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                            ASSET PURCHASE AGREEMENT
                                 BY AND BETWEEN
                                U.S. COTTON, LLC,
                          AMERICAN SAFETY RAZOR COMPANY
                           AND CERTAIN SUBSIDIARIES OF
                          AMERICAN SAFETY RAZOR COMPANY

                          DATED AS OF NOVEMBER 7, 2001



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<PAGE>







                                  TABLE OF CONTENTS

                                                                          Page


I.    TRANSFER OF ASSETS AND LIABILITIES.....................................1

      1.01  Assets to be Sold................................................1
      1.02  Consideration....................................................2
      1.03  Closing..........................................................2
      1.04  Deliveries by Seller.............................................2
      1.05  Deliveries by the Buyer..........................................3
      1.06  Adjustment to Initial Purchase Price.............................4
      1.07  Allocation of Purchase Price.....................................6
      1.08  Assumed Liabilities..............................................6
      1.09  [INTENTIONALLY OMITTED]..........................................7
      1.10  Acquisition of Certain Acquired Assets...........................7

II.   RELATED MATTERS........................................................8

      2.01  Mail Received After Closing......................................8

III.  REPRESENTATIONS AND WARRANTIES OF THE SELLER...........................8

      3.01  Organization And Authority.......................................8
      3.02  No Violation; Consents and Approvals.............................9
      3.03  Financial Statements............................................10
      3.04  Absence of Undisclosed Liabilities..............................10
      3.05  Absence of Certain Changes or Events............................10
      3.06  Title to Acquired Assets........................................10
      3.07  Intellectual Property...........................................11
      3.08  Litigation......................................................12
      3.09  Employee Benefit Plans..........................................13
      3.10  Employees; Employee Relations...................................15
      3.11  Certain Contracts and Arrangements..............................17
      3.12  Compliance with Laws, Licenses, Etc.............................17
      3.13  Insurance.......................................................17
      3.14  Brokers.........................................................18
      3.15  Inventories; Accounts Receivable................................18
      3.16  Environmental Matters...........................................19
      3.17  Sufficiency of the Acquired Assets..............................23
      3.18  Affiliate Transactions..........................................23
      3.19  Taxes...........................................................23
      3.20  Warranties......................................................24
      3.21  Motor Vehicles..................................................24
      3.22  Customers and Suppliers.........................................24
      3.23  Condition of the Property.......................................25
      3.24  Customer Deposits...............................................25
      3.25  Promotional Obligations.........................................25

IV.   REPRESENTATIONS AND WARRANTIES OF THE BUYER...........................25

      4.01  Organization And Authority......................................25
      4.02  No Violation; Consents and Approvals............................26
      4.03  Brokers.........................................................26
      4.04  Litigation......................................................26
      4.05  Available Funds.................................................27

V.    COVENANTS OF THE PARTIES..............................................27

      5.01  Conduct of the Business.........................................27
      5.02  Access to Information; Confidentiality..........................28
      5.03  Commercially Reasonable Efforts.................................29
      5.04  Consents........................................................29
      5.05  Public Announcements............................................29
      5.06  Notification of Certain Matters.................................29
      5.07  Supplemental Disclosure.........................................30
      5.08  Records Pertaining to the Business..............................30
      5.09  No Solicitation.................................................30
      5.10  Motor Vehicles..................................................31
      5.11  Other Actions...................................................31
      5.12  Bulk Sales Compliance...........................................31
      5.13  Discharge of Claims.............................................31
      5.14  Bank Accounts...................................................31
      5.15  Financial Information...........................................31

VI.   ADDITIONAL AGREEMENTS.................................................32

      6.01  Tax Matters.....................................................32
      6.02  Tax Certificates................................................32
      6.03  Proration of Taxes and Utilities................................32
      6.04  Covenant Not to Compete.........................................33
      6.05  Environmental Covenants.........................................34
      6.06  Employee Matters................................................35
      6.07  The Buyer's Financing...........................................36
      6.08  The Promotional Obligations.....................................36
      6.09  The Transition Services Agreement...............................37
      6.10  Insurance.......................................................37
      6.11  Certain Releases................................................38
      6.12  Investigations by Government Authorities........................38
      6.13  Review Period...................................................39
      6.14  The Trademark Licenses..........................................39
      6.15  [INTENTIONALLY OMITTED].........................................39
      6.16  Termination of Confidentiality Obligations......................39
      6.17  The Puerto Rico Lease...........................................39
      6.18  Treatment of Bulk Products......................................40
      6.19  Tax Credit Agreement............................................40
      6.20  Enterprise Zone Contract........................................40
      6.21  Nogales Sublease Additional Rent................................41
      6.22  [INTENTIONALLY OMITTED].........................................41
      6.23  Certain Landlord Lien Waivers...................................41
      6.24  The Puerto Rico Grant...........................................41

