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<SEC-DOCUMENT>0001299933-10-004020.txt : 20101110
<SEC-HEADER>0001299933-10-004020.hdr.sgml : 20101110
<ACCEPTANCE-DATETIME>20101109183754
ACCESSION NUMBER:		0001299933-10-004020
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20101109
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20101110
DATE AS OF CHANGE:		20101109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			LAWSON PRODUCTS INC/NEW/DE/
		CENTRAL INDEX KEY:			0000703604
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MACHINERY, EQUIPMENT & SUPPLIES [5080]
		IRS NUMBER:				362229304
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10546
		FILM NUMBER:		101177674

	BUSINESS ADDRESS:	
		STREET 1:		1666 E TOUHY AVE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
		BUSINESS PHONE:		7088279666

	MAIL ADDRESS:	
		STREET 1:		1666 EAST TOUHY AVENUE
		CITY:			DES PLAINES
		STATE:			IL
		ZIP:			60018-3640
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>htm_39671.htm
<DESCRIPTION>LIVE FILING
<TEXT>
<!-- CoverPageHeader start -->
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<TITLE> LAWSON PRODUCTS, INC. (Form: 8-K) </TITLE>
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<FONT SIZE="4">
		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
</FONT>
<BR>
<FONT SIZE="2">
	WASHINGTON, D.C. 20549
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="5">
	FORM 8-K
</FONT>
<FONT SIZE="2">

</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="3">
	CURRENT REPORT
</FONT>
</P>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
</FONT>
</P>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
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	&nbsp;
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	&nbsp;
</TD>
<TD WIDTH="44%">
	&nbsp;
</TD>
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<FONT SIZE="2">
	Date of Report (Date of Earliest Event Reported):
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	November 9, 2010
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</TD>
</TR>
</TABLE>
<BR>
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<!-- CoverPageTitle END --><!-- CoverPageRegistrant START -->
<P ALIGN="CENTER"><!-- -->
<FONT SIZE="6">
	LAWSON PRODUCTS, INC.
</FONT>
<FONT SIZE="2">
<BR>__________________________________________<BR>
	(Exact name of registrant as specified in its charter)
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
<TD WIDTH="33%">
	&nbsp;
</TD>
<TD WIDTH="34%">
	&nbsp;
</TD>
<TD WIDTH="33%">
	&nbsp;
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Delaware
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	0-10546
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	36-2229304
</FONT>
</TD>
</TR>
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<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________________<BR>
	(State or other jurisdiction
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
_____________<BR>
	(Commission
</FONT>
</TD>
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______________<BR>
	(I.R.S. Employer
</FONT>
</TD>
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<FONT SIZE="2">
	of incorporation)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	File Number)
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	Identification No.)
</FONT>
</TD>
</TR>
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<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
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	&nbsp;
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	&nbsp;
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<FONT SIZE="2">
	1666 E. Touhy Avenue, Des Plaines, Illinois
</FONT>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
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</TD>
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<FONT SIZE="2">
	60018
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_________________________________<BR>
	(Address of principal executive offices)
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	&nbsp;
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___________<BR>
	(Zip Code)
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</TD>
</TR>
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<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">

<TR VALIGN="BOTTOM">
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	&nbsp;
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	&nbsp;
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	&nbsp;
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	Registrant&#146;s telephone number, including area code:
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</TD>
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	&nbsp;
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	(847) 827-9666
</FONT>
</TD>
</TR>
</TABLE>
</CENTER>
<P ALIGN="CENTER">
<FONT SIZE="2">
	Not Applicable
<BR>______________________________________________<BR>
	Former name or former address, if changed since last report
</FONT>
<P ALIGN="CENTER">
<FONT SIZE="2">
	&nbsp;
</FONT>
<!-- CoverPageRegistrant END --><P><FONT SIZE="2">
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:</FONT>
</P>
<P><FONT SIZE="2">
[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<br>
[&nbsp;&nbsp;]&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br>
</P></FONT><!-- PageBreak START -->
<P>
<HR NOSHADE>
<DIV ALIGN="LEFT" STYLE="PAGE-BREAK-BEFORE:ALWAYS">
<A HREF="#DOCUMENT_TOP">
<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 1.01 Entry into a Material Definitive Agreement.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
On November 9, 2010, Lawson Products, Inc. ("the Company") announced it had entered into an Asset Purchase Agreement ("Agreement"), to sell substantially all of the assets of Rutland Tool & Supply Company ("Rutland"), its wholly owned subsidiary, to Sid Tool Co. Inc., a wholly owned subsidiary of MSC Industrial Direct Co., Inc., for approximately $11.0 million in cash plus the assumption of certain liabilities.<br><br>The transaction is expected to close in the fourth quarter of 2010, subject to customary closing conditions. The purchase price may be adjusted based on the final value of the net working capital of Rutland as of the closing date. In 2009 Rutland generated net sales of approximately $33.7 million of which approximately $3.0 million consisted of sales to the Company. The foregoing description of the Agreement is qualified in its entirety to the full text of the Agreement, which is attached as Exhibit 2.1 to this Form 8-K and is incorporated herein by reference. <br><br>A copy of the press releas
e is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.<br>
</FONT>
</P>
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<BR><BR><BR><BR><!-- Item START -->
<P ALIGN="LEFT">
<FONT SIZE="2">
<B>
	Item 9.01 Financial Statements and Exhibits.
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
d) Exhibits <br>          <br>2.1     Asset Purchase Agreement <br>99.1    Press Release issued on November 9, 2010 <br>
</FONT>
</P>
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<P ALIGN="CENTER">
<FONT SIZE="2">
<B>
	SIGNATURES
</B>
</FONT>
</P>
<P ALIGN="LEFT">
<FONT SIZE="2">
	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>
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<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
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	&nbsp;
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	&nbsp;
</TD>
<TD WIDTH="3%">
	&nbsp;
</TD>
<TD WIDTH="1%">
	&nbsp;
</TD>
<TD WIDTH="43%">
	&nbsp;
</TD>
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<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD COLSPAN="3" VALIGN="TOP" ALIGN="LEFT">
<FONT SIZE="2">
	LAWSON PRODUCTS, INC.
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
</TR>
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<TD VALIGN="TOP">
<FONT SIZE="2">
<I>
	November 9, 2010
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	By:
</I>
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Ronald J. Knutson
</I>
<BR>
</FONT>
</TD>
</TR>
<TR>
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<HR SIZE="1" NOSHADE>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Name: Ronald J. Knutson
</I>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD>
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="2">
<I>
	Title: Senior Vice President and Chief Financial Officer
</I>
</FONT>
</TD>
</TR>
</TABLE>
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<U>
<B>
<FONT SIZE="2">Top of the Form</FONT>
</B>
</U>
</A>
</DIV>
<!-- PageBreak END --><P ALIGN="CENTER">
<FONT SIZE="2">
	Exhibit&nbsp;Index
</FONT>
<CENTER>
<TABLE CELLSPACING="0" BORDER="0" CELLPADDING="0" WIDTH="60%">
<TR VALIGN="BOTTOM">
<TD WIDTH="8%">
	&nbsp;
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	&nbsp;
</TD>
<TD WIDTH="77%">
	&nbsp;
</TD>
</TR>

<BR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Exhibit No.
</B>
</FONT>
</TD>
<TD>
<FONT SIZE="1">
	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="LEFT">
<FONT SIZE="1">
<B>
	Description
</B>
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD NOWRAP ALIGN="CENTER">
<HR SIZE="1" NOSHADE>
</TD>
<TD>
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	&nbsp;
</FONT>
</TD>
<TD NOWRAP ALIGN="CENTER">
<HR ALIGN="LEFT" SIZE="1" WIDTH="88%" NOSHADE>
</TD>
</TR>





<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	2.1
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Asset Purchase Agreement
</FONT>
</TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" WIDTH="8%" nowrap>
<FONT SIZE="2">
<DIV ALIGN="LEFT">
	99.1
</DIV>
</FONT>
</TD>
<TD WIDTH="15%">
<FONT SIZE="2">
	&nbsp;
</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" WIDTH="77%">
<FONT SIZE="2">
Press Release issued on November 9, 2010
</FONT>
</TD>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>exhibit1.htm
<DESCRIPTION>EX-2.1
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
<TITLE> EX-2.1 </TITLE>
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<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">

<BODY style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><FONT style="font-size: 12pt"><B>ASSET PURCHASE AGREEMENT<BR>
By and Among<BR>
RUTLAND TOOL & SUPPLY CO.,<BR>
LAWSON PRODUCTS, INC.,<BR>
SID TOOL CO., INC.<BR>
and<BR>
MSC INDUSTRIAL DIRECT CO., INC.</B></FONT>



<P align="center" style="font-size: 12pt"><B>Dated as of November&nbsp;9, 2010</B>



<P align="center" style="font-size: 12pt"><B>Table of Contents</B>



<P align="right" style="font-size: 12pt"><B>Page #</B>


<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Article I. DEFINITIONS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article II. PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">2.1<BR>
2.2<BR>
2.3<BR>
2.4<BR>
2.5
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Sale and Transfer of Assets<BR>
Excluded Assets<BR>
Assumed Liabilities<BR>
Liabilities Not Assumed<BR>
Further Assurances</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article III. CLOSING</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">3.1<BR>
3.2
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Closing<BR>
Payment of Purchase Price; Instruments of Conveyance and Transfer.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article IV. PURCHASE PRICE</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">4.1<BR>
4.2<BR>
4.3
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Purchase Price<BR>
Transfer Taxes<BR>
Purchase Price Adjustment.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article V. REPRESENTATIONS AND WARRANTIES OF SELLER</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">5.1<BR>
5.2<BR>
5.3<BR>
5.4<BR>
5.5<BR>
5.6<BR>
5.7<BR>
5.8<BR>
5.9<BR>
5.10<BR>
5.11<BR>
5.12<BR>
5.13<BR>
5.14<BR>
5.15<BR>
5.16<BR>
5.17<BR>
5.18<BR>
5.19<BR>
5.20<BR>
5.21<BR>
5.22<BR>
5.23<BR>
5.24<BR>
5.25<BR>
5.26<BR>
5.27
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Organization, Power<BR>
Due Authorization<BR>
No Conflict; Governmental Authorizations<BR>
Ownership of Seller<BR>
Seller Financial Statements; Internal Controls.<BR>
No Undisclosed Liabilities<BR>
Title to Purchased Assets; Sufficiency of Assets<BR>
Absence of Changes<BR>
Accounts Receivable<BR>
Customers and Suppliers.<BR>
Inventories<BR>
Condition of Business Tangible Property<BR>
Contracts.<BR>
Leasehold Property and Tangible Property.<BR>
Intellectual Property.<BR>
No Liquidation, Insolvency, Winding-Up.<BR>
Litigation<BR>
Employee Matters.<BR>
Environmental Matters.<BR>
Compliance with Law.<BR>
Tax Matters.<BR>
Corrupt Practices<BR>
Affiliate Transactions<BR>
Insurance<BR>
Product Liabilities; Product Warranties<BR>
Brokers&#146; or Finders&#146; Fees<BR>
LIMITATIONS ON REPRESENTATIONS AND WARRANTIES</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article VI. REPRESENTATIONS OF SELLER PARENT</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">6.1<BR>
6.2<BR>
6.3
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Authority<BR>
No Conflict; Governmental Authorizations<BR>
LIMITATIONS ON REPRESENTATIONS AND WARRANTIES</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt"><B>Article&nbsp;VII. REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT</B>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">7.1<BR>
7.2<BR>
7.3<BR>
7.4<BR>
7.5
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Organization, Authorization<BR>
No Conflict; Governmental Authorizations<BR>
No Litigation<BR>
Investigation<BR>
Brokers&#146; or Finders&#146; Fees</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article VIII. COVENANTS</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">8.1<BR>
8.2<BR>
8.3<BR>
8.4<BR>
8.5<BR>
8.6<BR>
8.7<BR>
8.8<BR>
8.9<BR>
8.10<BR>
8.11<BR>
8.12<BR>
8.13<BR>
8.14<BR>
8.15
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Access to Information<BR>
Conduct of Business<BR>
Exclusivity.<BR>
Reasonable Best Efforts; Notices; Governmental Authorizations.<BR>
Employee Matters.<BR>
Tax Matters.<BR>
Regulatory and Other Approvals; Novations and Consents.<BR>
Records Retention<BR>
Publicity<BR>
Confidentiality.<BR>
Further Information<BR>
Restrictive Covenants.<BR>
Lease Assignments<BR>
Seller&#146;s Obligation to Change its Name<BR>
Intellectual Property</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article IX. CONDITIONS PRECEDENT TO CLOSING</B></TD>
</TR>

<!-- End Table Head -->
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<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">9.1<BR>
9.2
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Conditions Precedent to the Obligations of Buyer<BR>
Conditions Precedent to the Obligations of Seller</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article X. INDEMNIFICATION; SURVIVAL</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">10.1<BR>
10.2<BR>
10.3<BR>
10.4<BR>
10.5<BR>
10.6<BR>
10.7<BR>
10.8<BR>
10.9
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Survival of Representations and Warranties, Covenants and Agreements<BR>
Indemnification.<BR>
Third Party Claims<BR>
Direct Claims<BR>
Adjustment to Purchase Price<BR>
Exclusive Remedy<BR>
Limitation of Punitive Damages<BR>
Indemnification in Case of Strict Liability or Indemnitee Negligence<BR>
Certain Limitations.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article XI. TERMINATION OF AGREEMENT</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">11.1<BR>
11.2
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Termination<BR>
Effect of Termination</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 12pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Article XII. MISCELLANEOUS</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD align="left" valign="top">12.1<BR>
12.2<BR>
12.3<BR>
12.4<BR>
12.5<BR>
12.6<BR>
12.7<BR>
12.8<BR>
12.9<BR>
12.10<BR>
12.11<BR>
12.12<BR>
12.13<BR>
12.14<BR>
12.15<BR>
12.16<BR>
12.17<BR>
12.18<BR>
12.19<BR>
12.20
</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expenses; No Offset<BR>
Governing Law<BR>
Enforcement<BR>
Jurisdiction and Venue<BR>
Attorneys&#146; Fees<BR>
Waiver<BR>
Notices<BR>
Assignment.<BR>
Disclosure Schedules<BR>
Bulk Sales or Transfer Laws<BR>
No Third-Party Beneficiaries.<BR>
Amendments.<BR>
Interpretation, Exhibits and Schedules.<BR>
Entire Agreement.<BR>
Severability.<BR>
Mutual Drafting.<BR>
Counterparts<BR>
Waiver of Jury Trial.<BR>
Seller Parent Guaranty.<BR>
Buyer Parent Guaranty.</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 12pt"><B>SCHEDULES AND EXHIBITS</B>



<P align="left" style="font-size: 12pt">Schedule&nbsp;A &#150; Disclosure Schedule


<P align="left" style="font-size: 12pt">Exhibit&nbsp;A &#150; Assignment and Assumption Agreement


<P align="left" style="font-size: 12pt">Exhibit&nbsp;B &#150; Assignment of Trademarks


<P align="left" style="font-size: 12pt">Exhibit&nbsp;C &#150; Assignment of Internet Properties


<P align="left" style="font-size: 12pt">Exhibit&nbsp;D &#150; Bill of Sale


<P align="left" style="font-size: 12pt">Exhibit&nbsp;E &#150; Supply Agreement


<P align="left" style="font-size: 12pt">Exhibit&nbsp;F &#150; Transition Services Agreement


<P align="center" style="font-size: 12pt"><B>ASSET PURCHASE AGREEMENT</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">This ASSET PURCHASE AGREEMENT (this &#147;<U>Agreement</U>&#148;) is made and entered into as of
November&nbsp;9, 2010 by and among Rutland Tool & Supply Co., a Nevada corporation (&#147;<U>Seller</U>&#148;),
Lawson Products, Inc., a Delaware corporation (&#147;<U>Seller Parent</U>&#148;), Sid Tool Co., Inc. (d/b/a
MSC Industrial Supply Co.), a New York corporation (&#147;<U>Buyer</U>&#148;), and MSC Industrial Direct
Co., Inc., a New York corporation (&#147;<U>Buyer Parent</U>&#148;). Seller, Seller Parent, Buyer and Buyer
Parent are hereinafter referred to collectively as the &#147;<U>Parties</U>&#148; and each individually as a
&#147;<U>Party</U>.&#148;


<P align="center" style="font-size: 12pt"><B>RECITALS</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">A.&nbsp;Seller is engaged in the business of wholesaling and distributing metalworking and
industrial maintenance, repair and operations products, including cutting tools, shop supplies,
precision and tooling equipment, machinery, abrasives, safety equipment, welding supplies and
tooling components, to customers in the manufacturing industry and wholesale trade (the
&#147;<U>Business</U>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">B.&nbsp;Seller desires to sell, transfer and assign to Buyer, and Buyer desires to purchase from
Seller, the Purchased Assets (as defined below), and Buyer is willing to assume the Assumed
Liabilities (as defined below), in each case, as more fully described and upon the terms and
subject to the conditions set forth herein.


<P align="left" style="font-size: 12pt; text-indent: 4%">C.&nbsp;Concurrently with the execution and delivery of this Agreement, Seller has obtained from
Seller Parent, its sole stockholder, all approvals as are required from stockholders under the
Nevada Corporations Code and under any other applicable laws necessary for Seller to enter into
this Agreement and for Seller to perform its obligations under this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:


<P align="center" style="font-size: 12pt"><B>ARTICLE I.</B>



<P align="center" style="font-size: 12pt"><B>DEFINITIONS</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">As used in this Agreement, the following terms have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms defined).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.1 &#147;<U>Affiliate</U>&#148; means with respect to any Person, any other Person that directly or
indirectly controls, that is directly or indirectly controlled by, or that is under the direct or
indirect common control with, such Person. The term &#147;control&#148; (including, with correlative
meaning, the terms &#147;controlled by&#148; and &#147;under common control with&#148;), as used with respect to any
Person, means the possession of the power to direct or cause the direction of, directly or
indirectly, the management, policies or actions of such other Person, whether through the ownership
of voting securities or by Contract or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.2 &#147;<U>Agreement</U>&#148; has the meaning set forth in the preamble.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.3 &#147;<U>Ancillary Agreements</U>&#148; means the Assignment and Assumption Agreement, the
Assignment of Trademarks, the Assignment of Internet Properties, the Bill of Sale, the Lease
Assignments, the Transition Services Agreement and the Supply Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.4 &#147;<U>Apportioned Obligations</U>&#148; means any and all real property Taxes, personal property
Taxes or ad valorem obligations and similar Taxes (including any such Tax determined subsequent to
the Closing Date) relating to the Business or any Purchased Asset that is due for any Straddle
Period.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.5 &#147;<U>Assignment and Assumption Agreement</U>&#148; means the assignment and assumption
agreement between Seller and Buyer, in substantially the form of <U>Exhibit&nbsp;A</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.6 &#147;<U>Assignment of Internet Properties</U>&#148; means the assignment of internet properties
between Seller and Buyer, in substantially the form of <U>Exhibit&nbsp;C</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.7 &#147;<U>Assignment of Trademarks</U>&#148; means the assignment of trademarks between Seller and
Buyer, in substantially the form of <U>Exhibit&nbsp;B</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.8 &#147;<U>Assumed Contracts</U>&#148; means (a)&nbsp;those Contracts set forth on <U>Schedule&nbsp;1.8</U> of
the Disclosure Schedule and (b)&nbsp;any Contracts entered into by Seller in the ordinary course of
business during the period from the date hereof and continuing until the Closing Date and which
relate to the Business, <I>provided that </I>Seller shall have provided Buyer with written notice before
entering into any Contract that would be a Business Contract and Buyer shall have agreed in writing
that such Contract shall be an Assumed Contract, which consent shall not be unreasonably withheld.
Assumed Contracts also shall include all purchase orders and sales orders relating to the Business
that have been entered into by Seller in the ordinary course of business (whether before or after
the date of this Agreement) and are not Business Contracts (which are covered by the immediately
preceding sentence) and any other Contracts relating to the Business that have been entered into by
Seller in the ordinary course of business (whether before or after the date of this Agreement) and
are not Business Contracts and are not material in the aggregate.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Assumed Liabilities&#148; has the meaning set forth in Section&nbsp;2.3.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Balance Sheet Date&#148; has the meaning set forth in Section&nbsp;5.5.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Bank Consents&#148; has the meaning set forth in Section&nbsp;8.4(a).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.12 &#147;<U>Benefits Liabilities</U>&#148; means any and all Liabilities of Seller or any of its
Affiliates to the extent arising under, resulting from or relating to any Employee Plan or Employee
Contract, including those Liabilities arising under Law, Proceedings before any Governmental Entity
or under any order or consent decree or any award of any arbitrator of any kind.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.13 &#147;<U>Bill of Sale</U>&#148; means the bill of sale between Seller and Buyer, in substantially
the form of <U>Exhibit&nbsp;D</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.14 &#147;<U>Books and Records</U>&#148; means the business records, financial books and records,
sales order files, purchase order files, engineering order files, warranty and repair files,
supplier lists, customer lists, dealer, representative and distributor lists, budgets,
correspondence, marketing materials, studies, surveys, analyses, strategies, plans, forms, designs,
diagrams, drawings, specifications, technical data, production and quality control records to the
extent pertaining to the Business, the Purchased Assets, the Assumed Liabilities or the Assumed
Contracts.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.15 &#147;<U>Business</U>&#148; has the meaning set forth in the recitals.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.16 &#147;<U>Business Accounts Receivable</U>&#148; means (a)&nbsp;all trade accounts receivable and other
rights to payment from customers of Seller and the full benefit of all security for such accounts
or rights to payment, including all trade accounts receivable representing amounts receivable in
respect of goods shipped or products sold or services rendered to customers of Seller, (b)&nbsp;all
other accounts or notes receivable of Seller and the full benefit of all security for such accounts
or notes and (c)&nbsp;any claim, remedy or other right related to any of the foregoing, but excluding,
in each case, any accounts or notes receivable or other such claims for money due to Seller from
Seller Parent or any of its wholly-owned subsidiaries (or any claim, remedy or other right related
thereto).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.17 &#147;<U>Business Brands</U>&#148; means the trademarks &#147;Rutland Tool&#148;, &#147;Rutland Tool and Supply&#148;,
&#147;Washington Tools&#148;, &#147;eZ-Catalog&#148;, &#147;Prestige Plus&#148; and &#147;Prestige Value&#148; for the same or similar
goods and services as used in the Business, or any trademark confusingly similar thereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.18 &#147;<U>Business Contract</U>&#148; has the meaning set forth in Section&nbsp;5.13.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.19 &#147;<U>Business Day</U>&#148; means a day, other than Saturday, Sunday or other day on which
commercial banks in the City of New York, New York are authorized or required by Law to close.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.20 &#147;<U>Business Employees</U>&#148; has the meaning set forth in Section&nbsp;5.18(f).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.21 &#147;<U>Business Governmental Authorizations</U>&#148; means all Governmental Authorizations of
Seller applicable to the Business or the Purchased Assets and all pending applications therefor or
renewals thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.22 &#147;<U>Business Intellectual Property Rights</U>&#148; means all Intellectual Property Rights
used in the operation of the Business, excluding Technology and Copyrights that are not used
primarily in the Business.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.23 &#147;<U>Business Leasehold Property</U>&#148; means all leases and subleases of Real Property
relating primarily to the Business to which Seller is a party, each of which is set forth on
<U>Schedule&nbsp;1.23</U> of the Disclosure Schedule, and leasehold improvements thereon, and in each
case all other rights, subleases, permits, deposits and profits appurtenant to or related to such
leases and subleases.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.24 &#147;<U>Business Material Adverse Effect</U>&#148; means any change, effect, event, occurrence,
state of facts, development, circumstance, violation or inaccuracy (any such item, an
&#147;<U>Effect</U>&#148;) that, individually or in the aggregate, has been or could reasonably be expected
to be materially adverse to the business, financial condition, assets, liabilities, results of
operations, or supplier or customer relations of the Business, excluding any Effect primarily and
proximately resulting from (A)&nbsp;the announcement, pendency or consummation of the Transactions or
the identity of Buyer as the successor to the Business, (B)&nbsp;changes in general economic, regulatory
or political conditions (including acts of terrorism or war, whether declared or undeclared),
except to the extent that such changes disproportionately affect Seller, as compared to other
companies participating in the same industry or industries as Seller, (C)&nbsp;changes in general
conditions in the industry or industries in which Seller operates or in the geographic markets in
which Seller operates, except to the extent that such changes disproportionately affect Seller, as
compared to other companies participating in the same industry or industries as Seller, (D)&nbsp;any
changes (after the date hereof) in GAAP or the interpretation thereof, (E)&nbsp;changes or proposed
changes in any Laws or the interpretation thereof, (F)&nbsp;the failure of Seller to meet any internal
projections or forecasts; provided that the exception in this clause (F)&nbsp;shall not prevent or
otherwise affect a determination that any Effect underlying such failure has resulted in, or
contributed to, a Business Material Adverse Effect, or (G)&nbsp;the taking of any specific action, or
refraining from taking any specific action, in each case at the written direction (which may
include e-mail) of Buyer or Buyer Parent or as expressly required by this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.25 &#147;<U>Business Prepaid Expenses</U>&#148; means all prepaid expenses and advances (but
excluding cash security or other similar deposits) made by Seller and all other prepaid items,
credits, claims for refunds, rebates, promotional allowances and discounts for or toward the
purchase of goods, services, and Inventories to the extent relating to the Business which have not
as of the Closing Date been received in full by the Business.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.26 &#147;<U>Business Tangible Property</U>&#148; means all furniture, fixtures, equipment (including
motor vehicles), computer hardware, office equipment and apparatuses, tools, machinery and supplies
and other tangible property (other than Inventories) of every kind (wherever located, whether or
not carried on the Books and Records and whether or not leased), together with any express or
implied warranty by the manufacturers, sellers or lessors of any item or component part thereof and
all maintenance records and other documents relating thereto, in each case that relate primarily to
the Business, the Purchased Assets, the Assumed Contracts or the Assumed Liabilities. For the
avoidance of doubt, all fixed assets shown on the Recent Balance Sheet shall be Business Tangible
Property.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
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<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

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    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Buyer&#148; has the meaning set forth in the preamble.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.28</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Buyer Claim&#148; has the meaning set forth in Section&nbsp;10.2(a).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.29</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Buyer Indemnified Parties&#148; has the meaning set forth in Section&nbsp;10.2(a).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
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</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.30 &#147;<U>Buyer Material Adverse Effect</U>&#148; means any change that is materially adverse to
the ability of Buyer and/or Buyer Parent to consummate the Transactions and/or discharge their
respective obligations under the Transaction Documents within the timeframes contemplated thereby.

