Execution Copy

CONFIDENTIAL

STOCK PURCHASE AGREEMENT

dated as of April 13, 2007

by and between

RONALD J. RICE

and

     PLAYTEX PRODUCTS, INC.

with respect to the sale of all the outstanding stock

of

TIKI HUT HOLDING COMPANY, INC.

 

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TABLE OF CONTENTS

Page No.

Article 1 DEFINITIONS  2     1.1  Terms  2     1.2  Certain Rules of
Construction  10    Article 2 PURCHASE AND SALE OF SHARES  11     2.1  Purchase
and Sale of Holdco Shares  11     2.2  Purchase Price  11     2.3  Closing Date
Adjustment Determination  12    Article 3 CLOSING  16     3.1  Closing Date  16 
   3.2  Conditions to Both Parties Obligations  16     3.3  Conditions to
Seller’s Obligations  16     3.4  Conditions to Buyer’s Obligations  17     3.5 
Seller’s Closing Deliveries  17     3.6  Buyer’s Closing Deliveries  18     3.7 
Transfer of Excluded Assets  19    Article 4 REPRESENTATIONS AND WARRANTIES OF
SELLER  19     4.1  Seller  19     4.2  Status of the Companies  20     4.3 
Capitalization  21     4.4  Conflicts and Consents  21     4.5  Financial
Matters  22     4.6  Taxes  24     4.7  Governmental Permits  26     4.8 
Intellectual Property  26     4.9  Real and Personal Property -- Owned or
Leased  27     4.10  Material Contracts  28     4.11  Insurance  30     4.12  No
Violation, Litigation or Regulatory Action  30     4.13  ERISA  30     4.14 
Labor Matters  32     4.15  Employees  32     4.16  Insider Interests  32   
 4.17  Environmental Compliance  33     4.18  Inventory  34     4.19  Brokers 
34     4.20  Warranties  34     4.21  Customers and Suppliers  34     4.22 
Disclaimer of Warranties  35 

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Article 5 REPRESENTATIONS AND WARRANTIES OF BUYER  35     5.1  Status of Buyer 
36     5.2  Authority of Buyer; Conflicts and Consents  36     5.3  No
Litigation or Regulatory Action  36     5.4  Financial Ability  37     5.5 
Brokers  37     5.6  Investment  37     5.7  Access to Information;
Sophistication  37    Article 6 ACTIONS PRIOR TO THE CLOSING DATE  38     6.1 
Access to Information  38     6.2  Notifications  39     6.3  Consents of Third
Parties; Governmental Approvals  39     6.4  Filings Under the HSR Act  39   
 6.5  Operations Prior to the Closing Date  40     6.6  No Negotiations  42   
 6.7  Release of Guaranties, etc  42     6.8  Financial Statements  42     6.9 
Employee Plan Payments Through Closing  42     6.10  Notice of Prospective
Breach; Supplement to Schedules  42    Article 7 ADDITIONAL AGREEMENTS  43   
 7.1  Tax Matters  43     7.2  Transfer Taxes  47     7.3  Employee Matters  47 
   7.4  Securities Legends  48     7.5  Confidential Nature of Information  48 
   7.6  No Public Announcement  49     7.7  Expenses  49     7.8  Directors’ and
Officers’ Indemnification  50     7.9  Non-Competition  50     7.10 
Non-Solicitation of Employees  50     7.11  Non-Solicitation of Customers  50   
 7.12  Confidentiality  50     7.13  Non-Exclusive Remedy  51     7.14 
Assignment of Accounts Receivable  51     7.15  FIRPTA Certificate  51     7.16 
Access to Records  51    Article 8 INDEMNIFICATION  52     8.1  Definition of
Loss  52     8.2  Specific Indemnification Obligations—by Seller  52     8.3 
Specific Indemnification Obligations – by Buyer  54     8.4  Certain
Limitations  54     8.5  Notice of Claims  55     8.6  Third Person Claims  56 
   8.7  Additional Limitations  58     8.8  Survival; Exclusive Remedies  59   
 8.9  Treatment of Indemnity Payment  59 

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Article 9 TERMINATION  59     9.1  Termination  59     9.2  Notice of
Termination  59     9.3  Effect of Termination  60    Article 10 GENERAL
PROVISIONS  60     10.1  Good Faith; Cooperation; Further Assurances  60   
 10.2  Notices  60     10.3  Assignment; Successors in Interest  61     10.4  No
Third Party Beneficiaries  62     10.5  Severability  62     10.6  Remedies  62 
   10.7  Controlling Law; Integration; Amendment; Waiver  62     10.8 
Counterparts  63 

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LIST OF SCHEDULES

Schedule        Schedule 1.1(A)  Permitted Real Property Encumbrances  Schedule
1.1(B)    Adjustment Amount Examples  Schedule 1.1(C)   General Ledger Accounts 
Schedule 1.1(D)  Deferred Compensation Payments  Schedule 3.2(b)  Required
Government Approvals  Schedule 3.3(c)  Consents Obtained by Seller  Schedule
3.5(e)  Amounts Owed to Companies by Seller  Schedule 3.6  Excluded Assets 
Schedule 4.1  Violations or Conflicts  Schedule 4.2  List of Jurisdictions where
Business Conducted  Schedule 4.3  Encumbrances on Capital  Schedule 4.4  
Conflicts and Consents  Schedule 4.5(a)  Audited 2005, Unaudited 2006 and
Projected 2007 Financial Statements  Schedule 4.5(b)  Status of Financial
Statements  Schedule 4.5(c)  Absence of Changes  Schedule 4.5(d)  Accounts
Receivable  Schedule 4.5(e)  Undisclosed Liabilities  Schedule 4.6  Unpaid
Taxes  Schedule 4.7  Governmental Permits  Schedule 4.8(a)  Intellectual
Property  Schedule 4.8(b)  Intellectual Property Agreements  Schedule 4.8(c) 
Registered, Assumed or Fictitious Business Names  Schedule 4.8(d)  Intellectual
Property Licenses  Schedule 4.9(a)(I)  Real Property  Schedule 4.9(a)(II) 
Plant, Machinery and Tangible Personal Property  Schedule 4.9(b)  Material
Leases  Schedule 4.9(c)  Condemnation Proceedings  Schedule 4.10  Material
Contracts  Schedule 4.11  Insurance Policies  Schedule 4.12  Violation,
Litigation or Regulatory Actions  Schedule 4.13  Employee Plans  Schedule 4.14 
Labor Disputes  Schedule 4.15  List of Employees  Schedule 4.16  Insider
Interests  Schedule 4.17  Environmental Compliance  Schedule 4.18  Inventory 
Schedule 5.3  Litigation or Regulatory Action  Schedule 6.5(b)    Actions Prior
to Closing  Schedule 6.7  Seller Commitments  Schedule 6.8  2006 Financial
Statements and Unaudited 2007 Financial Statements  Schedule 7.10  List of
Employees Seller May Solicit 

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STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT, dated as of April 13, 2007, (as the same may
be amended from time to time, this “Agreement”) by and between the following
parties (sometimes referred to individually as a “Party” and collectively as the
“Parties”):

 * RONALD J. RICE, an individual resident in Florida (“Seller”), and
      
 * PLAYTEX PRODUCTS, INC., a Delaware corporation (“Buyer”).

WITNESSETH

WHEREAS:

1.       Seller owns all the outstanding shares of capital stock of Tiki Hut
Holding Company, Inc., a Florida corporation (“Holdco”).   2. Holdco owns all
the outstanding shares of capital stock of Tanning Research Laboratories, Inc.,
a Florida corporation (“TRL”) and Hawaiian Tropic Europe, Inc., a Florida
corporation (“HTE”). Holdco, TRL and HTE are sometimes referred to individually
as a “Company” and collectively as the “Companies” and TRL and HTE are sometimes
referred to individually as an “Operating Company” and collectively as the
“Operating Companies.”   3. TRL is engaged in the business of developing,
manufacturing, distributing and selling consumer suncare and related skincare
products in the United States and certain other countries, and HTE is engaged in
the business of distributing and selling such products in certain countries in
Europe, Asia and North Africa (collectively the “Business”).   4. The Seller
wishes to sell and Buyer wishes to purchase the Companies.

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto agree as follows:

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ARTICLE 1 DEFINITIONS

1.1       Terms. Each of the following terms has the meaning set forth or
referred to below:     “2005 Financial Statements” – see Section 4.5(a)(i)    
“2006 Financial Statements” – see Section 6.8.     “Adjustment Amount” – an
amount, which may be positive or negative, equal to the sum of

(i) the lesser of (a) the applicable Working Capital Cap and (b) the Closing
Date Working Capital, plus

(ii) the net amount of all outstanding cash and cash equivalents of the
Companies on the Closing Date as shown in the general ledger accounts identified
in Schedule 1.1(C), Item I (“Net Cash”), minus

(iii) the lesser of (a) the applicable Working Capital Cap and (b) the Target
Working Capital.

          

See examples on Schedule 1.1(B).

“Adjustment Statement” – see Section 2.3(a).

“ADSP” – see Section 7.1(c).

“Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, which shall
include, but not be limited to (i) a director, officer, shareholder, subsidiary
or employee of the first Person, (ii) a spouse, parent, sibling or descendent of
such Person (or spouse, parent, sibling or descendent of any director or
executive officer of such Person). “Control” means the possession, directly or
indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise.

“Aggregate Deemed Sales Price” – see Section 7.1(c)(iii).

“Agreement” – see the Preamble.

“Antitrust Division” – see Section 6.4(a).

“Applicable Law” – with respect to any Person, any Law in effect on the date of
this Agreement that is applicable to such Person or its business, properties or
assets.

“Applicable Reserves” – the following reserves, allowances, offsets and
discounts (shown where applicable by general ledger account number) applied by
the Companies to accounts receivable and determined as of any relevant date in
accordance with the Ordinary Course of Business: (i) allowance for returned
items (##122000, 122002), (ii) allowance for doubtful accounts (#124000), (iii)
accrued marketing development funds (#217600), (iv) accrued bill backs (#217610)
and (v) cash discounts granted to specific customers.

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“Basket” – see Section 8.4(b)(ii).

“Business” – see the Preamble.

“Buyer” – see the Preamble.

“Buyer’s Ancillary Agreements” – see Section 3.5(e).

“Buyer Related Parties” – see Section 8.2.

“California Sunscreen Litigation” – the litigation described in item 4 of
Schedule 4.12.

“Claim Notice” – see Section 8.5(a).

“Closing” – see Section 3.1.

“Closing Date” – see Section 3.1.

“Closing Date Indebtedness” – any indebtedness of the Companies under the
Existing Debt Agreements, and any additional debt agreements permitted by Buyer
under Section 6.5(b)(xv), including (i) any outstanding overdrafts that are or
would be funded via advances under the Revolving Credit Agreement, (ii) any
interest accrued on such indebtedness as of the Closing Date, (iii) amounts
incurred under the Revolving Credit Agreement to fund the Deferred Compensation
Payments, and (iv) any prepayment, change of control or similar penalties and
expenses that are payable as a result of the repayment of such indebtedness on
the Closing Date.

“Closing Date Working Capital” – an amount equal to the sum of (i) the Specified
Current Assets minus (ii) the Specified Current Liabilities as of the Closing
Date.

“Code” – the Internal Revenue Code of 1986, as amended.

“Company/Companies” – see the Preamble.

“Confidentiality Agreement” – the Confidentiality Agreement dated February 9,
2007, by and between Buyer and Holdco, as amended and supplemented from time to
time.

“Continuing Employee” – see Section 7.3(a).

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“Contract” – any written or oral contract, indenture, note, bond, loan,
instrument, lease, commitment or other agreement.

“Deferred Compensation Payments” – an amount equal to the sum of amounts
specified on Schedule 1.1(D) (net of all withholding taxes), which are owed by
the Companies to the specified individuals on Schedule 1.1(D) pursuant to the
Deferred Compensation Plans.

“Deferred Compensation Plans” – the Tanning Research Laboratories Inc. Deferred
Compensation Plan, originally effective March 1, 1993 and effective January 1,
2005 as restated, and the Tanning Research Laboratories Inc. No. 2 Deferred
Compensation Plan, originally effective June 1, 1996.

“Designated Auditors” – Cross Fernandez & Riley, of Orlando, Florida.

“Disputes Auditors” – see Section 2.3(e).

“Draft Allocation” – see Section 7.1(c).

“Due Diligence Materials” – (i) the due diligence materials distributed in
written or digital form by or on behalf of Seller to Buyer in connection with
the transactions or this Agreement, including the Information Memorandum, (ii)
the materials made available to Buyer in connection with any management
presentation made by or on behalf of the Companies, and (iii) all materials made
available to Buyer in the electronic Project Sand Data Room hosted by Intralinks
at the website https://services.intralinks.com.

“Employee Plan” – see Section 4.13(a)(iii).

“Encumbrance” – any lien, charge, security interest, option, claim, mortgage,
deed of trust, deed to secure debt, license, occupancy agreement, lease, right
of first refusal, easement, servitude, pledge, proxy, voting trust or agreement,
or other restriction on title or transfer of any nature whatsoever.

“Enterprise Value” – see Section 2.2(a).

“Environmental Laws” shall mean all federal, state, and local statutes,
regulations, and ordinances, in each case concerning pollution or protection of
the environment (including, without limitation, all those relating to the
presence, production, generation, handling, transport, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, or cleanup of any hazardous or otherwise regulated
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation).

“ERISA” – see Section 4.13(a)(i).

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“ERISA Affiliate” – see Section 4.13(a)(ii).

“Escrow Agent” – SunTrust Bank, a Georgia banking corporation, and any successor
appointed in accordance with the terms of the Escrow Agreement.

“Escrow Agreement” – the Escrow Agreement substantially in the form attached as
Exhibit A, to be dated on or about the Closing Date, among Seller, Buyer and the
Escrow Agent, as amended and supplemented from time to time in accordance with
its terms.

“Escrow Amount” – see Section 2.2(b).

“Escrow Funds” – the funds held by the Escrow Agent pursuant to the Escrow
Agreement and consisting of the Working Capital Escrow Fund and the General
Escrow Fund and accumulated earnings and interest thereon, less any
distributions therefrom in accordance with the Escrow Agreement.

“Estimated Working Capital” – see Section 2.3(a).

“Excluded Assets” – the assets and properties listed on Schedule 3.7.

“Existing Debt Agreements” – (i) the Revolving Credit Agreement, (ii) the Term
Credit Agreement, (iii) the Hickey Note, (iv) the obligation of TRL to pay
Hickey the sum of $275,000 pursuant to Section 1(d) of the Hickey Stock Purchase
Agreement, and (v) the Schories Note.

“Final Adjustment Statement” – see Section 2.3(j).

“Final Allocation” – see Section 7.1(c).

“Flow-Through Income Taxes” – any Income Taxes for any Tax Period ending on or
prior to the Closing Date related to or attributable to the Companies for which
Seller is primarily liable under local law.

“FTC” – see Section 6.4(a).

“GAAP” – United States generally accepted accounting principles as in effect
from time to time.

“General Escrow Fund” – see Section 2.2(b).

“Governmental Authority” – any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including any governmental authority, agency, department, board, commission or
instrumentality of the United States of America or any foreign country in which
any Company transacts business, any state or political subdivision thereof, and
any tribunal, court or arbitrator(s) of competent jurisdiction.

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“Hickey” – Stephen E. Hickey, a resident of Colorado and a former stockholder of
Holdco.

“Hickey Note” – the Subordinated Promissory Note dated as of July 31, 2005, by
Holdco and TRL in favor of Hickey in the original principal amount of $463,846.

“Hickey Stock Purchase Agreement” – the Stock Purchase and Settlement Agreement,
dated as of July 20, 2005, by and among Hickey, Holdco and TRL.

“Holdco” – see the Preamble.

“HSR Act” – the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

“HTE” – see the Preamble.

“Income Tax” – any federal, state, local or foreign income Tax, alternative
minimum Tax or other similar Tax (but only if determined with respect to net
income).

“Income Tax Return” – any Tax Return relating to Income Taxes.

“Indemnified Party” – see Section 8.5(a).

“Indemnitor” – see Section 8.5(a).

“Individual Deductible” – see Section 8.4(b)(i).

“Information Memorandum” – the Confidential Executive Summary dated January 2007
with respect to the Companies and the Business.

“Initial Purchase Price” – see Section 2.2(b)(i).

“Intellectual Property” – see Section 4.8(a).

“IRS” – see Section 4.6(d).

“Knowledge” – (i) with respect to the Seller or the Companies, the actual
knowledge of Ronald J. Rice, Bill Jennings, Larry Adams, Jack Surrette and Amy
Williams, and (ii) with respect to the Buyer, the actual knowledge of Kris
Kelley and Bill Stammer.

“Law” – any federal, state or local law, statute, code, ordinance, rule,
regulation, or other requirement (including common law) enacted, promulgated,
issued or entered by a Governmental Authority.

“Loss” – see Section 8.1.

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“Material Adverse Effect” – a material adverse effect on the Business, or the
assets, liabilities, results of operations or financial condition of the
Companies taken as a whole, other than changes (i) relating to generally
applicable economic conditions or to the suncare industry in general, or (ii)
resulting from the issuance of any decision, judgment or other order in
connection with the California Sunscreen Litigation, or from any other
development in connection with such litigation.