VII.  CONDITIONS TO OBLIGATIONS OF THE SELLER...............................41

      7.01  Conditions......................................................41

VIII. CONDITIONS TO OBLIGATIONS OF THE BUYER................................42

      8.01  Conditions......................................................42

IX.   TERMINATION, AMENDMENT AND WAIVER.....................................44

      9.01  Termination.....................................................44
      9.02  Effect of Termination...........................................45
      9.03  Amendment, Modification and Waiver..............................45

        X. FEES AND EXPENSES; SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
           AND INDEMNIFICATION..............................................45

      10.01 Fees and Expenses...............................................45
      10.02 Survival of Representations and Warranties and Covenants........45
      10.03 Indemnification Obligations of the Seller.......................46
      10.04 Limitation on the Liability of the Seller.......................48
      10.05 Indemnification Obligations of the Buyer........................49
      10.06 Limitation on the Liability of the Buyer........................49
      10.07 Response Action.................................................50
      10.08 Conditions of Indemnification...................................50
      10.09 Waiver of Special Damages.......................................51

XI.   MISCELLANEOUS.........................................................51

      11.01 Further Assurances..............................................51
      11.02 Notices.........................................................51
      11.03 Entire Agreement................................................52
      11.04 Severability....................................................52
      11.05 Binding Effect; Assignment......................................53
      11.06 Third-Party Beneficiaries.......................................53
      11.07 Counterparts....................................................53
      11.08 Interpretation..................................................53
      11.09 Specific Performance............................................53
      11.10 Governing Law...................................................53
      11.11 Knowledge.......................................................54
      11.12 Waiver of Jury Trial............................................54
      11.13 Consent  to  Personal  Jurisdiction;  Agent and Method  for
            Service; and Choice of Forum....................................54

XII.  DEFINITIONS AND TERMS.................................................55

      12.01 Certain Definitions.............................................55




<PAGE>


                         INDEX TO EXHIBITS AND SCHEDULES


EXHIBITS

Exhibit A-1-      Bill of Sale

Exhibit A-2-      Deed

Exhibit B-        Assignment and Assumption Agreement

Exhibit C-        Trademark Assignments

Exhibit D-        Lease Assignment and Assumption Agreement

Exhibit E-        Undertaking

Exhibit F-        [INTENTIONALLY OMITTED]

Exhibit G-1-      Subordination Non-Disturbance and Attornment Agreements

Exhibit G-2-      Landlord Lien Waivers

Exhibit H-        Ernst & Young, LLP Letter

Exhibit I--       [INTENTIONALLY OMITTED]

Exhibit J-        Transition Services Agreement

Exhibit K-        The Trademark Licenses

Exhibit L-        Opinion of the Buyer's Counsel

Exhibit M-        Opinion of the Seller's Counsel

Exhibit N-        Form of the Environmental Insurance Policy

Exhibit O-        The Puerto Rico Bill of Sale

Exhibit P-        The Mexico Bill of Sale

Exhibit Q-        The Pomfret Lease

Exhibit R-        The Canadian Bill of Sale

Exhibit S-        The New Collectron Agreement

Exhibit T-        The Cleveland Lease Amendment

Exhibit U-        The Cleveland Agreement

Exhibit V-        The Final Commitment Letter



<PAGE>


                                   APPENDICES

Appendix I  -.....PR Acquired Assets

Appendix II -.....Mexican Acquired Assets





<PAGE>


SCHEDULES

Schedule 1.01(a)-       The Acquired Assets

Schedule 1.01(b)-       The Excluded Assets

Schedule 1.02-          Percentage of Purchase Price to be paid to the Seller
                        Entities