<DIV align="center">
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    <TD width="1%">&nbsp;</TD>
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    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
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    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.31</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Buyer Parent&#148; has the meaning set forth in the preamble.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.32</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Closing&#148; has the meaning set forth in Section&nbsp;3.1.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.33</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Closing Consideration&#148; has the meaning set forth in Section&nbsp;4.1.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.34</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Closing Date&#148; has the meaning set forth in Section&nbsp;3.1.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
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</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.35 &#147;<U>Closing Date Net Working Capital</U>&#148; has the meaning set forth in Section&nbsp;4.3(a).

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
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    <TD width="1%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
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    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.36</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;COBRA&#148; has the meaning set forth in Section&nbsp;5.18(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.37</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Code&#148; means the Internal Revenue Code of 1986, as amended.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.38</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Confidential Information&#148; has the meaning set forth in Section&nbsp;8.10(a).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.39</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Contaminants&#148; has the meaning set forth in Section&nbsp;5.15(n).</DIV></TD>
</TR>
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    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
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</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.40 &#147;<U>Contracts</U>&#148; means any contract, agreement, subcontract, indenture, note, bond,
loan, instrument, lease, mortgage, franchise, license, purchase order, sale order, understanding or
commitment that is binding (or purports to be binding by its terms) on the parties thereto, and any
outstanding bid or proposal (which bid or proposal if accepted by the recipient thereof would
result in a binding contract), in each case, whether written or oral, including any and all
amendments, exhibits and schedules thereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.41 &#147;<U>Copyrights</U>&#148; means all works of authorship, including compilations, copyrights,
mask works, and all registrations thereof and applications therefor.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.42 &#147;<U>Disclosure Schedule</U>&#148; has the meaning set forth in Article&nbsp;V.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.43 &#147;<U>Effect</U>&#148; has the meaning set forth in the definition of Business Material Adverse
Effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.44 &#147;<U>Employee Contract</U>&#148; means each management, employment, severance, or other
similar Contract between Seller or any of its Affiliates and any Business Employee, other than an
Employee Plan.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.45 &#147;<U>Employee Plan</U>&#148; means each &#147;employee benefit plan&#148; within the meaning of Section
3(3) of ERISA and each other pension, profit sharing, welfare benefit, employment, bonus,
retention, deferred compensation, incentive compensation, stock ownership, stock option, stock
purchase, phantom stock, performance, stock bonus, excess benefit, supplemental unemployment, paid
time off, perquisite, fringe benefit, vacation, sick leave, severance, disability, death benefit,
life insurance, worker&#146;s compensation program or other plan, program or arrangement (whether
written or unwritten), in each case maintained or contributed to, or required to be maintained or
contributed to, by Seller or any of its ERISA Affiliates for the benefit of any present or former
directors, officers, consultants or employees of Seller, or with respect to which Seller has any
Liability.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.46 &#147;<U>Environmental Claim</U>&#148; means any request for information, notice or claim alleging
or asserting Liability for investigatory costs, cleanup costs, Governmental Entity response costs,
damages to natural resources or other property, personal injuries, fines, expenses or penalties
arising out of, based on or resulting from (a)&nbsp;the presence or Release into the environment, of any
Hazardous Material, or (b)&nbsp;circumstances forming the basis of any violation, or alleged violation,
of, or any Liability under, any Environmental Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.47 &#147;<U>Environmental Law</U>&#148; means collectively the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of
1976, as amended, the Clean Water Act, as amended, the Clean Air Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, and implementing regulations, orders and decisions and
any other applicable Laws that relate to protection of the environment (including the workplace and
the ambient environment), human health or safety or to Releases of Hazardous Materials, or the
treatment, storage, disposal, transport, stewardship, labeling or handling of Hazardous Materials.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.48 &#147;<U>ERISA</U>&#148; means the Employee Retirement Income Security Act of 1974, as amended.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.49 &#147;<U>ERISA Affiliate</U>&#148; means any other Person under common control with Seller within
the meaning of Section&nbsp;414(b), (c), (m)&nbsp;or (o)&nbsp;of the Code and the regulations issued thereunder.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.50 &#147;<U>Excluded Assets</U>&#148; has the meaning set forth in Section&nbsp;2.2.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.51 &#147;<U>Final Statement</U>&#148; has the meaning set forth in Section&nbsp;4.3(c).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.52 &#147;<U>Fundamental Representations</U>&#148; means the representations and warranties of the
Parties set forth in Section&nbsp;5.1 (Organization; Power), Section&nbsp;5.2 (Due Authorization), Section
5.4 (Ownership of Seller), Section&nbsp;5.7 (but only the first sentence thereof) (Title to Purchased
Assets; Sufficiency of Assets), Section&nbsp;5.26 (Brokers&#146; or Finders&#146; Fees), Section&nbsp;6.1 (Authority),
Section&nbsp;7.1 (Organization, Authorization) and Section&nbsp;7.5 (Brokers&#146; or Finders&#146; Fees).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.53 &#147;<U>GAAP</U>&#148; means United States generally accepted accounting principles, consistently
applied.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.54 &#147;<U>Governmental Authorization</U>&#148; means any consent, approval, license, registration,
security clearance, authorization, certificate or permit issued, granted, given or otherwise made
available by or under the authority of any Governmental Entity, including, where relevant, any
Taxing Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.55 &#147;<U>Governmental Entity</U>&#148; means any court, tribunal, arbitrator or any government or
quasi-governmental entity or municipality or political or other subdivision thereof, whether
federal, state, city, county, local, provincial, domestic, foreign or multinational, or any agency,
department, board, authority, bureau, branch, commission, official or instrumentality of any of the
foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.56 &#147;<U>Hazardous Material</U>&#148; means (a)&nbsp;any petroleum, crude oil, natural gas, or any
fraction, product or derivative thereof, radioactive materials or asbestos in any form; (b)&nbsp;any
chemicals, materials, substances or wastes that are defined as or included in the definition of
hazardous substances, hazardous wastes, hazardous materials, extremely hazardous substances, toxic
substances, pollutants, contaminants, hazardous products or words of similar import under any
Environmental Law; and (c)&nbsp;any other chemical, material, substance, waste or exposure that is
limited or regulated by any Governmental Entity with jurisdiction over Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.57 &#147;<U>Indebtedness</U>&#148; means any obligation in respect of or representing (a)&nbsp;borrowed
money or evidenced by bonds, debentures, or similar instruments, (b)&nbsp;the balance deferred and
unpaid of the purchase price of any property but excluding current trade payables, if and to the
extent any of the foregoing indebtedness would appear as a liability upon a balance sheet prepared
in accordance with GAAP, (c)&nbsp;all amounts owed by and all obligations of Seller as lessee under
leases that have been recorded as capital leases in accordance with GAAP, (d)&nbsp;guaranties, direct or
indirect, in any manner, of all or any part of any Indebtedness of any Person, (e)&nbsp;any obligations,
contingent or otherwise, under acceptances, letters of credit or similar facilities, (f)&nbsp;any
obligations under any hedging, swap, or similar arrangement and (g)&nbsp;accrued interest, premiums,
fees, and prepayment penalties for any of the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.58 &#147;<U>Indemnified Party</U>&#148; has the meaning set forth in Section&nbsp;10.3.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.59 &#147;<U>Independent Accounting Firm</U>&#148; means a nationally recognized independent
accounting firm mutually acceptable to Seller and Buyer.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.60 &#147;<U>Intellectual Property Contract</U>&#148; means any Contract relating to the Business to
which Seller or Seller Parent is a party that provides for the acquisition, license or use of Third
Party Intellectual Property Rights by Seller or the sale or license by Seller of Seller&#146;s
Intellectual Property Rights.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.61 &#147;<U>Intellectual Property Rights</U>&#148; means any and all rights throughout the world in,
arising out of, or associated with any of the following: Patents, Technology, Copyrights,
Trademarks, Software, Internet Properties, any similar, corresponding or equivalent rights to any
of the foregoing, and all goodwill associated with any of the foregoing.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.62 &#147;<U>Internet Properties</U>&#148; means all rights to Uniform Resource Locators, Web site
addresses and domain names and any registrations thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.63 &#147;<U>Inventories</U>&#148; means all inventories of raw materials, work-in-process and
finished goods of Seller, including consignment and prepaid inventory (whether or not delivered to
Seller), and all spare, service and repair parts, supplies and components held for sale by Seller,
together with all related wrapping, supply and packaging materials.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.64 &#147;<U>Knowledge of Seller</U>&#148; means, with respect to a particular fact or other matter,
the knowledge, after reasonable and appropriate inquiry, of any of Andrew S. Verey, Gloria Holcomb,
William Drewes, Gabriel Castro, Stewart Howley or Michael Tuvell.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.65 &#147;<U>Law</U>&#148; means any law, statute, rule, regulation, ordinance, Order or other
pronouncement having the effect of law of the United States of America, any foreign country or any
domestic or foreign state, or of any Governmental Entity, including common law.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.66 &#147;<U>Lease Agreement</U>&#148; means the lease agreement(s) for the Business Leasehold
Property.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.67 &#147;<U>Lease Assignments</U>&#148; has the meaning set forth in Section&nbsp;8.13.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.68 &#147;<U>Liabilities</U>&#148; means any liability, Indebtedness, guaranty, claim, loss, damage,
deficiency, assessment, obligation or responsibility, whether fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, known or unknown, contingent
or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.69 &#147;<U>Lien</U>&#148; means any mortgage, lien, pledge, hypothecation, charge, preference,
security interest, attachment, claim, transfer restriction, put, call, right of first refusal,
easement, servitude, right-of-way, option, warrant or encumbrance of any kind and any financing
lease involving substantially the same effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.70 &#147;<U>Lien Releases</U>&#148; means duly executed written instruments releasing the Liens other
than Permitted Liens on the Purchased Assets and authorizing the filing of UCC-3 termination
statements for all UCC-1 financing statements filed in connection with any such released Lien,
which Liens to be released are set forth on <U>Schedule&nbsp;1.70</U> of the Disclosure Schedule.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.71 &#147;<U>Loss</U>&#148; or &#147;<U>Losses</U>&#148; means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines, penalties, damages, expenses (including
reasonable and documented attorneys&#146; fees, costs and expenses incurred in connection with
investigation, defense and/or settlement of any claim), deficiencies or other charges.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.72 &#147;<U>Net Working Capital</U>&#148; means the amount by which (a)&nbsp;the aggregate amount of all
current assets of the Business contained in the Purchased Assets exceeds (b)&nbsp;the aggregate amount
of all current liabilities of the Business contained in the Assumed Liabilities.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.73 &#147;<U>Neutral Auditor</U>&#148; has the meaning set forth in Section&nbsp;4.3(c).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.74 &#147;<U>New Employees</U>&#148; has the meaning set forth in Section&nbsp;8.5(b).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.75 &#147;<U>Object Code</U>&#148; means computer software, substantially or entirely in binary form,
which is intended to be directly executable by a computer after suitable processing and linking but
without the intervening steps of compilation or assembly.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.76 &#147;<U>Objection Notice</U>&#148; has the meaning set forth in Section&nbsp;4.3(b).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.77 &#147;<U>Open Source Materials</U>&#148; means all software or other material that is distributed
as &#147;free software,&#148; &#147;freeware,&#148; &#147;open source software,&#148; &#147;public source software&#148; or under a similar
licensing or distribution model (including but not limited to the GNU General Public License (GPL),
GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic
License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry
Standards License (SISL), and the Apache License).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.78 &#147;<U>Order</U>&#148; means any writ, judgment, decree, award, ruling, injunction or similar
order of or consent agreement with any Governmental Entity, in each case whether preliminary or
final.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.79 &#147;<U>Party</U>&#148; and &#147;<U>Parties</U>&#148; have the meanings set forth in the preamble.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.80 &#147;<U>Patents</U>&#148; means all utility models and design and utility patents and
applications and provisional applications therefor and all reissues, divisions, renewals,
extensions, continuations and continuations-in-part thereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.81 &#147;<U>Permitted Lien</U>&#148; means (a)&nbsp;any Lien for Taxes not yet due or payable, (b)&nbsp;any
statutory Lien arising in the ordinary course of business or by operation of Law and not in
connection with the borrowing of money, (c)&nbsp;Liens of landlords and Liens of carriers, warehousemen,
mechanics and materialmen and other like Liens arising in the ordinary course of business for sums
not yet due and payable, and (d)&nbsp;contractual provisions providing for retention of title to goods
until payment is made entered into in the ordinary course of business.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.82 &#147;<U>Person</U>&#148; means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, company, trust, unincorporated organization,
Governmental Entity or other entity.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.83 &#147;<U>Preliminary Statement</U>&#148; has the meaning set forth in Section&nbsp;4.3(a).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.84 &#147;<U>Proceeding</U>&#148; means any action, suit, claim, complaint, investigation, litigation,
audit, proceeding or arbitration by or before any Person.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
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    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.85</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;PTO&#148; means the United States Patent and Trademark Office.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.86</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Purchase Price&#148; has the meaning set forth in Section&nbsp;4.1.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.87</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Purchased Assets&#148; has the meaning set forth in Section&nbsp;2.1.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.88 &#147;<U>Real Property</U>&#148; means real property together with all easements, licenses,
interests and all of the rights arising out of the ownership thereof or appurtenant thereto and
together with all buildings, structures, facilities, fixtures and other improvements thereon.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.89 &#147;<U>Recent Balance Sheet</U>&#148; has the meaning set forth in Section&nbsp;5.5.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.90 &#147;<U>Registered Business Intellectual Property</U>&#148; means all United States,
international and foreign Patents, Copyrights, Trademarks, Internet Property, and any other
Business Intellectual Property Rights that are the subject of an application, certificate, filing,
registration or other document issued, filed with or recorded by any Governmental Entity.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.91 &#147;<U>Release</U>&#148; means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, dumping, discharge, dispersal, leaching, escaping, emanation or migration of any
Hazardous Material in, into or onto the environment.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.92</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Resolution Period&#148; has the meaning set forth in Section&nbsp;4.3(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.93</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Retained Liabilities&#148; has the meaning set forth in Section&nbsp;2.4.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.94</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Review Period&#148; has the meaning set forth in Section&nbsp;4.3(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.95</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller&#148; has the meaning set forth in the preamble.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.96</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Claims&#148; has the meaning set forth in Section&nbsp;10.2(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.97</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Financial Statements&#148; has the meaning set forth in Section&nbsp;5.5.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.98</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Indemnified Parties&#148; has the meaning set forth in Section&nbsp;10.2(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.99</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Parent&#148; has the meaning set forth in the preamble.</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.100</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Significant Customer&#148; has the meaning set forth in Section 5.10(a).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.101</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#147;Seller Significant Supplier&#148; has the meaning set forth in Section&nbsp;5.10(b).</DIV></TD>
</TR>
<TR style="font-size: 1px">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 12pt; text-indent: 4%">1.102 &#147;<U>Software</U>&#148; means proprietary computer software and code, including assemblers,
applets, compilers, Source Code, Object Code, data (including image and sound data), development
tools, design tools and user interfaces, in any form or format, however fixed. Software shall
include Source Code listings and documentation.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.103 &#147;<U>Source Code</U>&#148; means computer software and code, in form other than Object Code
form, including related programmer comments and annotations, help text, data and data structures,
instructions and procedural, object-oriented and other code, which may be printed out or displayed
in human readable form.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.104 &#147;<U>Straddle Period</U>&#148; means any Tax year or period beginning on or before the
Closing Date and ending after the Closing Date.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.105 &#147;<U>Supply Agreement</U>&#148; means the supply agreement by and between Seller Parent and
Buyer, in substantially the form of <U>Exhibit&nbsp;E</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.106 &#147;<U>Target Closing Date Net Working Capital</U>&#148; has the meaning set forth in Section
4.3(e).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.107 &#147;<U>Tax</U>&#148; or &#147;<U>Taxes</U>&#148; (and, with correlative meanings &#147;Taxable&#148; or &#147;Taxing&#148;)
mean (a)&nbsp;all U.S. federal, state, local, provincial, foreign or other taxes, customs, tariffs,
imposts, levies, duties, government fees or other like assessments or charges of any kind,
including all income, franchise, sales, use, ad valorem, transfer, license, recording, employment
(including federal and state income tax withholding, backup withholding, FICA, FUTA or other
payroll taxes), environmental, excise, severance, stamp, occupation, premium, prohibited
transaction, property, value-added, net worth, or any other taxes or escheat or unclaimed property
charges or assessments and any interest, fines, penalties, assessments or additions imposed with
respect to such amounts, whether disputed or not, or (b)&nbsp;any Liability to pay or reimburse any
amounts of the type described in the preceding clause (a)&nbsp;as a result of being party to any
agreement to indemnify any Person or share responsibility with any Person with respect to such
amounts, being a successor or transferee of any Person, or being a member of an affiliated,
consolidated, combined, unitary, or other group.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.108 &#147;<U>Tax Return</U>&#148; means all U.S. federal, state, local, provincial and foreign
returns, declarations, claims for refunds, forms, statements, reports, schedules, information
returns or similar statements or documents, and any amendments thereof (including any related or
supporting information or schedule attached thereto) required to be filed with any Taxing
Authority.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.109 &#147;<U>Taxing Authority</U>&#148; means any Governmental Entity having jurisdiction over the
assessment, determination, collection or other imposition of Taxes.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.110 &#147;<U>Technology</U>&#148; means trade secrets, know-how, inventions, invention disclosures
(whether or not patentable and whether or not reduced to practice), inventor rights, discoveries,
developments, research and test data, blueprints, technology, ideas, compositions, processes,
procedures, prototypes, patent records, manufacturing and product procedures and techniques,
troubleshooting procedures, failure/defect analysis data, drawings, specifications, designs,
ingredient or component lists, formulae and technical data.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.111 &#147;<U>Third Party Claim</U>&#148; has the meaning set forth in Section&nbsp;10.3.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.112 &#147;<U>Third Party Intellectual Property Contracts</U>&#148; means all of the Contracts
pursuant to which Seller acquired access or rights to any Third Party Intellectual Property Rights.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.113 &#147;<U>Third Party Intellectual Property Rights</U>&#148; means all Intellectual Property
Rights not owned by Seller, including Technology in the public domain and (to the extent not owned
by Seller) any Open Source Materials or any modification or Software derived from, based upon,
containing or functionally integrated in whole or in part with any Open Source Materials.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.114 &#147;<U>Trademarks</U>&#148; means all trademarks and service marks, trade names, logos, trade
dress, all common law rights associated therewith, and all registrations thereof and applications
therefor, including the Business Brands.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.115 &#147;<U>Transaction Documents</U>&#148; means (a)&nbsp;this Agreement, (b)&nbsp;the Ancillary Agreements
and (c)&nbsp;all other agreements, certificates and instruments to be executed or delivered by any of
the Parties hereto or their respective Affiliates at or prior to the Closing pursuant to this
Agreement or any of the Ancillary Agreements.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.116 &#147;<U>Transactions</U>&#148; means the transactions contemplated by the Transaction Documents.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.117 &#147;<U>Transfer Taxes</U>&#148; has the meaning set forth in Section&nbsp;4.2.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.118 &#147;<U>Transferred Intellectual Property Rights</U>&#148; means all Business Intellectual
Property Rights owned by Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.119 &#147;<U>Transferred Registered Intellectual Property</U>&#148; means all Registered Business
Intellectual Property owned by Seller, or filed or registered in the name of Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.120 &#147;<U>Transition Services Agreement</U>&#148; means the transition services agreement by and
between Seller Parent and Buyer, in substantially the form of <U>Exhibit&nbsp;F</U> hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">1.121 &#147;<U>Transferred Software</U>&#148; has the meaning set forth in Section&nbsp;5.15(n).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.122 &#147;<U>Vacation Policy</U>&#148; has the meaning set forth in Section&nbsp;8.5(c).


<P align="left" style="font-size: 12pt; text-indent: 4%">1.123 &#147;<U>WARN Act</U>&#148; means the Workers Adjustment, Retraining and Notification Act, 29
U.S.C. &#167;2101, et seq.


<P align="center" style="font-size: 12pt"><B>ARTICLE II.</B>



<P align="center" style="font-size: 12pt"><B>PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">2.1 <U>Sale and Transfer of Assets</U>. Upon the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller shall sell, transfer, assign, convey and deliver to
Buyer, and Buyer shall purchase, acquire and accept from Seller, all right, title and interest of
Seller in and to all of the assets, rights and properties of Seller required for, used in, held for
use in or otherwise constituting the Business (other than the Excluded Assets), as the same may
exist immediately prior to Closing, free and clear of any and all Liens except Permitted Liens
(collectively, the &#147;<U>Purchased Assets</U>&#148;), including the following:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;all Business Tangible Property (including GL# 1902-00-001, &#147;Other L-T Assets-Deposits&#148;
included under &#147;Other Noncurrent Assets&#148; on the Recent Balance Sheet);


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;all Inventories;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;all Business Accounts Receivable;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;subject to Sections&nbsp;8.7(b) and 8.7(c), all Assumed Contracts;


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;the Transferred Intellectual Property Rights;


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;the Business Leasehold Property;


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;all Business Prepaid Expenses;


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;all other non-current assets as shown on the Recent Balance Sheet, with such changes
thereto as may occur in the ordinary course of business between the Balance Sheet Date and the
Closing;


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;all prepaid expenses and supplies as shown on the Recent Balance Sheet, with such changes
thereto as may occur in the ordinary course of business between the Balance Sheet Date and the
Closing;


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;the Books and Records; <I>provided that </I>Seller shall be entitled to retain a copy thereof as
may be reasonably needed (i)&nbsp;to satisfy its obligations hereunder or (ii)&nbsp;in connection with the
preparation and filing of Tax Returns and other accounting-related matters;


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;the Business Governmental Authorizations;


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;all of Seller&#146;s rights to corporate telephone numbers used in connection with the
operation or the conduct of the Purchased Assets and the Business; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;all claims, demands, refunds, rebates, causes of action, choses in action, rights of
recovery, rights of set-off and rights of recoupment to the extent related to the Business, the
Purchased Assets or the Assumed Liabilities, including (i)&nbsp;rights under or pursuant to all
warranties, representations and guarantees made by suppliers or service providers in connection
with the Business, the Purchased Assets or the Assumed Liabilities and (ii)&nbsp;proceeds or rights to
proceeds from insurance policies to the extent related to the Business, the Purchased Assets or the
Assumed Liabilities.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.2 <U>Excluded Assets</U>. Notwithstanding anything to the contrary contained in Section
2.1 or elsewhere in this Agreement, the following assets (collectively, the &#147;<U>Excluded
Assets</U>&#148;) are not part of the sale and purchase contemplated hereunder, are excluded from the
Purchased Assets and shall remain the property of Seller and/or its Affiliates after the Closing:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;all cash and cash equivalents, including any marketable securities or certificates of
deposit, or any collected funds or accounts or items in the process of collection at the financial
institutions of Seller through and including the Closing Date, and any cash security or other
similar deposits (other than as provided in Section&nbsp;2.1(a)), together with all accrued but unpaid
interest thereon;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;any accounts or notes receivable or other such claims for money due to Seller from Seller
Parent or any of its wholly-owned subsidiaries;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;all insurance policies and any rights of Seller or any of its Affiliates under such
insurance policies (except to the extent specified in Section&nbsp;2.1(l));


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;all Contracts, other than the Assumed Contracts;


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;all claims, demands, deposits, refunds, rebates, causes of action, choses in action,
rights of recovery, rights of set-off and rights of recoupment to the extent relating to any of the
Excluded Assets or Retained Liabilities;


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;the corporate charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, shares of capital stock, blank
stock certificates, and other documents relating to the organization, maintenance and existence of
Seller as a corporation;


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;any shares of capital stock or other equity interests in any entity;


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;all personnel records and other records that Seller is required by Law to retain in its
possession or is not permitted under Law to provide to Buyer, <I>provided that </I>Seller shall provide
copies of any portions of such retained information that relate to (i)&nbsp;the Business, (ii)&nbsp;the
Purchased Assets, or (iii)&nbsp;the New Employees, except to the extent prohibited by Law;


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;all rights in connection with, and assets of, any Employee Plan (except to the extent
specified in Section&nbsp;8.5);


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;any credits, prepaid expenses, deferred charges, advance payments, security deposits,
prepaid items, deposits and claims for refunds or reimbursements, in each case, to the extent
relating to the Excluded Assets and/or the Retained Liabilities;


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;all rights to indemnification, contribution or other reimbursement, or limitations on
liability, under the Assumed Contracts, or any warranties and guarantees, in each case, from any
third parties with respect to any Retained Liabilities and/or Losses for which Seller has an
indemnification obligation under this Agreement;


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;any rights of Seller or any of its Affiliates with respect to any Tax refund relating to
periods ending on or prior to the Closing Date, including any ratable portion of a Tax period that
includes the Closing Date (pro-rated in the manner contemplated by Section&nbsp;8.6), and any rights
under any Tax allocation or sharing agreement relating to periods ending on or prior to the Closing
Date; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;all rights of Seller under this Agreement or any other Transaction Document.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.3 <U>Assumed Liabilities</U>. Subject to the terms and conditions set forth in this
Agreement, at the Closing, Seller shall assign to Buyer, and Buyer shall assume and thereafter pay,
perform and discharge when due, only the following Liabilities (the &#147;<U>Assumed Liabilities</U>&#148;):


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;all Liabilities of Seller arising out of or relating to the Assumed Contracts (subject to
Section&nbsp;8.7(b) and Section&nbsp;8.7(c)) and the Lease Assignments, in each case that accrue or are
incurred after the Closing or are required to be performed in the ordinary course of business after
the Closing (other than obligations relating to breaches thereof by Seller or any Affiliate of
Seller occurring on or prior to the Closing);


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;accounts payable of Seller as shown on the Recent Balance Sheet, with such changes thereto
as may occur in the ordinary course of business between the Balance Sheet Date and the Closing;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;all Liabilities of Seller for product warranty to the extent relating to products sold by
Seller prior to the Closing in the ordinary course of conducting the Business, but only to the
extent that claims are first made after the Closing and only to the extent of claims that are
consistent with Seller&#146;s product warranty claims during the period from January&nbsp;1, 2009 through
October&nbsp;31, 2010; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;all Liabilities of Seller under transferred Business Governmental Authorizations that
accrue or are incurred after the Closing or are required to be performed in the ordinary course of
business after the Closing (other than obligations relating to violations thereunder by Seller or
any Affiliate of Seller occurring on or prior to the Closing).