“Material Contracts” – see Section 4.10(a).

“Material Leases” – see Section 4.9(b).

“Objection Notice” – see Section 2.3(b).

“Operating Company/Companies” – see Preamble.

“Ordinary Course of Business” – the ordinary course of business of the Companies
consistent with past practice.

“Pension Plan” – see Section 4.13(a)(ii).

“Permitted Encumbrances” – (i) requirements or restrictions arising under
Applicable Law in connection with any approval or consent of any Governmental
Authority required for the transfer of the Shares; (ii) liens for Taxes and
other governmental levies that are not yet due and payable or, if due, that are
being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established; (iii) inchoate mechanics’,
workmen’s, repairmen’s, warehousemen’s, carriers’ or other liens, including all
statutory liens; (iv) conditional sales contracts and equipment leases with
third parties entered into in the Ordinary Course of Business; (v) Permitted
Real Property Encumbrances; (vi) purchase money liens and liens securing rental
payments under capital lease arrangements; pledges or deposits under workers’
compensation legislation, unemployment insurance Laws or similar laws; (vii)
good faith deposits in connection with bids, tenders or contracts, including
rent security deposits; and (viii) pledges or deposits to secure public or
statutory obligations; and (ix) the security interests, pledges and mortgages
created pursuant to the Existing Debt Agreements; and (x) other Encumbrances
contemplated by this Agreement or otherwise reflected or referred to in the
Schedules hereto (including the Financial Statements and any notes thereto).

“Permitted Real Property Encumbrances” – (i) zoning, planning and building codes
and other Applicable Laws regulating the use, development and occupancy of the
Properties and permits, consents and rules under such Laws; (ii) Encumbrances,
rights-of-way, covenants, conditions, restrictions and other matters affecting
title to the Properties which do not materially detract from the value of the
Properties or materially restrict (or otherwise materially interfere with) the
use of the Properties, in each case, based on the current use of the Properties;
and (iii) matters identified in Schedule 1.1(A).

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“Person” – any natural persons, corporations, limited partnerships, limited
liability companies, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and all
Governmental Authorities.

“Properties” – see Section 4.9.

“Purchase Price” – see Section 2.2(b)(ii).

“Revolving Credit Agreement” – the Credit Agreement, dated February 1, 2007,
among the Operating Companies, as borrowers, Holdco, as guarantor, and SunTrust
Bank and Ableco Finance LLC, as lenders, as amended from time to time.

“Ron Rice Deferred Compensation Amount” – the deferred compensation accrued on
the books and records of TRL for the benefit of Seller or his beneficiaries, as
reflected on the Unaudited 2006 Financial Statements.

“Schories Note” – the Subordinated Promissory Note dated as of December 31,
1998, by TRL and HTE in favor of Alfred Schories in the original principal
amount of $450,000.

“Section 338 Elections” – see Section 7.1(c)(i).

“Section 338 Forms” – see Section 7.1(c)(ii).

“Securities Act” – see Section 5.6(a).

 “Seller” – see the Preamble.

“Seller Commitments” – see Section 6.7.

“Seller Related Parties” – see Section 8.3.

“Seller Trust” – the Ronald J. Rice Trust of October 1, 1979.

“Seller’s Ancillary Agreements” – see Section 3.4(d).

“Shares” – see Section 2.1.

“Specified Current Assets” – the following categories of assets, as shown on a
consolidated balance sheet of the Companies prepared in accordance with Section
2.3 and in each case reflecting the amounts shown in the general ledger accounts
identified on Schedule 1.1(C), Item II: (i) accounts receivable, (ii)
inventories, and (iii) prepaid expenses and other current assets, which shall
specifically exclude (A) deferred financing fees and (B) any amounts due from
Seller or Seller Trust to the Companies.

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“Specified Current Liabilities” – the following categories of liabilities, as
shown on a consolidated balance sheet of the Companies prepared in accordance
with Section 2.3 and in each case reflecting the amounts shown in the general
ledger accounts identified on Schedule 1.1(C), Item III: (i) accounts payable,
(ii) accrued expenses (including Taxes), and (iii) refunds due customers.

“Target Working Capital” – see Section 2.3(a).

“Tax” – any and all federal, state, municipal, local or foreign tax (including
income (net or gross), gross receipts, capital gain, surtax or add-on, windfall
profits, severance, property (real or personal), asset, capital, capital stock,
intangible, production, sales, use, license, import, excise, franchise,
employment, withholding, stamp, transfer, payroll, wage, railroad, occupation,
goods and services, ad valorem, value-added or minimum, estimated taxes or any
other tax), custom duty, fee, or other like assessment or charge of any kind
whatsoever), and any related fine, penalty, interest, or addition to tax with
respect thereto, imposed, assessed or collected by or under the authority of any
taxing authority or payable pursuant to any contract or other agreement, or any
tax-sharing agreement relating to the sharing or payment of any such Tax.

“Tax Indemnity Claim” – see Section 7.1(a).

“Tax Period” – any period prescribed by any Governmental Authority for which a
Tax Return is required to be filed or a Tax is required to be paid.

“Tax Proceeding” – see Section 7.1(a)(iv).

“Tax Return” – any report, return, declaration, claim for refund, information
report or return or statement required to be supplied to a taxing authority in
connection with Taxes, including any schedule or attachment thereto or amendment
thereof.

“Taxing Authority” – any Governmental Authority exercising any authority to
impose, regulate, levy, assess or administer the imposition of any Tax.

“Term Credit Agreement” – the Credit Agreement, dated February 1, 2007, among
the Operating Companies, as borrowers, Holdco, as guarantor, and Ableco Finance
LLC, as lenders, as amended from time to time.

“Transactions” – the sale and purchase of the Shares pursuant to this Agreement
and the other transactions contemplated by this Agreement.

“TRL” – see Preamble.

“Unaudited 2006 Financial Statements” – see Section 4.5(a)(ii).

“Unaudited 2007 Monthly Financial Projections” – see Section 4.5(a)(iii).

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“Unaudited 2007 Financial Results” – see Section 6.8.

“Working Capital Cap” – see Section 2.3(a)(ii).

“Working Capital Escrow Fund” – see Section 2.2(b).

“Working Capital Projections” – the working capital amounts set forth in the
Unaudited 2007 Monthly Financial Projections.
 

1.2       Certain Rules of Construction. For purposes of this Agreement:  

           (a)       “Including” and any other words or phrases of inclusion
shall not be construed as terms of limitation, so that references to “included”
matters shall be regarded as non-exclusive, non-characterizing illustrations.  
(b) “Copy” or “copies” means that the copy or copies of the material to which it
relates are true, correct and complete.   (c) “This Agreement” includes any
amendments or other modifications and supplements, and all exhibits, schedules
and other attachments to it.   (d) Titles and captions of or in this Agreement
and the cover sheet and table of contents of this Agreement are inserted only as
a matter of convenience and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any of its provisions.   (e) Whenever
the context so requires, the singular includes the plural and the plural
includes the singular, and the gender of any pronoun includes the other genders.
  (f) Each exhibit and schedule referred to in this Agreement and each
attachment to any exhibit, schedule or this Agreement is incorporated by
reference into this Agreement and is made a part of this Agreement as if set out
in full in the first place that reference is made to it. When “Article,”
“Section,” “Subsection,” “Exhibit,” or “Schedule” is capitalized in this
Agreement, such refers to such item of or to this Agreement.   (g) The Parties
acknowledge that they have participated jointly in the negotiation and drafting
of this Agreement. If an ambiguity or question of intent or interpretation
arises as to any aspect of this Agreement, then it shall be construed as if
drafted jointly by the Parties, and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.

 

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ARTICLE 2 PURCHASE AND SALE OF SHARES

2.1       Purchase and Sale of Holdco Shares. Upon the terms and subject to the
conditions of this Agreement,  

           (a)       Seller will sell and transfer to Buyer all the issued and
outstanding shares of capital stock of Holdco (the “Shares”).   (b) Buyer will
purchase and accept delivery of the Shares and will pay the Purchase Price to
the Seller in accordance with Sections 2.2 and 2.3.   (c) Buyer will repay or
cause the Companies to repay in full the Closing Date Indebtedness by wire
transfer or delivery of immediately available funds to the bank accounts
specified by the relevant creditors holding the Existing Debt Agreements.  

2.2       Purchase Price.  

           (a)       Enterprise Value. For the purposes of this Agreement the
“Enterprise Value” of the Companies is $83,000,000.   (b) Purchase Price.  

                     (i)       The initial payment that is to be paid by Buyer
to Seller for the Shares (the “Initial Purchase Price”) shall be an amount equal
to the Enterprise Value minus the Closing Date Indebtedness.   (ii) The Initial
Purchase Price shall be subject to adjustment in accordance with the provisions
of Section 2.3, and as so adjusted is referred to as the “Purchase Price.”  

           (c)       Payment of Initial Purchase Price. Buyer will pay the
Initial Purchase Price in full at Closing by wire transfer or delivery of
immediately available funds as follows.  

                     (i)       An amount equal to the sum of the amounts
specified in clauses (A) and (B), and (C) below (the “Escrow Amount”) will be
paid to the Escrow Agent on the Closing Date to an account specified by it, to
be held and distributed by it in accordance with the terms of the Escrow
Agreement, of which:  

                               (A)       $2,000,000 (the “Working Capital Escrow
Fund”) will be held for the purpose of funding any payment due from Seller to
Buyer pursuant to Section 2.3(k)(i)(B),   (B) $6,000,000 (the “General Escrow
Fund”) will be held for a period of 18 months for the purpose of funding any
payment due from Seller to any Buyer Related Parties pursuant to Article 8, and

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(C)       an amount equal to 10% of the Initial Purchase Price less Seller’s
reasonable bankers’ and legal fees for this transaction, if not otherwise
included as part of the Closing Date Indebtedness, plus $200,000 (the “Hawaii
Escrow Fund”) will be held for 12 months for the purpose of funding any payment
due under Section 8.2(e)(vi).       (ii)       The balance of the Initial
Purchase Price will be paid to a bank account specified by Seller.   2.3      
Closing Date Adjustment Determination.     (a)       Pre-Closing Working Capital
Adjustment. The Enterprise Value and the Initial Purchase Price have been agreed
by the Parties on the assumption that the Closing Date Working Capital will be
$47,000,000 (the “Estimated Working Capital”). Not less than one business day
before the scheduled Closing Date, Seller will deliver to Buyer a revised
calculation of the Estimated Working Capital (the “Target Working Capital”). The
Target Working Capital will be prepared by the Companies’ Chief Financial
Officer from the books and records of the Companies in accordance with the
methodology used in the preparation of the Unaudited 2007 Monthly Financial
Projections. On the Closing Date, the Initial Purchase Price will be adjusted
(“Working Capital Adjustment”) as follows:       (i) a dollar-for-dollar
decrease by the amount by which the Target Working Capital is less than the
Estimated Working Capital, or       (ii) a dollar-for-dollar increase by the
amount by which the Target Working Capital is more than the Estimated Working
Capital; provided that any such dollar-for-dollar increase will not exceed the
increase that would apply if the Target Working Capital were capped at the
amount shown in the Working Capital Projections for the end of the month in
which the Closing takes place (the “Working Capital Cap”).     (b) Post-Closing
Adjustment; Adjustment Statement. As soon as reasonably practicable after the
Closing, Seller shall cause the Designated Auditors to prepare a statement (the
“Adjustment Statement”) for the Companies setting forth the calculation of the
Closing Date Working Capital and the Adjustment Amount as of the Closing Date
together with all appropriate supporting documentation, prepared in accordance
with the bases set forth, and in the order shown, below:       (i) the
accounting policies, principles, practices, evaluation rules and procedures,
methods and bases adopted in the preparation of the 2006 Financial Statements,
and

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             (ii)       to the extent not covered by (i) above, in accordance
with GAAP in effect on the Closing Date.     Buyer will cause the Companies to
provide Seller and the Designated Auditors with access to the books and records
and relevant employees of the Companies to the extent reasonably requested by
Seller or the Designated Auditors for the purpose of preparing the Adjustment
Statement.   (c)       Objection Notice. The Adjustment Statement shall be
binding and conclusive upon Buyer and Seller unless Buyer, within 60 days after
the date on which it received the Adjustment Statement, shall have notified
Seller in writing of any objections thereto (an “Objection Notice”). An
Objection Notice shall specify in reasonable detail the items in the Adjustment
Statement that are being disputed and a description in reasonable detail of the
reasons for such dispute.   (d) Access to Working Papers, etc. During the 60-day
period following Buyer’s receipt of the Adjustment Statement, Buyer and its
independent auditors shall be permitted to review and make copies of the working
papers of Seller and the Designated Auditors relating to the Adjustment
Statement.   (e) Dispute Resolution. At the request of either Buyer or Seller,
any dispute between them relating to objections made to the Adjustment Statement
in accordance with Section 2.3(c) which cannot be resolved by them within 60
days after Seller’s receipt of an Objection Notice shall be referred to a
nationally recognized accounting firm for decision in accordance with this
Section 2.3. Such firm shall be selected by mutual agreement between Buyer and
Seller or, failing such agreement, within seven days of written notice by either
Buyer or Seller to the other requiring such agreement, shall be nominated by the
President of the American Arbitration Association (or his designee) on the
application of either Party (the “Disputes Auditors”).   (f) Agreed Procedures.
Before referring a matter to the Disputes Auditors, Buyer and Seller shall agree
on procedures to be followed by the Disputes Auditors (including procedures for
presentation of evidence). If they are unable to agree upon procedures within 60
days after Seller’s receipt of an Objection Notice, the Disputes Auditors shall
establish the procedures giving due regard to the provisions of this Agreement
and the intention of the Parties to resolve disputes as quickly, efficiently and
inexpensively as reasonably possible; provided that such procedures shall (i)
give both Buyer and Seller, and their authorized representatives, a reasonable
opportunity to submit written representations, make oral submissions, and
respond to the written and oral submissions of the other Party; (ii) require
that copies of all written submissions by either Buyer or Seller are supplied to
the other; and (iii) permit Buyer and Seller, and their authorized
representatives, to be present while any oral submissions are made by the other.

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           (g)       Process. Buyer and Seller shall, as promptly as
practicable, submit evidence in accordance with the procedures agreed upon or
established by the Disputes Auditors, and the Disputes Auditors shall decide the
dispute in accordance therewith as promptly as practicable. At all times pending
resolution of any matter submitted to the Disputes Auditors pursuant to this
Section 2.3, Buyer shall cause the employees of the Companies to afford to
Seller and its accountants, counsel, financial advisers and other
representatives on-site access reasonably required at all reasonable times to
all personnel, properties, books, contracts, records, schedules, analyses and
working papers of the Companies.   (h) Decision of Disputes Auditors. The
Disputes Auditors shall review only the specific objections to the Adjustment
Statement as to which the Parties are in dispute and shall make its
determination based upon the terms, conditions and principles set forth in this
Agreement and within the range of outcomes proposed by the Parties. The Parties
agree that they will require the Disputes Auditors to render its decision within
30 days after referral of the dispute to the Disputes Auditors for decision
pursuant hereto. Except for calculation and other similar manifest errors, or
manifest disregard for the decision principles set forth in this Section 2.3(h),
the decision of the Disputes Auditors shall be final and binding on all Parties.
Judgment may be entered upon the determination of the Disputes Auditors in any
court having jurisdiction over the Party against which such determination is to
be enforced.   (i) Fees and Expenses. Buyer and Seller shall be responsible for
their own costs in respect of the preparation and review of the Adjustment
Statement. All fees and expenses of the Disputes Auditors shall be borne by
Buyer and Seller on a 50/50 basis.   (j) Final and Binding. The Adjustment
Statement shall become final and binding on all Parties upon the earliest to
occur of (i) if no Objection Notice has been given, the expiration of the period
within which Buyer may notify Seller of any objections thereto pursuant to
Section 2.3(c), (ii) the agreement by Buyer and Seller that such Adjustment
Statement, together with any modifications thereto agreed by them, shall be
final and binding, and (iii) if a matter has been submitted to the Disputes
Auditors in accordance with this Section 2.3, the date on which the Disputes
Auditors shall issue its decision with respect thereto. The Adjustment
Statement, as adjusted, where applicable, pursuant to any agreement between
Buyer and Seller or pursuant to the decision of the Disputes Auditors, when
final and binding on all Parties in accordance with the immediately preceding
sentence, is referred to as the “Final Adjustment Statement.”   (k) Purchase
Price Adjustment. The Initial Purchase Price will be adjusted by the Adjustment
Amount as follows:

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  (i)       Within 10 business days after the Final Adjustment Statement has
become final and binding on Buyer and Seller:       (A)       if the Adjustment
Amount is positive, Buyer shall pay to Seller, by wire transfer in immediately
available funds, without set-off or counterclaim and to the account designated
by Seller in writing, an amount equal to the Adjustment Amount; or       (B) if
the Adjustment Amount is negative, Seller shall pay to Buyer, by wire transfer
in immediately available funds, without set-off or counterclaim and to the
account designated by Buyer in writing, an amount equal to the absolute value of
the Adjustment Amount.     (ii) Notwithstanding the foregoing provisions of this
Section 2.3(k), if       (A) the Adjustment Statement delivered by Seller
pursuant to Section 2.3(a) and any Objection Notice delivered by Buyer pursuant
to Section 2.3(b) would both require a payment by the same Party, then       (B)
within 10 days after delivery of the Objection Notice, that Party shall make a
payment to the other Party, in the manner and with interest as provided
elsewhere in this Section 2.3, in an amount equal to the lesser of         1.
      the amount payable by that Party pursuant to the calculation reflected in
the Adjustment Statement, and         2. the amount payable by that Party
pursuant to the calculation reflected in the Objection Notice.         Any
amount paid pursuant to the preceding sentence shall be applied against, and
correspondingly reduce, the amount otherwise payable under this Section 2.3.  
           (l)       Payment from Escrow. Any amounts payable by Seller to Buyer
pursuant to this Section 2.3 shall be satisfied as follows:     (i)  first, from
the Working Capital Escrow Fund pursuant to the terms of the Escrow Agreement,
and     (ii) second, if the Working Capital Escrow Fund is insufficient, from
Seller, to be paid pursuant to Section 2.3(k)(i)(B).   (m) Interest. Any amount
payable by a Party pursuant to Section 2.3(k) shall be paid with interest
thereon at a rate per annum equal to the three-month treasury bill rate (as
reported by The Wall Street Journal or, if not reported thereby, by another
authoritative source) in effect on the Closing Date plus 1.0%, calculated on the
basis of the actual number of days elapsed over 365, from the Closing Date to
the date of actual payment, compounded annually.