Schedule 1.07-          The Allocation

Schedule 1.08-          The Assumed Liabilities

Schedule 3.02-          The Seller's Consents and Approvals

Schedule 3.03(a)-       The Seller's Financial Statements

Schedule 3.03(b)-       Exceptions Relating to the Seller's Financial Statements

Schedule 3.04-          Certain Liabilities and Obligations

Schedule 3.06(a)-       Ownership of the Acquired Assets by the Seller

Schedule 3.06(b)(i)-    The Owned Real Property and the Leased Property

Schedule 3.06(b)(ii)-   The Legal Description of the Owned Real Property

Schedule 3.07(a)(i)-    The Intellectual Property

Schedule 3.07(a)(ii)-   The Retained Intellectual Property

Schedule 3.07(a)(iii)-  Inactive Intellectual Property

Schedule 3.08(a)-       Litigation

Schedule 3.09(a)-       Employee Benefit Plans

Schedule 3.10(a)-       Employees

Schedule 3.10(b)-       Employment Contracts

Schedule 3.10(d)(i)-    Employee Relations

Schedule 3.10(d)(ii)-   Collective Bargaining Agreement

Schedule 3.10(e)-       Disabled Employees

Schedule 3.10(f)-       Employee Perquisites

Schedule 3.11(a)-       Material Contracts

Schedule 3.11(b)-       Capitalized Leases

Schedule 3.13-          Insurance

Schedule 3.15(a)-       Inventory Unsold for Six Months

Schedule 3.15(b)-       Receivables

Schedule 3.16-          Environmental Matters, including Environmental Permits

Schedule 3.17-          Condition of the Acquired Assets

Schedule 3.18-          Affiliate Transactions

Schedule 3.19-          Taxes

Schedule 3.20-          Warranties

Schedule 3.22-          Customers and Suppliers

Schedule 3.23-          Condition of the Property

Schedule 3.24-          Customer Deposits

Schedule 3.25-          The Promotional Obligations

Schedule 4.02-          The Buyer's Consents and Approvals

Schedule 6.14-          The Licensed Trademarks

Schedule 7.01(f)(i)-    The Seller's Consents and Approvals

Schedule 7.01(f)(ii)-   The Buyer's Consents and Approvals

Schedule 8.01(n)-       Waivers, Consents and Estoppel Certificates




<PAGE>






                            ASSET PURCHASE AGREEMENT


      THIS ASSET PURCHASE AGREEMENT, dated as of November 7, 2001 (this
"Agreement"), by and between U.S. Cotton, LLC, a Delaware limited liability
company ("Buyer"), American Safety Razor Company, a Delaware corporation
("ASR"), Megas Beauty Care, Inc., a Delaware corporation ("Megas"), Valley Park
Realty, Inc., a Missouri corporation ("Valley Park"), Megas de Puerto Rico, Inc.
d/b/a Acme Chaston Puerto Rico, Inc., a Puerto Rican corporation ("Megas PR"),
American Safety Razor of Canada Limited, a Canadian corporation ("ASR Canada")
and Personna International de Puerto Rico, Inc., a Delaware corporation
("Personna") (each of ASR, Megas, Valley Park, Megas PR, ASR Canada and
Personna, a "Seller Entity" and, collectively, the "Seller") (the Buyer and the
Seller each hereinafter at times a "Party" and, collectively hereinafter at
times, the "Parties").

                               W I T N E S S E T H

      WHEREAS, the Buyer desires to purchase from the Seller and the Seller
desires to sell to the Buyer, free and clear of all liabilities, obligations,
claims, use and occupancy rights, options, pledges, mortgages, hypothecations,
security interests, liens, charges, prior claims, burdens and encumbrances
(collectively, the "Encumbrances") (other than the liabilities and obligations
expressly assumed pursuant to this Agreement and the Encumbrances expressly
permitted by this Agreement), substantially all of the property and assets of
the consumer, medical, pharmaceutical and other cotton products, tissues and
foot care (collectively, the "Cotton Products") manufacturing, sales and
distribution businesses currently conducted by the Seller (collectively
hereinafter at times, the "Business") and the Owned Real Property, as
hereinafter defined, upon the terms and subject to the conditions hereinafter
set forth.

      NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants, agreements and conditions contained
herein, and intending to be legally bound hereby, the Parties hereby agree as
follows:

I.    TRANSFER OF ASSETS AND LIABILITIES

1.01  Assets to be Sold.
      -----------------

(a) Upon the terms and subject to the conditions of this Agreement, at the
closing provided for in Section 1.03 hereof (the "Closing"), the Seller shall
sell, convey, assign, transfer and deliver to the Buyer all of the Seller's
right, title and interest in and to the property and assets of the Business
listed and described in Schedule 1.01(a) hereto and the Seller shall sell,
convey, assign, transfer and deliver to the Buyer the entire fee interest in the
Owned Real Property, including all rights, benefits and hereditaments
appurtenant thereto (collectively, the "Acquired Assets"), expressly excluding
the Excluded Assets, as hereinafter defined, free and clear of all Encumbrances,
except for the Assumed Liabilities and the Permitted Encumbrances.

(b) The Acquired Assets do not include any assets which are not listed on
Schedule 1.01(a) hereto, including, without limitation, those assets of the
Seller listed and described in Schedule 1.01(b) hereto (collectively, the
"Excluded Assets").