<P align="left" style="font-size: 12pt; text-indent: 4%">2.4 <U>Liabilities Not Assumed</U>. Notwithstanding anything to the contrary in this
Agreement, Seller and Buyer hereby expressly acknowledge and agree that the Assumed Liabilities
shall not include, Seller shall not assign to Buyer pursuant to this Agreement, and Buyer shall not
accept or assume or be obligated to pay, perform or otherwise discharge pursuant to this Agreement,
any Liability of Seller other than the Assumed Liabilities (collectively, the &#147;<U>Retained
Liabilities</U>&#148;). For the avoidance of doubt, the term &#147;Retained Liabilities&#148; means any and all
Liabilities of Seller that do not constitute Assumed Liabilities. Seller shall remain responsible
for the Retained Liabilities, which shall be paid, performed and discharged by Seller. Without
limiting the foregoing, Retained Liabilities shall mean every Liability of Seller, other than
Assumed Liabilities, including:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;all accounts or notes receivable or other claims for money due to Seller Parent or any of
its Affiliates (other than Seller) and owed by Seller;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;all Liabilities with respect to Taxes to the extent relating to, arising out of or
incurred in connection with the Business or the Purchased Assets for any taxable period or ratable
portion thereof ending on or prior to the Closing Date (pro-rated in the manner contemplated by
Section&nbsp;8.6, if applicable);


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;any Liability to the extent relating to, arising out of, or incurred in connection with,
the Excluded Assets;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;any Benefits Liabilities and any other Liability of Seller or any of its Affiliates (i)
under an employee benefit plan of an ERISA Affiliate, (ii)&nbsp;relating to, arising out of or in
connection with the employment or cessation of employment (including by reason of the transactions
contemplated by this Agreement) of any current or former employee of Seller on or before the
Closing, (iii)&nbsp;relating to, arising out of or in connection with any employee grievance against
Seller whether or not the affected employees are hired by Buyer, to the extent a claim with respect
to a Liability relates to the period on or prior to the Closing, (iv)&nbsp;relating to payroll,
employment Taxes, vacation, and sick pay for any current or former employee of Seller to the extent
relating to the period on or prior to the Closing, (v)&nbsp;relating to the classification as
independent contractors of any Persons providing services to Seller, (vi)&nbsp;with respect to any
actual or alleged Contracts regarding stock options, equity, or equity based compensation, of
Seller or Seller Parent, or (vii)&nbsp;under the WARN Act or any similar state or local Law, to the
extent relating to any event or occurrence happening or existing on or prior to the Closing Date
(including by reason of the transactions contemplated by this Agreement);


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;any Indebtedness of Seller, including any Liability under outstanding and unpaid checks,
other than any Indebtedness under an Assumed Contract (to the extent provided in Section&nbsp;2.3(a));


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;any Liability of Seller under any Contracts that are not Assumed Contracts (to the extent
provided in Section&nbsp;2.3(a));


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;any Liability of Seller for costs and expenses incurred by Seller or its Affiliates in
connection with the Transactions;


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;any Liability of Seller under the Transaction Documents;


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;any Liability arising from Environmental Claims or other matters arising under any
Environmental Law to the extent arising out of the ownership of the Purchased Assets or the conduct
of the Business prior to the Closing Date;


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;any Liability with respect to services provided or products sold by the Business on or
prior to the Closing Date to the extent arising out of or relating to product return, exchange,
rebate, sales promotion or allowance, credit and warranty obligations (except as provided in
Section&nbsp;2.3(c)), including GL# 2050-02-001, &#147;Accrued Catalogs-TruServ&#148; and GL# 2050-06-001,
&#147;Accrued Promotions-WWwhlsale&#148; included under &#147;Accrued Expenses & P/R Withhldng&#148; on the Recent
Balance Sheet (it being understood that Seller shall discharge these Retained Liabilities by
reimbursing Buyer for its costs in providing promotions, credits or other allowances to customers
in substitution for promotions/allowances that Seller historically has provided up to the amount
accrued on the Recent Balance Sheet therefor, such reimbursement to be made promptly upon request
by Buyer and following delivery to Seller of reasonable documentation evidencing such costs); and


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;any Liability with respect to product liability relating to, arising out of or incurred
with respect to services provided or products sold by the Business on or prior to the Closing Date,
including Liability arising from third party liability claims for bodily injury or property damage
arising out of the actual or alleged malfunction of a product due to a manufacturing or design
error.


<P align="left" style="font-size: 12pt; text-indent: 4%">2.5 <U>Further Assurances</U>


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;From time to time following the Closing, subject to applicable Law, Seller shall, or shall
cause its Affiliates to, make available to Buyer such data in personnel records of New Employees as
are in Seller&#146;s or Seller&#146;s Affiliates&#146; possession and reasonably necessary for Buyer to transition
such employees into Buyer&#146;s records and otherwise comply with its obligations hereunder.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;From time to time following the Closing, Seller and Buyer shall, and shall cause their
respective Affiliates to, execute, acknowledge and deliver all such further conveyances, notices,
assumptions, releases and acquittances and such other instruments, and shall take such further
actions, as may be necessary or appropriate to fully and effectively transfer, assign and convey
unto Buyer and its respective successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be conveyed to Buyer under the
Transaction Documents and to fully and effectively assign unto Buyer and its Affiliates and their
successors and assigns, the Liabilities intended to be assumed by Buyer under the Transaction
Documents, and to otherwise make effective the Transactions and to confirm Buyer&#146;s title to or
interest in the Purchased Assets and to put Buyer in actual possession and operating control
thereof, including (i)&nbsp;transferring back to Seller any asset or Liability not contemplated by this
Agreement to be a Purchased Asset or an Assumed Liability (including any Excluded Asset),
respectively, which asset or Liability was transferred to Buyer at the Closing, and (ii)
transferring to Buyer any asset or Liability contemplated by this Agreement to be a Purchased Asset
or an Assumed Liability, respectively, which was not transferred to Buyer at the Closing.


<P align="center" style="font-size: 12pt"><B>ARTICLE III.</B>



<P align="center" style="font-size: 12pt"><B>CLOSING</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">3.1 <U>Closing</U>. The closing of the transactions contemplated by this Agreement (the
&#147;<U>Closing</U>&#148;) shall take place at 10:00&nbsp;a.m., local time, at the offices of Curtis,
Mallet-Prevost, Colt & Mosle LLP, 101 Park Avenue, New York, New York 10178, no later than three
Business Days following the satisfaction or waiver of all of the conditions set forth in Article&nbsp;IX
(other than those conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions), or at such other date, place or time as the
Parties hereto may mutually agree upon (such date of the Closing, the &#147;<U>Closing Date</U>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">3.2 <U>Payment of Purchase Price</U>;<U> Instruments of Conveyance and Transfer</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;At the Closing, Buyer shall deliver to Seller the Closing Consideration. Buyer (and Buyer
Parent, as applicable) shall also execute and deliver to Seller the following:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;the Assignment and Assumption Agreement;

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="82%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(ii)<BR>
(iii)<BR>
(iv)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">the Assignment of Trademarks;<BR>
the Assignment of Internet Properties;<BR>
the Bill of Sale;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(v)&nbsp;the Lease Assignments;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vi)&nbsp;the Transition Services Agreement;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vii)&nbsp;the Supply Agreement;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(viii)&nbsp;such customary resale certificates relating to the Inventories included in the
Purchased Assets as Seller may reasonably request; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ix)&nbsp;the officer&#146;s and secretary&#146;s certificates referred to in Section&nbsp;9.2.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;At the Closing, Seller (and Seller Parent, as applicable) shall execute and deliver to
Buyer the following:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;the Assignment and Assumption Agreement;

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="82%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(ii)<BR>
(iii)<BR>
(iv)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">the Assignment of Trademarks;<BR>
the Assignment of Internet Properties;<BR>
the Bill of Sale;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(v)&nbsp;the Lease Assignments (also executed by the landlord and any applicable
sub-landlords of the Business Leasehold Property);



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vi)&nbsp;the Transition Services Agreement;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vii)&nbsp;the Supply Agreement;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(viii)&nbsp;a non-foreign affidavit dated as of the Closing Date, sworn under penalty of
perjury and in form and substance required under the Treasury Regulations promulgated under
Section&nbsp;1445 of the Code stating that Seller is not a &#147;foreign person&#148; as defined in Section
1445 of the Code;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ix)&nbsp;any Lien Releases;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(x)&nbsp;all consents, waivers or approvals theretofore obtained by Seller with respect to
the sale of the Purchased Assets, the assignment of the Assumed Liabilities or the
consummation of the Transactions; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xi)&nbsp;the officer&#146;s and secretary&#146;s certificates referred to in Section&nbsp;9.1.


<P align="center" style="font-size: 12pt"><B>ARTICLE IV.</B>



<P align="center" style="font-size: 12pt"><B>PURCHASE PRICE</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">4.1 <U>Purchase Price</U>. The purchase price for the Purchased Assets (the &#147;<U>Purchase
Price</U>&#148;) is the sum of (a)&nbsp;the assumption of the Assumed Liabilities and (b)&nbsp;Eleven Million
Fourteen Thousand Six Hundred Sixteen Dollars ($11,014,616) in cash (the &#147;<U>Closing
Consideration</U>&#148;), as such sum may be adjusted in accordance with Section&nbsp;4.3 and Section&nbsp;10.5.
At the Closing, Buyer shall pay Seller, by wire transfer of immediately available funds to a bank
account designated in writing by Seller, the Closing Consideration.


<P align="left" style="font-size: 12pt; text-indent: 4%">4.2 <U>Transfer Taxes</U>. Notwithstanding anything else contained herein, Buyer and Seller
shall (a)&nbsp;each pay one-half of all amounts that are required to be paid in respect of any transfer,
sales, use, recording, value-added or similar Taxes (including any registration and/or stamp Taxes,
levies and duties) that may be imposed by reason of the sale, assignment, transfer and delivery of
the Purchased Assets (the &#147;<U>Transfer Taxes</U>&#148;); and (b)&nbsp;timely file all Tax Returns, at the
Parties&#146; shared expense, required to be filed in connection with the payment of such Taxes.


<P align="left" style="font-size: 12pt; text-indent: 4%">4.3 <U>Purchase Price Adjustment</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Within sixty (60)&nbsp;days after the Closing Date, Buyer shall deliver to Seller a preliminary
statement (the &#147;<U>Preliminary Statement</U>&#148;) of the Net Working Capital, determined as of the
effective time of the Closing and in accordance with GAAP applied on a basis consistent with the
preparation of the Seller Financial Statements (the &#147;<U>Closing Date Net Working Capital</U>&#148;).
The Closing Date Net Working Capital shall be determined in a manner consistent with the
methodology shown on <U>Schedule&nbsp;4.3(a)</U>. Buyer and its Affiliates shall provide Seller and
its representatives with full access at all reasonable times and on reasonable advance notice to
such personnel and books, records and other materials of the Business to the extent they are
reasonably necessary for the preparation or review of, or relate to the matters covered by, the
Preliminary Statement, Final Statement and Closing Date Net Working Capital.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller shall have thirty (30)&nbsp;days to review the Preliminary Statement from the date of
its receipt thereof (the &#147;<U>Review Period</U>&#148;). If Seller objects to any aspect of the
Preliminary Statement, then Seller must deliver a written notice of objection (the &#147;<U>Objection
Notice</U>&#148;) to Buyer on or prior to the expiration of the Review Period. The Objection Notice
shall specify in reasonable detail any adjustment to the Preliminary Statement proposed by Seller
and the basis therefor, including the specific items proposed to be adjusted and the specific
Dollar amount of each such proposed adjustment and an explanation of how such proposed adjustment
was calculated. If Seller delivers an Objection Notice to Buyer prior to the expiration of the
Review Period in accordance with this Section&nbsp;4.3(b), Buyer and Seller shall, for a period of
fifteen (15)&nbsp;days thereafter (the &#147;<U>Resolution Period</U>&#148;), attempt in good faith to resolve
the matters properly contained therein, and any written resolution, signed by each of Buyer and
Seller, as to any such matter shall be final, binding, conclusive and non-appealable for all
purposes hereunder, except in the case of fraud. Except to the extent properly challenged in an
Objection Notice as provided in this Section&nbsp;4.3(b), or in the event Seller does not deliver an
Objection Notice to Buyer in accordance with this Section&nbsp;4.3(b) prior to the expiration of the
Review Period, Seller shall be deemed to have agreed to the Preliminary Statement in its entirety,
which Preliminary Statement or undisputed portions thereof (as the case may be) shall be final,
binding, conclusive and non-appealable for all purposes hereunder, except in the case of fraud.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;If, at the conclusion of the Resolution Period, Buyer and Seller have not reached an
agreement with respect to all disputed matters properly contained in the Objection Notice, then
within ten (10)&nbsp;days thereafter, Buyer and Seller shall submit for resolution such matters
remaining in dispute to BDO Seidman, or if such firm is unavailable or unwilling to so serve, to an
Independent Accounting Firm (the &#147;<U>Neutral Auditor</U>&#148;). Each of Seller and Buyer agrees to
execute, if requested by the Neutral Auditor, an engagement letter reasonably satisfactory to such
Party. The Neutral Auditor shall act as an arbitrator to resolve (based solely on the written
submissions of Buyer and Seller and not by independent review) only those matters properly included
in the Objection Notice and still in dispute at the end of the Resolution Period. Buyer and Seller
shall direct the Neutral Auditor to render a reasoned written resolution of all such disputed
matters, in accordance with the foregoing, within thirty (30)&nbsp;days after its engagement or such
other period agreed upon by Buyer and Seller. The resolution of the Neutral Auditor shall be set
forth in a written statement delivered to each of Buyer and Seller and shall be final, binding,
conclusive and non-appealable for all purposes hereunder, except in the case of fraud. The
Preliminary Statement, once modified and/or agreed to in accordance with Section&nbsp;4.3(b) or this
Section&nbsp;4.3(c), shall become the &#147;<U>Final Statement</U>.&#148;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;All fees and expenses of the Neutral Auditor shall be borne equally by Seller and Buyer,
and each of them shall promptly advance to the Neutral Auditor, upon its request, such Party&#146;s
share of such fees and expenses. Except as provided in the preceding sentence, all other costs and
expenses incurred by the Parties in connection with resolving any dispute hereunder before the
Neutral Auditor shall be borne by the Party incurring such cost and expense.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;If the Closing Date Net Working Capital as stated on the Final Statement exceeds
$10,672,000 (the &#147;<U>Target Closing Date Net Working Capital</U>&#148;), then Buyer shall pay to Seller
an amount equal to such excess, by wire transfer of immediately available funds to the account or
accounts designated in writing by Seller, within five (5)&nbsp;Business Days after the date on which the
Final Statement is determined. If the Target Closing Date Net Working Capital exceeds the Closing
Date Net Working Capital as stated on the Final Statement, then Seller shall pay to Buyer an amount
equal to such excess, by wire transfer of immediately available funds to the account designated in
writing by Buyer, within five (5)&nbsp;Business Days after the date on which the Final Statement is
determined. Any payment pursuant to this Section&nbsp;4.3(e) will be treated by the Parties as an
adjustment to the Purchase Price.


<P align="center" style="font-size: 12pt"><B>ARTICLE V.</B>



<P align="center" style="font-size: 12pt"><B>REPRESENTATIONS AND WARRANTIES OF SELLER</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">Except as set forth on, and in all cases subject to, the disclosure schedule attached hereto
as <U>Schedule&nbsp;A</U> (the &#147;<U>Disclosure Schedule</U>&#148;) (each such disclosure of which shall
reference the appropriate section and, if applicable, subsection of this <U>Article&nbsp;V</U> to which
it relates, and each such disclosure of which shall be deemed to be incorporated by reference into
the applicable representations and warranties made in this <U>Article&nbsp;V</U>; <I>provided</I>, that any
information disclosed under any paragraph of the Disclosure Schedule shall be deemed disclosed and
incorporated into any other section, subsection, paragraph and clause hereof where it is reasonably
apparent that such disclosure is relevant to such other section, subsection, paragraph or clause),
Seller represents and warrants to Buyer, as of the date of this Agreement and as of the Closing
Date, as follows:


<P align="left" style="font-size: 12pt; text-indent: 4%">5.1 <U>Organization</U>,<U> Power</U>. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. Seller has all corporate
power and authority required to own, operate and lease the Purchased Assets and to carry on the
Business as currently conducted. Seller is duly authorized to conduct business and is in good
standing in each jurisdiction where such authorization is required to conduct the Business as
presently conducted by it, except where the failure to be so authorized or be in good standing
would not have a Business Material Adverse Effect. <U>Schedule&nbsp;5.1</U> of the Disclosure Schedule
sets forth a true, correct and complete list of each jurisdiction in which Seller is qualified to
do business as a foreign corporation. Seller has no subsidiaries.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.2 <U>Due Authorization</U>. Seller has all corporate power and authority required to enter
into the Transaction Documents and to consummate the Transactions. The execution and delivery by
Seller of the Transaction Documents, the performance by it of its obligations thereunder, and the
Transactions have been duly and validly authorized by all necessary corporate action on the part of
Seller, including any required approval by Seller&#146;s sole stockholder. This Agreement has been, and
each of the other Transaction Documents to which Seller is or is to become a party, when executed,
will be, duly executed and delivered by Seller and constitute a valid and legally binding
obligation of Seller (assuming that this Agreement and such other Transaction Documents constitute
valid and legally binding obligations of the other parties hereto and thereto (other than Seller
Parent), enforceable in accordance with its terms and conditions, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar Laws of general applicability relating to or affecting creditors&#146; rights and subject to the
rules of law governing specific performance, injunctive relief, or other equitable remedies.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.3 <U>No Conflict</U>;<U> Governmental Authorizations</U>. The execution and delivery of
this Agreement does not, and the execution and delivery of the other Transaction Documents to which
Seller is or is to become a party and the consummation of the Transactions will not, (a)&nbsp;violate or
conflict with the provisions of the certificate of incorporation or bylaws of Seller, each as
amended to date, (b)&nbsp;result in the creation of any Lien (other than the rights of Buyer hereunder)
upon any of the Purchased Assets, (c)&nbsp;result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or impair Seller&#146;s rights
or alter the rights or obligations of any third party under, or give to others any right of
termination, amendment, acceleration or cancellation of, any Business Contract, or (d)&nbsp;conflict
with or violate any of the terms, conditions or provisions of any material Law or any Governmental
Authorization or Order applicable to Seller or by which Seller, the Business or any of the
Purchased Assets are bound or affected. Seller is not required to give any notice to any
Governmental Entity, and no material consent, approval or authorization of, or registration or
filing with, any Governmental Entity is required in connection with the execution, delivery or
performance by Seller of this Agreement or any of the other Transaction Documents to which Seller
is or is to become a party or in connection with the consummation of the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.4 <U>Ownership of Seller</U>. Seller Parent is the legal and beneficial owner of one
hundred percent (100%) of the outstanding capital stock of Seller. Other than the capital stock
owned by Seller Parent, there are no securities, options, warrants, calls, rights, contracts,
commitments, agreements, instruments, arrangements, understandings, obligations or undertakings of
any kind to which Seller is a party or by which Seller is bound obligating (or purporting to
obligate) Seller to (including on a deferred basis) issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock, other voting securities or any securities
convertible into shares of capital stock or other voting securities of Seller, or obligating Seller
to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment,
agreement, instrument, arrangement, understanding, obligation or undertaking.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.5 <U>Seller Financial Statements; Internal Controls</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Set forth on <U>Schedule&nbsp;5.5</U> of the Disclosure Schedule are copies of (i)&nbsp;the
unaudited balance sheets for Seller as of the end of the fiscal year of each of 2008 and 2009, and
the unaudited statements of operations for Seller for each of the fiscal years ended 2008 and 2009,
and (ii)&nbsp;an unaudited balance sheet of Seller (the &#147;<U>Recent Balance Sheet</U>&#148;) as of October
31, 2010 (the &#147;<U>Balance Sheet Date</U>&#148;), and the related unaudited statements of operations for
Seller for the ten-month period then ended (collectively, the &#147;<U>Seller Financial
Statements</U>&#148;). The Seller Financial Statements were prepared in accordance with GAAP, present
fairly in all material respects the financial condition and the results of operations of the
Business as of the dates and for the periods indicated therein and are derived from the books and
records of Seller and Seller Parent relating to the Business, except that the Seller Financial
Statements for the 2008 and 2009 fiscal years do not include footnote disclosures, and the Seller
Financial Statements for the ten months ended October&nbsp;31, 2010 are subject to normal year-end
adjustments (including Tax adjustments) and do not include footnote disclosure.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller Parent&#146;s system of internal controls over financial reporting is designed to
provide reasonable assurance, in each case with respect to the Business and the Purchased Assets:
(i)&nbsp;that transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP, (ii)&nbsp;that receipts and expenditures are executed in accordance with the
authorization of management, and (iii)&nbsp;that any unauthorized use, acquisition or disposition of
assets that would materially affect Seller&#146;s financial statements would be detected or prevented in
a timely manner. There were no significant deficiencies or material weaknesses in Seller Parent&#146;s
internal controls as of and for the year ended December&nbsp;31, 2009 (nor has there been any such
deficiency or weakness nor any fact, circumstance or change reasonably likely to result in any such
deficiency or weakness since such date).