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  (n)       Effect on Representations and Warranties. Any item that is taken
into account in determining the Adjustment Amount shall not, to the extent
accounted for in determining the Final Adjustment Statement, form the basis of a
claim for breach of any representation, warranty or covenant, or a claim for
indemnification, under this Agreement, and shall not be taken into account in
determining whether a Material Adverse Effect has occurred.   ARTICLE 3 CLOSING
  3.1        Closing Date. Subject to the provisions of Article 3 and Article 8,
the payments and deliveries described in this Article 3 (collectively, the
“Closing”) shall be made at the offices of Sutherland Asbill & Brennan LLP, 999
Peachtree Street, Atlanta, Georgia 30309, on April 18, 2007 or, if later, on the
third business day after the conditions set forth in Section 3.2(b) have been
satisfied, or at such other place, date and time as the Parties may agree. The
date on which the Closing is actually held is referred to as the “Closing Date.”
The Closing shall be effective as of 12:01 a.m. on the Closing Date.   3.2
Conditions to Both Parties Obligations. Seller’s obligation to sell the Shares
to Buyer and to perform the other actions required of him at Closing, and
Buyer’s obligation to purchase the Shares and to perform the other actions
required of it at Closing, are subject to the fulfillment of each of the
following conditions prior to or at the Closing.     (a) No Restraint. No
injunction or restraining order shall have been issued by any court of competent
jurisdiction and remain in effect which restrains or prohibits any material part
of the Transactions.     (b) Governmental Consents, Etc.. Each of the filings,
notifications and registrations with the Governmental Authorities listed on
Schedule 3.2(b) shall have been made, all applicable waiting periods that would
prevent or prohibit completion of the Transactions shall have expired or been
terminated, all inquiries (formal and informal), shall have been completed, and
all consents and authorizations from such Governmental Authorities with respect
to the Transactions that are referred to in such Schedule 3.2(b) shall have been
obtained or issued, and shall remain in full force and effect.   3.3 Conditions
to Seller’s Obligations. Seller’s obligations to make his deliveries at the
Closing are subject to the following conditions (any of which may be waived by
Seller):

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(a)       Representations and Warranties. Each of Buyer’s representations and
warranties contained in this Agreement shall be true in all material respects as
of the Closing after giving effect to all curative actions by Buyer, as though
made at and as of such date, except in each case for changes permitted or
contemplated by this Agreement.     (b) Agreements. There shall have been no
material breach by Buyer in the performance of its obligations under this
Agreement which has not been cured.     (c) Consents. Seller shall have obtained
the consents or other agreements of the necessary Persons listed on Schedule
3.3(c).     (d) Release of Seller Commitments. Seller shall have been released
from each of the Seller Commitments, without being required to make any payment
to any Person in lieu of such Commitments or to incur any similar obligation.  
3.4 Conditions to Buyer’s Obligations. Buyer’s obligation to make its payments
and deliveries at the Closing are subject to the following conditions (any of
which may be waived by Buyer):     (a) Representations and Warranties. Each of
Seller’s representations and warranties (without giving effect to any
qualification contained therein as to materiality, including without limitation,
the phrases “material,” “in all material respects,” and “Material Adverse
Effect”) contained in this Agreement (i) shall be true in all material respects
as of the date hereof, and (ii) shall be repeated and shall be true and correct
in all material respects on and as of the Closing with the same effect as though
made on and as of the Closing.     (b) Agreements. There shall have been no
material breach by Seller in the performance of its obligations under this
Agreement which has not been cured.     (c) Consents. Buyer shall have obtained
the consents or other agreements of the necessary Persons listed on Schedule
3.4(c).     (d) 2006 Financial Statements. The consolidated net operating income
of the Companies for the fiscal year ending December 31, 2006, as shown in the
2006 Financial Statements, shall not have been reduced by more than $1,000,000
from the net operating result shown on the 2006 Unaudited Financial Statements
(excluding any changes related to the amounts accrued on the Unaudited 2006
Financial Statements relating to the Deferred Compensation Plans and the release
by Seller to his right to receive the Ron Rice Deferred Compensation Amount).  
3.5       Seller’s Closing Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Sections 3.2 and 3.3, at the Closing Seller shall
deliver to Buyer all of the following:     (a) Stock Certificate. One or more
stock certificates representing all the Shares, together with a separate stock
transfer power duly endorsed by Seller for transfer of the Shares to Buyer.

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  (b)       Certificate. A certificate, duly executed by Seller, to the effect
that the conditions specified in Section 3.4(a) and (b) have been satisfied,
after giving effect to any permitted supplements to the Schedules.     (c)
Escrow Agreement. The Escrow Agreement, duly executed by the Seller and the
Escrow Agent.     (d) Seller’s Ancillary Agreements. Each of the other
agreements, instruments and documents that under the terms of this Agreement are
required to be executed and delivered by Seller on or before the Closing
(together with the other agreements required to be delivered pursuant to this
Section 3.5, “Seller's Ancillary Agreements”).     (e) Payment of Amounts Owed
to Companies. Payment by Seller of the outstanding amount of the advances made
to him by any Company and described in Schedule 3.5(e).   3.6       Buyer’s
Closing Deliveries. Subject to fulfillment or waiver of the conditions set forth
in Sections 3.2 and 3.4, at the Closing Buyer shall deliver all of the following
either to Seller or such other person as may be specified:     (a) Closing Date
Indebtedness. Payment of the Closing Date Indebtedness in accordance with the
terms of Section 2.1(a).     (b) Purchase Price to Seller. Payment of the
Initial Purchase Price in accordance with the terms of Section 2.2(c).     (c)
Secretary’s Certificate. Certificate of the Secretary or an Assistant Secretary
of Buyer, dated the Closing Date, in form and substance reasonably satisfactory
to Seller, as to the resolutions of the Board of Directors of Buyer authorizing
the execution and performance of this Agreement, Buyer’s Ancillary Agreements
and the Transactions.     (d) Officer’s Certificate. A certificate, duly
executed by a duly authorized officer of Buyer, to the effect that the
conditions specified in Section 3.3(a) and (b) have been satisfied.     (e)
Escrow Agreement. The Escrow Agreement, duly executed by the Buyer.     (f)
Buyer’s Ancillary Agreements. Each of the other agreements, instruments and
documents that under the terms of this Agreement are required to be executed and
delivered by Buyer on or before the Closing (together with the other agreements
required to be delivered pursuant to this Section 3.6, the “Buyer's Ancillary
Agreements”).

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3.7       Transfer of Excluded Assets. Contemporaneously with the Closing, to
the extent that any of the Excluded Assets have not previously been transferred
by the Companies to Seller, or his designee, such remaining Excluded Assets will
be transferred to Seller, or his designee, as described in Schedule 3.7.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER

As an inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, but subject to Section 4.22, Seller represents
and warrants to Buyer as follows:   4.1       Seller.     (a) Powers;
Authorization; Binding Nature. With respect to this Agreement and the Seller’s
Ancillary Agreements:       (i) Seller has the power and authority to execute
and deliver this Agreement and the Seller’s Ancillary Agreements, to consummate
the Transactions and otherwise to comply with or perform his obligations under
such agreements; and       (ii)       this Agreement and the Seller’s Ancillary
Agreements constitute valid and binding agreements of the Seller that are
enforceable against him in accordance with their terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and similar Laws of general application relating to or affecting creditor’s
rights, equitable principles affecting creditors’ rights generally and the
discretion of the courts in granting equitable remedies.     (b)       Absence
of Violations or Conflicts. Except as disclosed on Schedule 4.1, the execution
and delivery by Seller of this Agreement and the Seller's Ancillary Agreements,
the consummation of the Transactions and the performance by him under and the
compliance with the terms and conditions of this Agreement and Seller’s
Ancillary Agreements do not and will not (with the giving of notice or lapse of
time or both):       (i) constitute a violation of or default under, conflict
with, or result in the creation or imposition of any Encumbrance in, upon or
with respect to the Shares under any Contract to which Seller is a party or to
which his Shares are subject, or any Applicable Law, or       (ii) create, or
cause the acceleration of the maturity of, any debt, obligation or liability of
Seller that would result in the imposition of any Encumbrance upon or with
respect to the Shares other than the obligation to sell his Shares to Buyer
under this Agreement.

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  (c)       No Consents Required. Except as disclosed on Schedule 4.1, no
consent, approval, order or authorization of, or registration, declaration or
filing by Seller with, any Governmental Authority or other person is required in
connection with Seller’s execution or delivery of, or his performance under or
compliance with, this Agreement or the Seller’s Ancillary Agreements or the
consummation of the Transactions.     (d) Share Ownership. Seller is the owner
of record and beneficially of all of Holdco’s issued and outstanding capital
stock. Seller owns all right, title and interest in and to the Shares, free and
clear of all Encumbrances (other than transfer restrictions that arise solely by
operation of federal or state securities Laws). The transfer by Seller of the
Shares to the Buyer pursuant to this Agreement will pass to the Buyer all right,
title and interest to and in the Shares free of any Encumbrance. The Shares were
obtained by such Seller in transactions that complied fully with federal and
state securities Laws.     (e) No Claims. No act or omission by any Seller or
any predecessor in interest or by any Company (including any prior offer,
purchase, sale, transfer, negotiation or transaction of any kind with respect to
any capital stock, securities or ownership interests in any Company, or any
options, warrants, subscriptions, puts, calls or other rights, commitments,
undertakings or understandings to acquire any of the same) has resulted or will
result in any person, including any former shareholder or holder of any
ownership interest in any Company or any of its predecessors, having any valid
claim or cause of action against Seller, any Shares, any Company or the Buyer as
a result of, or in any way connected with, the transactions contemplated by this
Agreement.   4.2       Status of the Companies.     (a) Each Company is a
corporation duly organized, validly existing and in good standing under the
corporation Laws of the State of Florida.     (b) Each Company is duly qualified
to transact business and is in good standing under the corporation Laws in each
jurisdiction listed on Schedule 4.2, and is not required to be similarly
qualified in any other jurisdiction, except where the failure to be so qualified
or in good standing would not have a Material Adverse Effect.     (c) Holdco has
the corporate power and corporate authority to own the shares of the Operating
Companies. Each of the Operating Companies has the corporate power and corporate
authority to own or lease and operate and use all of its properties and to carry
on the Business in the manner that it is currently conducted.

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4.3 Capitalization.     (a)       The authorized capital stock of Holdco
consists of 100,000 shares of common stock, $0.01 par value, of which 93,920
shares, which constitute all the Shares, are validly issued and outstanding,
fully paid and nonassessable and free of preemptive rights. In addition 6,080
shares of such common stock are held in the treasury of Holdco. The authorized
capital stock of TRL consists of 500,000 shares of common stock, $0.01 par
value, of which 322,637.43 shares are validly issued and outstanding, fully paid
and non-assessable and free of pre-emptive rights. The authorized capital stock
of HTE consists of 1,000 shares of common stock, $1.00 par value, of which
981.36 shares are validly issued and outstanding, fully paid and non-assessable
and free of pre-emptive rights. No shares of capital stock are held in the
treasury of either TRL or HTE.     (b) Holdco owns all of the outstanding
capital stock of HTE and TRL. Except as disclosed on Schedule 4.3, all of the
issued and outstanding equity securities of each Operating Company are owned of
record and beneficially by Holdco, free and clear of all Encumbrances (other
than transfer restrictions that arise solely by operation of federal or state
securities Laws).     (c) There are no authorized or outstanding options,
warrants, subscriptions, puts, calls or other rights, commitments, undertakings
or understandings to acquire, dispose of or restrict the transfer of, any shares
of capital stock or other securities of any kind or rights, obligations or
undertakings convertible into securities of any kind or class of any Company.
None of the Companies is subject to any obligation to purchase, redeem or
otherwise acquire any of its capital stock or securities (or any options or
rights or obligations described in the preceding sentence) upon the occurrence
of a specified event (assuming that specified time periods have passed and
appropriate notices have been given) or otherwise.   4.4       Conflicts and
Consents. Except as set forth in Schedule 4.4, the execution and delivery of
this Agreement and the Seller’s Ancillary Agreements and the consummation of the
Transactions, and the compliance with or fulfillment of the terms, conditions
and provisions this Agreement and the Seller’s Ancillary Agreements will not:  
  (a) violate, conflict with, constitute a default under, require the consent of
a third party under, permit a termination of, result in the creation or
imposition of any Encumbrance in, upon or with respect to any of the property of
any Company under, or accelerate any obligation or require any payment under,  
    (i)       the articles of incorporation or by-laws of any Company,      
(ii) any Material Contract.

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  (iii)       any permit, judgment, order or decree of any Governmental
Authority to which any Company is a party or by which any Company is bound, the
result of which singly or in the aggregate would reasonably be expected to have
a Material Adverse Effect, or       (iv) any Applicable Law affecting any
Company the result of which would reasonably be expected to have a Material
Adverse Effect, or     (b)       require the approval, consent, authorization or
act of, or the making by any Company of any declaration, filing or registration
with, any Governmental Authority, except for such approvals, consents,
authorizations, declarations, filings or registrations, the failure of which to
be obtained or made would not have a Material Adverse Effect.   4.5      
Financial Matters.     (a) Financial Statements. Attached to Schedule 4.5(a)
are:       (i) the audited consolidated balance sheet of the Companies as of
December 31, 2005 and the related audited consolidated statements of income and
comprehensive income and audited consolidated statement of cash flow for the
year ended on such date (collectively the “2005 Financial Statements”),      
(ii) the unaudited consolidated balance sheet of the Companies as of December
31, 2006 and the related unaudited consolidated statements of income and
comprehensive income for the year ended on such date (the “Unaudited 2006
Financial Statements”), and       (iii) the monthly 2007 financial projections
(the “Unaudited 2007 Monthly Financial Projection”).     (b) Status of Financial
Statements. Except as disclosed on Schedule 4.5(b) all such statements listed in
Section 4.5(a)(i) and, solely with respect to clause (i) and (ii) below, all
such other statements:       (i) have been prepared from and in accordance with
the books and records of the Companies,       (ii) have been prepared in all
material respects in accordance with GAAP, consistently applied (except as
otherwise noted), and       (iii) present fairly the financial position and
results of operations of the Companies as of their respective dates and for the
respective periods covered thereby.