(c) Such sale, conveyance, assignment, transfer and delivery shall be effected
by delivery by the Seller to the Buyer or its designees of (i) a duly executed
bill of sale, in substantially the form of Exhibit A-1 hereto (the "Bill of
Sale"), (ii) a special warranty deed, in recordable form and in the form of
Exhibit A-2 hereto (the "Deed"), with respect to the Owned Real Property, (iii)
an assignment of the Contracts (as hereinafter defined), permits and certain
other assets included in the Acquired Assets in substantially the form of
Exhibit B hereto (the "Assignment and Assumption Agreement"), (iv) assignments
of all of the trademarks of the Seller included in the Acquired Assets in
substantially the form of Exhibit C hereto (the "Trademark Assignments"), and
(v) such other good and sufficient instruments of conveyance and transfer,
including, without limitation, assignments of any leases for Leased Property
included in the Acquired Assets in substantially the form of Exhibit D hereto
(the "Lease Assignment and Assumption Agreements") (collectively, the "Other
Instruments"), as shall be necessary to vest in the Buyer or one of its
subsidiaries good, valid and marketable title to the Acquired Assets, free and
clear of all Encumbrances, excepting the Assumed Liabilities (as hereinafter
defined) and Permitted Encumbrances (as hereinafter defined).

1.02 Consideration. Upon the terms and subject to the conditions of this
Agreement, in consideration of the aforesaid sale, conveyance, assignment,
transfer and delivery of the Acquired Assets, at the Closing, the Buyer shall
deliver or cause to be delivered to the Seller Entities in accordance with the
respective percentages set forth on Schedule 1.02 in full payment for the
aforesaid sale, conveyance, assignment, transfer and delivery of the Acquired
Assets: (i) Eighteen Million U.S. Dollars ("Dollars") (US $18,000,000) (the
"Initial Purchase Price"), subject to adjustment in accordance with Section 1.06
hereof (as so adjusted, the "Purchase Price"); (ii) an undertaking,
substantially in the form of Exhibit E hereto (the "Undertaking"), whereby the
Buyer shall assume and agree to perform, pay or discharge certain of the
liabilities and obligations of the Seller relating to the Business specified
therein, (iii) the Assignment and Assumption Agreement; and (iv) the Lease
Assignment and Assumption Agreements.

1.03 Closing. The Closing of the transactions contemplated by this Agreement
shall take place at the offices of Locke Liddell & Sapp LLP, 2200 Ross Avenue,
Suite 2200, Dallas, Texas 75201, at 10:00 a.m. Central time on November 9, 2001
or, if the conditions to Closing set forth in Articles VII and VIII hereof shall
not have been satisfied or waived by such date, as soon as practicable after
such conditions shall have been satisfied, or such other date and time as shall
be agreed upon in writing by the parties hereto. The date on which the Closing
actually occurs is referred to herein as the "Closing Date."

1.04 Deliveries by Seller. At the Closing, the Seller shall deliver or cause to
be delivered to the Buyer (unless delivered previously) the following:

(a) the Bill of Sale,  the Puerto Rico Bill of Sale, the Mexico Bill of Sale and
the Canadian Bill of Sale;

(b) the Deed;

(c) the Acquired Assets;

(d) the Trademark  Assignments,  the Assignment and  Assumption  Agreement, the
Lease Assignment and Assumption  Agreements,  the Transition  Services Agreement
and the Other Instruments;

(e) the compliance certificate referred to in Subsection 8.01(d) hereof;

(f) the opinion of counsel to the Seller referred to Subsection 8.01(k) hereof;


(g) the originals or copies (in the Seller's discretion) of all books and
records, in any form or media (including all computerized or electronic records
and other computerized storage media), of the Seller relating in a meaningful
way to the Business (collectively, the "Books and Records"), including, without
limitation, all Books and Records relating to the purchase of materials for,
supplies and services for, and dealings with customers and distributors of, the
Business, but specifically excluding the corporate charter, qualifications to
conduct business as a foreign corporation, payroll and other employee records,
the Environmental Information, seals, minute books, stock transfer books, blank
stock certificates, and other documents relating to the organization and
corporate governance of the Seller or any of its subsidiaries as a corporation
or other entity;

(h) to the extent to which the Seller can obtain them through the use of
commercially reasonable efforts: (i) subordination, non-disturbance and
attornment agreements for any encumbered Leased Property from the lender thereon
substantially in the form of Exhibit G-1 hereto (the "Subordination
Non-Disturbance and Attornment Agreements"); and (ii) landlord lien waivers for
any Leased Property from the landlord thereof substantially in the form of
Exhibit G-2 hereto (the "Landlord Lien Waivers").