<P align="left" style="font-size: 12pt; text-indent: 4%">5.6 <U>No Undisclosed Liabilities</U>. Except as disclosed, reflected in, reserved against
or otherwise described in the Seller Financial Statements, Seller has no Liabilities required by
GAAP to be reflected as a liability on the Seller Financial Statements, other than (a)&nbsp;those
Liabilities incurred in the ordinary course of business since the Balance Sheet Date; and (b)&nbsp;those
Liabilities incurred in connection with the Transaction Documents or the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.7 <U>Title to Purchased Assets</U>;<U> Sufficiency of Assets</U>. Except for (a)&nbsp;any
Permitted Liens and (b)&nbsp;Liens covered by (or to be covered by) the Lien Releases, Seller owns and
has good title (or a valid leasehold interest with respect to leased assets) to the Purchased
Assets, free and clear of any Liens. Except for inventories in transit to or from customers or
suppliers, no third party is in possession of any material asset or property of Seller. Other than
with respect to services that are to be provided under the Transition Services Agreement, as of the
Closing, none of the Business is conducted through, and none of the Purchased Assets are operated
by, any Affiliate of the Seller. The Purchased Assets, together with the services to be provided
under the Transition Services Agreement after the Closing, include all of the buildings, machinery,
equipment, and other tangible assets and Intellectual Property Rights necessary to conduct the
Business in substantially the same manner as presently conducted by Seller. At the Closing, Buyer
will acquire good title to the tangible personal property contained in the Purchased Assets and a
valid and enforceable leasehold interest in the leased property contained in the Purchased Assets,
in each case, except for Permitted Liens.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.8 <U>Absence of Changes</U>. Since December&nbsp;31, 2009, except as required pursuant to this
Agreement, the Business has been conducted in the ordinary course consistent with past practices in
all material respects and there has not been, accrued or arisen:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Any Business Material Adverse Effect;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Any sale, lease or other disposition of any property or asset having a value of at least
$10,000, other than sales of Inventories in the ordinary course of business consistent with past
practice;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Any purchase of fixed assets or other long term assets for an amount more than $10,000
individually, or $50,000 in the aggregate;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Any Contract entered into by Seller relating to its assets or the Business, in each case
having a stated contract amount or involving obligations or entitlements with a value of more than
$50,000, other than Contracts involving the sale of Inventories or purchase of materials in the
ordinary course of business consistent with past practice, or any termination, modification,
amendment or extension of or waiver of any rights under any Contract to which Seller is a party or
by which Seller, the Business or any of the Purchased Assets may be bound or affected, which
termination, modification, amendment, extension or waiver involves obligations or entitlements of
more than $25,000;


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Any disposition or lapse of any rights to use any of the Intellectual Property Rights
relating to the Business;


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Any change in the levels of product returns, bad debts and reserves relating to accounts
receivable experienced by Seller from the levels experienced by Seller in the fiscal year ended
December&nbsp;31, 2009 in excess of $25,000 in the aggregate;


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;Any grants of any refunds, credits, rebates or other allowances by Seller to any customer,
reseller or distributor, other than in the ordinary course of business and consistent with prior
practice;


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Any recall, field notification or field correction with respect to products manufactured
by or on behalf of Seller;


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;Any settlement or compromise of any Proceeding involving the Business that involves
amounts in controversy in excess of $25,000 in the aggregate;


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;Any increase in compensation of any Business Employee, other than increases in the
ordinary course of business of not more than $10,000 for any Business Employee, or $100,000 in the
aggregate;


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;Any other material change in the employment terms for any Business Employee or the hiring
of any Business Employee earning $75,000 or more per year;


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;The establishment or adoption of any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement or other similar benefit plan or arrangement covering any Business Employee, or
any amendment or modification of any of the foregoing, which amendment or modification involves or
is expected to involve obligations or entitlements with a value of more than $25,000;


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;Any damage, destruction or loss, whether or not covered by insurance, affecting Seller&#146;s
properties or assets or the Business and involving aggregate losses in excess of $25,000;


<P align="left" style="font-size: 12pt; text-indent: 8%">(n)&nbsp;Any significant change in accounting methods or practices or the revaluation of any of the
Purchased Assets or the Assumed Liabilities;


<P align="left" style="font-size: 12pt; text-indent: 8%">(o)&nbsp;Any failure to maintain its fill rate in all material respects consistent with reasonable
historical practice; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(p)&nbsp;Any commitment by Seller to do any of the foregoing identified in Sections&nbsp;5.8(a) through
5.8(o).


<P align="left" style="font-size: 12pt; text-indent: 4%">5.9 <U>Accounts Receivable</U>. All Business Accounts Receivable included in the Purchased
Assets represent or will represent bona fide obligations arising from sales actually made or
services actually performed by Seller in the ordinary course of business. All such Business
Accounts Receivable are or will be as of the Closing Date collectible net of the reserves shown on
the Recent Balance Sheet and, with respect to Business Accounts Receivable arising after the date
of the Recent Balance Sheet, net of reserves calculated on a basis consistent with the Seller
Financial Statements. Subject to such reserves, such Business Accounts Receivable will be
collectible in full, without any setoff, within ninety (90)&nbsp;days after the respective dates on
which such Business Accounts Receivable first become due and payable. There is no contest, claim,
defense or right of setoff, other than returns in the ordinary course of business of Seller, under
any Contract with any account debtor of a Business Account Receivable relating to the amount or
validity of such Business Account Receivable. <U>Schedule&nbsp;5.9</U> of the Disclosure Schedule
contains a complete and accurate list of all Business Accounts Receivable as of October&nbsp;31, 2010,
which list sets forth the aging of each such Business Account Receivable.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.10 <U>Customers and Suppliers</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;To the Knowledge of Seller, Seller does not have any outstanding disputes concerning its
goods and/or services with any customer which, in the twelve months ended December&nbsp;31, 2009 or the
ten months ended October&nbsp;31, 2010, was one of the twenty (20)&nbsp;largest sources of revenues for
Seller, based on amounts paid (a &#147;<U>Seller Significant Customer</U>&#148;). No Seller Significant
Customer has terminated or materially modified its contracts or arrangements with Seller and no
Seller Significant Customer has notified Seller that it does not intend to continue as a customer
of Seller after the Closing or that such customer intends to terminate or materially modify
existing contracts or arrangements with Seller. <U>Schedule&nbsp;5.10(a)</U> of the Disclosure
Schedule lists each Seller Significant Customer. There is no Business Contract with any Seller
Significant Customer providing for any rebate, sales promotion or other allowance to any Seller
Significant Customer.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;To the Knowledge of Seller, Seller does not have any outstanding disputes concerning goods
or services provided by any supplier which, in the twelve months ended December&nbsp;31, 2009 or the ten
months ended October&nbsp;31, 2010, was one of the twenty (20)&nbsp;largest suppliers of goods and services
to Seller, based on amounts paid (a &#147;<U>Seller Significant Supplier</U>&#148;). Seller has not received
any written notice of a termination or interruption of any existing contracts or arrangements with
any Seller Significant Suppliers. No Seller Significant Supplier has notified Seller in writing
that it will stop or decrease the rate of supplying materials, products or services to Seller.
<U>Schedule&nbsp;5.10(b)</U> of the Disclosure Schedule lists each Seller Significant Supplier.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.11 <U>Inventories</U>. All items included in the Inventories included in the Purchased
Assets consist of a quality and quantity usable or saleable in the ordinary course of business of
Seller, except for obsolete items and items of below-standard quality, all of which have been
written off or written down in the Seller Financial Statements consistent with the past practice of
Seller. All of the Inventories have been valued at the lower of cost or net realizable value in
accordance with Seller&#146;s reserve policy. Inventories that were purchased after the date of the
Recent Balance Sheet were purchased in the ordinary course of business of Seller. Seller has
provided Buyer with a complete and accurate list of Inventories current to within ten (10)&nbsp;days of
the date of this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.12 <U>Condition of Business Tangible Property</U>. Each item of Business Tangible Property
owned or leased by Seller is in good repair and good operating condition, ordinary wear and tear
excepted, and is suitable for use in the ordinary course of business of Seller. No item of
Business Tangible Property owned or leased by Seller is in need of repair or replacement other than
as a result of ordinary wear and tear or as part of routine maintenance in the ordinary course of
business. All Business Tangible Property owned or leased by Seller is, and immediately prior to
Closing shall be, in the possession or control of Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.13 <U>Contracts</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;5.13(a)</U> of the Disclosure Schedule contains a true, correct and complete
list (including the names of the parties, the date, and all amendments, supplements or
modifications thereto) of the following (collectively, the &#147;<U>Business Contracts</U>&#148;):



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;all Contracts related to the Business, the Purchased Assets or the Assumed
Liabilities that provide for payment by or to Seller of more than $25,000 in the twelve (12)
month period immediately following the date hereof;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;all Contracts for the sale of goods or the performance of services by Seller
having an actual or anticipated value to Seller of at least $25,000 in the twelve (12)&nbsp;month
period immediately following the date hereof, including purchase orders;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iii)&nbsp;all Lease Agreements;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iv)&nbsp;all Intellectual Property Contracts;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(v)&nbsp;all Contracts entered into by Seller that provide any exclusive license or
exclusive distribution right of any kind, including, without limitation, with regard to any
product, service, market, industry, field of use or geographic territory;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vi)&nbsp;all Contracts involving a sharing of profits, losses, costs or Liabilities by
Seller with any other Person, including any joint venture agreement;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vii)&nbsp;all Contracts under which Seller has granted or received most favored customer
pricing provisions, rights of first refusal, rights of first negotiation, or similar rights
with respect to any product, service or Intellectual Property Right that is now or hereafter
owned by it;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(viii)&nbsp;all Contracts containing any covenant limiting in any respect the right of
Seller to engage in any line of business, to compete with any Person or to solicit any
Person for business, employment or other purposes;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ix)&nbsp;all Contracts between Seller and any other Person related to the Business under
which Seller has agreed to, provided, or assumed any obligation to reimburse for or guaranty
any third party obligation or action;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(x)&nbsp;all Contracts between Seller and Seller Parent or any other Affiliate relating to
the Business (other than (A)&nbsp;Contracts relating to matters that are covered by the
Transition Services Agreement or the Supply Agreement and (B)&nbsp;any employee benefit plans
maintained by Seller);



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xi)&nbsp;all forms of dealer, sales representative, distributor, reseller, or similar
Contracts relating to the Business;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xii)&nbsp;all settlement agreements of the Business under which Seller has any ongoing
obligations, limitations or restrictions, receives any ongoing benefits or rights or grants
any license or right to any current or prior Intellectual Property Rights;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xiii)&nbsp;all Employee Contracts with Business Employees (excluding offer letters for
&#147;at-will&#148; employment that are terminable at any time, with or without notice, and with no
Liability to Seller);



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xiv)&nbsp;all Contracts under which Seller has delivered copies of or disclosed, or
promised to deliver or disclose any Source Code that constitutes a Purchased Asset to a
third party, whether pursuant to an escrow arrangement or otherwise; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(xv)&nbsp;all Contracts of the Business with any Governmental Entity.


<P align="left" style="font-size: 12pt">Seller has delivered to Buyer or made available to Buyer a true, correct and complete copy of each
written Business Contract listed on <U>Schedule&nbsp;5.13(a)</U> of the Disclosure Schedule and a
written summary setting forth in reasonable detail the material terms and conditions of each oral
Business Contract listed on <U>Schedule&nbsp;5.13(a)</U> of the Disclosure Schedule.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Each Business Contract listed on <U>Schedule&nbsp;5.13(a)</U> of the Disclosure Schedule is
valid, binding and enforceable against Seller and, to the Knowledge of Seller, the other parties
thereto in accordance with its terms and is in full force and effect, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar Laws of general applicability relating to or affecting creditors&#146; rights and
subject to the rules of law governing specific performance, injunctive relief, or other equitable
remedies. Seller has performed, or is now performing, the obligations of, and has not breached,
violated or defaulted under, or received any written or, to the Knowledge of Seller, oral notice
that it is in default under or in breach of, any of the terms or conditions of any such Business
Contract, and, to the Knowledge of Seller, each of the other parties thereto has performed all
obligations required to be performed by it under, and is not in default under, any such Business
Contract and no event has occurred that, with notice or lapse of time, or both, would constitute
such a breach, violation or default by Seller or, to the Knowledge of Seller, any other party
thereto. There are presently no renegotiations of, or attempts to renegotiate under any Business
Contract, and no Person has made any written demand to Seller or any representative thereof for
such renegotiation. No Business Contract is currently being audited by any other party, and Seller
has not received any written notice or other communication that any other party wishes to audit
Seller&#146;s compliance with any Business Contract.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.14 <U>Leasehold Property and Tangible Property</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;5.14(a)</U> of the Disclosure Schedule sets forth a true, correct and
complete list and contains a description (including street address and use) of all of the Business
Leasehold Property. There are no maintenance or capital improvement obligations on the Business
Leasehold Property in an amount greater than $25,000 in the aggregate. Prior to the date hereof,
Seller has delivered or made available to Buyer true, complete and correct copies of each Lease
Agreement. The Business Leasehold Property is in a condition suitable for return to the lessors
(subject to normal wear and tear) under the terms of the applicable Lease Agreement without payment
of any penalty or forfeiture of a security deposit or any portion thereof.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;There are no parties other than Seller in possession of any of the Business Leasehold
Property or any portion thereof, and there are no leases, subleases, licenses, concessions or other
agreements, written or oral, to which Seller, Seller Parent or any of its Affiliates is a party,
granting to any party or parties (other than Seller) the right of use or occupancy of any portion
of the Business Leasehold Property.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Seller does not own any interest in real property.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.15 <U>Intellectual Property</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Schedule&nbsp;5.15(a)</U> of the Disclosure Schedule lists all Transferred Registered
Intellectual Property and lists any proceedings or actions before any court, tribunal (including
the PTO) or equivalent authority anywhere in the world) involving Seller and related to any of the
Transferred Registered Intellectual Property. Each item of Transferred Registered Intellectual
Property is currently in compliance in all material respects with all formal applicable legal
requirements (including payment of filing, examination and maintenance fees and proofs of use) and
is valid and subsisting.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Schedule&nbsp;5.15(b)</U> of the Disclosure Schedule contains a complete and accurate list
and description of all material Business Intellectual Property Rights owned by Seller, other than
the Transferred Registered Intellectual Property Rights.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Seller owns exclusively, and has good title to, each item of Transferred Intellectual
Property Rights, and no other Person has any ownership interest therein or thereto.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;To the extent that any of the Transferred Intellectual Property Rights was originally
owned or created by or for any third party, including any contractor or employee of Seller and any
predecessor of Seller: (i)&nbsp;Seller has obtained good title to such Intellectual Property Rights;
(ii)&nbsp;such third parties have not retained and do not have any rights or licenses with respect to
such Transferred Intellectual Property Rights or any modifications, enhancements or improvements
thereto by Seller or its licensees or transferees; and (iii)&nbsp;no valid basis exists for such third
party to challenge or object to this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Seller has not transferred ownership of, or granted any exclusive license of or exclusive
right to use, or authorized the retention of any exclusive rights to use, or granted any option to
acquire, any Intellectual Property Right to any other Person that would be infringed by the
operation of the Business as conducted by Seller (with respect to the jurisdictions in which Seller
has conducted the Business, and, to the Knowledge of Seller, any other jurisdictions).


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Seller has sufficient rights to use, pursuant to the Intellectual Property Contracts, all
Third Party Intellectual Property Rights that are used in the Business as currently conducted by
Seller.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;The Transferred Intellectual Property Rights, together with the Intellectual Property
Rights granted to Seller by the Third Party Intellectual Property Contracts that are Assumed
Contracts, collectively constitute all Intellectual Property Rights used by Seller in the current
operation of the Business, or that are necessary to or that would be infringed by the operation of
the Business as currently conducted by Seller (with respect to the jurisdictions in which Seller
has conducted the Business, and, to Seller&#146;s Knowledge, any other jurisdictions), and are
collectively sufficient to conduct the Business as currently conducted.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Neither (1)&nbsp;the operation of the Business, including the design, development, use, import,
branding, advertising, promotion, marketing manufacture and sale of products or services, by
Seller or, immediately following the Closing, by Buyer, nor (2)&nbsp;the use of the Purchased Assets in
the manner used by Seller prior to the Closing, did, do, or will, in the jurisdictions in which
Seller has conducted the Business, and, to the Knowledge of Seller, any other jurisdictions: (i)
infringe or misappropriate the Intellectual Property Rights of any Person; (ii)&nbsp;violate the rights
of any Person (including rights to privacy or publicity); or (iii)&nbsp;constitute unfair competition or
trade practices under the Laws of any jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;Seller has not received written or, to the Knowledge of Seller, oral notice from any
Person claiming that Seller, the Business or the Purchased Assets infringe or misappropriate the
Intellectual Property Rights of any Person or constitute unfair competition or trade practices
under the Laws of any jurisdiction (nor does Seller have Knowledge of any basis therefor).


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;To the Knowledge of Seller, no Person is infringing or misappropriating the Transferred
Intellectual Property Rights.


<P align="left" style="font-size: 12pt; text-indent: 8%">(k)&nbsp;(i)&nbsp;Seller has taken reasonable steps to protect its Technology, and the Technology of
third parties provided under written agreements obligating Seller to protect the same, according to
the Laws of the applicable jurisdictions where such Technology is developed, practiced or
disclosed, and (ii)&nbsp;to the Knowledge of Seller, there has been no unauthorized disclosure of any
confidential information of the Business within the past five years.


<P align="left" style="font-size: 12pt; text-indent: 8%">(l)&nbsp;Seller is not required to make or accrue any royalty or other payment to any third party
in connection with any of the Purchased Assets, including in connection with the sale or
distribution of any product of the Business. Immediately following the Closing, to the Knowledge
of Seller, Buyer will not be required to make or accrue any royalty or other payment to any third
party in connection with any of the Purchased Assets, including in connection with the sale or
distribution of any product of the Business, as a result of any Intellectual Property Contract or
action of Seller.


<P align="left" style="font-size: 12pt; text-indent: 8%">(m)&nbsp;Neither this Agreement nor the transactions contemplated hereby, including the assignment
to Buyer of the Assumed Contracts, will result under any Intellectual Property Contract in: (i)
Buyer granting to any third party any right to or with respect to any Intellectual Property Right
owned by, or licensed to, Buyer prior to the Closing; or (ii)&nbsp;Buyer being bound by, or subject to,
any non-compete or other restriction on the operation or scope of its businesses or its ability to
conduct any type of business.


<P align="left" style="font-size: 12pt; text-indent: 8%">(n)&nbsp;Seller has taken commercially reasonable steps (customary for companies of the type and
size of Seller) to prevent the introduction into the products and the Software included in the
Transferred Intellectual Property Rights (the &#147;<U>Transferred Software</U>&#148;) of, and to the
Knowledge of Seller, the products and the Transferred Software (and all parts thereof) are free of,
any disabling codes or instructions and any &#147;back door,&#148; &#147;time bomb,&#148; &#147;Trojan horse,&#148; &#147;worm,&#148; &#147;drop
dead device,&#148; &#147;virus&#148; or other software routines or hardware components that permit unauthorized
access or the unauthorized disablement or erasure of such Product or Transferred Software (or parts
thereof) or data or other software of users (&#147;<U>Contaminants</U>&#148;). The Transferred Software does
not contain any Open Source Materials licensed under terms that require the disclosure of Source
Code either for the Transferred Software, or for any software that may be combined with the
Transferred Software.


<P align="left" style="font-size: 12pt; text-indent: 8%">(o)&nbsp;The Purchased Assets, together with the services provided under the Transition Services
Agreement, include information technology systems sufficient to operate the Business as it is
currently conducted. Seller has taken commercially reasonable steps and implemented commercially
reasonable procedures, customary for companies of the type and size of Seller, to keep the
information technology systems used in connection with Business free from Contaminants. Seller has
utilized appropriate disaster recovery plans, procedures and facilities for the Business and has
taken reasonable steps to safeguard the information technology systems utilized in the operation of
the Business as it is currently conducted, in each case as are customary and commercially
reasonable for companies of the type and size of Seller. To the Knowledge of Seller, there have
been no material unauthorized intrusions or breaches of the security of the information technology
systems that are Purchased Assets. To the Knowledge of Seller, Seller has implemented any and all
security patches or upgrades that are generally available for the information technology systems
that are Purchased Assets.


<P align="left" style="font-size: 12pt; text-indent: 8%">(p)&nbsp;Seller has not collected, and no third party has collected on Seller&#146;s behalf, any
personally identifiable information from any third parties in connection with the Business. Seller
has complied in all material respects with all applicable Laws and its internal privacy policies
relating thereto. True and correct copies of all current privacy policies of Seller are attached
to <U>Schedule&nbsp;5.15(p)</U> of the Disclosure Schedule and Seller has at all times made all
disclosures to users or customers required by applicable Laws and none of such disclosures made or
contained in any such privacy policy or in any such materials have been inaccurate, misleading or
deceptive or in violation of any applicable Laws in any material respect.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.16 <U>No Liquidation, Insolvency, Winding-Up</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;No order or decree has been made or petition presented, or resolution passed for the
winding-up or liquidation of Seller and there is not outstanding:



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;any appointment of a receiver over the whole or part of the undertaking of assets
of Seller;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;any petition or order for administration of Seller;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iii)&nbsp;any voluntary arrangement between Seller and any of its respective creditors; or



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iv)&nbsp;any distress or execution or other process levied in respect of Seller which has
not been discharged.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;There are no circumstances which would entitle any Person to successfully prosecute a
petition for the winding-up or administration of Seller or to appoint a receiver over the whole or
any part of the undertaking or assets of Seller.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Seller is able to pay its debts within the meaning of applicable Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Seller has not had its operations suspended or terminated.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.17 <U>Litigation</U>. There is no Proceeding pending and, to the Knowledge of Seller,
there is no Proceeding threatened, in each case that relates to the Business, the Purchased Assets
or the Assumed Liabilities, including under any escheat laws, or that challenges or may have the
effect of preventing, delaying, making illegal or otherwise interfering with the Transactions; and
(b)&nbsp;there is no Order to which Seller is subject that relates to the Business, the Purchased Assets
or the Assumed Liabilities. For purposes of this Section&nbsp;5.17, the term &#147;Proceeding&#148; shall not
include claims which do not otherwise constitute &#147;Proceedings&#148; under any of the other enumerated
items in the definition of the term &#147;Proceeding.&#148;


<P align="left" style="font-size: 12pt; text-indent: 4%">5.18 <U>Employee Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Employee Plans and Employee Contracts</U>. <U>Schedule&nbsp;5.18(a)</U> of the Disclosure
Schedule contains an accurate and complete list of each Employee Plan and each Employee Contract.
Seller has provided or made available to Buyer, to the extent applicable with respect to each
Employee Plan and Employee Contract, true, correct and complete copies of, (i)&nbsp;the plan document or
agreement, including any amendments (or a written description of any unwritten plan or agreement);
(ii)&nbsp;any trust agreement, insurance contract, or any other funding vehicle; (iii)&nbsp;any summary plan
description and summary of material modifications; (iv)&nbsp;any IRS determination letter; and (v)&nbsp;Form
5500 reports filed for the last three plan years. Seller has also provided or made available to
Buyer a true, correct and complete copy of any employee handbook applicable to the Business
Employees.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Employee Plan Compliance</U>. (i)&nbsp;Seller has performed all material obligations
required to be performed by it under, and is not in any material respect in default under or in
material violation of, any Employee Plan or Employee Contract, and each Employee Plan has been
operated and administered in all material respects in accordance with its terms and in material
compliance with all applicable Laws; (ii)&nbsp;there has been no non-exempt &#147;prohibited transaction&#148;
(within the meaning of Section&nbsp;406 of ERISA and Section&nbsp;4975 of the Code) with respect to any
Employee Plan; (iii)&nbsp;each Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to be exempt from tax under Section 501(a) of the Code has received a favorable
determination letter from the IRS with respect to its qualified status under the Code, and no event
has occurred since the date of such determination letter or condition exists that could reasonably
be expected to give rise to disqualification or loss of tax-exempt status of any such Employee Plan
or its related trust; (iv)&nbsp;to the Knowledge of Seller, there is currently no audit or investigation
by any Governmental Entity or any claim (other than routine claims for benefits in the ordinary
course) or action against or involving any Employee Plan; (v)&nbsp;Each Employee Plan that is a &#147;group
health plan&#148; (as such term is defined in Section&nbsp;5000(b)(1) of the Code) complies in all material
respects with the applicable requirements of Section&nbsp;4980B of the Code and Sections&nbsp;601 to 608 of
ERISA (&#147;<U>COBRA</U>&#148;) or any other similar applicable Law providing for health continuation
coverage; and (vi)&nbsp;all contributions and premium payments required to have been paid under or with
respect to any Employee Plan have been timely paid. Seller does not sponsor or maintain any
self-funded Employee Plan. None of the Employee Plans or Employee Contracts covers or has been
entered into with an employee or person who performs services for or on behalf of the Business
outside the United States.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Defined Benefit, Multiemployer and Multiple Employer Plans; ERISA Affiliate
Liability</U>. None of the Employee Plans is subject to Title IV of ERISA or Section&nbsp;412 of the
Code, and none of the Employee Plans is a multiemployer plan (within the meaning of Section&nbsp;3(37)
or 4001(a)(3) of ERISA), or a &#147;multiple employer plan&#148; (within the meaning of Section 413(c) of the
Code). No event has occurred and no condition exists with respect to any Employee Plan, any
employee benefit plan maintained by an ERISA Affiliate of Seller or any employee benefit plan
previously maintained by Seller or any of its ERISA Affiliates which could reasonably be expected
to subject Buyer, or any of its officers, directors, employees, agents or affiliates, directly or
indirectly to any tax, penalty, fine or other liability, or which could reasonably be expected to
result in the imposition of any Lien on the assets of Seller


