required to receive a majority of the votes cast to retain their
          positions on the Board. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board&#146;s Corporate Governance Guidelines shall include the following
          specific limits on outside board memberships: The CEO of the Company shall be
          prohibited from serving on the Board of any other public for-profit
          corporations, other than any public for-profit corporation that is an affiliate
          of the Company. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board, and all Board Subcommittees, shall keep typed meeting minutes from
          their regular and/or special Board meetings and circulate to the directors prior
          to the subsequent Board meeting, provided that such meeting takes place at least
          two (2) weeks following the previous meeting. These minutes shall be maintained
          by the Company for at least five (5) years. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>B.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Responsibilities of the Independent Directors</U></B> </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board&#146;s independent directors shall meet separately from the CEO in
          executive sessions, chaired by the Lead Independent Director, held on at least a
          quarterly basis. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Upon consummation of the settlement of the Action, the Board&#146;s independent
          directors shall elect a Lead Independent Director. The Lead Independent Director
          must be reaffirmed annually by a majority vote of independent directors. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Lead Independent Director is responsible for coordinating the activities of
          the independent directors. In addition to the duties of all Board members (which
          shall not be limited or diminished by the Lead Independent Director&#146;s
          role), the specific responsibilities of the Lead Independent Director are as
          follows: </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          advise the Chairman of the Board as to an appropriate schedule of Board
          meetings, seeking to ensure that the independent directors can perform their
          duties responsibly while not interfering with the flow of Systemax&#146;s
          operations; </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          provide the Chairman of the Board with input as to the preparation of agendas
          for the Board and Committee meetings; </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          advise the Chairman of the Board as to the quality, quantity, and timeliness of
          the flow of information from Systemax&#146;s management that is necessary for
          the independent directors to effectively and responsibly perform their duties,
          and although Systemax&#146;s management is responsible for the preparation of
          materials for the Board, the Lead Independent Director may specifically request
          the inclusion of certain material; </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          recommend to the Chairman of the Board the retention of consultants who report
          directly to the Board; </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          assist the Board and Systemax&#146;s officers in assuring compliance with and
          implementation of the Corporate Governance Policies; and be principally
          responsible for recommending revisions to the Corporate Governance Policies; </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          coordinate and develop the agenda for, and moderate executive sessions of, the
          independent directors of Systemax&#146;s Board, and act as principal liaison
          between the independent directors and the Chairman of the Board on sensitive
          issues; and </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          recommend to the Chairman of the Board the membership of the various Systemax
          Board Committees. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<B>C.</B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><U>Board Committees</U></B> </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board&#146;s Committees shall have standing authorization, on their own
          initiative, to retain legal or other advisors of their choice, who shall report
          directly to the Chairman of the Board and/or the Lead Independent Director. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board&#146;s Committees shall meet independently and in separate sessions
          from the Board&#146;s regular and/or special meetings at least twice per fiscal
          year, provided, however, the Audit Committee shall meet at least four (4) times
          per year and there shall be no yearly minimum of Executive Committee meetings. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Board Committee&#146;s shall keep typed meeting minutes from their regular
          and/or special committee meetings and circulate to the members of the committee
          and the Board prior to the subsequent committee and/or Board meeting, provided
          that such meeting takes place at least two (2) weeks following the previous
          meeting. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>D.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Audit Committee &amp; Management Oversight Function</U></B> </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Audit Committee shall conduct a re-proposal for the Company&#146;s
          independent auditor at least once every five (5) years. The Audit
          Committee&#146;s charter shall be amended to clearly reflect this obligation. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Audit Committee&#146;s charter shall be amended to enforce a policy that any
          independent auditor responsible for auditing Systemax&#146;s financial
          statements shall not provide any consulting services to Systemax except for tax
          consulting services. </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Management shall review with the Audit Committee the appropriateness and
          accounting treatment of all related party transactions, including corporate
          acquisitions and sales of assets of greater than $300,000. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<B>E.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><U>The Company&#146;s Internal Audit Function</U></B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;The
Company&#146;s Directors of Internal Audit shall report directly to the Company&#146;s
Chief Financial Officer (the &#147;CFO&#148;) and the Audit Committee at least four (4)
times per fiscal year, or more often as necessary. </FONT></P>

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<P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Settling Parties believe that the foregoing corporate governance measures will
substantially benefit the Company and its stockholders. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>IV.&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp; <U>SETTLEMENT HEARING AND APPROVAL</U> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;<B>On
July 6, 2006 at 10:00 a.m. at the United States District Court for the Eastern District of
New York, 225 Cadman Plaza East, Brooklyn, New York 11201, before the Honorable David G.
Trager, the Court will hold a Settlement Hearing to consider the approval of the
Settlement on the terms set forth above and in the stipulation of settlement between the
parties (the &#147;Stipulation&#148;).</B> If the Court approves the Settlement and enters
the Order and Final Judgment (substantially in the form attached to the Stipulation as
Exhibit C), all Released Claims relating to Defendants and Defendants&#146; Related
Parties will be compromised, settled, released, discharged and dismissed with prejudice.