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           (c)       Absence of Changes. Except as set forth in Schedule 4.5(c)
or in connection with the Transactions, since December 31, 2006, the Companies
have conducted the Business in the Ordinary Course of Business and none of the
following have occurred:     (i)       any change (other than in the Ordinary
Course of Business or as required under Applicable Law) in the business,
operations, assets owned, leased or currently used by any Company, the
liabilities, properties, financial condition of any Company or results of
operation of the Business, which has had a materially adverse effect on the
Companies’ ability to operate the Business as it has previously been conducted;
    (ii) any damage, destruction or loss with respect to any Company or its
properties or assets, whether or not covered by insurance, that has had,
individually or in the aggregate, a Material Adverse Effect;     (iii) any
material change in any method of accounting or accounting practice used by any
Company;     (iv) any single write-down of any inventory or any single
writing-off of any receivable above $15,000;     (v) any merger or consolidation
with any other corporation (or any transaction having a similar effect)
involving any Company or any acquisition of any business unit or operation
(however effected) of any other Person to which any Company was a party;    
(vi) any declaration, setting aside or payment of any dividend (other than in
the Ordinary Course of Business) or other distribution of cash or other assets
in respect of any Company’s capital stock or other securities or any direct or
indirect issuance by any Company, or redemption, purchase or other acquisition
by any Company, of any such stock or Contract to do so;     (vii) any incurring
of any indebtedness, other than borrowings under the Revolving Credit Agreement
and the Term Credit Agreement, and the incurrence of trade payables or other
current expenses in the Ordinary Course of Business, or any grant or incurring
of any Encumbrance on any of Company’s assets to secure any indebtedness except
Permitted Encumbrances;     (viii) any sale, lease or other conveyance of all or
any portion of (or any interest in) any material property owned by any Company
(other than sales of inventory and licenses of trademarks and trade names and
other dispositions in the Ordinary Course of Business, the creation of Permitted
Encumbrances, and the transfer of any Excluded Assets as contemplated by
Schedule 3.7);

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    (ix)       any material increase in the wages, salaries, benefits or other
compensation of any officer, director, employee or agent of any Company (except
for increases implemented as a result of the compensation policies of the
Operating Companies and customary and regularly scheduled increases based on
term of service or promotion);       (x) any appointment of a receiver or the
commencement of any other bankruptcy proceeding with respect to any Company; or
      (xi) any Contract to do any of the foregoing.     (d)       Accounts
Receivable. Except as set forth on Schedule 4.5(d), all accounts receivable of
the Operating Companies reflected on the books and records as of the date of
this Agreement, or that will be reflected on the 2006 Financial Statements and
on its books and records as of the Closing Date (i) are valid obligations that
arise, or will arise, from bona fide transactions in the Ordinary Course of
Business and (ii) are collectible in full net of Applicable Reserves within 180
days after the Closing Date. The Companies have not made any sales of products
in Brazil.     (e) Undisclosed Liabilities. Except (i) as set forth in Schedule
4.5(e) and the other exhibits and schedules to this Agreement, (ii) as disclosed
in the Unaudited 2006 Financial Statements, (iii) for liabilities and
obligations which have arisen since December 31, 2006 in the Ordinary Course of
Business, and (iv) for liabilities and obligations arising in accordance with
the terms of a Contract or authorization or approval of, or filing with any
Governmental Authority to which a Company is a party and not as a result of any
breach of any such Contract or authorization or approval of, or filing with any
Governmental Authority, the Companies do not have any liabilities or obligations
that are required to be reflected on a balance sheet prepared in accordance with
GAAP.   4.6       Taxes.     (a) All material Tax Returns that are or were
required to be filed by any Company have been filed on a timely basis (including
any valid extensions of time for filing such Tax Returns). All such Tax Returns
were correct and complete in all material respects. The Companies have paid, or
made provision for the payment of, all Taxes due and required to be paid by or
with respect to the Companies for all Tax Periods ending on or prior to the
Closing Date.     (b) Except as set forth in Schedule 4.6,

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(i) no audit of a Tax Return of a Company is currently being conducted, and
neither Seller nor any Company has received any notice that any federal, state,
local or other Taxing Authority intends to conduct such audit,       (ii)      
neither Seller nor the Companies has received any written notice of proposed
adjustments, written notice of deficiency or assessment from any federal, state,
local or other Taxing Authority with respect to any material Taxes owed by any
Company that has not previously been resolved, or that is not adequately
reserved for in the financial statements of the Companies and being contested in
good faith through appropriate proceedings,       (iii) no Company has waived or
extended any statute of limitations with respect to any Taxes that may be due or
owing by any Company, and       (iv) the unpaid Taxes of the Companies (A) do
not exceed the reserve for Tax liability set forth in the most recent Unaudited
2007 Monthly Financial Results and (B) will not exceed that reserve as adjusted
for operations and transactions through the Closing Date in accordance with the
past custom and practice of the Companies in filing their Tax Returns.     (c)
None of the Companies is a party to any Tax sharing or Tax allocation agreement
(other than amongst themselves).              (d)       A valid election has
been made to treat Holdco as an “S corporation” within the meaning of Section
1361(a)(1) of the Code at all times since the date of its organization. A valid
election was made to treat HTE as an “S corporation” within the meaning of
Section 1361(a)(1) of the Code since the date of its organization through
September 27, 2000 and a valid election has been made to treat HTE as a
“qualified subchapter S subsidiary” within the meaning of Section 1361(b)(3)(B)
of the Code at all times since September 27, 2000. A valid election was made to
treat TRL as an “S corporation” within the meaning of Section 1361(a)(1) of the
Code at all times since December 1, 1988 through September 27, 2000 and a valid
election has been made to treat TRL as a “qualified subchapter S subsidiary”
within the meaning of Section 1361(b)(3)(B) of the Code at all times since
September 27, 2000. All such elections remain in effect and neither Seller nor
the Companies has taken any action, nor has any other event occurred, that would
terminate any such election. No proceedings are pending before the Internal
Revenue Service (“IRS”) or any other Taxing Authority challenging any such
election or the status of any of the Companies pursuant to Subchapter S, nor to
the Knowledge of the Seller are any such proceedings threatened.

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4.7 Governmental Permits. Except as set forth in Schedule 4.7, each Operating
Company owns, holds or possesses all permits that are necessary to entitle it to
own or lease, operate and use its assets and to carry on and conduct the
Business substantially as currently conducted, except for any permit the absence
of which would not have a Material Adverse Effect.   4.8       Intellectual
Property.     (a)       Schedule 4.8(a) contains a list, as of the date of this
Agreement, of all material United States patents and patent applications, all
U.S. and foreign copyright registrations and applications, all U.S., state and
foreign trademarks, service marks and trade names for which registrations have
been issued or applied for, and all Internet domain names (together with trade
secrets and proprietary software used in the Business, collectively, the
“Intellectual Property”), which are owned by any Company and are primarily used
in the Business as currently conducted.     (b) Schedule 4.8(b) contains a list,
as of the date of this Agreement, of all Contracts pursuant to which (i) any of
the Companies has licensed any Intellectual Property to any other Person or (ii)
any of the Companies licenses any Intellectual Property from any other Person,
provided that no disclosure is required under this Section 4.8(b) of any such
items that relate to ‘shrink-wrap’ and similar licenses of computer software or
other items that are generally available to the public.     (c) Schedule 4.8(c)
contains a list, as of the date of this Agreement, of all registered, assumed or
fictitious names under which the Companies are conducting the Business or have
conducted the Business in the previous three years.     (d) Except as set forth
in Schedule 4.8(d):       (i)       subject to licenses granted by the Operating
Companies in the Ordinary Course of Business and the limitation imposed by each
applicable licensor, and subject to security interests created pursuant to the
Existing Debt Agreements, the Companies own all right, title and interest in and
to, or have a license to use, free and clear of all Encumbrances, all the
Intellectual Property used in or necessary for the conduct of, or otherwise
material to, the Business as currently conducted;       (ii) immediately after
the Closing all Intellectual Property owned by any Company material to the
Business as currently conducted will continue to be owned by or available for
use by such Company on terms and conditions substantially equivalent to those
under which such Company owned or used the Intellectual Property immediately
before Closing;       (iii) no proceedings are pending or, to the Knowledge of
Seller, threatened against any Company that challenge the validity,
enforceability or ownership of any Company of any of its Intellectual Property;

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(iv) there is no infringement or misappropriation by any other Person of any
Intellectual Property owned by any Company material to the Business as currently
conducted;       (v)       the operations, activities, products, services and
Intellectual Property material to the Business as currently conducted do not
infringe, misappropriate or violate in any material respect issued patents,
registered trademarks, registered service marks, registered trade names,
registered Internet domain names, registered copyrights, registered trade dress
or logo, or to the Knowledge of Seller, unregistered patents, unregistered
trademarks, unregistered service marks, unregistered trade names, unregistered
copyrights, unregistered trade dress, unregistered logo, or trade secrets, of
any other Person;       (vi) the inventory currently held in Uruguay with the
“BRAZILIAN TROPIC” brand name or trademark has not infringed, misappropriated or
violated in any respect issued patents, registered trademarks, registered
service marks, registered trade names, registered Internet domain names,
registered copyrights, registered trade dress or logo, or to the Knowledge of
Seller, unregistered patents, unregistered trademarks, unregistered service
marks, unregistered trade names, unregistered copyrights, unregistered trade
dress, unregistered logo, or trade secrets, of any other Person in Uruguay or
Brazil; and       (vii) subject to licenses granted by the Operating Companies
in the Ordinary Course of Business and the limitation imposed by each applicable
licensor, and subject to security interests created pursuant to the Existing
Debt Agreements, there are no written or oral settlements or agreements,
limiting or restricting in any way the use, registration, ability to license,
assign or otherwise transfer or hypothecate any Intellectual Property.     (e)
      The Companies have used commercially reasonable efforts to preserve the
confidentiality and secrecy of trade secrets and other proprietary information
used in the Business as currently conducted.   4.9       Real and Personal
Property -- Owned or Leased. This Section 4.9 refers to the real and tangible
personal properties owned or leased by the Companies (sometimes referred to as
the “Properties”).     (a) Owned Properties. Schedule 4.9(a)(I) lists all real
property owned by any Company. Schedule 4.9(a)(II) lists all items of plant,
machinery or equipment or other tangible personal property owned by any Company
on December 31, 2006 that had a net book value as of that date of $50,000 or
more. Except as set forth in Schedules 4.9(a)(I) and (a)(II):

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(i) Each Company owns good and marketable title to all Properties owned by it
subject to no Encumbrance other than Permitted Encumbrances.       (ii)       No
Person has any rights to acquire, lease or use any of such owned Properties or
has any interest in any of such owned Properties (except as set forth in this
Agreement).     (b) Leased Properties. Schedule 4.9(b) lists the following
leases (collectively, the “Material Leases”) as of the date of this Agreement:  
    (i) all leases of real property to which any Company is a party as a lessee,
and       (ii) all leases of tangible personal property to which any Company is
a party as a lessee and which have annual aggregate rental payments of $50,000
or more and a term of more than one year.       Except as set forth in Schedule
4.9(b), each Company that is a party to a Material Lease is in possession of,
and such Material Lease grants to that Company the exclusive right to possess,
the property subject to that Lease.     (c)       Condemnation Proceedings.
Except as set forth in Schedule 4.9(c), to the Knowledge of Seller there is no
pending or contemplated condemnation or eminent domain proceeding affecting any
of such Properties that constitute real property.   4.10       Material
Contracts.     (a) Material Contracts. The term “Material Contracts” means all
Contracts to which any Company is a party that are described by any of the
following:       (i) any Material Lease;       (ii) any Contract pursuant to
which any party thereto is obligated to make payments after the date of this
Agreement aggregating for each such Contract more than $50,000 per annum,
provided that no disclosure is required under this section with respect to any
purchase order or invoice issued in the Ordinary Course of Business, which is
less than $200,000;       (iii) any Contract that requires any Company to obtain
a performance bond or letter of credit or other security arrangement;       (iv)
any Contract that requires any Company to purchase more than 90% of its
requirements for any goods or services from any one or more parties;       (v)
any Contract that establishes or creates a joint venture, partnership or teaming
Contract or arrangement;

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  (vi) any promissory note, instrument or contract that evidences indebtedness
for money borrowed by any Company;     (vii)       any Contract under which any
Company is liable by guaranty, suretyship agreement, indemnification contract,
contribution contract or otherwise, upon or with respect to any debt, dividend
or other liability or obligation of any other Person (except contracts
ordinarily containing such provisions which are entered into in the Ordinary
Course of Business and endorsements made in the Ordinary Course of Business in
connection with the deposit of items for collection);     (viii) any employment
or consulting Contract for any Person with an annual base compensation in excess
of $100,000, or a collective bargaining agreement, works council agreement or
similar contract with a labor union or labor organization relating to the
employees of the Business, and any Contract with any employee that cannot be
terminated with notice of 90 or fewer days without liability to that Company or
that entitles the employee or consultant to receive any salary continuation or
severance payment (in excess of the Companies’ standard severance policies) or
retain any specified position with any Company; or     (ix) any Contract that
restricts any Company’s right to compete, whether by restricting territories,
customers or otherwise, in any line of business or territory.   (b) List of
Material Contracts. Schedule 4.10 lists all Material Contracts, as of the date
of this Agreement, excluding any Material Leases that are listed on Schedule
4.9(b).              (c)       Status of Contracts. Except as disclosed in
Schedule 4.8(b) with respect to Intellectual Property Rights or otherwise in
Schedule 4.10, with respect to each Material Contract to which any Company is a
party,     (i) such Material Contract is in full force and effect and
constitutes a valid and binding obligation of that Company and, to the Knowledge
of Seller, the other parties thereto, enforceable in each case in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar Laws of general
application relating to or affecting creditors’ rights, by general equitable
principles and the discretion of courts in granting equitable remedies;     (ii)
no event has occurred which (whether with or without notice, lapse of time or
the happening of any other event) would constitute a default thereunder by that
Company, entitling any other party thereto to terminate the Material Contract;
and

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  (iii) no Company or Seller has received written notice of any alleged default
under that Material Contract by that Company.   4.11 Insurance. Schedule 4.11
lists all insurance policies maintained by the Companies as of the date of this
Agreement, and such list states the type of policy, the limits of coverage, the
carrier and the expiration date. Except as set forth in Schedule 4.11, each such
insurance policy is in full force and effect.   4.12 No Violation, Litigation or
Regulatory Action. Except as set forth in Schedule 4.12:     (a)       The
Companies are in compliance with applicable Law except to the extent that any
noncompliance would not reasonably be expected to result in liability to the
Companies in excess of $50,000, in any single instance.     (b) Except for (i)
matters that are covered by the Companies’ existing workers’ compensation
insurance policies and (ii) other matters that if determined adversely to any
Company would not reasonably be expected to result in a loss or liability of
more than $10,000 in any individual case, there are no lawsuits, claims, suits,
proceedings or investigations pending or, to the Knowledge of Seller, threatened
in writing against any Company, its properties, business or assets.     (c)
There is no action, suit or proceeding pending or, to the Knowledge of Seller,
threatened in writing challenging or attempting to restrain or enjoin, delay or
interfere with the Transactions or in which the relief sought would impair the
Seller’s ability to perform its respective obligations under this Agreement or
any of the Seller’s Ancillary Agreements.     (d) There has not been a recall or
safety advisory required by any Governmental Authority on products manufactured
and sold by the Companies since December 31, 2003.     (e) To the Knowledge of
Seller, the products the Companies have manufactured and sold comply in all
material respects with standards set forth by the applicable Governmental
Authorities as of such time of sale.   4.13       ERISA.         (a)
Definitions. For the purposes of this Agreement:       (i)      “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended.       (ii)
“ERISA Affiliate” means any entity that together with any of the Companies would
be treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the Code or Section 4001(b) of ERISA.

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              (iii)     “Employee Plan” means all employee benefit plans, as
defined in Section 3(3) of ERISA, and all other material retirement, profit
sharing, deferred compensation, incentive compensation, stock option, restricted
stock, stock purchase, severance, employment, health, life, disability,
accident, employee assistance, cafeteria, fringe benefit or other employee
benefit plan, program, agreement or arrangement sponsored, maintained,
contributed to or required to be contributed to by the Companies or an ERISA
Affiliate, but shall not include any payroll practice (such as overtime, paid
time off or similar arrangements), workers’ compensation or employment policies.
  (b)      Plan Documents and Other Information. Each Employee Plan in effect as
of the date of this Agreement is listed in Schedule 4.13. With respect to each
Employee Plan, the Companies have made available a correct and complete copy of
each of the following: (i) all current plan documents and amendments, trust
agreements and insurance and annuity contracts and policies (and a written
summary of any Employee Plan not in writing); (ii) the most recent favorable
determination letter or opinion letter from the IRS with respect to each
Employee Plan that is intended to be qualified within the meaning of Section
401(a) of the Code; (iii) the three most recently filed Forms 5500 plus all
schedules and attachments, if applicable; (iv) each current summary plan
description or other general explanation or communication distributed or
otherwise provided to employees or former employees describing the terms of the
Employee Plan and any summaries of material modifications; (v) any
correspondence and other materials submitted to or received from the IRS or U.S.
Department of Labor; and (vi) all contracts and other service agreements with
any third party administrators in connection with the Employee Plan. Except as
disclosed on Schedule 4.13, no benefit under any Employee Plan, including any
severance, parachute or other “change of control” payment will be established or
become accelerated, vested, funded or otherwise payable by the Companies upon
consummation of the Transactions.   (c) Status of Plans. Except as set forth in
Schedule 4.13, to the Knowledge of Seller, with respect to each Employee Plan,  
  (i) each such plan has been maintained and operated in substantial compliance
with its terms and the applicable requirements of the Code and ERISA and the
regulations issued thereunder, and     (ii) no litigation or filed claims
against any Company exist with respect to any such plan other than claims for
benefits in the Ordinary Course of Business.     (iii) all contributions and
other payments required to be made by Seller or the Companies to any Employee
Plan have been made.