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;<U>No Post-Employment Obligations</U>. No Employee Plan or Employee Contract provides
post-termination or retiree life insurance, health or other employee welfare benefits to any person
for any reason, except as may be required by COBRA or other similar applicable Law, and neither
Seller nor any ERISA Affiliates have ever represented, promised or contracted (whether in oral or
written form) to any employee of or service provider to the Business that such employee or service
provider or any of their dependents would be provided with post-termination or retiree life
insurance, health or other employee welfare benefits, except to the extent required by applicable
Law.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;<U>No Parachute Payments</U>. Neither the execution of this Agreement nor the
consummation of the transactions contemplated by this Agreement, will (i)&nbsp;increase in any material
respect the amount of benefits otherwise payable under any Employee Plan or Employee Contract, (ii)
result in the acceleration of the time of payment, exercisability, funding or vesting of any such
benefits, or (iii)&nbsp;result in any payment (whether severance pay or otherwise) becoming due to, or
with respect to, any current or former employee, director, or consultant of Seller.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;<U>Employees and Independent Contractors</U>. <U>Schedule&nbsp;5.18(f)(i)</U> of the
Disclosure Schedule accurately lists all persons currently employed by Seller in connection with
the Business (&#147;<U>Business Employees</U>&#148;) (including any employee who is on a leave of absence or
lay off status) and accurately sets forth, with respect to each employee: (i)&nbsp;the name of such
employee and the date as of which such employee was originally hired by Seller; (ii)&nbsp;such
employee&#146;s title and employment status; and (iii)&nbsp;such employee&#146;s current annual base salary or
hourly wage rate, potential 2010 bonus, incentive, commission or similar payments, and 2009 bonus,
incentive, commission or similar payments. <U>Section&nbsp;5.18(f)(ii)</U> of the Disclosure Schedule
accurately lists each independent contractor presently engaged by Seller and accurately sets forth,
with respect to each such independent contractor: (i)&nbsp;the name of such independent contractor and
the date as of which such independent contractor was originally retained by Seller; (ii)&nbsp;a brief
description of the work performed by such independent contractor; and (iii)&nbsp;the aggregate dollar
amount of the compensation (including all payments or benefits of any type) received by such
independent contractor from Seller with respect to services performed since January&nbsp;1, 2009. All
Persons who have performed services for Seller and have been classified as independent contractors
have satisfied the requirements of applicable Law to be so classified, and Seller has accurately
reported their compensation on IRS Forms 1099 or other applicable tax forms for independent
contractors when required to do so.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;<U>Employment Matters</U>. Seller: (i)&nbsp;is in compliance in all material respects with
all applicable Laws respecting employment, employment practices, terms and conditions of employment
and wages and hours; (ii)&nbsp;has withheld and reported all amounts required by Law or by Contract to
be withheld and reported with respect to the wages, salaries and other payments to employees by
virtue of their employment by Seller; (iii)&nbsp;is not liable for any arrears of wages or any taxes or
any penalty for failure to comply with any of the foregoing; and (iv)&nbsp;is not liable for any payment
to any trust or other fund or to any Governmental Entity, with respect to unemployment compensation
benefits, social security or other benefits or obligations for employees (other than routine
payments to be made in the normal course of business and consistent with past practice). There are
no pending or, to the Knowledge of Seller, any threatened Proceedings against Seller under any
worker&#146;s compensation policy or long term disability policy with respect to any employees.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;<U>Labor</U>. No work stoppage or labor strike against Seller is pending or, to the
Knowledge of Seller, threatened by any employees. There is no pending or, to the Knowledge of
Seller, threatened labor dispute, grievance, or litigation relating to labor, safety or
discrimination matters involving any employee of Seller, including charges of unfair labor
practices or discrimination complaints. Seller has not received any claim that it has engaged in
any unfair labor practices within the meaning of the National Labor Relations Act.


<P align="left" style="font-size: 12pt; text-indent: 8%">(i)&nbsp;<U>Worker Adjustment and Retraining Notification Act</U>. As of the date of this
Agreement, Seller is not subject to any obligations or Liability under the WARN Act. Each employee
of Seller is terminable by Seller at will.


<P align="left" style="font-size: 12pt; text-indent: 8%">(j)&nbsp;<U>Section&nbsp;409A</U>. No Employee Plan or Employee Contract provides for a deferral of
compensation that could be subject to the taxes imposed by Section&nbsp;409A of the Code.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.19 <U>Environmental Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Seller has complied in all material respects and is in compliance in all material respects
with all applicable Environmental Laws relating to the Purchased Assets or the Business Leasehold
Property, including applicable Laws regarding the storage, transportation, sale or reporting of
Hazardous Materials.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Within the past three (3)&nbsp;years, Seller has not received any Environmental Claim that
relates in any way to the Purchased Assets or the Business Leasehold Property; and no Environmental
Claim is now pending or, to the Knowledge of Seller, threatened against Seller (or, to the
Knowledge of Seller, against any Person whose liability Seller has retained or assumed either
contractually or by operation of Law).


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Within the past three (3)&nbsp;years, there have been no Releases of Hazardous Materials by
Seller or, to the Knowledge of Seller, by any prior owner or tenant at the Business Leasehold
Property.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Seller has all Governmental Authorizations required for the conduct of the Business and
operation of the Business Leasehold Property under applicable Environmental Laws; Seller is in
material compliance with all such Governmental Authorizations; and <U>Schedule&nbsp;5.19</U> of the
Disclosure Schedule identifies all Governmental Authorizations currently held by Seller pursuant to
the Environmental Laws with respect to the Purchased Assets and the Business Leasehold Property.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Seller is not party to, or subject to the terms of, any Order under any applicable
Environmental Law in connection with the Purchased Assets or the Business Leasehold Property.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;To the Knowledge of Seller, there are no past or present actions, activities,
circumstances, conditions, events or incidents that could give rise to any Liability against Seller
(or against any Person whose liability Seller has retained or assumed either contractually or by
operation of Law) pursuant to Environmental Laws with respect to the Purchased Assets or the
Business Leasehold Property.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.20 <U>Compliance with Law</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Since January&nbsp;1, 2009, Seller has been in compliance with all Laws or Orders to which the
Business, any of the Purchased Assets or the Assumed Liabilities are subject, except for failures
to be in compliance which, individually or in the aggregate, would not reasonably be expected to
have a Business Material Adverse Effect. No claim has been made by any Governmental Entity and, to
the Knowledge of Seller, there are no threatened or alleged claims, of any violation, Liability or
potential Liability under any Law or Order to which the Business or the Purchased Assets or the
Assumed Liabilities are subject. Since January&nbsp;1, 2009, Seller has not conducted any internal
investigation with respect to any actual, potential or alleged material violation of any Law or
Order by any director, officer or employee of Seller in connection with the Business.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller possesses all Governmental Authorizations necessary to carry on the Business,
except for those the absence of which, singly or in the aggregate, would not reasonably be expected
to have a Business Material Adverse Effect. Each such Governmental Authorization is validly and
presently in effect, and Seller is not in default (with or without notice or lapse of time, or
both) under any such Governmental Authorization in any material respect. There are no Proceedings
pending, or to the Knowledge of Seller, threatened, that seek the revocation, cancellation,
suspension, failure to renew or adverse modification of any such Governmental Authorization. All
required filings with respect to such Governmental Authorizations have been timely made and all
required applications for renewal thereof have been timely filed.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.21 <U>Tax Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Seller has timely filed all Tax Returns that it was required to file, including all Tax
Returns determined by any Taxing Authority that Seller was required to file. All such Tax Returns
as so filed disclose all Taxes required to be paid for the periods covered thereby. All such Tax
Returns were true, correct and complete in all material respects. All Taxes due and owing,
including all Taxes determined by any Taxing Authority to be due and owing, by Seller (whether or
not shown on any Tax Return and including all withholding and payroll Taxes, and all sales, use or
other similar Taxes in connection with the Business or the Purchased Assets required to be paid by
Seller or Seller Parent prior to the date of this Agreement) have been paid. Seller is not
currently the beneficiary of any extension of time within which to file any Tax Return. Seller has
withheld and paid over all Taxes required to have been withheld and paid over and all Tax Returns
(including Forms W-2 and 1099) required with respect thereto have been properly completed and
timely filed. There are no Liens with respect to any Taxes upon any of the Purchased Assets, other
than Permitted Liens.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;No claim for assessment or collection of Taxes is presently being asserted against Seller
and Seller is not party to any pending Proceeding by any Taxing Authority nor, to the Knowledge of
Seller, is there any such threatened Proceeding. Any Tax deficiencies assessed or asserted by any
Taxing Authority with respect to the Purchased Assets or the Business have been fully settled and
paid. No claim has ever been made by any Taxing Authority in a jurisdiction where Seller does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction. Seller has not
waived any statute of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Seller has provided Buyer with a list of all federal, state, local, and foreign Tax
Returns filed with respect to Seller for taxable periods ended on or after December&nbsp;31, 2007,
indicated those Tax Returns that have been audited, and indicated those Tax Returns that currently
are the subject of audit. Seller has delivered to Buyer correct and complete copies of all federal
income Tax Returns, examination reports and statements of deficiencies assessed against, or agreed
to by, Seller since December&nbsp;31, 2007.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Seller is not a party to any agreement, contract, arrangement, or plan that has resulted
or could result, separately or in the aggregate, in the payment of any &#147;excess parachute payment&#148;
within the meaning of Section&nbsp;280G of the Code (or any corresponding provision of state, local or
foreign Tax Law).


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Seller has not &#147;participated&#148; in a &#147;reportable transaction&#148; (as such terms are defined in
Treasury Regulations &#167;1.6011-4).


<P align="left" style="font-size: 12pt; text-indent: 4%">5.22 <U>Corrupt Practices</U>. None of Seller, its officers, directors or employees, nor to
the Knowledge of Seller, its agents, representatives or any other Person otherwise acting for or on
behalf of Seller, has directly or indirectly made any improper contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other similar payment to any Person, private or public,
regardless of what form, whether in money, property, or services, (a)&nbsp;to obtain favorable treatment
for business or Contracts secured, (b)&nbsp;to pay for favorable treatment for business or Contracts
secured, (c)&nbsp;to obtain special concessions or for special concessions already obtained, or (d)&nbsp;in
violation of any legal requirement. Without limiting the foregoing, Seller has not maintained any
programs pursuant to which employees of Seller&#146;s customers have received cash or other personal
benefits in return for ordering merchandise from Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.23 <U>Affiliate Transactions</U>. <U>Schedule&nbsp;5.23</U> of the Disclosure Schedule
contains a summary of all transactions and Contracts between Seller and any of its Affiliates since
December&nbsp;31, 2009, other than transactions contemplated by this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.24 <U>Insurance</U>. <U>Schedule&nbsp;5.24</U> of the Disclosure Schedule sets forth a true,
correct and complete list of all insurance policies maintained by Seller or Seller Parent that
provide coverage for the Purchased Assets or the Business Leasehold Property. Seller has delivered
or made available to Buyer true, correct and complete copies of all such insurance policies, all of
which are valid and enforceable against Seller or Seller Parent, as applicable, and, to the
Knowledge of Seller, the other parties thereto in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar Laws of general applicability relating to or affecting creditors&#146;
rights, or by general equity principles, including principles of commercial reasonableness, good
faith and fair dealing, and are in full force and effect. All premiums payable under all such
policies have been paid in accordance with the terms thereof and Seller or Seller Parent, as
applicable, is otherwise in compliance in all material respects with the terms of such policies.
Seller has not received any written or, to the Knowledge of Seller, oral notice regarding any
actual or possible (a)&nbsp;cancellation or invalidation of any such insurance policy or (b)&nbsp;refusal of
any coverage or rejection of any material claim under any such insurance policy. There is no
outstanding claim under any insurance policy of Seller that covers the Purchased Assets or the
Business Leasehold Property.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.25 <U>Product Liabilities; Product Warranties</U>. Seller has made no express warranties
or guarantees to any third party with respect to the products marketed and/or sold or services
rendered by it, other than warranties or guarantees set forth in the Assumed Contracts. Since
January&nbsp;1, 2009: (a)&nbsp;the products sold by the Business and the services provided by the Business
have complied with applicable Laws, contractual commitments and all express warranties in all
material respects; and (b)&nbsp;there have not been any material defects or material deficiencies in any
such products or services, at the time sold or provided by the Business to its customers, that
would result in material breach of warranty claims against the Business. There are no pending, nor
to the Knowledge of Seller, threatened, claims under or pursuant to any warranty, whether expressed
or implied, on products or services sold on or prior to the Closing Date by the Business that are
not disclosed in the Seller Financial Statements and that are not reserved against in accordance
with GAAP.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.26 <U>Brokers&#146; or Finders&#146; Fees</U>. None of Seller, Seller Parent nor any of their
respective Affiliates has engaged or has any liability or obligation to pay any fees or commissions
to any broker, finder or agent with respect to the Transactions for which Buyer or Buyer Parent
would become liable.


<P align="left" style="font-size: 12pt; text-indent: 4%">5.27 <U>LIMITATIONS ON REPRESENTATIONS AND WARRANTIES</U>. EXCEPT AS EXPRESSLY SET FORTH IN
THIS <B>ARTICLE V</B>, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR WITH RESPECT TO ANY OF THE PURCHASED ASSETS,
THE ASSUMED LIABILITIES, THE BUSINESS OR OTHERWISE, OR WITH RESPECT TO ANY INFORMATION PROVIDED TO
BUYER OR BUYER PARENT, INCLUDING WITH RESPECT TO ANY REPRESENTATIONS OR WARRANTIES OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR USE, TITLE, NON-INFRINGEMENT, OR
ENVIRONMENTAL MATTERS. ALL OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY DISCLAIMED.


<P align="center" style="font-size: 12pt"><B>ARTICLE VI.</B>



<P align="center" style="font-size: 12pt"><B>REPRESENTATIONS OF SELLER PARENT</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">Seller Parent hereby represents and warrants to Buyer that:


<P align="left" style="font-size: 12pt; text-indent: 4%">6.1 <U>Authority</U>. Seller Parent has all corporate power and authority required to enter
into this Agreement and each of the other Transaction Documents to which it is or is to become a
party and to consummate the Transactions. This Agreement has been, and each of the other
Transaction Documents to which Seller Parent is or is to become a party, when executed, will be,
duly executed and delivered by Seller Parent and constitute the legal, valid, and binding
obligations of Seller Parent (assuming that this Agreement and such Transaction Documents
constitute valid and legally binding obligations of the other parties thereto (other than Seller)),
enforceable in accordance with its terms and conditions, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws
of general applicability relating to or affecting creditors&#146; rights and subject to the rules of law
governing specific performance, injunctive relief, or other equitable remedies.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.2 <U>No Conflict; Governmental Authorizations</U>. The execution and delivery of this
Agreement does not, and the execution and delivery of the other Transaction Documents to which
Seller Parent is or is to become a party will not, and the consummation of the Transactions will
not, (a)&nbsp;result in any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or impair any of Seller Parent&#146;s rights or alter the
rights or obligations of any third party under, or give to others any right of termination,
amendment, acceleration or cancellation of, any material Contract to which Seller Parent is a party
or by which Seller Parent is bound, or (b)&nbsp;conflict with or violate any of the terms, conditions or
provisions of any material Law or any Governmental Authorization or Order applicable to Seller
Parent or by which Seller Parent is bound. Seller Parent is not required to give any notice to any
Governmental Entity, and no material consent, approval or authorization of, or registration or
filing with, any Governmental Entity is required in connection with the execution or delivery by
Seller Parent of this Agreement or any of the other Transaction Documents to which Seller Parent is
or is to become a party or the consummation of the Transactions, other than such of the foregoing
that, if not given or obtained, would not have a material adverse effect upon the ability of Seller
Parent to consummate the Transactions or to discharge its obligations under any of the Transaction
Documents to which it is or is to become a party.


<P align="left" style="font-size: 12pt; text-indent: 4%">6.3 <U>LIMITATIONS ON REPRESENTATIONS AND WARRANTIES</U>. EXCEPT AS EXPRESSLY SET FORTH IN
THIS <B>ARTICLE VI</B>, SELLER PARENT MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS
OR IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR WITH RESPECT TO ANY OF THE PURCHASED ASSETS,
THE ASSUMED LIABILITIES, THE BUSINESS OR OTHERWISE, OR WITH RESPECT TO ANY INFORMATION PROVIDED TO
BUYER OR BUYER PARENT, INCLUDING WITH RESPECT TO ANY REPRESENTATIONS OR WARRANTIES OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR USE, TITLE, NON-INFRINGEMENT, OR
ENVIRONMENTAL MATTERS. ALL OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY DISCLAIMED.


<P align="center" style="font-size: 12pt"><B>ARTICLE VII.</B>



<P align="center" style="font-size: 12pt"><B>REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">Each of Buyer and Buyer Parent represents and warrants to Seller that:


<P align="left" style="font-size: 12pt; text-indent: 4%">7.1 <U>Organization, Authorization</U>. Buyer is a corporation duly organized, validly
existing and in good standing under the Laws of the State of New York. Buyer Parent is a
corporation duly organized, validly existing and in good standing under the Laws of the State of
New York. Each of Buyer and Buyer Parent has all corporate power and authority required to enter
into the Transaction Documents and to consummate the Transactions. The execution and delivery by
Buyer and Buyer Parent of this Agreement and each of the other Transaction Documents to which Buyer
and/or Buyer Parent is or is to become a party, the performance by Buyer and/or Buyer Parent, as
applicable, of their respective obligations hereunder and thereunder, and the Transactions have
been duly and validly authorized by all necessary corporate action on the part of each of Buyer and
Buyer Parent. This Agreement has been, and each of the other Transaction Documents to which Buyer
and/or Buyer Parent is or is to become a party, when executed, will be, duly executed and delivered
by Buyer and/or Buyer Parent, as applicable, and constitute valid and legally binding obligations
of Buyer and/or Buyer Parent, as applicable (assuming that this Agreement and such Transaction
Documents constitute valid and legally binding obligations of the other parties thereto),
enforceable in accordance with its terms and conditions, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws
of general applicability relating to or affecting creditors&#146; rights and subject to the rules of law
governing specific performance, injunctive relief, or other equitable remedies.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.2 <U>No Conflict; Governmental Authorizations</U>. The execution and delivery of this
Agreement by Buyer and Buyer Parent does not, and the execution and delivery of the other
Transaction Documents to which Buyer and/or Buyer Parent is or is to become a party will not, and
the consummation of the Transactions will not, (a)&nbsp;violate or conflict with the provisions of the
charter or bylaws of Buyer or Buyer Parent, each as amended to date, (b)&nbsp;cause the acceleration,
cancellation or modification of any obligation under, create in any party the right to terminate,
constitute a default or breach of, or violate or conflict with the terms, conditions or provisions
of, or result in the loss of a benefit under, any material Contract to which Buyer or Buyer Parent
is a party or by which it or its assets are bound, or (c)&nbsp;conflict with or violate any of the
terms, conditions or provisions of any material Law, or any Governmental Authorization or Order
applicable to Buyer or Buyer Parent or by which Buyer or Buyer Parent is bound. Neither Buyer nor
Buyer Parent is required to obtain any Governmental Authorization or give any notice to any
Governmental Entity, and no material consent, approval or authorization of, or registration or
filing with, any Governmental Entity is required in connection with the execution or delivery by
Buyer and/or Buyer Parent of this Agreement or any of the other Transaction Documents to which
Buyer and/or Buyer Parent is or is to become a party or in connection with the consummation of the
Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.3 <U>No Litigation</U>. There are no Proceedings pending or, to the knowledge of Buyer or
Buyer Parent, threatened, that question the validity of this Agreement or any of the other
Transaction Documents, or any action taken or to be taken by Buyer or Buyer Parent in connection
with this Agreement or any of the other Transaction Documents, other than such of the foregoing
that would not reasonably be expected to have a Buyer Material Adverse Effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.4 <U>Investigation</U>. Buyer and Buyer Parent have been given the opportunity to ask
questions of, and receive answers from Seller, and have made all inquiries and investigations that
they deem necessary or appropriate, concerning the Transactions. Buyer and Buyer Parent have made
their own inquiry and investigation into and, based thereon, have formed an independent judgment
concerning the Business, the Purchased Assets and the Assumed Liabilities.


<P align="left" style="font-size: 12pt; text-indent: 4%">7.5 <U>Brokers&#146; or Finders&#146; Fees</U>. None of Buyer, Buyer Parent nor any of their
respective Affiliates has engaged or has any liability or obligation to pay any fees or commissions
to any broker, finder or agent with respect to the Transactions for which Seller or Seller Parent
would become liable.


<P align="center" style="font-size: 12pt"><B>ARTICLE VIII.</B>



<P align="center" style="font-size: 12pt"><B>COVENANTS</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">8.1 <U>Access to Information</U>. Except as may be prohibited by Law, by the terms of any
contract or under any confidentiality agreement (and subject to the terms of any contract or
confidentiality agreement governing such access), or as may be required to preserve the
confidentiality of privileged or otherwise protected information, from the date hereof and
continuing until the earlier to occur of the Closing Date and the termination of this Agreement,
Buyer shall be entitled, through its employees and representatives, to enter upon and make such
reasonable investigation, at its own expense, of the assets, properties, business and operations of
Seller and such examination of the Books and Records, financial condition and operations of the
Business as Buyer may reasonably request, including by way of communication with Seller&#146;s
customers, vendors, suppliers and creditors; <I>provided</I>, that Buyer shall not contact any customer,
vendor, supplier or creditor of Seller with respect to any matter relating to the Business or the
transactions contemplated hereby without Seller&#146;s prior consent (such consent not to be
unreasonably withheld or delayed). Any such investigation and examination shall be conducted at
reasonable times, during normal business hours, upon reasonable prior notice to Seller and under
reasonable circumstances.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.2 <U>Conduct of Business</U>. Except as set forth on <U>Schedule&nbsp;8.2</U> or as otherwise
agreed in writing by the Parties (which may include by e-mail), Seller agrees that, during the
period from the date hereof and continuing until the earlier of the termination of this Agreement
or the Closing, Seller will (a)&nbsp;carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance with all applicable Laws,
(b)&nbsp;pay its debts and obligations when due, subject to good faith disputes over such debts and
obligations, and (c)&nbsp;use its reasonable best efforts consistent with past practice to (i)&nbsp;preserve
intact its present business organization and employee base and (ii)&nbsp;preserve its relationships with
customers, suppliers, licensors, licensees and others with which it has business dealings. In
addition, except as set forth on <U>Schedule&nbsp;8.2</U> or as otherwise agreed in writing by the
Parties (which may include by e-mail), during the period from the date hereof and continuing until
the earlier of the termination of this Agreement or the Closing Date, Seller will not take any
action, or fail to take any action within its reasonable control, as a result of which any of the
changes, events or actions listed in Section&nbsp;5.8 would, or could reasonably be expected to, occur.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.3 <U>Exclusivity</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;From the date hereof and continuing until the earlier of the termination of this Agreement
or the Closing, neither Seller nor Seller Parent shall (nor shall Seller or Seller Parent permit
any of their respective directors, officers or other employees, agents, representatives or
Affiliates to), directly or indirectly, take any of the following actions with any party other than
Buyer and its designees: (i)&nbsp;solicit, encourage, seek, entertain, support, assist, initiate or
participate in any inquiry, negotiations or discussions, or enter into any agreement, with respect
to any offer or proposal to acquire any Purchased Assets (for the avoidance of doubt, excluding the
sale of inventory in the ordinary course of business), any capital stock of Seller, or any part of
the Business, whether by merger, consolidation, purchase of assets, purchase of shares, tender
offer, license or otherwise, or effect any such transaction, (ii)&nbsp;disclose or furnish any
information not customarily disclosed to any Person concerning the Business, the Purchased Assets
or the Assumed Liabilities, or afford to any Person access to any properties or technologies of the
Business or the Books and Records, not customarily afforded such access, (iii)&nbsp;knowingly assist or
cooperate with any Person to make any proposal to purchase all or any part of the Business or
Purchased Assets (for the avoidance of doubt, excluding the sale of inventory in the ordinary
course of business), or (iv)&nbsp;enter into any Contract with any Person providing for the acquisition
of the Business or the Purchased Assets, whether by merger, purchase of assets, license, tender
offer or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller and Seller Parent shall immediately cease and cause to be terminated any such
negotiations, discussion or agreements (other than with Buyer) that are the subject matter of
clause (i), (ii), (iii)&nbsp;or (iv)&nbsp;of Section&nbsp;8.3(a).