(i)   the Trademark Licenses;

(j) to the extent transferable under applicable Laws and set forth on Schedule
7.01(f)(i), any documents, instruments or agreements to effectuate the transfer
and assignment of any and all permits (including, without limitation,
Environmental Permits) authorizations, building permits, certificates of
occupancy, approvals and variances (collectively, "Permits") held by the Seller
which are necessary to own and operate the Acquired Assets in accordance with
applicable laws;

(k)   [INTENTIONALLY OMITTED]

(l) all other documents, certificates, instruments or writings reasonably
required to be delivered by the Seller at or prior to the Closing pursuant to
this Agreement or otherwise reasonably requested by counsel to the Buyer in
connection herewith, including any declaration of value or other affidavits or
filings required in connection with the recordation of the Deeds or the issuance
of title insurance to Buyer with respect to the Owned Real Property.

1.05 Deliveries by the Buyer. At the Closing, the Buyer shall deliver or cause
to be delivered to the Seller (unless delivered previously) the following:

(a) an amount equal to the Initial Purchase Price, in accordance with Section
1.02 hereof, by wire transfer of immediately available funds in Dollars, to bank
accounts designated by the Seller, which accounts shall be designated not less
than two (2) business days prior to the Closing Date;

(b)   the Undertaking;

(c)   the  Assignment  and  Assumption  Agreement and the Lease  Assignment and
      Assumption Agreements;

(d)   the Transition Services Agreement;

(e)   the compliance certificate referred to in Subsection 7.01(c) hereof;

(f)   the opinion of counsel to the Buyer referred to in Section 7.01(g) hereof;

(g)   the Trademark Licenses; and

(h) all other documents, certificates, instruments or writings reasonably
required to be delivered by the Buyer at or prior to the Closing pursuant to
this Agreement or otherwise reasonably requested by counsel to the Seller in
connection herewith.

     1.06 Adjustment to Initial Purchase Price. The Initial Purchase Price shall
be adjusted following the Closing as follows:

     (a) As soon as practicable,  but in any event no later than sixty (60) days
after the Closing Date, Ernst & Young, LLP, the Seller's auditor,  shall conduct
an audit of the working capital of the Business (excluding,  the Excluded Assets
and liabilities  which are not Assumed  Liabilities) as of the Closing Date (the
"Audit") to  determine,  among  other  things,  the  Business'  working  capital
(excluding,   the  Excluded  Assets  and  liabilities   which  are  not  Assumed
Liabilities)  as of the Closing  Date (the  "Closing  Working  Capital")  and to
prepare and deliver to the Buyer a statement (the "Statement") setting forth the
Closing Working  Capital and setting forth in reasonable  detail the calculation
thereof.  Subject to the terms of the letter agreement  customarily  employed by
Ernst & Young,  LLP, a copy of which is attached  hereto as Exhibit H, the Buyer
and its agents and  representatives  shall have complete and unrestricted access
to the  work  papers  of  Ernst &  Young,  LLP  used in the  preparation  of the
Statement. Subject expressly to the right of the Buyer to reasonable observation
of such procedures,  the Buyer shall give the Seller and its auditors reasonable
access to, and the right to examine  and make  copies of all books and  records,
and  reasonable  access to  appropriate  employees of the Buyer  relating to the
Business during normal business hours in order to conduct the Audit. The cost of
the  Audit  shall  be borne by the  Seller.  The  Audit  shall be  conducted  in
accordance with generally  accepted auditing  standards.  The Statement shall be
prepared in accordance with GAAP,  provided that materiality shall be determined
by reference  solely to the Business.  The results of the Audit shall be subject
to verification by the Buyer's  accountants  and other  representatives.  In the
event of a dispute  regarding  any item  contained in the  Statement,  the Buyer
shall  notify the Seller in writing of such dispute  within  thirty (30) days of
the  Buyer's  receipt  of the  Statement,  and the  Buyer and the  Seller  shall
negotiate in good faith to resolve such dispute. In the event that the Buyer and
the Seller are unable to resolve the dispute  within  thirty (30) days after the
Seller  receives  written notice of such dispute,  the dispute shall be promptly
referred to  PricewaterhouseCoopers  (the  "Independent  Accounting Firm") whose
decision shall be final and binding on the Parties. The costs of the Independent
Accounting Firm shall be borne by the Party whose  determination  of the Closing
Working Capital differs from the Closing Working  Capital,  as determined by the
Independent Accounting Firm, by the greatest amount. In the event that the Buyer
does not notify the Seller of any dispute with respect to any item  contained in
the  Statement  within  thirty (30) days  following  the Buyer's  receipt of the
Statement,  the  Statement  shall be the  "Final  Statement".  In the event of a
dispute,  the Statement,  as modified by resolution by the Buyer and the Seller,
or the Independent Accounting Firm, shall be the "Final Statement."