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            (d)       Defined Benefit and Other Plans. Except as set forth in
Schedule 4.13, no Employee Plan is, and none of the Companies or any ERISA
Affiliate do now or have ever sponsored, maintained, contributed to or been
required to contribute to, any of the following:       (i)       a defined
benefit plan, within the meaning of Section 3(35) of ERISA, subject to Title IV
of ERISA;       (ii) a multiemployer plan within the meaning of Section 3(37) of
ERISA;       (iii) a multiple employer plan within the meaning of Section 413(c)
of the Code; or       (iv) a multiple employer welfare arrangement within the
meaning of Section 3(40) of ERISA.     (e) Prohibited Transactions. None of the
Companies or any of their respective directors, officers, employees or agents
has, with respect to any Employee Plan, engaged in or been a party to any
“prohibited transaction,” within the meaning of Section 4975 of the Code or
Section 406 or ERISA, which could reasonably be expected to result in material
liability on the part of the Companies for a Tax imposed pursuant to Section
4975 of the Code or a penalty assessed pursuant to Section 502(i) of ERISA.  
4.14 Labor Matters. Each Company is in material compliance with all applicable
Laws respecting employment and employment practices, terms and conditions of
employment and wages and hours. There is no collective bargaining agreement
which is binding on any Company, and to the Knowledge of Seller, there is no
union organizing effort underway, pending or threatened with respect to the
employees of any Company. Except as set forth in Schedule 4.14, (a) there are no
material controversies pending between any Company and its employees or (b)
since January 1, 2003, there have been no actual or, to the Knowledge of Seller,
threatened material arbitrations, material grievances, material labor disputes,
strikes, lockouts, slowdowns or work stoppages against or affecting any Company.
  4.15 Employees. Schedule 4.15 contains a list of all employees of the
Companies as of February 28, 2007, their annual salary, date of hire, and job
title.   4.16 Insider Interests. Except as set forth in Schedule 4.16, no
Seller, Affiliate of a Seller or any officer or director of any Company is a
party to any Contract with any Company or has any material ownership interest in
any property, real or personal, tangible or intangible, including Intellectual
Property, used in or pertaining to the Business, other than     (a) agreements
and transactions entered into in the Ordinary Course of Business, and

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            (b)       other transactions and agreements that may be cancelled or
terminated by the Companies without penalty upon not more than 90 days written
notice.   4.17       Environmental Compliance. Except as set forth in Schedule
4.17:     (a) The operations of the Companies are and since January 1, 1997,
have been, to the Knowledge of the Seller in substantial compliance with all
applicable Environmental Laws including the possession of, and compliance with,
applicable permits issued under any Environmental Laws, other than any instances
of noncompliance that, singly or in the aggregate, have not resulted and would
not reasonably be expected to result in liability to the Companies in excess of
$200,000.     (b) Neither Seller nor the Companies has received at any time
since January 1, 1997 any written complaint, claim or notice or request for
information concerning any actual or alleged violation of, or any actual or
alleged liability under, any Environmental Law with respect to the operation of
the Business or any real property owned, leased or operated by the Companies,
other than any of the same that relate to matters that, singly or in the
aggregate, have not resulted and would not reasonably be expected to result in
liability to the Companies in excess of $200,000.     (c) None of the Companies
and, to the Knowledge of the Seller, none of the real properties now or formerly
owned, leased or operated since January 1, 1997 by the Companies is subject to
any order or judgment issued by any Governmental Authority under any
Environmental Laws, nor is any proceeding or investigation that might lead to
such an order or judgment pending or to the Knowledge of the Seller threatened,
other than any of the same with respect to which either the compliance by the
Companies, or the failure by the Companies to comply, would not singly or in the
aggregate reasonably be expected to result in liability to the Companies in
excess of $200,000.     (d) Since January 1, 1997, none of the Companies has
treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled or released any toxic substance, petroleum, crude oil or
hazardous material or other chemical substance, pollutants, or contaminants that
are regulated by Environmental Laws in a manner that has resulted in or could
result in liability to the Companies pursuant to violation of Environmental
Laws, that, singly or in the aggregate, are in excess of $200,000.     (e)
Seller has caused the Companies to make available to Buyer copies of all
environmental audits in the possession of Seller or the Companies with respect
to any real property now or formerly owned, leased or operated by the Companies.

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4.18 Inventory. Except as disclosed on Schedule 4.18, the Companies’ inventory
(a) was acquired and is sufficient for the operation of the Business in the
Ordinary Course of Business, (b) is of a quality and quantity usable or saleable
in the Ordinary Course of Business, (c) is valued on the books and records of
the Companies pursuant to the FIFO method under GAAP, and (d) is not consigned
to any party. No previously sold inventory is subject to returns in excess of
those historically experienced by the Companies, and for which proper reserves
have been established in accordance with GAAP. Except as disclosed on Schedule
4.18, all items included in the inventory of the Company are the property of the
Company free and clear of any Encumbrances, other than Permitted Encumbrances,
and are not held by the Company on consignment from others and conform in all
material respects to the standards applicable to the use or sale of such
inventory imposed by the respective Governmental Authorities in which such
inventory is to be sold.   4.19 Brokers. Except for SunTrust Robinson Humphrey,
none of the Companies, Seller or any Person acting on their behalf has paid or
become obligated to pay any fee or commission to any broker, finder, investment
banker or intermediary for or on account of the transactions contemplated by
this Agreement.   4.20       Warranties. Except as disclosed in Schedule 4.20,  
  (a)       since January 1, 2001, each product sold, licensed, leased, or
consigned by the Companies has been in conformity in all material respects (at
such time the product was sold, licensed, leased or consigned) with (i)
applicable contractual commitments, (ii) applicable U.S. and foreign regulatory
requirements, and (iii) express and implied warranties,     (b) there is no
pending, nor to the Knowledge of Seller, threatened in writing, claim under or
pursuant to any warranty, whether expressed or implied, on products sold prior
to the date hereof by the Companies that are not fully reserved against and that
exceed, individually or in the aggregate for related matters, $50,000, and    
(c) no product sold, licensed, leased or consigned by the Company is subject to
any guaranty, warranty, or other indemnity beyond the applicable standard terms
and conditions of sale, license, lease or consignment.   4.21 Customers and
Suppliers     (a) Schedule 4.21(a) sets forth a list of the 10 largest customers
of the Business, by revenue during fiscal year 2006 (the “Large Customers”). As
of the date of this Agreement, no such Large Customer has terminated, or to
Seller’s Knowledge threatened to (i) terminate its relationship with the
Companies or (ii) cease to use or substantially decrease the purchase of the
Companies’ products other than as a result of ordinary course changes consistent
with past practice in the volume and mix of products previously purchased from
the Companies.

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  (b) Schedule 4.21(b) sets forth a list of the 20 largest suppliers by dollar
volume of purchases made by the Companies during fiscal year 2006 (the “Large
Suppliers”). As of the date of this Agreement, no such Large Supplier has
terminated, or to Seller’s Knowledge threatened to (i) terminate its
relationship with the Companies or (ii) cease to supply a substantial portion of
the materials, products, goods or services sold to the Company other than as a
result of ordinary course changes consistent with past practice in the volume
and mix of products previously sold to the Companies.   4.22       Disclaimer of
Warranties     (a)       GENERAL. EXCEPT FOR THOSE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 4,       (i)       SELLER
DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND NO
SUCH REPRESENTATION OR WARRANTY SHALL BE IMPLIED BY OR CONSTRUED FROM ANY OF THE
DUE DILIGENCE MATERIALS OR ANY OTHER INFORMATION, WHETHER ORAL OR WRITTEN,
PROVIDED BY OR ON BEHALF OF SELLER OR ITS AFFILIATES.       (ii) NO
REPRESENTATION OR WARRANTY IS MADE BY SELLER AS TO THE CONDITION,
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OF ANY PROPERTIES OR ASSETS OF THE
COMPANIES, ALL OF WHICH ARE FOR THE PURPOSES OF THIS AGREEMENT CONSIDERED TO BE
IN “AS-IS, WHERE-IS” CONDITION.     (b) Disclosure. Notwithstanding anything to
the contrary contained in this Agreement or in any of the Schedules, any
information disclosed in one Schedule shall be deemed to be disclosed in all
other Schedules if it is reasonably apparent on the face of such Schedule that
its contents are relevant to such other Schedules. Certain information set forth
in the Schedules is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any
information shall not be deemed to constitute an acknowledgement that such
information is required to be disclosed in connection with the representations
and warranties made by Sellers in this Agreement or that it is material, nor
shall such information be deemed to establish a standard of materiality.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER

     As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated hereby, Buyer hereby represents and warrants to
Seller as follows:

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5.1 Status of Buyer. Buyer is a corporation duly organized, validly existing and
in good standing under the corporation Laws of the State of Delaware.   5.2
Authority of Buyer; Conflicts and Consents.     (a)       Buyer has the power
and authority as a corporation to execute, deliver and perform this Agreement
and each of the Buyer’s Ancillary Agreements. The execution, delivery and
performance of this Agreement and the Buyer’s Ancillary Agreements by Buyer have
been authorized and approved by all necessary action as a corporation. This
Agreement has been duly executed and delivered by Buyer and is the valid and
binding agreement of Buyer enforceable in accordance with its terms, and each of
the Buyer’s Ancillary Agreements, upon execution and delivery by Buyer, will be
a valid and binding obligation of Buyer enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws of general application
relating to or affecting creditors’ rights, general equitable principles, and
the discretion of the courts in granting equitable remedies.     (b) Neither the
execution and delivery of this Agreement or any of the Buyer’s Ancillary
Agreements nor the consummation of the Transactions nor compliance with or
fulfillment of the terms, conditions and provisions hereof or thereof will:    
  (i)       violate, conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default under         (A)       the charter or
by-laws or other organizational documents of Buyer,         (B) any Contract to
which Buyer is a party,         (C) any permit, judgment, decree or order of any
Governmental Authority to which Buyer is a party, or         (D) any applicable
Law affecting Buyer,         the result of which would impair the ability of
Buyer to execute, deliver and perform this Agreement or the Buyer’s Ancillary
Agreements, or       (ii) require the approval, consent, authorization or act of
or the making by Buyer of any declaration, filing or registration with, any
Governmental Authority, except for the filings under the HSR Act referred to in
Section 6.4.   5.3       No Litigation or Regulatory Action. Except as set forth
in Schedule 5.3, there are no lawsuits, claims, suits, proceedings or
investigations pending or, to the Knowledge of Buyer, threatened in writing
against the Buyer challenging or attempting to restrain or enjoin the
Transactions or in which the relief sought would impair Buyer’s ability to
perform its obligations under this Agreement and the Buyer’s Ancillary
Agreements.

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5.4       Financial Ability. Buyer has the financial ability to consummate the
Transactions using Buyer’s existing credit facilities and financial resources
without any delay or restriction which would adversely impact the certainty of
Buyer’s ability to so consummate. After taking into account the purchase of the
Shares and the payment of the Purchase Price Buyer will not be ‘insolvent’ as
such term is used in the U.S. Bankruptcy Code or any applicable state law. Buyer
has furnished to Seller all documentation or other evidence of the foregoing
that has been requested by Seller.   5.5 Brokers. Except for Sawaya Segalas &
Co., LLC, neither Buyer nor any person acting on its behalf has paid or become
obligated to pay any fee or commission to any broker, finder, investment banker
or intermediary for or on account of the transactions contemplated by this
Agreement.   5.6 Investment.     (a)       Buyer is acquiring the Shares (i) for
its own account and not on behalf of any other Person, and (ii) for investment
purposes only, and not with a view to the ‘distribution’ thereof (as such term
is used in Section 2(11) of the Securities Act of 1933, as amended (the
“Securities Act”)).     (b) Buyer understands and acknowledges that the Shares
have not been registered under the Securities Act or any applicable state
securities laws and may not be sold or transferred unless (i) they are
subsequently registered under the Securities Act and applicable state securities
laws, or (ii) an exemption from such registration is available.   5.7 Access to
Information; Sophistication.     (a) Sophistication. Buyer is an experienced and
knowledgeable participant in the consumer packaged goods business. Before
entering into this Agreement, Buyer has been advised by its counsel,
accountants, financial advisors and such other persons as it has deemed
appropriate concerning this Agreement, the Transactions, the purchase of the
Shares, and the scope and nature of the Business.     (b) Access to Information.
Buyer (i) acknowledge that, before entering into this Agreement, it has been
afforded access to and the opportunity to review the Material Contracts and all
other Due Diligence Materials, and (ii) has reviewed the Material Contracts and
the Due Diligence Materials to the extent it deems necessary or advisable.

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            (c)       Reliance. Buyer is relying solely upon the representations
and warranties made by Seller and expressly set forth in Article 4 (as qualified
by any disclosure contained in any Schedule to this Agreement and any supplement
to such Schedule), and its own inspections and investigations in order to
satisfy itself as to the condition and suitability of the Companies and the
scope and nature of the Business.   (d) No Other Representations. Buyer
acknowledges that:     (i)       No Person has been authorized by Seller to make
any representation or warranty relating to Seller, the Companies, or the
Business or any other matter relating to this Agreement, any Ancillary Agreement
or the Transactions.     (ii) Any cost estimates, projections or other
predictions, except as expressly provided in this Agreement, provided by or on
behalf of Seller in relation to the Companies and the Business or in connection
with the Transactions are not, and shall not be deemed to be or to include,
representations or warranties of Seller.

ARTICLE 6 ACTIONS PRIOR TO THE CLOSING DATE

     The parties hereto covenant and agree to take the following actions between
the date hereof and the Closing Date:

6.1       Access to Information. Seller shall permit the officers, employees and
authorized representatives of Buyer (including independent public accountants
and attorneys) to have reasonable access during normal business hours upon
reasonable advance notice to the offices, properties and senior managers of the
Companies, and business and financial records of the Companies (that are not
trade secrets or otherwise competitively sensitive), to the extent Buyer shall
reasonably deem necessary or desirable in connection with continued due
diligence, and shall furnish to Buyer or its authorized representatives such
additional information concerning the Companies or the Business as shall be
reasonably requested; provided, however, that     (a)       Seller shall not be
required to violate any obligation of confidentiality to which he or any Company
is subject,     (b) such investigation shall be conducted in such a manner as
not to interfere unreasonably with the operations of the Companies, and     (c)
if Buyer is a competitor of the Companies in any business, then access shall be
limited to matters necessary for due diligence and shall otherwise be restricted
in accordance with applicable requirements of the antitrust laws and the HSR
Act, and in compliance with restrictions contained in the Confidentiality
Agreement.

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6.2      Notifications. Each Party shall promptly notify the other of any
action, suit or proceeding that shall be instituted or threatened against such
Party to restrain, prohibit or otherwise challenge the legality of the
Transactions. Each Party hereto shall promptly notify the other of any lawsuit,
claim, proceeding or investigation that may be threatened or asserted in
writing, brought or commenced against Seller, any Company or Buyer, as the case
may be, that would have been listed in Schedule 4.12 or Schedule 5.3, as the
case may be, if such lawsuit, claim, proceeding or investigation had arisen
prior to the date hereof.   6.3 Consents of Third Parties; Governmental
Approvals.     (a)      Each Party hereto shall act diligently and reasonably to
secure, before the Closing Date, the consent, approval or waiver, in form and
substance reasonably satisfactory to the other Party, required to be obtained
from any Person with respect to any Contract to which any Company is a party, if
the failure to obtain such consent, approval or waiver would result in a failure
to satisfy any condition specified in Section 3.2, 3.3 or 3.4; provided,
however, that no Party hereto shall have any obligation to offer or pay any
consideration in excess of $100,000 in order to obtain such consents, approvals
or waivers.     (b) Subject to the provisions of Section 6.4, during the period
prior to the Closing Date, each Party hereto shall act diligently and
reasonably, and shall cooperate with each other, to secure the consents and
approvals of any Governmental Authority required to be obtained by it in order
to permit the consummation of the Transactions.   6.4 Filings Under the HSR Act.
    (a) General. Seller and Buyer acknowledge that it is their mutual
understanding that the transactions contemplated by this Agreement do not
require filings with the Federal Trade Commission (the “FTC”) and the Antitrust
Division of the United States Department of Justice (the “Antitrust Division”)
under the HSR Act.     (b) Investigations. In the event that prior to the
Closing the FTC or the Antitrust Division commences any investigation of the
transactions contemplated by this Agreement the Parties will consult with each
other and specifically (i) shall keep the other Party fully informed through
their respective outside antitrust counsel of all contacts and communications
with government representatives and (ii) shall seek to permit participation by
the other Party’s outside antitrust counsel in any face-to-face meetings with
government representatives or telephone interviews of party representatives
conducted in connection with such investigation. Information of a confidential
nature obtained by outside antitrust counsel for one of the Parties from the
other Party or its counsel in the course of such investigation shall be deemed
“Outside Counsel Only” information and shall be revealed by such outside counsel
to its client or inside counsel only upon the consent of the Party providing
such information.