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;In the event that Seller or any of Seller&#146;s Affiliates shall receive any offer, proposal,
or request, directly or indirectly, of the type referenced in clause (i), (iii), or (iv)&nbsp;of Section
8.3(a), or any request for disclosure or access as referenced in clause (ii)&nbsp;of Section&nbsp;8.3(a),
Seller shall immediately suspend any discussions with such Person with regard to such offers,
proposals, or requests.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;The Parties hereto agree that irreparable damage would occur in the event that the
provisions of this Section&nbsp;8.3 were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed by the Parties hereto that Buyer shall be entitled to
an immediate injunction or injunctions, without the necessity of proving the inadequacy of money
damages as a remedy and without the necessity of posting any bond or other security, to prevent
breaches of the provisions of this Section&nbsp;8.3 and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this being in addition
to any other remedy to which Buyer may be entitled at law or in equity. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth above in this Section
8.3 by any officer, director, authorized agent, representative or Affiliate of Seller shall be
deemed to be a breach of this Section&nbsp;8.3 by Seller.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.4 <U>Reasonable Best Efforts; Notices; Governmental Authorizations</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Subject to the terms and conditions herein provided, the Parties agree to use their
respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things necessary, proper or advisable under applicable Laws to consummate and make
effective the Transactions as promptly as practicable; <I>provided that </I>Seller shall not be required
to pay or otherwise provide any consideration to any Person from whom any consents, approvals or
authorizations are requested in connection with the Transactions (other than lessor consent fees
and lessor legal fees and other costs as required under the Lease Agreements and any payments
required to obtain the Lien Releases and any consents or releases (the &#147;<U>Bank Consents</U>&#148;)
required under the Credit Agreement with The PrivateBank And Trust Company, as amended, or under
any ancillary agreements thereto) or make any out-of-pocket expenditures (excluding any
out-of-pocket expenditures in connection with obtaining the Lien Releases and Bank Consents) in an
aggregate amount in excess of $25,000 in connection therewith; <I>provided further that </I>Seller and
Buyer shall bear any such out-of-pocket expenditures (excluding any out-of-pocket expenditures in
connection with obtaining the Lien Releases and Bank Consents) in excess of $25,000 on a 50-50
basis.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;From the date hereof through the Closing Date, each of the Parties shall promptly notify
the other Parties in writing of (i)&nbsp;the occurrence or failure to occur of any event, which
occurrence or failure (A)&nbsp;causes or is reasonably likely to cause any of its representations or
warranties to be untrue or inaccurate in any material respect, or (B)&nbsp;individually or in the
aggregate, results in or could have, a Business Material Adverse Effect or a Buyer Material Adverse
Effect, as applicable, and (ii)&nbsp;any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it hereunder. Except as
otherwise provided in Section&nbsp;8.4(c), no notice delivered pursuant this subsection shall be deemed
to (1)&nbsp;modify any representation, warranty or covenant set forth herein, or any Schedule, (2)&nbsp;cure
or prevent any such inaccuracy or failure, or (3)&nbsp;limit or otherwise affect the remedies available
hereunder to the other Parties. Any notice pursuant to this Section&nbsp;8.4(b) must state that it is
being given pursuant to this Section&nbsp;8.4(b) in order to be effective.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;If Buyer is notified by Seller or Seller Parent (or Seller is notified by Buyer or Buyer
Parent) in writing in accordance with Section&nbsp;8.4(b) of a material failure to comply with or
satisfy a covenant, condition or agreement to be complied with or satisfied hereunder (a &#147;material
covenant breach&#148;), the Party receiving such notice may, at its option and in its sole discretion,
(x)&nbsp;invoke as unsatisfied the condition set forth in Section&nbsp;9.1 or 9.2, as the case may be, and
terminate this Agreement pursuant to Section&nbsp;11.1(d) or 11.1(e) (and subject to the cure period
provided in Section&nbsp;11.1(c)), as the case may be, in which event the Parties hereto shall have no
rights hereunder other than those that specifically survive pursuant to Section&nbsp;11.2 (including all
rights with respect to any breach of the terms and provisions of this Agreement), or (y)&nbsp;waive the
failure to satisfy such condition and proceed with the transaction contemplated hereby, in which
event the Party receiving such notice shall retain all rights it has under this Agreement with
respect to such material covenant breach, including without limitation its right to indemnification
under Article&nbsp;X of this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;From the date hereof through the earliest to occur of the termination of this Agreement
and the Closing Date, each Party hereto shall promptly inform the other non-Affiliated Parties
hereto of any material communication from any Governmental Entity regarding any of the
Transactions. Each Party hereto will advise the other non-Affiliated Parties promptly in respect
of any understandings, undertakings or agreements (oral or written), which such Party proposes to
make or enter into with any Governmental Entity in connection with the Transactions, and shall in
good faith take into account all reasonable comments by the other non-Affiliated Parties with
respect thereto.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;From the date hereof through the earliest to occur of the termination of this Agreement
and the Closing, Seller shall use reasonable best efforts to cause the issuance or transfer of the
Business Governmental Authorizations to Buyer upon the Closing Date in form and substance
substantially the same as the Business Governmental Authorizations that were held by Seller,
<I>provided that </I>Buyer may in its discretion elect for any of the Business Governmental Authorizations
not to be issued or transferred to Buyer but to be retained or surrendered by Seller; provided
further that Seller shall not be required to pay or otherwise provide any consideration to any
Person pursuant to this Section&nbsp;8.4(e) or make any out-of-pocket expenditures in an aggregate
amount in excess of $25,000 in connection therewith; <I>provided further that </I>Seller and Buyer shall
bear any such out-of-pocket expenditures in excess of $25,000 on a 50-50 basis.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.5 <U>Employee Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Buyer shall have the right to access and review employment personnel files for Seller&#146;s
employees in order to determine if any of Seller&#146;s employees would not be eligible to begin
employment with Buyer after the Closing Date.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;On the first Business Day following the Closing Date, Buyer shall make good faith offers
of employment to all employees of Seller set forth on <U>Schedule&nbsp;8.5(b)</U> of the Disclosure
Schedule (employees that shall have accepted and not subsequently revoked acceptance of such
offers, the &#147;<U>New Employees</U>&#148;). Such offers of employment by Buyer shall be subject to a
post-hire background check consistent with Buyer&#146;s employment practices (substantially as disclosed
to Seller prior to the date hereof) and shall provide for substantially equivalent base pay and a
work location that is no more than 35 miles from the employee&#146;s assigned work location with Seller,
as in effect immediately prior to the Closing, but shall otherwise be on such terms and conditions
as determined by Buyer in its sole discretion. Employment with Buyer of New Employees shall be
effective as of the first Business Day following the close of business on the Closing Date, except
that the employment of New Employees receiving short-term disability benefits or on approved leave
of absence on the Closing Date, if any, will become effective as of the date they present
themselves for work with Buyer. For any New Employee who is terminated or not hired as a result of
failing a background check, Buyer shall pay severance and provide benefits continuation in
accordance with its severance and benefits continuation policies (substantially as disclosed to
Seller prior to the date hereof) (which severance shall take into account the employee&#146;s years of
service at Seller). Seller shall be solely responsible for any notice under the WARN Act and the
related California provisions affecting relocations, terminations, and mass layoffs set forth in
California Labor Code section 1400 <I>et seq.</I>


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;With respect to any accrued but unused vacation time as of the Closing to which any of
Seller&#146;s employees is entitled pursuant to the vacation policies of Seller in effect immediately
prior to the Closing Date (the &#147;<U>Vacation Policy</U>&#148;), accrued paid time off or sick leave as
of the Closing and accrued bonuses reflected as GL# 2064-00-001,&#147;Accr Benefits-Bonus&#148; included
under &#147;Accrued Expenses & P/R Withhldng&#148; on the Recent Balance Sheet, Seller shall pay out such
accrued but unused vacation time, such accrued but unused paid time off or sick leave and such
accrued bonuses in each employee&#146;s final paycheck from Seller. Seller shall maintain any and all
liability and will indemnify and hold Buyer harmless from any future claims regarding failure to
pay wages associated with Seller&#146;s Vacation Policy and for such accrued paid time off or sick leave
and accrued bonuses.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Seller and Seller Parent shall have sole responsibility for &#147;continuation coverage&#148; under
COBRA and any other similar applicable Law for any current or former employee of Seller and its
ERISA Affiliates and all &#147;qualified beneficiaries&#148; of any such employee for whom a &#147;qualifying
event&#148; occurs on or prior to the Closing (including all qualifying events that occur in connection
with the consummation of the Transactions). The terms &#147;continuation coverage,&#148; &#147;qualified
beneficiaries&#148; and &#147;qualifying event&#148; shall have the meanings ascribed to them under COBRA or to
similar terms under other similar applicable Law. Buyer shall have sole responsibility for
&#147;continuation coverage&#148; for any New Employee and all &#147;qualified beneficiaries&#148; of any such New
Employee for whom a &#147;qualifying event&#148; occurs after the Closing.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Except as expressly set forth in this Section&nbsp;8.5, from and after the Closing, Seller and
its Affiliates shall retain and be solely responsible for all Benefits Liabilities. As of the
effective time of their employment with Buyer, Seller shall terminate any New Employee and any
existing employment agreement between Seller and each New Employee shall cease. In addition,
Seller shall terminate, waive and release its rights (whether arising under an agreement or by
operation of law) regarding non-competition, conflicting obligations and similar restrictions that
may apply to any New Employee, which termination, waiver and release shall be effective as of the
Closing and shall apply to all events and all acts and failures to act by any New Employee at any
time after the Closing.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Following the Closing Date, New Employees shall be eligible to participate in the employee
benefit plans maintained by Buyer from time to time for the benefit of similarly situated employees
of Buyer in the same geographic region, consistent with the terms of such employee benefit plans
and Buyer&#146;s applicable human resources policies, as such plans and policies may be adopted, amended
or terminated by Buyer, in its sole discretion. All New Employees shall be required to sign new
hire paperwork with Buyer, including Buyer&#146;s at-will statement, and will be considered new hires.


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;Buyer will cause any benefit plans which New Employees are eligible to participate in
following the Closing Date to take into account for purposes of eligibility and vesting thereunder
(but not for purposes of benefit accruals), and for the purpose of determining the level of
vacation provided by Buyer (to the extent any such benefits are calculated by reference to years of
service), prior service by such New Employees with Seller and its Affiliates, to the same extent
such service was credited under a comparable benefit plan of Seller or its Affiliates, <I>provided
that </I>(i)&nbsp;such prior service credit shall be subject to applicable Law and shall be given only to
the extent it does not result in a duplication of benefits, and (ii)&nbsp;prior to the Closing, Seller
has provided Buyer with each New Employee&#146;s prior service credit with Seller and such other
necessary information requested by Buyer with respect to service credited to New Employees under
comparable benefit plans of Seller and its Affiliates. For purposes of each benefit plan of Buyer
providing medical, dental, pharmaceutical and/or vision benefits to any New Employee, Buyer will
use commercially reasonable efforts to cause any eligible expenses incurred by such New Employee
and his or her covered dependents during the portion of the plan year of a corresponding plan of
Seller ending on the date such New Employee&#146;s participation in the Buyer&#146;s plan begins to be taken
into account under such Buyer benefit plan for purposes of satisfying all deductible, co-payment,
co-insurance and maximum out-of-pocket requirements applicable to such New Employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid in accordance with
Buyer&#146;s plan, <I>provided that </I>immediately following the Closing Seller has provided Buyer with all
necessary information with respect to such eligible expenses incurred by each New Employee under
Seller&#146;s plans.


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Nothing in this Section&nbsp;8.5 shall be construed to (i)&nbsp;entitle any New Employee to continue
his or her employment with Buyer or its Affiliates, (ii)&nbsp;require Buyer to implement, or limit the
rights of Buyer to amend or discontinue, any employee benefit plan, or require Buyer to maintain
any particular level of compensation for the New Employees, or (iii)&nbsp;confer upon any New Employee
any rights or remedies under this Agreement (including under this Section&nbsp;8.5). All New Employees
will be considered employees &#147;at-will,&#148; terminable with or without cause and with or without
notice.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.6 <U>Tax Matters</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Seller (or an Affiliate of Seller) shall prepare and timely file all Tax Returns in
respect of the operations of the Business (including ownership of the Purchased Assets) for all Tax
periods ending on or prior to the Closing Date. Buyer shall prepare and timely file all other Tax
Returns for Taxes that are required to be filed in respect of the Purchased Assets for all Tax
periods ending after the Closing Date.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller and Buyer will each provide the other Party with such assistance as may reasonably
be requested in connection with the preparation of any Tax Return relating to the Purchased Assets
or Assumed Liabilities, or the audit or other examination by any Taxing Authority or judicial or
administrative proceeding relating to liability for Taxes arising out of the ownership of the
Purchased Assets or any obligation under the Assumed Liabilities. Such assistance shall include
the provision of records and information that are reasonably relevant to any such Tax Return,
audit, examination or proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any such material.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;Until the Closing, Seller shall, and shall cause each of its Affiliates to, not make any
Tax election or change any method of accounting, other than in the ordinary course of business
consistent with past practice, or settle any Tax contest, in each case, with respect to the
Purchased Assets or the Business.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Subject to Section&nbsp;8.6(e), Seller shall exercise exclusive control over the handling,
disposition and settlement of any Proceeding by a Governmental Entity (or that portion of any
Proceeding by a Governmental Entity) that relates to Tax periods ending before the Closing Date if
such Proceeding could result in a determination with respect to Taxes due or payable by Seller, or
for which Seller may be required to indemnify Buyer; <I>provided that</I>, if any such Proceeding would
result in an adjustment to Tax that would have an adverse effect on Buyer, Seller will permit Buyer
to participate in the Proceeding. Buyer shall notify Seller in writing promptly upon learning of
any such Proceeding; <I>provided that </I>the failure to provide notice will not affect any rights of
Buyer under this Agreement except to the extent the failure prejudices Seller. Buyer and its
Affiliates shall cooperate with Seller, as Seller may reasonably request, in any such Proceeding.
Except as provided in the foregoing in this Section&nbsp;8.6(d), and subject to Section&nbsp;8.6(e), after
the Closing, Buyer shall control any Proceeding for any Taxable period (including any Taxable
period ending before the Closing Date) with respect to any Tax Return described in Section&nbsp;8.6(a),
but Seller may participate at its own expense in any such Proceeding for any Taxable period ending
before the Closing Date.


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Neither Party (nor any Affiliate of such Party) shall, without the other Party&#146;s prior
written consent, which consent shall not be unreasonably withheld, conditioned or delayed, (i)
agree to settle any Tax liability or compromise any claim with respect to Taxes, which settlement
or compromise may affect the liability for Taxes hereunder (or right to Tax benefits) of the other
Party, or (ii)&nbsp;extend the statute of limitations for any Tax for which the other Party may be
required to pay or indemnify.


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;<U>Apportioned Obligations</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;Apportioned Obligations will be apportioned between Seller and Buyer by multiplying
(A)&nbsp;the amount of such Apportioned Obligations for the entire Straddle Period, by (B)&nbsp;a
fraction, the numerator of which is the number of calendar days in the portion of the
Straddle Period ending on and including the Closing Date in the case of Seller (or, in the
case of Buyer, the number of calendar days in the portion of the Straddle Period after the
Closing Date), and the denominator of which is the number of calendar days in the entire
Straddle Period.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;Seller will pay Apportioned Obligations that are due and payable on or prior to
the Closing Date, and invoice the Buyer for any part of that amount apportioned to Buyer.
Buyer will pay Apportioned Obligations that are due and payable after the Closing Date and
invoice Seller for any part of that amount apportioned to Seller. Notwithstanding any other
provision contained in this Agreement, (A)&nbsp;no payment obligations shall arise under this
Section&nbsp;8.6(f)(ii) for any apportioned amount reflected in the calculation of the Closing
Date Net Working Capital under Section&nbsp;4.3, and (B)&nbsp;any obligation arising out of this
Section&nbsp;8.6(f)(ii) will not be considered a Loss, subject to any limits of minimum or
maximum amounts, measurement of aggregate amount of Losses or any limit of time.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iii)&nbsp;Seller and Buyer shall share the costs of any inquiry, examination or proceeding
by a Governmental Entity in proportion to the fraction determined in Section&nbsp;8.6(f)(i).



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iv)&nbsp;If Buyer or an Affiliate of Buyer receives a refund with respect to Taxes for
which Seller or any of its Affiliates is wholly or partially responsible under this Section
8.6(f), Buyer or such Affiliate shall pay to Seller, within five (5)&nbsp;Business Days following
the receipt of such refund, the amount of such refund attributable to Seller. If Seller or
an Affiliate of Seller receives a refund with respect to Taxes for which Buyer is wholly or
partially responsible under this Section&nbsp;8.6(f), Seller or such Affiliate shall pay to
Buyer, within five (5)&nbsp;Business Days following the receipt of such refund, the amount of
such refund attributable to Buyer.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.7 <U>Regulatory and Other Approvals; Novations and Consents</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Authorizations and Consents</U>. As promptly as practicable after the date hereof,
Buyer and Seller shall make all necessary or advisable filings with Governmental Entities, and use
reasonable best efforts to obtain all permits, approvals, authorizations and consents of all third
parties, required to consummate the Transactions; provided that no Party shall be required to pay
or otherwise provide any consideration to any Person from whom any consents, approvals or
authorizations are requested in connection with the Transactions (other than lessor consent fees
and lessor legal fees and other costs as required under the Lease Agreements and any payments
required to obtain the Lien Releases or Bank Consents, all of which shall be paid by Seller or
Seller Parent, as applicable) or make any out-of-pocket expenditures (excluding any out-of-pocket
expenditures in connection with obtaining the Lien Releases and the Bank Consents) in an aggregate
amount in excess of $25,000 in connection therewith; <I>provided further that </I>Seller and Buyer shall
bear any such out-of-pocket expenditures (excluding any out-of-pocket expenditures in connection
with obtaining the Lien Releases and the Bank Consents) in excess of $25,000 on a 50-50 basis.
Buyer and Seller shall cooperate in good faith and use reasonable best efforts to furnish promptly
to each other all information that is not otherwise available to the other Party and that such
Party may reasonably request in connection with any such filing.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Novation and Assignment of Contracts</U>.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;Seller shall seek the transfer (by novation or assignment) of all Assumed Contracts
from Seller to Buyer, effective as of or as soon as practicable after the Closing Date. For
each Assumed Contract where consent of the other Party is required for assignment, Seller
shall use reasonable best efforts to obtain the consent and approval of the other party or
parties to that Assumed Contract to novate Seller&#146;s obligations and rights to Buyer, so that
Buyer is substituted for Seller under the Assumed Contract and Seller is relieved of all
further Liabilities and rights. Failing approval for novation, Seller shall use reasonable
best efforts to obtain all required consents and approvals for assignment of the Assumed
Contract from Seller to Buyer. Nothing in this Agreement shall be deemed to (x)&nbsp;require
Seller to seek a novation or consent for assignment of a Contract where such assignment does
not require consent, or (y)&nbsp;constitute an assignment or novation of any Assumed Contract if
the attempted assignment or novation thereof without consent of the other party thereto
would constitute a breach thereof or would be ineffective with respect to any party to such
Assumed Contract. Notwithstanding the foregoing, no Party shall be required to pay or
otherwise provide any consideration to any Person pursuant to this Section&nbsp;8.7(b) (other
than lessor consent fees and lessor legal fees and other costs as required under the Lease
Agreements) or make any out-of-pocket expenditures in an aggregate amount in excess of
$25,000 in connection therewith; <I>provided further that </I>Seller and Buyer shall bear any such
out-of-pocket expenditures in excess of $25,000 on a 50-50 basis.



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;In the event any Assumed Contract cannot be transferred in accordance with Section
8.7(b)(i), then as of the Closing, this Agreement, to the extent permitted by Law and the
terms of the Assumed Contract, shall constitute full and equitable assignment by Seller to
Buyer, of all of Seller&#146;s right, title and interest in and to, and assumption by Buyer of
all of Seller&#146;s Liabilities (other than Retained Liabilities) under, such Assumed Contract,
and Buyer shall be deemed Seller&#146;s agent for purpose of completing, fulfilling and
discharging all of Seller&#146;s liabilities thereunder. The Parties shall take all necessary
steps and actions to provide Buyer with the benefits of such Assumed Contract, and to
relieve Seller of the performance and other obligations thereunder, including entry into
subcontracts for the performance thereof.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Alternative to Assignment</U>. In the event Seller shall be unable to make the
transfer of one or more Assumed Contracts as described in Section&nbsp;8.7(b), or if such attempted
assignment would give rise to any right of termination on the part of the other party to such
Assumed Contract, or would otherwise materially and adversely affect the rights of Buyer under such
Assumed Contract, or would not assign all of Seller&#146;s rights thereunder at the Closing and provided
Buyer waives Section&nbsp;9.1(d) (if applicable) with respect thereto, from and after the Closing,
Seller and Buyer shall continue to cooperate and use reasonable best efforts to obtain all consents
and approvals required to provide Buyer with all such rights. To the extent that any such consents
and waivers are not obtained, or until the impediments to such assignment are resolved, Seller
shall use reasonable best efforts, at the sole expense and liability of Buyer, to (i)&nbsp;provide to
Buyer, at the request of Buyer, the benefits of any such Assumed Contract to the extent related to
the Business, (ii)&nbsp;cooperate in any lawful arrangement designed to provide such benefits to Buyer
and (iii)&nbsp;enforce, at the request of and for the account of Buyer, any rights of Seller arising
from any such Assumed Contract against any third Person (including any Governmental Entity)
including the right to elect to terminate in accordance with the terms thereof upon the advice of
Buyer. To the extent that Buyer is provided the benefits of any Assumed Contract referred to
herein (whether from Seller or otherwise), Buyer shall perform, at its sole expense and liability,
on behalf of Seller and for the benefit of any third Person (including any Governmental Entity) the
obligations of Seller thereunder or in connection therewith. To the extent that Buyer is provided
the benefits of any Assumed Contract referred to herein (whether from Seller or otherwise) and
Buyer performs on behalf of Seller and for Seller thereunder or in connection therewith, Seller
acknowledges and agrees that it will not charge Buyer for any general administrative costs or any
additional profit margin of Seller thereunder or in connection therewith.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;<U>Condition to Closing</U>. Notwithstanding the provisions of this Section&nbsp;8.7 or any
other provision of this Agreement, Buyer&#146;s obligation to consummate the Transactions shall be
conditioned on the satisfaction of Section&nbsp;9.1(d).