     (b) The  Purchase  Price  shall  be equal to the  Initial  Purchase  Price,
increased or decreased, as the case may be, pursuant to this Section 1.06(b). In
the event the Closing Working Capital exceeds $10,530,000 (the "Required Working
Capital"),  the Purchase Price shall be increased by such excess,  and the Buyer
shall pay to the Seller Entities in accordance  with the respective  percentages
set forth on Schedule  1.02 an amount equal to such excess.  Subject to the last
sentence of Section  1.06(e),  in the event the Closing  Working Capital is less
than the Required  Working  Capital,  the  Purchase  Price shall be equal to the
Initial  Purchase Price  decreased by such deficit,  and the Seller shall pay to
the Buyer an amount equal to such deficit.  The Closing Working Capital shall be
comprised of: (i) Receivables (net of reserves, as determined in accordance with
GAAP) of at  least  $6,500,000;  (ii)  all of the  Seller's  raw  materials  and
supplies,  packaging,  manufactured  and purchased  parts,  work-in-process  and
finished  goods  inventories  and spare parts  inventories  which  relate to the
Business  (the  "Inventory")  having  value of at least  $10,000,000;  provided,
however,  that if the value of such Inventory shall be in excess of $11,000,000,
then the amount by which such Inventory value exceeds $11,000,000 shall be known
as the "Inventory  Surplus Amount",  and in that event the value of the finished
goods which comprise the Inventory shall be equal to the sum of: (x) $4,000,000;
and (y) fifty  percent  (50%) of the  Inventory  Surplus  Amount;  and provided,
further,  that  the  value  of the  finished  goods  Inventory  shall  under  no
circumstances  be less than an amount  equal to  $4,000,000;  and (iii)  prepaid
expenses and other assets that are transferable to the Buyer having a value less
than or equal to  $600,000.  For  purposes  of this  Section  1.06,  the Closing
Working  Capital shall be calculated in conformity with GAAP, and shall mean, as
of  the  Closing  Date,  (i)  the  sum  of  (A)  the  value  of  Inventory  on a
first-in-first-out  basis (net of reserves,  as determined  in  accordance  with
GAAP), (B) Receivables  (net of reserves,  as determined in accordance with GAAP
and net of fully accrued amounts for future deductions  relating to sales booked
on or before  the  Closing  Date) and (C)  prepaid  expenses  and other  working
capital assets that are transferable to the Buyer less (ii) the accounts payable
and  accrued  expenses of the  Business  with due dates of twelve (12) months or
less from the Closing Date, exclusive of capitalized leases; provided,  however,
that any items for which the Seller  retains  liability as a result of proration
pursuant to Section 6.03 shall not be included as accrued  expenses for purposes
of calculating  the Closing Working  Capital.  In the event that the Receivables
exceed $8,500,000, the Seller shall retain the amount of such excess.

     (c) Any payments to be made by the Buyer or the Seller, as the case may be,
pursuant  to  Section  1.06(b)  shall be made by wire  transfer  in  immediately
available  funds  within  five (5)  business  days after the date upon which the
Statement  becomes  the Final  Statement,  in an amount  determined  pursuant to
Section  1.06(b),  together with interest  thereon from the Closing Date through
the date such payment is made,  at the prime lending rate as announced as of the
date of such payment by Bank of America.

     (d) On that date which is two (2) business days prior to the date scheduled
to be the Closing  Date (the  "Assessment  Date") the Buyer and the Seller shall
jointly calculate the value of the Inventory according to the Seller's books, as
adjusted pursuant to the physical Inventory inspection conducted as of September
29, 2001 (such  calculation,  the  "Inventory  Audit") of the  Inventory  of the
Seller which is used in the Business (net of reserves,  determined in accordance
with GAAP).  The Parties  expressly  acknowledge and agree that, with respect to
any Obsolete  Inventory,  as hereinafter  defined:  (i) such Obsolete  Inventory
which does not  constitute  packaging  material  shall be valued at the lower of
cost or market;  and (ii) such Obsolete  Inventory which  constitutes  packaging
material shall be valued at zero ($0.00). Each of the Seller and the Buyer shall
use its commercially reasonable efforts to cooperate fully with the other in the
conduct  of the  Inventory  Audit,  and each  Party  shall bear its own costs of
performing the Inventory Audit. The results of the Inventory Audit, adjusted for
changes in the Inventory between the Assessment Date and the Closing Date, shall
be considered  by the Parties for purposes of  determining  the Closing  Working
Capital, in accordance with Section 1.06(b) of this Agreement, and the Inventory
identified  as a result of the  Inventory  Audit  shall be set forth on Schedule
1.01(a) hereto as part of the Acquired Assets.