Additionally, at the Settlement Hearing, Representative Plaintiffs&#146; Counsel will
request that the Court approve their proposed Fees and Expenses (as defined below). </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>V.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>PLAINTIFFS&#146;
ATTORNEYS&#146; FEES AND REIMBURSEMENT OF EXPENSES</U> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Representative
Plaintiffs&#146; Counsel in the Actions will apply to the Court for approval of the
payment of reasonable attorneys&#146; fees and expenses not to exceed in the aggregate
three hundred thousand dollars ($300,000) (the &#147;Fees and Expenses&#148;). Defendants
have agreed to pay the Fees and Expenses. The Fees and Expenses include fees and expenses
incurred by Representative Plaintiffs&#146; Counsel in connection with the prosecution and
settlement of the Actions. To date, Representative Plaintiffs&#146; Counsel have not
received any fees, not have they been reimbursed for their out of pocket expenses. The
Fees and Expenses would compensate Representative Plaintiffs&#146; Counsel for the results
achieved in the Actions, and risks of undertaking the prosecution of the Actions on a
contingent basis. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;In
light of the fact that Plaintiffs, through their prosecution of the Actions, brought
meaningful benefits to the Company and other Systemax Stockholders, they will each seek an
incentive award in the amount of $1,000.00 (the &#147;Incentive Award&#148;) at the
Settlement Hearing. The Incentive Award shall be paid out of the Fees and Expenses.
Defendants do not oppose the Incentive Award. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<B>VI.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><U>YOUR RIGHT TO BE HEARD AT THE HEARING</U></B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Any
current Systemax Shareholder (<I>i.e.</I>, any Systemax Stockholder as of May 15, 2006,
who continues to own Systemax stock as of the Settlement Hearing) who objects to: (i) the
Settlement or any of its terms, (ii) the dismissal of the Action, (iii) the Judgment to be
entered approving the Settlement, or (iv) the application by Representative
Plaintiffs&#146; Counsel for Fees and Expenses, or who otherwise wishes to be heard, may
appear in person or through counsel at the Settlement Hearing and present evidence or
argument that may be proper and relevant; provided, however, that<B> no person other than
counsel for Plaintiffs and Defendants shall be heard and no papers, briefs, pleadings or
other documents submitted by any such person shall be received and considered by the Court
(unless the Court in its discretion shall thereafter otherwise direct, upon application of
such person and for good cause shown), unless, not later than ten (10) days prior to the
Settlement Hearing,</B> <B>such person:</B> </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; files with
the Clerk of the Court, United States District Court for the Eastern District of
New York, 225 Cadman Plaza East, Brooklyn, New York 11201, a written objection
containing (1) the Person&#146;s name, address and telephone number; (2) the
number of shares of Systemax common stock the Person owns; (3) the date(s) of
purchase of such shares, and a statement as to whether the Person will own such
shares as of the date of the Settlement Hearing; (4)&nbsp;a detailed statement
of the basis for the Person&#146;s objections to or comments upon the
Settlement, Representative Plaintiffs&#146; Counsel&#146;s request for
attorneys&#146; fees and reimbursement of expenses, or any other matter before
the Court; (5) any supporting papers, including all documents and writings that
the person desires the Court to consider; (6) a representation as to whether the
Person intends to appear the Settlement Hearing; (7) a representation as to
whether the Person plans on calling any witness[es] at the Settlement Hearing;
and (8) the identities of any witnesses the Person plans to call at the
Settlement Hearing; and</B> </FONT></P>

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     <P><FONT SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>on or before the date of such filing, serves the same documents upon the
          following counsel of record:</B> </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10% ALIGN=LEFT></TD>
<TD WIDTH=40% ALIGN=LEFT>
Robert B. Weiser, Esq.       <BR>
The Weiser Law Firm, P.C.    <BR>
121 N. Wayne Ave., Suite 100 <BR>
Wayne, PA 19087<BR>
<BR>
<B><I>Plaintiffs&#146; Settlement Counsel</I> </B>
</TD>
<TD WIDTH=50%>
Melvin A. Brosterman, Esq.<BR>
Stroock &amp; Stroock &amp; Lavan LLP<BR>
180 Maiden Lane<BR>
New York, NY 10038-4982<BR>
<BR>
<B><I> Defendants&#146; Counsel</I></B>
</TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;<B>Unless
the Court otherwise directs, no Person shall be entitled to object to the approval of the
Settlement, to any Judgment entered thereon, to any award of Fees and Expenses, or to
otherwise to be heard, except by serving and filing a written objection and supporting
papers and documents as prescribed above. Any Person who fails to object in the manner and
within the time prescribed above shall be deemed to have waived the right to object
(including the right to appeal) and forever shall be barred, in this proceeding or in any
other proceeding, from raising such objection.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>VIII.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>SCOPE OF THIS NOTICE</U> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;The
foregoing descriptions of the Actions, the Settlement Hearing, the proceedings to be held,
the activities leading to the Settlement, the terms of the Settlement, the conditions of
Settlement, the effect of disapproval, cancellation or termination of the Settlement, and
other matters described herein do not purport to be all inclusive. Accordingly, you are
referred to the Complaint in the Federal Action and the Stipulation, filed with the Clerk
of the Court, which may be examined during regular business hours at the offices of the
Clerk of the Court at 225 Cadman Plaza East, Brooklyn, New York 11201. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>IX.&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp; <U>QUESTIONS REGARDING THE PROPOSED SETTLEMENT</U> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;If
you have questions regarding the proposed Settlement, <B>please do not call or write the
Court. </B> Questions may be directed to: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Robert B. Weiser, Esq.<BR>
The Weiser Law Firm, P.C.<BR>
121 N. Wayne Ave., Suite 100<BR>
Wayne, PA 19087<BR>
(866) 934-7372<BR>
<BR>
 <B><I>Plaintiffs&#146; Settlement Counsel</I></B> </FONT></TD>
</TR>
</TABLE>
<BR>
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