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  (c) Appeal. If the Antitrust Division brings suit seeking to prevent or
restrain the Transactions or if the FTC issues a complaint or petitions a court
to enjoin the Transactions, then the decision as to whether an adverse decision
or action of the FTC or the Antitrust Division should be appealed or contested
shall be solely within the discretion of Seller.   6.5      Operations Prior to
the Closing Date.     (a)      Except as otherwise expressly contemplated by
this Agreement and the schedules attached hereto, or with the prior written
consent of Buyer (which consent shall not be unreasonably withheld, delayed or
conditioned), during the period from the date hereof to and through the Closing
Date, Seller shall cause each of the Companies to continue to: (i) conduct the
Business in all material respects in the Ordinary Course of Business, including
continuing to sell to all the Large Customers, and (ii) preserve in all material
respects its business operations, organization and goodwill.     (b) Except in
the Ordinary Course of Business, as otherwise expressly contemplated by this
Agreement and the schedules attached hereto, or with the prior written consent
of Buyer (which consent shall not be unreasonably withheld, delayed or
conditioned), and except as disclosed on Schedule 6.5(b), during the period from
the date of this Agreement to and through the Closing Date, Seller shall not,
nor shall he permit any Company to,       (i)      make any material
modification, amendment or extension to any existing Material Contract or enter
into any additional Contract that constitutes, or would constitute, a Material
Contract; provided that this clause (i) shall not restrict the Companies from
modifying or amending, or seeking any waivers under, any of the Existing Debt
Agreements;       (ii) enter into any compromise or settlement of litigation,
proceeding or investigation by a Governmental Authority relating to the assets
of the Companies;       (iii) allow the Shares or the assets of the Companies to
become subject to any Encumbrance other than, in the case of assets of the
Companies, a Permitted Encumbrance;       (iv) issue any additional Shares;    
  (v) redeem or repurchase any Shares or other equity interests in any Company;

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                    (vi)      sell, lease or otherwise dispose of any assets of
the Companies (other than the transfer to Seller or his designee of the Excluded
Assets in the manner contemplated by Schedule 3.7;   (vii) waive any claims or
rights of any Company in excess of $50,000;   (viii) amend its Articles of
Incorporation or Bylaws or enter into any merger, consolidation or share
exchange agreement;   (ix) make any capital expenditures in excess of $50,000;  
(x) take any action that would result in, or may reasonably be expected to
result in, any of the events described in Section 4.5(c);   (xi) (a) grant any
severance or termination pay to (or amend any such existing arrangement with)
any director, officer or employee of the Companies, (b) amend, terminate or
establish any Employee Plan or enter into any employment, deferred compensation
or other similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Companies, (c) increase any
benefits payable under any existing severance or termination pay policies or
employment agreements, (d) increase (or amend the terms of) any compensation,
bonus or other benefits payable to directors, officers or employees of the
Companies, (e) permit any director, officer or employee who is not already a
party to an agreement or a participant in an Employee Plan providing benefits
upon or following a “change in control” to become a party to any such agreement
or a participant in any such Employee Plan, or (f) make any new grants or amend
any existing grants of equity-based, incentive, bonus or similar awards;   (xii)
enter into any transaction or agreement which restricts the Company from
engaging in any business or activity anywhere in the world;   (xiii) sell or
agree to sell (a) any products accompanied by receivable payment terms (e.g.,
deferred due dates or payment discounts), (b) any products to any Company
Affiliate or to any intermediary not previously used by the Company’s customers,
(c) any products accompanied by a promise, commitment or agreement, whether
written or oral, to provide advertising support, (d) any products accompanied by
any change in the level of compensation (including, without limitation, changes
in base salary, bonus opportunities or benefits) for any broker or sales
personnel, or (e) any products accompanied by return rights;   (xiv) change its
shipment documentation necessary to recognize revenue; and               (xv)
enter into or become obligated for any indebtedness which is not contained in
the Existing Debt Agreements.

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6.6 No Negotiations. Until the Closing or until this Agreement is terminated,
Seller shall not, and the Seller will cause each Company not to, solicit or
enter into any discussions or negotiations with any Person, or furnish or cause
to be furnished any information concerning the Business to any Person (other
than Buyer and its employees and agents) in connection with any proposed
acquisition of the Business, however effected.   6.7 Release of Guaranties, etc.
With respect to each guaranty, letter of credit, indemnity, performance or
surety bond or similar credit support arrangement issued by or for the account
of Seller in relation to the Business (the “Seller Commitments”), a complete
list of which is provided on Schedule 6.7, Buyer shall use commercially
reasonable efforts to obtain, prior to the Closing if practicable and otherwise
as soon after the Closing as is practicable, substitute credit support
arrangements in replacement for the Seller Commitments, and shall procure that
Seller, and, where applicable, his sureties or letter of credit issuers, shall
be fully released from their respective obligations under the Seller
Commitments, in form and substance satisfactory to Seller. Seller will cooperate
reasonably with Buyer with respect to the foregoing. If Buyer is unable to
procure such a release prior to the Closing, then Buyer shall indemnify, defend
and hold Seller harmless from any claim under such Seller Commitments as set
forth in Section 8.3.   6.8 Financial Statements. At least 4 calendar days prior
to Closing, Seller shall deliver to Buyer (a) the audited consolidated balance
sheet of the Companies as of December 31, 2006 and the related audited
consolidated statements of income and comprehensive income and audited
consolidated statement of cash flow for the year ended on such date, and related
footnotes thereto, together with an unqualified opinion from the Designated
Auditors (collectively the “2006 Financial Statements”), and (b) the unaudited
2007 monthly financial results for January and February 2007 (the “Unaudited
2007 Financial Results”). The preparation and delivery of the 2006 Financial
Statements shall be consistent with the standards set forth in Section 4.5(b).
Except as disclosed on Schedule 4.5(b), the preparation and delivery of the
Unaudited 2007 Financial Results shall be consistent with the standards set
forth in Section 4.5(b)(i) and (ii).   6.9 Employee Plan Payments Through
Closing. Seller will cause each of the Companies to make all contributions and
other payments required to be made by the Companies to any Employee Plan with
respect to the period between the date of this Agreement and Closing.   6.10
     Notice of Prospective Breach; Supplement to Schedules     (a)      Seller
shall immediately notify Buyer in writing upon the occurrence, or failure to
occur, of any event, which occurrence or failure to occur would be reasonably
likely to cause (i) any representation or warranty of the Seller or any Company
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date of this Agreement to the Closing if such
representation and warranty were made at such time or (ii) any material failure
of Seller or any Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.

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          (b)      From time to time prior to the Closing, the Seller shall
supplement or amend with reasonable frequency the information contained in the
Schedules hereto with respect to any matter hereafter arising, which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in any Schedule hereto. Any supplement or amendment
delivered pursuant to this Section 6.10(b) shall in no event be the basis for
any claim that any representation or warranty is inaccurate or has been breached
for purposes of Section 3.4 or Section 8.2, but such supplement or amendment may
provide a basis for the Purchaser to terminate this Agreement pursuant to
Article 9.  

ARTICLE 7 ADDITIONAL AGREEMENTS

  7.1 Tax Matters.     (a) Filing of Returns and Payment of Taxes.       (i)
     Seller shall cause the Companies to prepare and timely file all Tax Returns
that are due on or before the Closing Date. Seller shall pay any Flow- Through
Income Taxes owed with respect to the Tax Periods covered by such filings and
shall cause the Companies to timely pay any other Taxes due on or prior to the
Closing Date.       (ii) Except as provided in Section 7.1(a)(i), Buyer shall be
responsible for preparing and filing or causing the Companies to prepare and
file all Tax Returns of the Companies. To the extent that Seller may have an
indemnification obligation with respect to any Tax Return that Buyer is
responsible for preparing under this Section 7.1(a)(ii), Buyer shall provide a
copy of such Tax Return to Seller at least 45 days prior to the due date of such
Tax Return. Seller shall provide any comments in writing to Buyer with respect
to such Tax Return at least 15 days prior to the due date for such Tax Return.
Buyer and Seller agree to discuss such comments in good faith in an effort to
resolve any disputes; provided, however, that if the Buyer and the Seller are
not able to resolve any such dispute within 7 days of receiving the written
comments, the Buyer and Seller shall select a mutually agreeable independent and
nationally recognized accounting firm to resolve the dispute. The decision of
such accounting firm shall be binding on both parties and the Tax Return shall
be prepared reflecting such resolution. To the extent Seller is not liable as
provided in Section 7.1(a)(iii), Buyer shall pay or cause the Companies to pay
all Taxes due after the Closing Date.

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                  (iii)      Seller shall be liable for and, pursuant to Section
8.2, Seller shall indemnify and hold harmless Buyer, it being understood that
the limitations under Section 8.4(b) and (c) do not apply to any such
indemnification, against all Flow-Through Income Taxes and other Taxes (whether
assessed or unassessed), together with reasonable out-of-pocket costs or
expenses incurred by Buyer or the Companies in preparing the Tax Returns, in
respect of or applicable to any of the Companies attributable to any Tax Period
ending on or prior to the Closing Date or, with respect to any taxable year or
period beginning before and ending after the Closing Date (a “Straddle Period”),
the portion of such Straddle Period ending on and including the Closing Date;
provided, however, that Seller shall not be liable for any Taxes to the extent
such Taxes are accrued on the Unaudited 2007 Monthly Financial Results of the
Companies and reflected in the Final Adjustment Statement. The income of the
Companies will be apportioned to the period up to and including the Closing Date
and the period after the Closing Date by closing the books of the Companies as
of the Closing Date; provided, however, that Taxes that are computed on a
periodic basis, such as property Taxes, shall be apportioned on a daily basis.  
    (iv) Seller shall cause the Companies not to, nor shall any of the
Companies, make any election or take any action or position on any Tax Return
required to be filed on or before the Closing Date with respect to any item of
income, deduction, or credit of the Companies that is inconsistent with any
position or reporting for the prior year and that would have a material adverse
impact on Buyer without the consent of Buyer (which consent shall not be
unreasonably withheld or delayed), unless required by applicable Law (in which
case notice thereof will be given to Buyer). In preparing any Tax Returns with
respect to which Seller may have an indemnification obligation, Buyer shall not,
and shall cause the Companies not to, deviate from the manner in which any item
of income or expense of the Companies was reported in the prior year unless
required by applicable Law (in which case notice of such deviation shall be
given to Seller) and except as necessary to implement the Section 338 Elections.
No party shall file any amended Tax Returns with respect to any Tax Period
ending on or prior to the Closing Date without the written consent of the other
party, which consent shall not be unreasonably withheld or delayed.            
  (v) If Buyer or the Companies receive notice of any Tax audit, investigation,
examination, or other administrative or judicial proceeding (a “Tax Proceeding”)
relating to (1) Flow-Through Income Taxes, (2) any other Tax to the extent that
an adjustment of such Tax could affect the Seller’s liability for any
Flow-Through Income Taxes in any material manner, or (3) any other Tax to the
extent that an adjustment of such Tax could result in Buyer having an indemnity
claim against Seller under Article VIII of this Agreement (a “Tax Indemnity
Claim”), Buyer shall promptly notify Seller of such proceeding. To the extent
any such Tax Proceeding relates to Flow-Through Income Taxes or could result in
a Tax Indemnity Claim, Seller, at Seller’s expense, shall be entitled to control
such Tax Proceeding; provided that Seller may not settle any such Tax Proceeding
in a manner that would materially increase Buyer’s or the Companies’ liability
for Taxes for any Tax Period without the written consent of Buyer, which consent
shall not be unreasonably withheld or delayed. With respect to any Tax
Proceeding for which Seller has a right to control, but notifies Buyer in
writing that it does not intend to exercise such control and with respect to any
other Tax Proceeding that could affect the Seller’s liability for any
Flow-Through Income Taxes in any material manner, Buyer (A) shall have the right
to control such Tax Proceeding (at Buyer’s expense), provided that Buyer may not
settle any such Tax Proceeding in a manner that would materially increase
Seller’s liability for any Flow-Through Income Tax without the written consent
of Seller, which consent shall not be unreasonably withheld or delayed, and (B)
shall notify Seller from time to time as to the status of such Tax Proceeding.
Buyer shall cause the Companies to maintain all tax records of or relating to
the Company for seven years after the Closing Date.

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          (b)      Access and Assistance. Buyer and the Companies on the one
hand and Seller on the other hand shall provide each other with such assistance
as may reasonably be requested by any of them in connection with the preparation
of any Tax Return and the handling or contesting of any Tax Proceeding with
respect to the income or operations of the Companies. The party requesting
assistance shall reimburse the other for reasonable out-of-pocket expenses
incurred in providing such assistance. No party shall request a Tax audit of any
Company.   (c) Election Under Section 338(h)(10).     (i)      With respect to
the purchase of Shares hereunder, Seller (and to the extent necessary, the
Companies) and Buyer shall, at Buyer’s election, jointly make timely and
irrevocable elections under Section 338(h)(10) of the Code, and if permissible,
similar elections under any applicable state and local Tax Laws (collectively,
the “Section 338 Elections”).     (ii) Buyer shall prepare (and shall be solely
responsible for preparing) any and all forms necessary to effectuate the Section
338 Elections (including, without limitation, IRS Forms 8023 and 8883, and any
similar forms under applicable state and local Laws (collectively, the “Section
338 Forms”)). Seller shall cooperate with Buyer in the preparation of the
Section 338 Forms and shall execute such Section 338 Forms as may be necessary.

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                    (iii)      Within 60 days following the Closing Date, Seller
shall prepare and deliver to Buyer a draft schedule allocating the “aggregate
deemed sales price” (“ADSP”) for purposes of Section 338(h)(10) among the assets
of the Company in accordance with the applicable Treasury regulations (the
“Draft Allocation”). Within 30 days of its receipt of such Draft Allocation,
Buyer will provide Seller with a written notice of any proposed changes thereto,
together with a detailed explanation of the basis for such proposed changes. If
the Buyer does not provide Seller with any proposed changes within such 30 day
period, the Draft Allocation shall become final (the “Final Allocation”). If
Buyer timely notifies Seller of any proposed changes to the Draft Allocation,
the parties shall discuss such proposed changes in good faith and shall attempt
to resolve any dispute. If the parties are able to reach a mutually satisfactory
agreement as to any proposed changes, the Draft Allocation shall be modified to
reflect such agreed changes and shall become the Final Allocation. In the event
that the parties cannot agree on an allocation schedule within 30 days after
Seller’s receipt of Buyer’s notice of proposed changes, the dispute shall be
resolved by a nationally recognized accounting firm mutually selected by Buyer
and Seller (or if they cannot agree on the selection, Buyer and the Seller shall
each select a nationally recognized accounting firm, which two firms shall
select a third nationally recognized accounting firm to resolve the dispute).
The resolution by such nationally recognized accounting firm shall be binding on
both parties. The Draft Allocation shall be modified to reflect such resolution
(and any other agreed proposed changes) and shall become the Final Allocation.  
(iv) Buyer, the Companies and Seller shall file all Tax Returns (including but
not limited to the Section 338 Forms) consistent with the Final Allocation and
shall not voluntarily take any action inconsistent therewith upon examination of
any Tax Return, in any refund claim, in any litigation, or otherwise with
respect to such Tax Returns, unless required to pursuant to a final
determination of any Taxing Authority; provided, however, that the deemed
purchase price of the asset may differ from the ADSP to the extent necessary to
reflect (A) the Buyer’s capitalized transaction costs not included in the total
ADSP, (B) any liabilities or other items included in the ADSP but not included
in the deemed purchase price; provided further, the amount realized upon the
deemed sale of assets may differ from the ADSP to reflect transaction costs that
reduce the amount realized for federal income Tax purposes.   (v) Buyer shall
bear all of the costs and expenses of preparing the Section 338 Forms and the
Draft and Final Allocations (including the costs of any accounting firm required
to resolve any dispute under Section 7.1(c)(iii)) other than costs and expenses
incurred by the Seller in connection with Seller’s preparation of the Draft
Allocation, Seller’s review of any Section 338 Form, or Seller’s execution of
any Section 338 Form.

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    (d) Seller shall be responsible for paying all Flow-Through Income Taxes
regardless of when due. Seller shall be entitled to all refunds and credits
attributable to or related to any Flow-Through Income Taxes.     (e) The
obligations of the parties under this Section 7.1 shall not expire until 90 days
after the applicable statute of limitations for the Taxes to which such
obligations relate.   7.2      Transfer Taxes. Buyer and Seller shall each pay
50% of all transfer Taxes (including any real property transfer or gain Tax, use
Tax, documentary Tax, stamp Tax or other similar Tax) and fees in respect of the
Transactions and shall be responsible for paying all the cost of filing all Tax
Returns relating to such Taxes and fees. The obligations of the parties under
this Section 7.2 shall not expire until 60 days after the applicable statute of
limitations for the transfer Taxes to which such obligations relate.   7.3
Employee Matters.     (a)      General. Buyer shall maintain, in general and not
for any specific employee, for a period of one year after the Closing Date,
without interruption, employee compensation and benefit plans, programs and
policies and fringe benefits that will provide compensation and benefits to
employees of the Companies who are employed by the Companies immediately after
the Closing (“Continuing Employees”) that are in the aggregate no less favorable
than those provided pursuant to the employee compensation and benefit plans,
programs and policies and fringe benefits of the Companies as in effect
immediately prior to the Closing.Continuing Employees shall be given credit for
all service with any of the Companies (or service credited by any of the
Companies for similar plans, programs or policies) under (i) all employee
compensation and benefit plans, programs and policies and fringe benefits of the
Companies or Buyer in which they become participants for purposes of eligibility
and vesting, and (ii) severance plans for purposes of calculating the amount of
each such employee’s severance benefits. Nothing in the foregoing shall require
Buyer to maintain the employment of any individual employee of the Companies
after the Closing Date or to pay any of the above described benefits after the
date that any individuals are not so employed, except as provided in any
specific employee contract or in accordance with the terms of any specific
benefit agreement or plan applicable to such employee.     (b) Medical Plans.
Buyer shall cause each medical, dental or health plan of Buyer or its Affiliates
to (i) waive any preexisting condition limitations for conditions covered under
the applicable medical, health or dental plans of the Companies and (ii) give
credit for any deductible, out-of-pocket or similar expenses incurred by the
Continuing Employees and their beneficiaries under the such medical, health and
dental plans during the portion of 2007 preceding the Closing. Buyer shall cause
each group term life insurance plan maintained by Buyer or its Affiliates to
waive any medical certification for such employees up to the amount of coverage
the employees had under the life insurance plan of the Companies (but subject to
any limits on the maximum amount of coverage under Buyer’s life insurance plan).