     (e) On the Assessment  Date, the Buyer and the Seller shall, in good faith,
make a determination of the working capital of the Business as of the Assessment
Date including consideration of the Inventory Audit. As it pertains to the other
components of the working capital of the Business as of the Assessment Date, the
Buyer and the Seller shall use the  provisions of Section  1.06(b)  hereof.  The
Parties hereto  expressly  acknowledge and agree that, if the working capital of
the Business,  as determined by the Parties on the Assessment Date, (i) fails to
satisfy any of the composition  requirements set forth in the fourth sentence of
Section 1.06(b);  (ii) is less than $8,530,000;  or (iii) more than $12,530,000,
then  the  Buyer,  in its sole  and  absolute  discretion,  may  terminate  this
Agreement.

     1.07  Allocation  of  Purchase  Price.  The Parties  agree to allocate  the
Purchase Price and the Assumed  Liabilities (as  hereinafter  defined) among the
Acquired   Assets  in  the  manner  set  forth  in  Schedule  1.07  hereto  (the
"Allocation"),  which  Allocation  shall be  adjusted  to take into  account any
difference  between the  Purchase  Price and the  Initial  Purchase  Price.  The
Parties hereby agree that the Allocation shall be conclusive and binding on each
of them for  purposes  of federal  and,  where  applicable,  state and local Tax
Returns  and that they  will  file all Tax  Returns  consistent  therewith.  The
Parties  hereby agree to prepare and timely file all  applicable  forms with the
Internal  Revenue  Service  ("IRS")  and  any  other  Government  Authority  (as
hereinafter defined) in a manner that reflects the Allocation, to cooperate with
each other in the  preparation  of such  forms and to furnish  each other with a
copy of such forms  prepared in draft,  within a reasonable  period prior to the
filing due date thereof.

     1.08 Assumed Liabilities. The liabilities and obligations expressly assumed
by the Buyer in this Agreement and in each of the Undertaking and the Assignment
and  Assumption  Agreement  are set forth on  Schedule  1.08 hereto and shall be
hereinafter  referred to as the  "Assumed  Liabilities".  Except for the Assumed
Liabilities, the Buyer has not agreed to assume, shall not be required to assume
and shall have no liability  or  obligation  with  respect to, any  liability or
obligation,  direct or indirect,  absolute or contingent,  of any of the Seller,
the Business, the Owned Real Property or the Leased Property, including, without
limitation,  any of the  Seller's  indebtedness  for borrowed  money,  advances,
loans, notes or other monetary obligations  (including interest incurred on such
indebtedness,  advances, loans, notes and other monetary obligations).  Further,
the Buyer  shall not  assume  and shall  have no  liability  (including  without
limitation  strict  liability)  or  obligation  with respect to any liability or
obligation arising under Environmental  Laws, the facts or circumstances  giving
rise to which occurred on or before the Closing Date,  and the Seller  expressly
agrees that if any Governmental  Authority or third party asserts that the Buyer
is liable for such matters,  the Seller shall  expressly  indemnify the Buyer in
accordance  with  Article X hereof and the Buyer's  remedies  against the Seller
shall be solely as set forth in Article X hereof.

     1.09 [INTENTIONALLY OMITTED]

     1.10 Acquisition of Certain Acquired Assets.

     (a)  Acquisition of Acquired  Assets in Puerto Rico.  Prior to the Closing,
the Buyer shall cause to be formed U.S.  Cotton de Puerto  Rico,  Inc., a Puerto
Rican corporation,  as a wholly owned subsidiary of the Buyer ("USCPR").  At the
Closing,  the Seller  shall cause:  (i) all of the  Acquired  Assets used in the
conduct of the Business in Puerto Rico and  identified on Appendix I hereto (the
"PR Acquired Assets") to be sold, conveyed, assigned,  transferred and delivered
by  Personna  and Megas PR to USCPR by means of a bill of sale,  assignment  and
assumption  agreement  relating  solely to the PR Acquired Assets which shall be
substantially in the form attached hereto as Exhibit O (the "Puerto Rico Bill of
Sale"); and (ii) the lease for the Leased Property in Puerto Rico to be assigned
by Megas PR to USCPR pursuant to a Lease Assignment and Assumption  Agreement in
substantially the form of Exhibit D hereto.  At the Closing,  USCPR shall assume
certain  liabilities  associated  with the PR  Acquired  Assets  pursuant to the
Puerto Rico Bill of Sale.