<P align="left" style="font-size: 12pt; text-indent: 4%">8.8 <U>Records Retention</U>. Each Party agrees that for a period of not less than seven
years following the Closing Date, it shall not destroy or otherwise dispose of any of the books and
records relating to the Purchased Assets or the Assumed Liabilities in its possession with respect
to periods prior to the Closing. Each Party shall have the right to destroy all or part of such
books and records after the seventh anniversary of the Closing Date or, at an earlier time by
giving each other Party hereto thirty (30)&nbsp;days&#146; prior written notice of such intended disposition
and by offering to deliver to the other Party, at the other party&#146;s expense, custody of such books
and records as such first Party may intend to destroy. Nothing herein shall prohibit a Party from
storing such books and records with an Affiliate or representative of such Party.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.9 <U>Publicity</U>. The Parties agree that, from the date hereof through the Closing Date,
no public release or announcement concerning the Transactions shall be issued without the prior
consent of each Party (which consent shall not be unreasonably withheld or delayed), except as such
release or announcement may be required by any Law or by the applicable rules of any stock exchange
or self regulatory organization on which a Party or any of its Affiliates lists securities.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.10 <U>Confidentiality</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;Seller and Seller Parent hereby acknowledge and agree that, through their ownership and/or
management of the Purchased Assets and the Business, they have occupied positions of trust and
confidence with respect to the Business and have had access to and become familiar and will
continue to have access until the Closing with confidential and proprietary information relating to
the Purchased Assets and the Business (collectively the &#147;<U>Confidential Information</U>&#148;),
including: (i)&nbsp;customer and supplier lists, target customer information, current and anticipated
customer requirements, price lists, market studies and business plans; (ii)&nbsp;research and
development plans, activities and results; (iii)&nbsp;Technology and Intellectual Property; (iv)
historical and projected sales data, financial data and projections, capital spending budgets and
operating budgets; (v)&nbsp;employee training techniques and materials and personnel files; and (vi)
environmental studies, reports, and analyses, and any related regulatory filings or submissions,
including summaries, memoranda, reports, compilations or other derivations thereof.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller and Seller Parent hereby acknowledge and agree that the protection of the
Confidential Information is necessary to protect and preserve the value of the Purchased Assets and
the Business, and that without such protection, Buyer would not have entered into this Agreement
and consummated the Transactions. Accordingly, subject to the provisions of Section&nbsp;8.10(c), each
of Seller and Seller Parent hereby covenants and agrees, for itself and its Affiliates and
representatives and its and their successors and permitted assigns, that, following the Closing,
without the prior written consent of Buyer (which consent shall be at Buyer&#146;s absolute discretion
to give or withhold), Seller or Seller Parent shall not, nor shall it cause or permit any of its
Affiliates or representatives to, directly or indirectly, disclose to any Person or use for its own
account or benefit or for the account or benefit of any other Person any Confidential Information.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The provisions of Section&nbsp;8.10(b) shall not apply to (i)&nbsp;information that is generally
known to the public other than as a result of the breach of this Agreement, (ii)&nbsp;information that
is required to be disclosed pursuant to any oral questions, interrogatories, requests for
information or other documents in legal proceedings, subpoena, civil investigative demand or any
other similar process, pursuant to the applicable rules of any stock exchange or self regulatory
organization on which Seller or any of its Affiliates lists securities, or pursuant to any
applicable Law or Order, or (iii)&nbsp;disclosure by Seller or Seller Parent that is reasonably
necessary for Seller or Seller Parent to exercise its rights or satisfy and perform its covenants
and obligations under this Agreement or any of the Transaction Documents. If Seller or Seller
Parent is requested or required by oral questions, interrogatories, requests for information or
other documents in legal proceedings, subpoena, civil investigative demand or any other similar
process, pursuant to the applicable rules of any stock exchange or self regulatory organization on
which Seller or any of its Affiliates lists securities or pursuant to any applicable Law or any
Order, to disclose any Confidential Information, Seller or Seller Parent shall provide Buyer with
prompt written notice of such request or requirement so that Buyer may seek a protective order or
other remedy in respect of such disclosure. If such a protective order or other remedy is not
obtained by or is not available to Buyer, then Seller or Seller Parent shall use commercially
reasonable efforts to ensure that only the minimum portion of such Confidential Information that is
legally required to be disclosed is so disclosed, and Seller or Seller Parent shall use
commercially reasonable efforts to obtain assurances that confidential treatment shall be given to
such Confidential Information.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.11 <U>Further Information</U>. Following the Closing, each of Buyer and Seller will afford
to the other Party, its counsel and its accountants, during normal business hours, reasonable
access to the books and records relating to the Purchased Assets or the Assumed Liabilities in its
possession and the right to make copies and extracts therefrom, to the extent that such access may
be reasonably required by the requesting Party: (a)&nbsp;to facilitate the investigation, litigation and
final disposition of any claims that may have been or may be made against any Party or its
Affiliates, and (b)&nbsp;for any other reasonable business purpose. Each of Buyer and Seller and its
agents shall keep confidential and not disclose any information learned as a result of any
examination conducted pursuant to this Section&nbsp;8.11 to any other Person without the prior consent
of the other Party unless (i)&nbsp;the disclosure of such information is required pursuant to any oral
questions, interrogatories, requests for information or other documents in legal proceedings,
subpoena, civil investigative demand or any other similar process, pursuant to the applicable rules
of any stock exchange or self regulatory organization on which such Party or any of its Affiliates
lists securities or pursuant to any applicable Law or Order; (ii)&nbsp;such information is generally
known to the public other than as a result of the breach of this Agreement; or (iii)&nbsp;disclosure of
such information is reasonably necessary for such Party to exercise its rights or satisfy and
perform its covenants and obligations under this Agreement or any of the Transaction Documents. If
either Buyer or Seller is requested or required by oral questions, interrogatories, requests for
information or other documents in legal proceedings, subpoena, civil investigative demand or any
other similar process, pursuant to the applicable rules of any stock exchange or self regulatory
organization on which such Party or any of its Affiliates lists securities or pursuant to any
applicable Law or any Order, to disclose any information learned as a result of any examination
conducted pursuant to this Section&nbsp;8.11, such Party shall provide the other Party with prompt
written notice of such request or requirement so that such other Party may seek a protective order
or other remedy in respect of such disclosure. If such a protective order or other remedy is not
obtained or is not available, then the disclosing Party shall use commercially reasonable efforts
to ensure that only the minimum portion of such information that is legally required to be
disclosed is so disclosed, and such disclosing Party shall use commercially reasonable efforts to
obtain assurances that confidential treatment shall be given to such information. Each of Buyer
and Seller shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in
assisting the other pursuant to this Section&nbsp;8.11. Neither Buyer nor Seller shall be required by
this Section&nbsp;8.11 to take any action that would unreasonably interfere with the conduct of its
business or unreasonably disrupt its normal operations.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.12 <U>Restrictive Covenants</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;For a period of two (2)&nbsp;years from the Closing Date, neither Seller nor Seller Parent
shall, directly or indirectly, for Seller or Seller Parent or on behalf of or in conjunction with
any other Person, employ or solicit the employment of any New Employee; <I>provided, however</I>, that the
foregoing shall not apply (i)&nbsp;to responses to or follow-up hiring in respect of general
solicitations or advertisements for job positions not specifically directed to New Employees or
(ii)&nbsp;to any New Employee who is terminated by Buyer after the Closing Date or terminates his or her
employment with Buyer without any solicitation directly or indirectly from Seller or any of
Seller&#146;s Affiliates.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Without limiting Section&nbsp;10.10, following the Closing Date, neither Seller, Seller Parent
nor any of their respective Affiliates shall (i)&nbsp;use any Confidential Information in direct or
indirect competition with the Business, or (ii)&nbsp;disclose, provide or otherwise make directly
available to any sales employee or sales representative of Seller, Seller Parent or any of their
respective Affiliates any Confidential Information that was not previously disclosed, provided or
otherwise made available to such sales employee or sales representative by Seller, Seller Parent or
any of their respective Affiliates


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;The Parties agree that the foregoing covenants in this Section&nbsp;8.12 impose a reasonable
restraint on Seller in light of the activities and operations of the Business and Buyer and its
Affiliates on the date of the execution of this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Seller and Seller Parent acknowledge and agree that (i)&nbsp;the provisions of Sections&nbsp;8.10
and 8.12 are reasonable and necessary to protect the legitimate business interests of Buyer, (ii)
any breach by Seller or Seller Parent of any of its covenants contained in any of Sections&nbsp;8.10 and
8.12 would result in irreparable injury to Buyer, the exact amount of which may be difficult, if
not impossible, to ascertain or estimate, and (iii)&nbsp;the remedies at law for any such breach may not
be reasonable or adequate compensation to Buyer for such breach. Accordingly, notwithstanding any
other provision of this Agreement, if Seller or Seller Parent, directly or indirectly, breaches any
of its covenants or obligations under any of Sections&nbsp;8.10 or 8.12, then, in addition to any other
remedy which may be available to Buyer at law or in equity, Buyer shall be entitled to seek
injunctive relief against the breaching Party, without posting bond or other security, and without
the necessity of proving actual or threatened damage or harm.


<P align="left" style="font-size: 12pt; text-indent: 4%">8.13 <U>Lease Assignments</U>. Prior to the Closing Date, Seller and Buyer shall use their
respective reasonable best efforts to negotiate in good faith one or more agreements providing for
the assignment and assumption of Seller&#146;s interest in the Lease Agreements, which agreements shall
be in a form reasonably satisfactory to Buyer and Seller and shall assign to Buyer the Lease
Agreements on substantially the same terms currently existing in such agreements (the &#147;<U>Lease
Assignments</U>&#148;).


<P align="left" style="font-size: 12pt; text-indent: 4%">8.14 <U>Seller&#146;s Obligation to Change its Name</U>. Promptly following the Closing, but in
any event no later than thirty (30)&nbsp;days following the Closing, Seller shall take any action
necessary (including amending its constituent documents) to change its name to a name that does not
include or relate to and is not based on or likely to be confused with the name &#147;Rutland Tool &
Supply Co.&#148;


<P align="left" style="font-size: 12pt; text-indent: 4%">8.15 <U>Intellectual Property</U>. Seller shall (a)&nbsp;cause Seller Parent to assign all right,
title and interest in and to the Business Brands, including all trademark registrations and
applications therefor, and all goodwill associated therewith, to Seller prior to Closing, and (b)
cause the owner of the URL <U>www.rutlandonlinecatalog.com</U> to assign all right, title and
interest in and to such URL to Seller prior to Closing, which Business Brands, trademarks and
Internet Property shall become Transferred Intellectual Property Rights at the time of Closing.


<P align="center" style="font-size: 12pt"><B>ARTICLE IX.</B>



<P align="center" style="font-size: 12pt"><B>CONDITIONS PRECEDENT TO CLOSING</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">9.1 <U>Conditions Precedent to the Obligations of Buyer</U>. The obligations of Buyer to
purchase and pay for the Purchased Assets and assume the Assumed Liabilities are subject to the
fulfillment on or prior to the Closing of the following conditions, any one or more of which may be
waived in writing by Buyer:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;(i)&nbsp;The representations and warranties of Seller and Seller Parent made in Sections&nbsp;5.1,
5.2, 5.4, 5.16, 5.26, and 6.1 of this Agreement shall be true and correct as of the date hereof and
as of the Closing Date, as though made on such date (except for those representations and
warranties that refer to facts existing at a specific date, which shall be true, correct and
complete as of such date); and (ii)&nbsp;the other representations and warranties of Seller and Seller
Parent made in this Agreement shall be true and correct (without giving effect to any limitation on
any representation or warranty indicated by the words &#147;Business Material Adverse Effect,&#148; &#147;in all
material respects,&#148; &#147;in any material respect,&#148; &#147;material&#148; or &#147;materially&#148;) as of the date hereof
and as of the Closing Date, as though made on such date (except for those representations and
warranties that refer to facts existing at a specific date, which shall be true, correct and
complete as of such date), except where the failure of such representations and warranties to be so
true and correct would not reasonably be expected to have a Business Material Adverse Effect;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Seller and Seller Parent shall have performed or complied in all material respects with
all obligations and covenants required by this Agreement and the other Transaction Documents to be
performed or complied with by Seller and Seller Parent, as applicable, at or prior to the Closing.
Seller and Seller Parent each shall have delivered to Buyer a certificate, dated the Closing Date
and signed by an authorized officer, confirming the satisfaction of the conditions provided in
Sections&nbsp;9.1(a) and (b);


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;No Order prohibiting, preventing or making illegal the purchase and sale contemplated by
this Agreement or the consummation of the Transactions shall be in effect, and no Proceeding shall
have been instituted and be pending before any Governmental Entity to restrain or prohibit any of
the Transactions;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Each of the consents identified on <U>Schedule&nbsp;9.1(d)</U> of the Disclosure Schedule
shall have been obtained and shall be in full force and effect;


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Since the date of this Agreement, there shall not have occurred a Business Material
Adverse Effect;


<P align="left" style="font-size: 12pt; text-indent: 8%">(f)&nbsp;Seller shall have delivered to Buyer a certificate executed by the Secretary of Seller
certifying that attached thereto is (i)&nbsp;a true and complete copy of the certificate of
incorporation of Seller, as in effect on the Closing Date, certified by an appropriate authority of
the State of Nevada, (ii)&nbsp;a true and complete copy of the Bylaws of Seller, as in effect on the
Closing Date, and (iii)&nbsp;true and complete copies of resolutions of Seller&#146;s directors and sole
shareholder, authorizing the execution, delivery and performance of this Agreement and the other
Transaction Documents and the Transactions, which resolutions shall not have been modified,
rescinded or revoked;


<P align="left" style="font-size: 12pt; text-indent: 8%">(g)&nbsp;Seller shall have delivered to Buyer a good standing certificate from the State of Nevada
certifying as to Seller&#146;s good standing and payment of all applicable Taxes due and payable by
Seller prior to the Closing Date; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(h)&nbsp;Seller shall have made all the deliveries required to be made by Seller pursuant to
Section&nbsp;3.2(b).


<P align="left" style="font-size: 12pt; text-indent: 4%">9.2 <U>Conditions Precedent to the Obligations of Seller</U>. The obligations of Seller to
sell and deliver the Purchased Assets to Buyer are subject to the fulfillment on or prior to the
Closing of the following conditions, any one or more of which may be waived in writing by Seller:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The representations and warranties of Buyer and Buyer Parent made in Section&nbsp;7.1 of this
Agreement shall be true and correct as of the date hereof and as of the Closing Date, as though
made on such date (except for those representations and warranties that refer to facts existing at
a specific date, which shall be true, correct and complete as of such date); and (ii)&nbsp;the other
representations and warranties of Buyer and Buyer Parent made in this Agreement shall be true and
correct (without giving effect to any limitation on any representation or warranty indicated by the
words &#147;Buyer Material Adverse Effect,&#148; &#147;in all material respects,&#148; &#147;in any material respect,&#148;
&#147;material&#148; or &#147;materially&#148;) as of the date hereof and as of the Closing Date, as though made on
such date (except for those representations and warranties that refer to facts existing at a
specific date, which shall be true, correct and complete as of such date), except where the failure
of any such representations and warranties to be so true and correct would not reasonably be
expected to have a Buyer Material Adverse Effect;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;Buyer shall have performed or complied in all material respects with all obligations and
covenants required by this Agreement and the other Transaction Documents to be performed or
complied with by Buyer at or prior to the Closing. Buyer shall have delivered to Seller a
certificate, dated the Closing Date, and signed by an authorized officer of Buyer on behalf of
Buyer confirming satisfaction of the conditions provided in Sections&nbsp;9.2(a) and (b);


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;No Order prohibiting, preventing or making illegal the purchase and sale contemplated by
this Agreement or the consummation of the Transactions shall be in effect, and no Proceeding shall
have been instituted and be pending before any Governmental Entity to restrain or prohibit any of
the Transactions;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;Buyer shall have delivered to Seller a certificate executed by the Secretary of Buyer
certifying that attached thereto is (i)&nbsp;a true and complete copy of the certificate of
incorporation of Buyer, as in effect on the Closing Date, certified by an appropriate authority of
the State of Delaware, (ii)&nbsp;a true and complete copy of the Bylaws of Buyer, as in effect on the
Closing Date, and (iii)&nbsp;true and complete copies of resolutions of Buyer&#146;s directors, authorizing
the execution, delivery and performance of this Agreement and the other Transaction Documents and
the Transactions, which resolutions shall not have been modified, rescinded or revoked; and


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;Buyer shall have made all the deliveries required to be made by Buyer pursuant to Section
3.2(a).


<P align="center" style="font-size: 12pt"><B>ARTICLE X.</B>



<P align="center" style="font-size: 12pt"><B>INDEMNIFICATION; SURVIVAL</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">10.1 <U>Survival of Representations and Warranties, Covenants and Agreements</U>. The
representations and warranties (and any related indemnification obligations) of the Parties made in
this Agreement, or any other Transaction Document, shall survive the Closing and continue in full
force and effect until the expiration of twelve (12)&nbsp;months from the Closing Date, except that (i)
the representations and warranties contained in Sections&nbsp;5.19 (Environmental Matters) and 5.21 (Tax
Matters) shall survive the Closing and continue in full force and effect until ninety (90)&nbsp;days
after the expiration of the applicable statute of limitations (including any modification,
extension, waiver or tolling thereof), (ii)&nbsp;the representations and warranties contained in
Sections&nbsp;5.3 (No Conflict; Governmental Authorizations), 5.7 (other than the first sentence
thereof) (Title to Purchased Assets: Sufficiency of Assets), 5.15 (Intellectual Property), 5.18
(Employee Matters), and 6.2 (No Conflict; Governmental Authorizations) shall survive the Closing
and continue in full force and effect for a period of three (3)&nbsp;years after the Closing Date, and
(iii)&nbsp;the Fundamental Representations shall survive the Closing indefinitely. All covenants and
agreements (and any related indemnification obligations) contained herein which by their terms
contemplate actions or impose obligations following the Closing shall survive the Closing and
remain in full force and effect in accordance with their respective terms. All covenants and
agreements contained herein which by their terms contemplate full performance at or prior to the
Closing shall terminate upon the Closing. The indemnification obligations set forth in Sections
10.2(a)(iii) through 10.2(a)(vii), 10.2(b)(iii) and 10.2(b)(iv) shall continue and survive the
Closing indefinitely. No claim or proceeding may be commenced after the expiration of the
applicable survival periods, <I>provided that </I>the indemnification obligations set forth in this
Article&nbsp;X shall not terminate with respect to any item as to which any Buyer Indemnified Party or
Seller Indemnified Party shall have, before the expiration of the applicable survival period,
previously made a claim in writing pursuant to this Article&nbsp;X. Each representation and covenant
shall be interpreted separately and the application of any representation or covenant shall not be
limited by the applicability of any other representation or warranty.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.2 <U>Indemnification</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Indemnification by Seller</U>. Subject to the terms and conditions of this Article&nbsp;X,
following the Closing, Seller and Seller Parent jointly and severally agree to indemnify and hold
harmless Buyer and its Affiliates, including each of their respective officers, directors,
employees, representatives and agents (the &#147;<U>Buyer Indemnified Parties</U>&#148;), against all Losses
paid, incurred or suffered by the Buyer Indemnified Parties, or any of them, arising from or in
connection with (collectively, &#147;<U>Buyer Claims</U>&#148;):



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;subject to the survival periods provided in Section&nbsp;10.1, the breach of any
representation or warranty of Seller contained in this Agreement or any other Transaction
Document (without regard to any materiality, Business Material Adverse Effect or similar
qualifier therein);



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;subject to the survival periods provided in Section&nbsp;10.1, the breach of any
covenant or agreement of Seller contained in this Agreement or any other Transaction
Document;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iii)&nbsp;any of the Retained Liabilities;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iv)&nbsp;any and all employment-related Liabilities with respect to notices, payments,
fines or assessments due to any governmental authority pursuant to any Laws with respect to
the employment, discharge or layoff of current and former employees of Seller with respect
to Seller&#146;s operations occurring prior to the Closing, including such liability as arises
under the WARN Act and under COBRA or other similar applicable Law;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(v)&nbsp;any and all employment-related Liabilities incurred or suffered as a result of any
claim by any employee or former employee of Seller in connection with Seller&#146;s operations
occurring prior to the Closing and that arises under federal, state or local statute
(including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1990, the Equal Pay Act, the Americans with Disabilities
Act of 1990, ERISA, immigration Law, the California Labor Code, the Fair Employment and
Housing Act, the payment of wages or salaries or other amounts, hours, benefits collective
bargaining, the payment of social security and similar taxes, federal contracting, workers&#146;
compensation and occupational safety and all other statutes regulating the terms and
conditions of employment), regulation or ordinance, the common law or in equity (including
any claims for wrongful discharge or otherwise), to the extent arising out of actions,
events or omissions that occurred (or, in the case of omissions, failed to occur) prior to
the Closing Date. This includes, but is not limited to, outstanding judgments, awards and
orders; pending litigation, including court cases, grievances, or agency proceedings; and
pension withdrawal liability or under-funding of any of the Employee Plans;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vi)&nbsp;subject to (and except as provided in) Section&nbsp;8.5, any Liabilities with respect
to any former employees or independent contractors of Seller who are not, or do not become,
employees or independent contractors of Buyer, as applicable, as a result of the
transactions contemplated by this Agreement; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(vii)&nbsp;any Liabilities with respect to any employees of Seller&#146;s for periods on or prior
to the Closing regarding any Employee Plan, including, subject to (and except as provided
in) Section&nbsp;8.5, any benefit continuation and/or severance payments relating to any current
or former employee of the Business and that may be payable as a result of any termination by
Seller of employment of any such employee on or prior to the Closing.


<P align="left" style="font-size: 12pt">Notwithstanding anything contained herein to the contrary, the obligations of Seller and Seller
Parent pursuant to this Section&nbsp;10.2(a) shall (i)&nbsp;not apply to any Buyer Claims until, and then
only to the extent that, the Losses incurred by all Buyer Indemnified Parties exceeds One Hundred
Fifty Thousand Dollars ($150,000), (ii)&nbsp;be limited to, and shall not exceed, the aggregate amount
of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), and/or (iii)&nbsp;not apply to any
individual Buyer Claim (it being understood that a series of related Buyer Claims or Buyer Claims
arising from the same or a similar circumstance shall be aggregated for purposes of applying the
limitation in this clause (iii); and for the avoidance of doubt, it being understood that all
claims for a breach of Section&nbsp;5.9 shall be deemed to arise from the same or a similar
circumstance) with respect to which the Losses incurred by the Buyer Indemnified Party are less
than Ten Thousand Dollars ($10,000); <I>provided that </I>the limitations set forth in this Section
10.2(a) shall not apply (i)&nbsp;to breaches of the Fundamental Representations or the representations
and warranties contained in Section&nbsp;5.19 (Environmental Matters) (except that the limitations in
clauses (i)&nbsp;and (iii)&nbsp;above shall apply to breaches of Section&nbsp;5.19) and Section&nbsp;5.21 (Tax
Matters), (ii)&nbsp;to Buyer Claims made pursuant to Sections&nbsp;10.2(a)(iii) through 10.2(a)(vii), or
(iii)&nbsp;in the case of fraud by Seller or Seller Parent.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Indemnification by Buyer</U>. Subject to the terms and conditions of this Article&nbsp;X,
following the Closing, Buyer agrees to indemnify and hold harmless Seller and its Affiliates,
including each of their respective officers, directors, employees, representatives, and agents (the
&#147;<U>Seller Indemnified Parties</U>&#148;), against all Losses paid, incurred or suffered by the Seller
Indemnified Parties, or any of them, arising from or in connection with (collectively, &#147;<U>Seller
Claims</U>&#148;):



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(i)&nbsp;subject to the survival periods provided in Section&nbsp;10.1, the breach of any
representation or warranty of Buyer or Buyer Parent contained in this Agreement or any other
Transaction Document (without regard to any materiality, Buyer Material Adverse Effect or
similar qualifier therein);



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(ii)&nbsp;subject to the survival periods provided in Section&nbsp;10.1, the breach of any
covenant or agreement of Buyer or Buyer Parent contained in this Agreement or any other
Transaction Document;



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iii)&nbsp;any of the Assumed Liabilities; and



<P align="left" style="margin-left:4%; font-size: 12pt; text-indent: 8%">(iv)&nbsp;any Liabilities arising from the conduct and operation of the Business or the use
or ownership of the Purchased Assets from and after the Closing, other than any Retained
Liabilities or is otherwise a Loss for which Seller is required to indemnify the Buyer
Indemnified Parties.


<P align="left" style="font-size: 12pt">Notwithstanding anything contained herein to the contrary, the obligations of Buyer and Buyer
Parent pursuant to this Section&nbsp;10.2(b) shall (i)&nbsp;not apply to any Seller Claims until, and then
only to the extent that, the Losses incurred by all Seller Indemnified Parties exceeds One Hundred
Fifty Thousand Dollars ($150,000), (ii)&nbsp;be limited to, and shall not exceed, the aggregate amount
of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), and/or (iii)&nbsp;not apply to any
individual Seller Claim (it being understood that a series of related Seller Claims or Seller
Claims arising from the same or a similar circumstance shall be aggregated for purposes of applying
the limitation in this clause (iii)) with respect to which the Losses incurred by the Seller
Indemnified Party are less than Ten Thousand Dollars ($10,000); <I>provided that </I>the limitations set
forth in this Section&nbsp;10.2(b) shall not apply (i)&nbsp;to breaches of the Fundamental Representations,
(ii)&nbsp;to Seller Claims made pursuant to Sections&nbsp;10.2(b)(iii) or (iv), or (iii)&nbsp;in the case of fraud
by Buyer or Buyer Parent.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;<U>Effect of Knowledge or Waiver</U>. Notwithstanding anything to the contrary in this
Article&nbsp;X, the right of any Indemnified Party to indemnification, payment of Losses or other
remedies will not be affected in any way by any investigation conducted or knowledge (whether
actual, constructive or imputed) acquired at any time by such Indemnified Party with respect to the
accuracy or inaccuracy of or compliance with or performance of, any representation, warranty,
covenant, agreement or obligation. The waiver of any condition based upon the breach of any
representation or warranty, or on the failure to perform any covenant or obligation will not affect
the right to indemnification, reimbursement or other remedy under this Agreement or under Law.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.3 <U>Third Party Claims</U>. If any Buyer Indemnified Party or Seller Indemnified Party
receives notice from a third party of any matter (a &#147;<U>Third Party Claim</U>&#148;) which a Buyer
Indemnified Party or Seller Indemnified Party (as applicable, an &#147;<U>Indemnified Party</U>&#148;)
reasonably believes will entitle such Indemnified Party to indemnification under this Article&nbsp;X,
the procedure set forth below shall be followed:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;<U>Notice</U>. The Indemnified Party shall promptly notify (but in any event within
twenty (20)&nbsp;Business Days) the indemnifying party in writing of such Third Party Claim; <I>provided
that </I>the failure to so notify the indemnifying party shall not limit the obligations of such
indemnifying party under this Article&nbsp;X except to the extent the indemnifying party is prejudiced
thereby. All such notices shall describe with reasonable specificity the Third Party Claim and the
basis of the Indemnified Party&#146;s claim for indemnification. Thereafter, the Indemnified Party
shall deliver to the indemnifying party, promptly following the Indemnified Party&#146;s receipt
thereof, copies of all notices and documents (including court papers) received by the Indemnified
Party relating to the Third Party Claim, other than those notices and documents separately
addressed to the indemnifying party.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;<U>Defense of Claim</U>. The indemnifying party will be entitled to participate in, and
will have the right to assume and control, at the indemnifying party&#146;s sole cost and expense, the
defense of the Third Party Claim with counsel reasonably acceptable to the Indemnified Party by
providing the Indemnified Party with written notice to the effect that it intends to assume the
defense of the Third Party Claim; provided, however, that the indemnifying party must conduct the
defense of the Third Party Claim actively and diligently thereafter, as the circumstances warrant;
and provided further that the Indemnified Party may retain separate co-counsel and participate in
the defense of the Third Party Claim, but the fees and expenses of such counsel retained by the
Indemnified Party shall be at the expense of the Indemnified Party, unless (x)&nbsp;there exists a
material legal conflict between the interests of the Indemnified Party and the indemnifying party
that could reasonably be expected to result in material prejudice to the Indemnified Party, or (y)
the indemnifying party has failed to assume the defense, retain counsel and actively and diligently
pursue such defense, as the circumstances warrant, and such failure could reasonably be expected to
result in material prejudice to the Indemnified Party, in which case, the indemnifying party shall
bear the fees and expenses of one separate co-counsel for all Indemnified Parties in connection
with the applicable Third Party Claim. The Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim without the prior
written consent of the indemnifying party; <I>provided, however</I>, that, if the indemnifying party fails
to assume and conduct the defense of the Third Party Claim in an active and diligent manner, as the
circumstances warrant, and such failure could reasonably be expected to result in material
prejudice to the Indemnified Party, (A)&nbsp;the Indemnified Party may assume and conduct the defense
against, and consent to the entry of any judgment or enter into any settlement with respect to, the
Third Party Claim in any manner it deems appropriate in good faith, and (B)&nbsp;the indemnifying party
will remain responsible for any Losses the Indemnified Party may suffer as a result of the Third
Party Claim to the fullest extent provided in this Article&nbsp;X; <I>provided further </I>that the
indemnifying party may retain separate co-counsel and participate in the defense of the Third Party
Claim at its own expense. The indemnifying party shall not consent to the entry of any judgment or
enter into any settlement of any Third Party Claim that might give rise to liability of the
Indemnified Party under this Article&nbsp;X without such Indemnified Party&#146;s consent, which consent
shall not be unreasonably withheld or delayed.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.4 <U>Direct Claims</U>. Any claim for indemnification under this Agreement which does not
result from the assertion of a claim by a third party shall be asserted by written notice given by
the Indemnified Party to the indemnifying party promptly but in any event within twenty (20)
Business Days after the Indemnified Party discovers any matter that may give rise to a claim for
indemnification under this Agreement; <I>provided, however</I>, that any delay in the Indemnified Party&#146;s
delivery of such written notice shall not prejudice the Indemnified Party&#146;s right to receive
indemnification unless, and then only to the extent that, such delay prejudices the indemnifying
party&#146;s ability to mitigate or otherwise minimize the Losses or to contest such claim.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.5 <U>Adjustment to Purchase Price</U>. All amounts paid by the Parties under this Article
X shall, to the extent permitted by applicable Law, be treated as adjustments to the Purchase Price
for all purposes (including Tax purposes).