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        (c)       Vacation and Sick-Pay. Vacation and sick-pay entitlement
accrued but not utilized by a Continuing Employee under the policies of the
Companies by which he is employed as in effect on the Closing Date, as reflected
on the Unaudited 2007 Financial Results and, with respect to the period between
February 28, 2007 and the Closing Date, recorded on the books and records of the
Companies consistent with past practices, shall be recognized by the Buyer and
the Companies following the Closing.   (d) WARN. Buyer shall be responsible for
all liabilities or obligations under the Worker Adjustment and Retraining
Notification Act, or any other applicable laws, rules or customs relating to
severance of employees, resulting from Buyer’s actions following the Closing.  

7.4       Securities Legends. Buyer agrees and understands that the Shares have
not been, and will not be, registered under the Securities Act or the securities
Laws of any state and that the Shares may be sold or disposed of only in one or
more transactions registered under the Securities Act and applicable state
securities Laws or as to which an exemption from the registration requirements
of the Securities Act and applicable state securities Laws is available. Buyer
acknowledges and agrees that no Person has any right to require Seller to cause
the registration of any of the Shares. The certificate or certificates
representing the Shares shall contain a legend similar to the following and
other legends necessary or appropriate under applicable state securities Laws:  

                    THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) OR ANY STATE SECURITIES
ACTS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS A
REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES ACTS
WITH RESPECT TO SUCH SHARES IS EFFECTIVE OR UNLESS THE COMPANY IS IN RECEIPT OF
AN OPINION OF COUNSEL SATISFACTORY TO IT TO THE EFFECT THAT SUCH SHARES MAY BE
SOLD WITHOUT REGISTRATION UNDER THE ACT AND SUCH ACTS.

  7.5       Confidential Nature of Information.  

           (a)       Buyer agrees that it will treat in confidence all
documents, materials and other information which it shall have obtained
regarding the Companies or any of their affiliates during the course of the
negotiations leading to the consummation of the Transactions (whether obtained
before or after the date of this Agreement), the investigation provided for
herein and the preparation of this Agreement and other related documents.

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           (b)       If the Transactions are not consummated, Buyer shall return
to Seller all copies of non-public documents and materials which have been
furnished in connection therewith and shall return or destroy all analyses,
compilations, studies or other documents of or prepared by Buyer from such
information (and confirm to Seller in writing that it has done so). Such
documents, materials and information shall not be communicated to any third
Person (other than to Buyer’s counsel, accountants, financial advisors or
lenders who shall be made aware of and agree to be bound by this Section 7.5).
Buyer shall not use any such confidential information in any manner whatsoever
except solely for the purpose of evaluating the transactions contemplated
hereby; provided, however, that after the Closing Buyer may use or disclose any
confidential information of the Companies.   (c) The obligation of each Party to
treat such documents, materials and other information in confidence shall not
apply to any information which (i) is or becomes available to the public other
than as a result of disclosure by such Party or its agents, (ii) is required to
be disclosed under Applicable Law or judicial process, but only to the extent it
must be disclosed or (iii) such Party reasonably deems necessary to disclose to
obtain any of the consents or approvals contemplated hereby, but only to the
extent it must be disclosed.   (d) The limitations on disclosure and use of
confidential information are in addition to and not in lieu of the obligations
of confidentiality contained in the Confidentiality Agreement, which obligations
shall continue in effect in accordance with the terms thereof and in any event
until the Closing.  

7.6       No Public Announcement. Neither Buyer nor Seller shall, without the
approval of the other, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that any such Party shall be so obligated by Law, in which case the other
Party shall be advised and the parties shall use their best efforts to cause a
mutually agreeable release or announcement to be issued; provided, however, that
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement or to comply with accounting and
Securities and Exchange Commission disclosure obligations or the rules of any
stock exchange.   7.7 Expenses. Each Party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and to
its performance and compliance with all agreements and conditions contained
herein on its part to be performed or complied with, including the fees,
expenses and disbursements of its counsel, investment banker and independent
public accountants.

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7.8         Directors’ and Officers’ Indemnification. For a period of not less
than six years from the Closing Date, Buyer shall not, and shall cause the
Companies to not, amend or modify their organizational documents as in effect as
of the Closing Date with respect to the indemnification or exculpation of
current or former officers, directors or employees of any such companies in any
manner that would limit or reduce such indemnification or exculpation with
respect to actions or conduct prior to the Closing.   7.9 Non-Competition.
Without the express prior written consent of the Buyer,  

             (a)       neither Seller nor any of his Affiliates shall, at any
time during the five year period immediately following the Closing Date,
anywhere in the world, directly or indirectly, own, manage, operate, control, be
employed by, or participate in the ownership, management, operation or control
of, or be related or otherwise connected in any manner with, or otherwise engage
in, any business to the extent that business is engaged in, or deals with, any
suncare, skincare, cosmetics or any similar or related products or business,
provided that nothing in this clause (a) will restrict Seller or any of his
Affiliates from (i) owning not more than 5% of the shares in any publicly traded
company, or (ii) engaging in any way in pageant and modeling businesses that are
not related to suncare, skincare, cosmetics or similar products or business, and
  (b) Seller will not at any time use any of the names set forth on Schedule
4.8(a)(III) or 4.8(c), excepting he can use the name “Ron Rice” separate from
“Beach Products”.  

7.10       Non-Solicitation of Employees. The Seller, and his Affiliates, agree
that for a period of five years after the Closing Date, it will not directly or
indirectly, for himself or any other Person, entice, induce, hire, retain,
solicit or attempt to cause any Person employed by any of the Companies at that
time or within the preceding year to terminate his or her employment with any of
the Companies, except those that are listed on Schedule 7.10.   7.11
Non-Solicitation of Customers. Seller and his Affiliates shall not, directly or
indirectly, for himself or for any other Person, solicit, divert, take away or
attempt to take away any of the customers of any of the Companies or the
business of any such customers or in any way interfere with, disrupt or attempt
to disrupt any then-existing relationships between any of the Companies and any
of its customers with whom they shall deal, at any time during the five-year
period commencing on the date hereof.   7.12 Confidentiality. Seller shall not
during the term of this Agreement or at any time thereafter (except with respect
to information that becomes generally known in the industry through no fault of
Seller, is part of public knowledge or literature or is lawfully received by
Seller from a third party) use or disclose to any Person whatsoever any
confidential or proprietary information of any of the Companies that he may have
acquired heretofore or may hereafter acquire relating to the business of any of
the Companies, including but not limited to, information relating to the
business, accounts, financial dealings, transactions, trade secrets, intangible
property, customer lists, plans and proposals of any of the Companies, whether
or not marked or otherwise identified as confidential or secret except as
authorized by Buyer or ordered by a court of competent jurisdiction.

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7.13       Non-Exclusive Remedy. Seller acknowledges that, in view of the nature
of the business objectives of Buyer in acquiring the Companies and the
consideration paid to Seller as a stockholder of the Company under the terms of
this Agreement, the restrictions contained in Section 7.9 through 7.12 hereof
are reasonably necessary to protect the legitimate business interests of Buyer
and the Companies and that any violation of such restrictions will result in
irreparable injury to Buyer and the Companies for which damages will not be an
adequate remedy. Seller therefore acknowledges that, if any such restrictions
are violated, Buyer and the Companies shall be entitled to preliminary and
injunctive relief (without the requirement of posting a bond). The rights and
remedies of Buyer and the Companies hereunder are not exclusive of, or limited
by, or in limitation of, any other rights or remedies that they may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative. Should any provision of this Agreement or part thereof be held under
any circumstances in any jurisdiction to be invalid or unenforceable for any
reason, including, without limitation, because of its geographic or business
scope or duration, such provision shall be construed in such a way as to make it
valid and enforceable to the maximum extent possible. Any invalidity or
unenforceability of any provision in this Agreement shall not affect the
validity or enforceability of any other provision or other part of such
provision of this Agreement or any other agreement or instruments.   7.14
Assignment of Accounts Receivable. If and to the extent that Seller is required
to make any payment to Buyer pursuant to Article 8 as a result of a breach of
the representations and warranties contained in Section 4.5(e) with respect to
the collectibility of any account receivable of any Company, then promptly upon
the making of such payment Buyer will cause the affected Company to assign to
Seller all right title and interest to such account receivable, and Seller shall
have right to seek collection of the uncollected portion of such account
receivable.   7.15 FIRPTA Certificate. Seller shall deliver to Buyer a
non-foreign affidavit as of the Closing Date, sworn under penalty of perjury and
in form and substance required under the Treasury Regulations issued pursuant to
Section 1445 of the Code stating that such Seller is not a “Foreign Person” as
defined in Section 1445 of the Code.   7.16 Access to Records. Promptly after
Closing, Seller shall deliver to Buyer and its authorized representatives, all
books and records that in any way relate to the Companies and that remain in
Seller’s possession except for such books and records that relate to any
Excluded Asset. Buyer shall for the three years following Closing give to Seller
and his representatives, for the purpose of preparing his Tax Returns,
investigating or defending any claims for which indemnification is sought under
Article 8, or for any other claims that may arise against Seller, upon
reasonable notice and during normal business hours, access to the books and
records of the Companies that are delivered to the Buyer as books and records to
be kept by the Company relating to the period up to the Closing Date. Seller
shall be entitled, at its own expense, to make copies of such books and records
and Buyer shall cooperate in connection with accomplishing the same.

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ARTICLE 8 INDEMNIFICATION

8.1       Definition of Loss. For the purposes of this Agreement “Loss” means
100% of any liability, loss, judgment, penalty, fine, interest, expense, cost,
damage (including indirect or consequential damages), diminution in value,
out-of-pocket expense or payment, whether or not involving a third party,
including  

           (a)       related attorneys’, accountants’ and other professional
advisors’ fees and out-of-pocket expenses, including those incurred in
investigating, preparing or defending against a Loss or investigating,
preserving or enforcing a Seller Related Party’s or a Buyer Related Party’s
rights under this Article 8,   (b) amounts paid in settlement or compromise of a
dispute with a Person not a Party that if resolved in favor of such third party
would constitute a matter to which a Party is indemnified pursuant to this
Agreement, even though such settlement does not acknowledge that the underlying
facts or circumstances constitute a breach of a representation or warranty or
other indemnified matter, and   (c) reasonable costs and out-of-pocket expenses
necessary to avoid having a claim for indemnification against another Party
pursuant to this Agreement or to mitigate any such claim.  

8.2       Specific Indemnification Obligations—by Seller. If the Closing occurs
then, subject to the other provisions of this Article 8, Seller shall indemnify,
defend and hold Buyer and the Companies, and their Affiliates, successors and
assigns and the respective officers and directors of each of the foregoing
(collectively the “Buyer Related Parties”) harmless as provided in this Article
8 as to any Loss incurred by them resulting from any of the following:  

           (a)       Fees and Expenses. Any obligation for the payment of fees
and expenses imposed on Seller pursuant to this Agreement, including any fees
and expenses to be borne by Seller pursuant to Section 7.2;   (b) Breach of
Covenants. Any breach or non-performance of any covenant, obligation or
agreement made by Seller and, prior to the Closing, by any Company, in this
Agreement or under any Seller’s Ancillary Agreement, including Seller’s
obligation under Section 2.3(l)(ii);   (c) Breach of Representations. Any
inaccuracy or breach of any representation or warranty made by Seller and, prior
to the Closing, by any Company, in this Agreement, its Schedules, or any
Seller’s Ancillary Agreement or in any certificate or document delivered by
Seller under this Agreement; and

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           (d)      Seller’s Taxes. Any liability of the Companies or Seller for
Flow-Through Income Taxes or Taxes arising before the Closing or as a result of
the Transactions, as set forth and to the extent provided in Section
7.1(a)(iii).   (e) Specific Indemnities. Notwithstanding the disclosure of any
such claim, demand or Loss in this Agreement, or any Schedule or otherwise, the
assertion of any claim, demand a Loss against Buyer or any of the Companies
relating to the following:  

                    (i)      the matters reflected on Schedule 4.12(I), Numbers
2 and 6;   (ii) the counterclaim of Galarzo Atlantica Galaco, S.A. on Schedule
4.5(e)(II);   (iii) the inability of the Companies to sell in Brazil any
inventory with the “BRAZILIAN TROPIC” brand name or trademark currently held in
Uruguay on behalf of the Companies;   (iv) the matters reflected on Schedule
4.12(II), Number 1;   (v) the Deferred Compensation Payments in excess of the
amount set forth on Schedule 2.2(c)(ii).   (vi) any claim by Don Langer, David
Langer, Langer Hawaii Corporation or any of their Affiliates for part of the
sale price of the Companies, or for part of the outstanding shares of the
Companies, however computed or presented; and   (vii) any other claim by Don
Langer, David Langer, Langer Hawaii Corporation or any of their Affiliates
related to acts or omissions of Seller or the Companies that occurred prior to
the Closing Date, including but not limited to, any claim related to the
distribution agreement of Langer Hawaii Corporation with TRL or for any products
shipped, manufactured or services provided by or any other acts or omissions of
Seller or the Companies.

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8.3      Specific Indemnification Obligations – by Buyer. If the Closing occurs
then, subject to the other provisions of this Article 8, Buyer shall indemnify,
defend and hold Seller and his permitted successors and assigns (collectively
the “Seller Related Parties”) harmless as provided in this Article 8 as to any
Loss incurred by them resulting from any of the following:

          (a)      Fees and Expenses. Any obligation for the payment of fees and
expenses imposed on Buyer pursuant to this Agreement, including any fees and
expenses to be borne by Buyer pursuant to Section 6.4 or 7.2 or 7.7.   (b)
Breach of Covenants. Any breach of any covenant or agreement made by Buyer in
this Agreement, or any Buyer’s Ancillary Agreement or in any certificate or
document delivered by Buyer under this Agreement.   (c) Breach of
Representations. Any inaccuracy or breach of any representation or warranty made
by Buyer in this Agreement or any Buyer’s Ancillary Agreement.   (d) Seller
Commitments. Any liability under the Seller Commitments.  

8.4      Certain Limitations. Notwithstanding the foregoing:  

          (a)      Time Limitations. The indemnification provided for in Section
8.2(c) shall terminate eighteen months after the Closing Date (and no claims
shall be made by Buyer under Section 8.2(c) thereafter), except that Seller’s
indemnification obligations will continue as to:  

                   (i)      any representations and warrantees set forth in
Section 4.6, 4.13 or 4.17, which shall become time-barred on the 90th day after
the date on which the applicable statutory period of limitations expires
(including any valid extensions), and   (ii) any representations and warrantees
set forth in Section 4.1(d) or 4.3, which shall survive indefinitely.  

          (b)       Deductible. Except in the case of fraud, Seller shall be
required to indemnify any Buyer Related Parties for inaccuracies or breaches of
representations or warranties of the Seller under Section 8.2(c),  

                   (i)      only to the extent that the amount of any Loss
related to an individual claim is greater than $25,000 (the “Individual
Deductible”), and   (ii) if any Individual Deductible is exceeded, then only to
the extent of the excess of such Loss over the Individual Deductible and only to
the extent that the aggregate amount of such excess Losses that have been agreed
to or adjudicated as valid indemnification claims against the Seller exceed an
amount equal to $500,000 (the “Basket”); provided, however, that the foregoing
limitation shall not apply to the rights of the Buyer Related Parties under
Section 8.2(a), (b), (d) or (e).

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           (c)       Escrow Fund Cap. The aggregate liability of the Seller
under Section 8.2(c) shall not exceed the amount of the General Escrow Fund and
the amount of Seller’s liability with respect to any Losses covered by Section
8.2(c) shall be satisfied, after the amount has been finally determined,
exclusively by the payment to the Buyer Related Party of amounts held in the
General Escrow Fund pursuant to the Escrow Agreement; provided, that the
foregoing limitation shall not apply to any Loss to the extent that it arises as
a result of (A) a breach of any representation or warranty contained in Section
4.1(d),4.3, 4.6, 4.13 or 4.17 or (B) a breach by Seller of any representation or
warranty in this Agreement, whether by act or omission, that is intended to
mislead the Buyer, or any intentional breach by Seller of any representation or
warranty in this Agreement.   (d) Purchase Price Cap. The aggregate liability of
Seller under this Article 8 shall be limited to the Purchase Price except for
any Loss to the extent it arises as a result of an act or omission intended to
mislead Buyer.   (e) Computation. Notwithstanding anything contained herein to
the contrary, for purposes of determining any inaccuracy in, or breach of, any
representation or warranty and the amount of any Loss resulting from an
inaccuracy or breach of a representation or warranty, such determination shall
be made without regard to any materiality qualification (including references to
“Material Adverse Effect”) or that a matter be or not be “reasonably expected”
to occur, contained in or otherwise applicable to such representation or
warranty.   (f) Notwithstanding anything contained here to the contrary,
Seller’s indemnification obligation will continue without regard to the time
limits in Section 8.4(a) above, for indemnification claims that are duly
notified in accordance with the provisions of Section 8.5(a) on or before the
expiration of the applicable time limit, as to which claims the obligation of
the Indemnitor shall continue until any liability under Article 8 has been
determined and, if applicable, paid in accordance with the terms of this Article
8.  