<P align="left" style="font-size: 12pt; text-indent: 4%">10.6 <U>Exclusive Remedy</U>. After the Closing Date, other than (i)&nbsp;in cases of fraud by
the Parties hereto and (ii)&nbsp;rights to specific performance and injunctive relief with respect to
the covenants and agreements set forth in Sections&nbsp;8.10 and 8.12, the indemnification provisions of
this Article&nbsp;X shall be the sole and exclusive remedy of the Parties (and all Indemnified Parties)
for any breach of the obligations, covenants, agreements, representations and warranties set forth
in this Agreement, or for any other claims or causes of actions arising out of, relating to or in
connection with the transactions contemplated hereby, whether based upon breach of contract, tort
or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.7 <U>Limitation of Punitive Damages</U>. No Party shall be responsible for any punitive
damages other than Losses relating to punitive damages awarded to third parties.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.8 <U>Indemnification in Case of Strict Liability or Indemnitee Negligence</U>. The
indemnification provisions in this Article&nbsp;X shall be enforceable regardless of whether the
liability is based upon past, present or future acts, claims or applicable legal requirements and
regardless of whether any Person (including the Person from whom indemnification is sought) alleges
or proves the sole, concurrent, contributory or comparative negligence of the person seeking
indemnification or the sole or concurrent strict liability imposed upon the person seeking
indemnification.


<P align="left" style="font-size: 12pt; text-indent: 4%">10.9 <U>Certain Limitations</U>.


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;The obligations of the Indemnifying Party to provide indemnification under this Article&nbsp;X
shall be terminated, modified or abated as appropriate to the extent that the underlying claim
would not have arisen but for a voluntary act that is carried out by or at the express written
request (which may include e-mail) of, or with the express written approval (which may include
e-mail) of, the Indemnified Party.


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;The amount of any indemnification payable under this Article&nbsp;X shall be reduced by an
amount equal to the proceeds available to the Indemnified Party under any insurance policy or from
any third-party in respect of such claim. An Indemnified Party shall use reasonable best efforts
to pursue any insurance recovery or third-party recovery available to it with respect to any claim
for which such Indemnified Party seeks indemnification pursuant to this Article&nbsp;X.


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;In calculating amounts payable to an Indemnified Party hereunder, the amount of any
indemnified Losses shall be determined without duplication of any other Loss for which an
indemnification claim has been made or could be made under any other representation, warranty,
covenant or agreement and shall be computed net of (i)&nbsp;payments recovered by the Indemnified Party
under indemnification agreements or arrangements with third parties, (ii)&nbsp;any prior recovery by the
Indemnified Party by means of the operation of Section&nbsp;4.3, or (iii)&nbsp;any Tax benefits that the
Indemnified Party receives or is entitled to receive by reason of the claim giving rise to the
indemnification payment.


<P align="center" style="font-size: 12pt"><B>ARTICLE XI.</B>



<P align="center" style="font-size: 12pt"><B>TERMINATION OF AGREEMENT</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">11.1 <U>Termination</U>. This Agreement may be terminated prior to the Closing as follows:


<P align="left" style="font-size: 12pt; text-indent: 8%">(a)&nbsp;By the mutual written consent of the Parties hereto;


<P align="left" style="font-size: 12pt; text-indent: 8%">(b)&nbsp;By either Buyer on the one hand or Seller on the other hand (by written notice to the
other Party) if (i)&nbsp;the consummation of the Transactions shall violate any Order that shall have
become final and nonappealable or (ii)&nbsp;there shall be any applicable Law that makes the
Transactions illegal or otherwise prohibited;


<P align="left" style="font-size: 12pt; text-indent: 8%">(c)&nbsp;By either Buyer on the one hand or Seller on the other hand, by giving written notice to
the other Party, in the event of a material breach of this Agreement by the non-terminating Party
if such non-terminating Party fails to cure such breach within twenty (20)&nbsp;Business Days following
written notification thereof by the terminating Party;


<P align="left" style="font-size: 12pt; text-indent: 8%">(d)&nbsp;By Buyer if any condition in Section&nbsp;9.1 has not been satisfied by February&nbsp;28, 2011;
<I>provided that </I>the failure of such condition to be satisfied is not caused by a breach of this
Agreement by Buyer, and Buyer has not waived such condition on or before such date; or


<P align="left" style="font-size: 12pt; text-indent: 8%">(e)&nbsp;By Seller if any condition in Section&nbsp;9.2 has not been satisfied by February&nbsp;28, 2011;
<I>provided that </I>the failure of such condition to be satisfied is not caused by a breach of this
Agreement by Seller, and Seller has not waived such condition on or before such date.


<P align="left" style="font-size: 12pt; text-indent: 4%">11.2 <U>Effect of Termination</U>. In the event of termination of this Agreement as
permitted by Section&nbsp;11.1, this Agreement shall become void and of no further force and effect,
except for the following provisions, which shall remain in full force and effect: Section&nbsp;8.9
(Publicity), this Section&nbsp;11.2 (Effect of Termination), and Article&nbsp;XII (Miscellaneous); <I>provided
that </I>nothing in this Section&nbsp;11.2 will relieve any Party from liability for any breach of any
representation, warranty, covenant or agreement in this Agreement prior to the date of termination.


<P align="center" style="font-size: 12pt"><B>ARTICLE XII.</B>



<P align="center" style="font-size: 12pt"><B>MISCELLANEOUS</B>



<P align="left" style="font-size: 12pt; text-indent: 4%">12.1 <U>Expenses; No Offset</U>. Whether or not the Transactions are consummated, and except
as otherwise provided in this Agreement, Seller and Seller Parent on the one hand, and Buyer and
Buyer Parent, on the other hand, shall bear their respective fees, costs and expenses (including
legal and accounting fees) incurred in connection with the preparation, negotiation, execution and
performance of this Agreement, the other Transaction Documents and the consummation of the
Transactions. Neither Party may make any offset against amounts due to the other Party or its
Affiliates pursuant to this Agreement, the other Transaction Documents or otherwise.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.2 <U>Governing Law</U>. This Agreement and any disputes or controversies arising out of
or relating to this Agreement or the transactions contemplated hereby (whether in contract, tort or
otherwise) shall be governed by, and construed in accordance with, the internal laws of the State
of New York, without regard to any conflicts of law principles that would require the application
of the laws of any other jurisdiction.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.3 <U>Enforcement</U>. In addition to any other remedies that may be available to the
Parties, prior to the Closing, each Party hereto shall have the right to seek injunctive relief to
restrain a breach or threatened breach of, or otherwise to obtain specific performance of, the
other Parties&#146; covenants and agreements contained in this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.4 <U>Jurisdiction and Venue</U>. Each of the Parties hereto irrevocably (a)&nbsp;agrees that
any suit, action or other legal proceeding arising out of or connected to this Agreement, the other
Transactions Documents or the matters contemplated herein or therein shall be brought only in the
courts of the State of New York or the Federal Courts of the United States of America, in each case
sitting in the County of New York, New York, (b)&nbsp;consents to the jurisdiction of such courts in any
such suit, action or proceeding, and (c)&nbsp;waives any objection that it may have to the laying of
venue of such suit, action or proceeding in any such court.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.5 <U>Attorneys&#146; Fees</U>. If any action, suit or other proceeding for the enforcement of
this Agreement is brought with respect to or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions hereof, the successful or prevailing
Party shall be entitled to recover reasonable and documented attorneys&#146; fees and other costs
incurred in that proceeding, in addition to any other relief to which it may be entitled.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.6 <U>Waiver</U>. Neither any failure nor any delay by any Party in exercising any right,
power or privilege under this Agreement or any of the other Transaction Documents will operate as a
waiver of such right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right, power or privilege or
the exercise of any other right, power or privilege. To the maximum extent permitted by applicable
law, (a)&nbsp;no claim or right arising out of this Agreement or any of the other Transaction Documents
to which one Party may be entitled can be discharged by the other Parties, in whole or in part, by
a waiver or renunciation of the claim or right unless in writing signed by the Party entitled to
the right or claim; (b)&nbsp;no waiver that may be given by a Party will be applicable except in the
specific instance for which it is given; and (c)&nbsp;no notice to or demand on one Party will be deemed
to be a waiver of any obligation of that Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this Agreement or any of the
other Transaction Documents. Any extension or waiver by any Party of any provision hereto shall be
valid only if set forth in an instrument in writing signed on behalf of such Party.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.7 <U>Notices</U>. All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be deemed given to a Party (a)&nbsp;upon being delivered by
hand, (b)&nbsp;upon the first or second Business Day, as applicable, after deposit with a nationally
recognized overnight courier service (costs prepaid), or (c)&nbsp;upon sending by facsimile with
confirmation of transmission by the transmitting equipment, in each case to the following:



<P align="left" style="margin-left:4%; font-size: 12pt"><I>if to Seller, to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Rutland Tool & Supply Co.
<BR>
c/o Lawson Products, Inc.
<BR>
1666 E. Touhy Avenue
<BR>
Des Plaines, IL 60018
<BR>
Attention: Neil E. Jenkins
<BR>
Fax: (847)&nbsp;795-9030



<P align="left" style="margin-left:4%; font-size: 12pt"><I>with copies to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Jenner & Block LLP
<BR>
353 North Clark Street
<BR>
Chicago, IL 60654
<BR>
Attention: Michael T. Wolf
<BR>
Fax: (312)&nbsp;840-7530



<P align="left" style="margin-left:4%; font-size: 12pt"><I>if to Seller Parent, to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Lawson Products, Inc.
<BR>
1666 E. Touhy Avenue
<BR>
Des Plaines, IL 60018
<BR>
Attention: Neil E. Jenkins
<BR>
Fax: (847)&nbsp;795-9030



<P align="left" style="margin-left:4%; font-size: 12pt"><I>with copies to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Jenner & Block LLP
<BR>
353 North Clark Street
<BR>
Chicago, IL 60654
<BR>
Attention: Michael T. Wolf
<BR>
Fax: (312)&nbsp;840-7530



<P align="left" style="margin-left:4%; font-size: 12pt"><I>if to Buyer, to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Sid Tool Co., Inc.
<BR>
75 Maxess Road
<BR>
Melville, NY 11747
<BR>
Attention: General Counsel
<BR>
Fax: (516)&nbsp;812-1175



<P align="left" style="margin-left:4%; font-size: 12pt"><I>with copies to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Curtis, Mallet Prevost, Colt & Mosle LLP
<BR>
101 Park Avenue
<BR>
New York, NY 10178
<BR>
Attention: Jeffrey N. Ostrager
<BR>
Fax: (212)&nbsp;697-1559



<P align="left" style="margin-left:4%; font-size: 12pt"><I>if to Buyer Parent, to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">MSC Industrial Direct Co., Inc.
<BR>
75 Maxess Road
<BR>
Melville, NY 11747
<BR>
Attention: General Counsel
<BR>
Fax: (516)&nbsp;812-1175



<P align="left" style="margin-left:4%; font-size: 12pt"><I>with a copy to:</I>



<P align="left" style="margin-left:8%; font-size: 12pt">Curtis, Mallet Prevost, Colt & Mosle LLP
<BR>
101 Park Avenue
<BR>
New York, NY 10178
<BR>
Attention: Jeffrey N. Ostrager
<BR>
Fax: (212)&nbsp;697-1559


<P align="left" style="font-size: 12pt; text-indent: 4%">Any Party hereto may change its contact information for notices and other communications
hereunder by written notice to the other non-Affiliated Parties hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.8 <U>Assignment</U>. This Agreement and the rights of each Party hereunder shall not be
assigned or transferred by such Party (including by operation of law or in connection with a merger
or sale of substantially all the assets, stock or membership interests of such Party) without the
prior written consent of the other non-Affiliated Parties hereto; <I>provided, however</I>, that Buyer may
assign its rights and obligations under this Agreement to another subsidiary of Buyer Parent;
<I>provided, further</I>, that notwithstanding any such assignment, Buyer shall remain liable to Seller
for all of its obligations hereunder. Subject to the preceding sentence, this Agreement shall
apply to, be binding in all respects upon and inure to the benefit of the permitted successors and
assigns of the Parties. Any attempted assignment in violation of the provisions hereof shall be
null and void and have no effect.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.9 <U>Disclosure Schedules</U>. Inclusion of information in the Disclosure Schedules will
not be construed as an admission that such information is material to the business, operations or
condition (financial or otherwise) of the Business or the Purchased Assets, taken in part or as a
whole, or as an admission of Liability or obligation of the Seller to any third party.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.10 <U>Bulk Sales or Transfer Laws</U>. Buyer waives compliance by Seller with the
provisions of any bulk sales laws that may be applicable to the Transactions.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.11 <U>No Third-Party Beneficiaries</U>. Except for Indemnified Parties as contemplated in
Article&nbsp;X, this Agreement is for the sole benefit of the Parties hereto and their permitted assigns
and nothing herein expressed or implied shall give or be construed to give to any Person, other
than the Parties hereto and such assigns, any legal or equitable rights, remedy or claim hereunder.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.12 <U>Amendments</U>. This Agreement may not be amended by the Parties hereto at any time
except by execution of an instrument in writing signed on behalf of each of the Parties hereto.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.13 <U>Interpretation, Exhibits and Schedules</U>. The headings contained in this
Agreement, in any Exhibit or Schedule hereto and in the table of contents to this Agreement, are
for reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words &#147;include&#148;, &#147;includes&#148; or &#147;including&#148; are used in this Agreement,
they are deemed to be followed by the words &#147;without limitation.&#148; Except when the context
otherwise requires, references to Sections, Articles, Exhibits or Schedules contained herein refer
to Sections, Articles, Exhibits or Schedules of this Agreement. All Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit, but not otherwise defined
therein, shall have the meaning as defined in this Agreement. All accounting terms shall have the
meaning specified by GAAP unless otherwise specified. All references to &#147;Dollars&#148; or &#147;$&#148; shall
mean U.S. dollars unless otherwise specified.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.14 <U>Entire Agreement</U>. This Agreement (which includes the Schedules hereto) and the
other Transaction Documents contain the entire agreement and understanding between the Parties
hereto with respect to the subject matter hereof and supersede all prior oral and written
agreements and understandings relating to such subject matter.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.15 <U>Severability</U>. If any provision of this Agreement or the application of any such
provision to any Person or circumstance shall be held invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision hereof.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.16 <U>Mutual Drafting</U>. The Parties hereto are sophisticated and have been represented
by attorneys who have carefully negotiated the provisions hereof. As a consequence, the Parties do
not intend that the presumptions of any laws or rules relating to the interpretation of contracts
against the drafter of any particular clause should be applied to this Agreement and therefore
waive their effects.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.17 <U>Counterparts</U>. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all such counterparts taken together shall constitute one
and the same Agreement. Any such counterpart, to the extent delivered by means of a facsimile
machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail shall be treated in
all manner and respects as an original executed counterpart and shall be considered to have the
same binding legal effect as if it were the original signed version thereof delivered in person.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.18 <U>Waiver of Jury Trial</U>. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. THE PARTIES AGREE THAT EITHER OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH
ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT BETWEEN THE
PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN
THEM RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.19 <U>Seller Parent Guaranty</U>. Seller Parent absolutely, irrevocably and
unconditionally guarantees each and every representation, warranty, covenant, agreement and
obligation of Seller and the full and timely performance of its obligations under this Agreement.
This is a guarantee of payment and performance, and not merely of collection, and Seller Parent
acknowledges and agrees that this guarantee is absolute and unconditional, and no release or
extinguishments of Seller&#146;s obligations or liabilities (other than in accordance with the terms of
this Agreement), whether by decree in any bankruptcy proceeding or otherwise, shall affect the
continuing validity and enforceability of this guarantee. Seller Parent hereby waives, for the
benefit of Buyer, (a)&nbsp;any right to require Buyer, as a condition of payment or performance by
Seller Parent, to proceed against Seller or pursue any other remedies whatsoever and (b)&nbsp;to the
fullest extent permitted by Law, any defenses or benefits that may be derived from or afforded by
Law that limit the liability of or exonerate guarantors or sureties; <I>provided that</I>, notwithstanding
anything in this Section&nbsp;12.19 to the contrary, Seller Parent shall not be deemed to have waived
any defenses to the payment or performance of any guaranteed obligation under this Section&nbsp;12.19
that are available to Seller or Seller Parent under the terms of this Agreement, all of which
defenses (if any) shall be available to Seller Parent. Seller Parent understands that Buyer is
relying on this guarantee in entering into this Agreement.


<P align="left" style="font-size: 12pt; text-indent: 4%">12.20 <U>Buyer Parent Guaranty.</U> Buyer Parent absolutely, irrevocably and
unconditionally guarantees each and every representation, warranty, covenant, agreement and
obligation of Buyer and the full and timely performance of its obligations under this Agreement.
This is a guarantee of payment and performance, and not merely of collection, and Buyer Parent
acknowledges and agrees that this guarantee is absolute and unconditional, and no release or
extinguishments of Buyer&#146;s obligations or liabilities (other than in accordance with the terms of
this Agreement), whether by decree in any bankruptcy proceeding or otherwise, shall affect the
continuing validity and enforceability of this guarantee. Buyer Parent hereby waives, for the
benefit of Seller, (a)&nbsp;any right to require Seller, as a condition of payment or performance by
Buyer Parent, to proceed against Buyer or pursue any other remedies whatsoever and (b)&nbsp;to the
fullest extent permitted by Law, any defenses or benefits that may be derived from or afforded by
Law that limit the liability of or exonerate guarantors or sureties; <I>provided that</I>, notwithstanding
anything in this Section&nbsp;12.20 to the contrary, Buyer Parent shall not be deemed to have waived any
defenses to the payment or performance of any guaranteed obligation under this Section&nbsp;12.20 that
are available to Buyer or Buyer Parent under the terms of this Agreement, all of which defenses (if
any) shall be available to Buyer Parent. Buyer Parent understands that Seller is relying on this
guarantee in entering into this Agreement.


<P align="center" style="font-size: 12pt">&#091;<I>Remainder of Page Intentionally Left Blank; Signature Page Follows</I>&#093;



<P align="left" style="font-size: 12pt; text-indent: 4%">IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly
executed this Asset Purchase Agreement on the date first above written.



<P align="left" style="margin-left:23%; font-size: 12pt"><B>RUTLAND TOOL & SUPPLY CO., as Seller</B>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="23%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:27%; font-size: 12pt">Name:
<BR>
Title:



<P align="left" style="margin-left:23%; font-size: 12pt"><B>LAWSON PRODUCTS, INC., as Seller Parent</B>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="23%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:27%; font-size: 12pt">Name:
<BR>
Title:



<P align="left" style="margin-left:23%; font-size: 12pt"><B>SID TOOL CO., INC., as Buyer</B>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="23%" style="background: transparent">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD>By:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:27%; font-size: 12pt">Name:
<BR>
Title:



<P align="left" style="margin-left:23%; font-size: 12pt"><B>MSC INDUSTRIAL DIRECT CO., INC., as Buyer Parent</B>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="23%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By:</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:27%; font-size: 12pt">Name:
<BR>
Title:



<P align="center" style="font-size: 10pt; display: none">




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<P align="right" style="font-size: 10pt"><FONT style="font-size: 11pt">Media Contact:<BR>
Courtney Harper<BR>
Reputation Partners (for Lawson Products)<BR>
Phone: 312-819-5722<BR>
E-mail: courtney@reputationpartners.com</FONT>



<P align="left" style="font-size: 11pt"><FONT style="font-size: 12pt">FOR IMMEDIATE RELEASE
</FONT>

<P align="center" style="font-size: 12pt"><FONT style="font-size: 14pt"><B>Lawson Products Divests Rutland Tool & Supply Co.; Proceeds to Continue Investment in Core MRO<BR>
Business</B></FONT>



<P align="left" style="font-size: 14pt"><FONT style="font-size: 11pt"><B>Des Plaines, IL &#150; November&nbsp;9, 2010 &#150; </B>Lawson Products, Inc. (NASDAQ: LAWS), a distributor of
maintenance, repair and operations (MRO)&nbsp;products, announced today that it has reached a definitive
agreement to sell substantially all of the assets of Rutland Tool & Supply Co. (&#147;Rutland&#148;), a
wholly owned subsidiary, to Sid Tool Co., Inc, a wholly owned subsidiary of MSC Industrial Direct
Co., Inc. for approximately $11.0&nbsp;million in cash plus the assumption of certain liabilities. Based
in Whittier, California, Rutland is an industrial supplier providing metalworking and maintenance
solutions. The transaction is expected to close in the fourth quarter of 2010.
</FONT>

<P align="left" style="font-size: 11pt">Lawson Products&#146; sale of Rutland aligns with the company&#146;s on-going strategy to provide resources
to focus on advancing the Lawson MRO business, its most profitable and fastest growing segment.
Lawson will continue to offer its full line of MRO products, including Rutland products, to its
customers.


<P align="left" style="font-size: 11pt">&#147;The sale of Rutland will provide us with valuable resources to further invest in and grow our core
MRO business,&#148; said Tom Neri, president and chief executive officer of Lawson Products. &#147;Through
this sale, as well as through the recent sale of Assembly Component Systems, Inc., we are
successfully positioning Lawson for profitable growth and ensuring our strong competitive position
for the future.&#148;


<P align="left" style="font-size: 11pt"><U>About Lawson Products, Inc.</U>
<BR>
Founded in 1952, Lawson Products, Inc. (NASDAQ:LAWS), is an industrial distributor of more than
200,000 different maintenance and repair supplies. Lawson Products serves its customers through a
dedicated team of 1,200 experienced field sales agents and approximately 1,000 employees. The
company services the industrial, institutional, commercial and government markets in all 50 U.S.
states, Canada and Puerto Rico.


<P align="left" style="font-size: 11pt">This Release contains certain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties. The terms &#147;may,&#148;
&#147;should,&#148; &#147;could,&#148; &#147;anticipate,&#148; &#147;believe,&#148; &#147;continues,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;intend,&#148;
&#147;objective,&#148; &#147;plan,&#148; &#147;potential,&#148; &#147;project&#148; and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict. These statements are based on
management&#146;s current expectations, intentions or beliefs and are subject to a number of factors,
assumptions and uncertainties that could cause or contribute to such differences or that might
otherwise impact the business and include the risk factors set forth in Item&nbsp;1A of the December&nbsp;31,
2009 Form 10-K filed on February&nbsp;25, 2010. The Company undertakes no obligation to update any such
factor or to publicly announce the results of any revisions to any forward-looking statements
whether as a result of new information, future events or otherwise.



<P align="center" style="font-size: 10pt; display: none">




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