8.5       Notice of Claims.  

           (a)       Any Buyer Related Party or Seller Related Party (the
“Indemnified Party”) seeking indemnification under this Article 8 shall give to
the Party obligated to provide indemnification to such Indemnified Party (the
“Indemnitor”) a written notice (a “Claim Notice”) describing in reasonable
detail the facts giving rise to any claim for indemnification hereunder and
shall include in such Claim Notice (if then known) the amount or the method of
computation of the amount of such claim, and a reference to the provision of
this Agreement or any other agreement, document or instrument executed hereunder
or in connection herewith upon which such claim is based; provided, however,
that a Claim Notice in respect of any action at law or suit in equity by or
against a third Person as to which indemnification will be sought shall be given
promptly after the action or suit is commenced.

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          (b)      After the giving of any Claim Notice pursuant hereto, the
amount of indemnification to which an Indemnified Party shall be entitled under
this Article 8 shall be determined:  

                    (i)      by the written agreement between the Indemnified
Party and the Indemnitor;   (ii) by a final judgment or decree of any court of
competent jurisdiction; or   (iii) by any other means to which the Indemnified
Party and the Indemnitor shall agree.   The judgment or decree of a court shall
be deemed final when the time for appeal, if any, shall have expired and no
appeal shall have been taken or when all appeals taken shall have been finally
determined. The Indemnified Party shall have the burden of proof in establishing
the amount of Loss suffered by it.

8.6      Third Person Claims.  

          (a)      Notices. In order for an Indemnified Party to be entitled to
any indemnification provided for under this Agreement in respect of, arising out
of or involving a claim or demand made by any third Person against the
Indemnified Party, such Indemnified Party must give a Claim Notice to the
Indemnitor, and in reasonable detail, of the third Person claim promptly after
such Indemnified Party receives written notice of the third Person claim;
provided, however, no delay by the Indemnified Party in notifying the Indemnitor
shall relieve the Indemnitor from any liability or obligation hereunder unless
the Indemnitor can demonstrate that it was damaged by such delay. Thereafter,
the Indemnified Party shall deliver to the Indemnitor, promptly after the
Indemnified Party’s receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnitor relating to the third Person
claim. Notwithstanding the foregoing, if an Indemnified Party is served with a
complaint with regard to a third Person claim, the Indemnified Party must notify
the Indemnitor with a copy of the complaint promptly after receipt thereof and
shall deliver to the Indemnitor promptly after the receipt of such complaint
copies of notices and documents (including court papers) received by the
Indemnified Party relating to the third Person claim.   (b) Procedure.  

                   (i)      If a third Person asserts any claim or initiates any
legal proceeding against the Indemnified Party, the Indemnitor shall have the
sole and absolute right after the receipt of notice, at its option and at its
own expense, to be represented by counsel of its choice and to control, defend
against, negotiate, settle or otherwise deal with any proceeding, claim, or
demand which relates to any Loss indemnified against hereunder; provided,
however, that the Indemnified Party may participate in any such proceeding with
counsel of its choice and at its expense.

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                    (ii)       The parties hereto agree to cooperate fully with
each other in connection with the defense, negotiation or settlement of any such
legal proceeding, claim or demand.   (iii) To the extent the Indemnitor elects
not to defend or abandons such proceeding, claim or demand, and the Indemnified
Party defends against or otherwise deals with any such proceeding, claim or
demand, the Indemnified Party may retain counsel, at the expense of the
Indemnitor, and control the defense of such proceeding.   (iv) Neither the
Indemnitor nor the Indemnified Party may consent to entry of any judgment or
settle any such proceeding which judgment or settlement obligates the other
Party to any money, to perform obligations or to admit liability without the
consent of the other Party, such consent not to be unreasonably withheld. If the
Indemnified Party refuses to consent to the settlement of any legal proceeding,
claim or demand, so long as only money damages are involved, the liability of
the Indemnitor for indemnification in respect of such legal proceeding, claim or
demand shall not exceed the amount for which the legal proceeding, claim or
demand could have been settled plus the amount of expenses incurred by the
Indemnified Party prior to the time of the proposed settlement to which it is
entitled to indemnification.   (v) After any final judgment or award shall have
been rendered by a court, arbitration board or administrative agency of
competent jurisdiction and the time in which to appeal therefrom has expired, or
a settlement shall have been consummated, or the Indemnified Party and the
Indemnitor shall arrive at a mutually binding agreement with respect to each
separate matter alleged to be indemnified by the Indemnitor hereunder, the
Indemnified Party shall forward to the Indemnitor notice of any sums due and
owing by it with respect to such matter and the Indemnitor shall pay all of the
sums so owing to the Indemnified Party by wire transfer, or by certified or bank
cashier’s check within 30 days after the date of such notice.  

          (c)       Tax Proceedings. If there shall be any conflict between the
provisions of this Section 8.6 relating to contests of third-party claims, and
Section 7.1 relating to Tax Proceedings, the provisions of Section 7.1 shall
control with respect to Tax contests.

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8.7       Additional Limitations.  

           (a)       In any case where an Indemnified Party recovers from third
Persons any amount in respect of a matter with respect to which an Indemnitor
has indemnified it pursuant to this Agreement, such Indemnified Party shall
promptly pay over to the Indemnitor the amount so recovered (after deducting
therefrom the full amount of the expenses incurred by it in procuring such
recovery), but not in excess of the sum of  

                     (i)       any amount previously so paid by the Indemnitor
to or on behalf of the Indemnified Party in respect of such matter, plus   (ii)
any amount expended by the Indemnitor in pursuing or defending any claim arising
out of such matter.  

           (b)       The amount of any Loss suffered by a Indemnified Party
shall be reduced by the amount, if any, of the recovery or benefit (net of
reasonable expenses incurred in obtaining such recovery or benefit) the
Indemnified Party shall have received or otherwise enjoyed with respect thereto
from any other Person; and if such a recovery or benefit is received or enjoyed
by an Indemnified Party after it receives payment or other credit under this
Agreement with respect to a Loss, then a refund equal in aggregate amount of the
recovery, net of reasonable expenses or other costs incurred in obtaining
recovery, shall be made promptly to the Indemnitor. The present value shall be
calculated using the prevailing interest rates established by the Code and the
interest rates promulgated under it.   (c) Any Indemnified Party that becomes
aware of a Loss for which it seeks indemnification under this Article 8 shall be
required to use commercially reasonable efforts to mitigate the Loss including,
at any time after a Claim Notice has been given to the Indemnitor, any actions
reasonably requested by the Indemnitor. Notwithstanding any other provision of
this Article 8, no Indemnitor shall have any liability under this Article 8 to
indemnify any Indemnified Party with respect to a Loss to the extent that the
Loss arose from or was exacerbated by any action taken directly or indirectly by
such Indemnified Party or any of its Affiliates on or after the Closing Date.  
(d) The obligations of an Indemnitor in respect of a claim or indemnification
under this Agreement shall be limited to the taking of such reasonable actions
as are necessary under the circumstances giving rise to such claim, and an
Indemnitor  

                     (i)       shall in no event be required to take more
extensive actions than would be required under Applicable Law then in effect,  
(ii) shall not be liable for any Loss to the extent that it is attributable to
the Indemnified Party’s failure to mitigate as required by Section 8.7(c).

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           (e)       Except for fraud, Seller and Buyer agree that their
respective rights and obligations in respect of matters as provided in this
Agreement shall supersede any such rights and obligations either may have under
any existing or future Law.  

8.8       Survival; Exclusive Remedies. The representations and warranties made
in this Agreement shall survive the Closing for the periods specified in Section
8.4(a). If the Closing occurs, then the remedies provided in this Article 8
constitute the sole and exclusive remedies for recoveries against another Party
for breaches of the representations, warranties, covenants and agreements in
this Agreement and for the matters specifically listed in this Article 8 as
being indemnified against.   8.9 Treatment of Indemnity Payment. All amounts
paid by Buyer or Seller, as the case may be, under this Article 8 shall be
treated, to the extent permitted under applicable law, as adjustments to the
Purchase Price for all purposes, including Tax purposes.

ARTICLE 9 TERMINATION

9.1       Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:  

           (a)       by the mutual written consent of Buyer and Seller;   (b) by
Buyer or Seller if the Closing shall not have occurred on or before April 30,
2007 (or such later date as may be agreed in writing to by Buyer and Seller);  
(c) by Buyer in the event of any material breach by either Seller of any of the
agreements, representations or warranties of such Seller contained in this
Agreement and the failure of such Seller to cure such breach within 30 days
after receipt of notice from Buyer requesting such breach to be cured, provided
that such breach is susceptible to cure within 30 days;   (d) by Seller in the
event of any material breach by Buyer of any of Buyer's agreements,
representations or warranties contained in this Agreement and the failure of
Buyer to cure such breach within 30 days after receipt of notice from either
Seller requesting such breach to be cured, provided that such breach is
susceptible to cure within 30 days; or   (e) by Buyer or Seller if any court of
competent jurisdiction in the United States or other governmental authority
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby.  

9.2       Notice of Termination. Any Party desiring to terminate this Agreement
pursuant to Section 9.1 shall give written notice of such termination to the
other Party to this Agreement.

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9.3         Effect of Termination. In the event that this Agreement shall be
terminated pursuant to this Article 9, all further obligations of the Parties
under this Agreement (other than Sections 7.5 and 7.7) shall be terminated
without further liability of any Party to the other; provided that nothing
herein shall relieve any Party from liability for its breach or wrongful
termination of this Agreement.

ARTICLE 10 GENERAL PROVISIONS

10.1       Good Faith; Cooperation; Further Assurances. The Parties shall in
good faith undertake to perform their obligations in this Agreement, to satisfy
all conditions and to cause the transactions contemplated by this Agreement to
be carried out promptly in accordance with its terms. The Parties shall
cooperate fully with each other and their respective representatives in
connection with any actions required to be taken as part of their respective
obligations under this Agreement. Each Party will at the Closing and from time
to time after the Closing, deliver to the other such further instruments
necessary or desirable, in the reasonable opinion of the requesting Party and at
the expense of the requesting Party, to consummate or document the Transactions.
  10.2 Notices. Each notice, communication and delivery under this Agreement  

             (a)       shall be made in writing signed by the Party making it;  
(b) shall specify the Section to which it relates;   (c) shall either be
delivered in person or by telecopier or nationally recognized next business day
delivery service;   (d) unless given in person, shall be given to the address
specified below;   (e) shall be deemed given (i) if delivered in person, on the
date delivered, (ii) if sent by telecopier, on the date transmitted (if received
during the normal business hours of the recipient) or (iii) if sent by
nationally recognized next business day delivery service (with costs prepaid),
on the first business day after so sent; and   (f) shall be deemed received (i)
if delivered in person, on the date of personal delivery, (ii) if telecopied, on
the day transmitted (if received during the normal business hours of the
recipient) or (iii) if sent by nationally recognized next business day delivery
service, on the day received.   The addresses and requirements for copies are as
follows:

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            If to Seller, to:   With a copy to:     Ronald J. Rice  Sutherland,
Asbill & Brennan LLP  175 Ocean Shore Blvd.  999 Peachtree Street  Ormond Beach,
FL 32176  Atlanta, Georgia 30309-3996        Attention: James R. McGibbon 
Tel:       386-673-7336  Tel:       404-853-8122  Fax: 386-673-1018  Fax:
404-853-8806                  If to Buyer, to:   with a copy to:     Playtex
Products, Inc.  Carter Ledyard & Milburn LLP  300 Nyala Farms Road,  2 Wall
Street  Westport, Ct 06880  New York, NY 10005    Attention: General Counsel 
Attention: H. Tom Davis  Tel: 203-341-4069  Tel: 212-732-3200  Fax:
203-341-4080  Fax: 212-732-3232 

10.3      Assignment; Successors in Interest.  

            (a)      No Assignment. Except with the prior consent of the other
Party neither Buyer, nor Seller, shall make any assignment by operation of law
or otherwise of its rights and obligations under this Agreement, provided that:
 

                     (i)       following the Closing Seller may assign his
rights under this Agreement to a trust to be established for the benefit of his
immediate family, provided that Seller shall not be released from any of his
obligations under this Agreement,   (ii) any Party may assign its rights under
this Agreement to another legal entity that, directly or indirectly, controls,
is controlled by or under common control with that Party, provided that the
assigning Party shall not be released from any of its obligations under this
Agreement,   (iii) Buyer may make a collateral assignment of its post-Closing
rights under this Agreement to any lender or lenders or agent acting on behalf
of such lenders providing financing to Buyer or its affiliates, and any such
lender, lenders or agent may exercise any and all rights and remedies of Buyer
under this Agreement, provided that such collateral assignment does not
adversely affect Seller’s rights under this Agreement or any outstanding claims
of Seller (including any offset rights) under this Agreement or impose
additional liabilities or obligations on Seller other than those contained in
this Agreement, and

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                      (iv)      nothing in this Section 10.3(a) shall be deemed
to restrict any merger of any Party with or into any other Person.  

             (b)      Binding Nature. This Agreement is binding upon the parties
and their respective successors or assigns (whether or not permitted) and inures
to the benefit of the Parties and their permitted successors and assigns.  

10.4       No Third Party Beneficiaries. With the exception of the
indemnification obligations contained in Section 7.8 and except as set forth in
Section 10.3, the Parties do not intend to confer any benefit under this
Agreement on anyone other than the Parties, and nothing contained in this
Agreement shall be deemed to confer any such benefit on any other Person,
including any current or former employee or agent of any Company or any
dependent or beneficiary of any of them.   10.5 Severability. Any determination
by any court of competent jurisdiction of the invalidity of any provision of
this Agreement that is not essential to accomplishing its purposes shall not
affect the validity of any other provision of this Agreement, which shall remain
in full force and effect and which shall be construed as to be valid under
Applicable Law.   10.6 Remedies. Except as set forth in Article 8, the rights
and remedies specified in any provision of this Agreement are in addition to all
other rights and remedies a Party may have, including any right to equitable
relief and any right to sue for damages as a result of a breach of this
Agreement (whether or not it elects to terminate this Agreement), and all such
rights and remedies are cumulative. Without limiting the foregoing, no exercise
of a remedy shall be deemed an election excluding any other remedy (any such
claim by any other Party being hereby waived). Buyer acknowledges and agrees
that in the event it fails to fulfill its obligations under this Agreement,
Seller would suffer irreparable harm and damages would not be an adequate
remedy, and accordingly Seller shall be entitled to an injunction or injunctions
to prevent a breach of this Agreement and to enforce specifically the terms and
provisions of this Agreement.   10.7 Controlling Law; Integration; Amendment;
Waiver.  

             (a)       This Agreement is governed by, and shall be construed and
enforced in accordance with, the Laws of the State of New York, except its Laws
that would render such choice of laws ineffective.   (b) This Agreement and the
other contracts, documents and instruments to be delivered pursuant to this
Agreement supersede all prior negotiations, agreements and understandings
between the parties with respect to their subject matter (other than the
provisions of Paragraphs 1, 2, 4, 5, 8, 10, 12, and 13 of the Confidentiality
Agreement, which will remain in full force and effect), constitute the entire
agreement of the parties with respect to their subject matter, and may not be
altered or amended except in writing signed by Seller and Buyer.

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             (c)      This Agreement may not be amended or supplemented except
by an agreement in writing signed by each of the Parties.   (d) The failure of
any Party at any time or times to require performance of any provision of this
Agreement shall in no manner affect the right to enforce such provision; and no
waiver by any Party of any provision (or of a breach of any provision) of this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed or construed either as a further or continuing waiver of any such
provision or breach or as a waiver of any other provision (or of a breach of any
other provision) of this Agreement.  

10.8       Counterparts. This Agreement may be executed in one or more
counterparts (one counterpart reflecting the signatures of all parties), each of
which shall be deemed to be an original, and it shall not be necessary in making
proof of this Agreement or its terms to account for more than one of such
counterparts. This Agreement may be executed by each Party upon a separate copy,
and one or more execution pages may be detached from one copy of this Agreement
and attached to another copy in order to form one or more counterparts.

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     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first above written.

BUYER:    Playtex Products, Inc.      By:  /s/KRIS KELLEY      Name: Kris
Kelley  Title: Executive Vice President and Chief Financial Officer    SELLER: 
  /s/ RONALD J. RICE    Ronald J. Rice 

 

 

 

Stock Purchase Agreement
Signature Page

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