     (b)  Acquisition of Acquired  Assets in Mexico.  Prior to the Closing,  the
Buyer  shall  cause to be formed USC  Mexico  Holding,  LLC, a Delaware  limited
liability company, as a wholly owned subsidiary of the Buyer ("USCMEX").  At the
Closing,  the Seller  shall cause:  (i) all of the  Acquired  Assets used in the
conduct of the  Business  in Mexico and  identified  on  Appendix II hereto (the
"Mexican  Acquired  Assets") to be sold,  conveyed,  assigned,  transferred  and
delivered  by  Megas to  USCMEX  by  means  of a bill of  sale,  assignment  and
assumption  agreement relating solely to the Mexican Acquired Assets which shall
be  substantially  in the form attached hereto as Exhibit P (the "Mexico Bill of
Sale"); and (ii) assign the lease for the Leased Property in Nogales,  Mexico to
be assigned by Megas to USCMEX  pursuant to a Lease  Assignment  and  Assumption
Agreement in substantially the form of Exhibit D hereto. At the Closing,  USCMEX
shall assume certain  liabilities  associated  with the Mexican  Acquired Assets
pursuant to the Mexico Bill of Sale.

     (c) Acquisition of the Owned Real Property. Prior to the Closing, the Buyer
shall cause to be formed VP, LLC, a Delaware  limited  liability  company,  as a
wholly owned subsidiary of the Buyer ("VPLLC"). At the Closing, the Seller shall
cause the Owned Real Property to be sold,  conveyed,  assigned,  transferred and
delivered by Valley Park to VPLLC by means of the Deed.

     (d) Acquisition of the Canadian Inventory. At the Closing, the Seller shall
cause all of the Inventory  located in Toronto,  Ontario,  Canada (the "Canadian
Inventory")  to be  sold,  conveyed,  assigned,  transferred  and  delivered  by
American Safety Razor of Canada Limited, a Canadian corporation,  to U.S. Cotton
(Canada) Co., a Nova Scotia unlimited  liability company and a subsidiary of the
Buyer ("USC  Canada"),  by means of a bill of sale,  assignment  and  assumption
agreement relating solely to the Canadian Inventory which shall be substantially
in the form attached  hereto as Exhibit R (the "Canadian Bill of Sale").  At the
Closing,  USC  Canada  shall  assume  certain  liabilities  associated  with the
Canadian Inventory pursuant to the Canadian Bill of Sale.

     (e)  The  Buyer  shall   cause   USCPR,   USCMEX,   VPLLC  and  USC  Canada
(collectively,  the  "USC  Subsidiaries")  to  comply  with  all of the  Buyer's
covenants and agreements  under this Agreement and shall be liable in accordance
with the terms of Article X hereof for any  Damages  incurred by the Seller as a
result of the failure of any of the USC  Subsidiaries to comply with the Buyer's
covenants and agreements  hereunder.  ASR shall cause Megas,  Valley Park, Megas
PR, ASR Canada and Personna  (collectively,  the "ASR  Subsidiaries")  to comply
with all of ASR's  covenants and  agreements  under this  Agreement and shall be
liable in accordance with the terms of Article X hereof for any Damages incurred
by the Buyer as a result of the failure of any of the ASR Subsidiaries to comply
with ASR's covenants and agreements hereunder.

II.  RELATED MATTERS

     2.01 Mail Received After Closing.  On and after the Closing:  (a) the Buyer
may open all mail  received by it and  addressed to the Seller and the Buyer may
deal with the contents  thereof in its  discretion  to the extent that such mail
and the contents thereof relate in a material way to the Business,  the Acquired
Assets  or any of the  Assumed  Liabilities;  and (b)  Seller  may open all mail
received  by it and  addressed  to the  Seller  and the Seller may deal with the
contents thereof in its discretion to the extent that such mail and the contents
thereof  relate to the  businesses  of the Seller other than the  Business  (the
"Retained Businesses") or to the Excluded Assets or to liabilities which are not
Assumed  Liabilities,  but not the Business,  the Acquired  Assets or any of the
Assumed  Liabilities.  The Buyer agrees to deliver, or to cause to be delivered,
promptly to the Seller all other mail  received  which is addressed to Seller to
the extent such mail and the contents thereof do not relate to the Business, the
Acquired Assets or the Assumed Liabilities.  The Seller agrees to deliver, or to
cause to be delivered,  promptly to the Buyer all other mail  received  which is
addressed to the Seller to the extent such mail and the contents  thereof relate
to the Business,  the Acquired  Assets or the Assumed  Liabilities.  Each of the
Buyer and the Seller  hereby  agrees,  on and after the Closing,  to provide the
other with copies of all mail and other material  information  which relate both
to: (i) the Acquired  Assets or the Assumed  Liabilities;  and (ii) the Retained
Businesses,   the  Excluded   Assets  or  liabilities   which  are  not  Assumed
Liabilities,  reasonably redacted for confidential  information as determined by
the delivering party.

III.  REPRESENTATIONS AND WARRANTIES OF THE SELLER

      The Seller represents and warrants to the Buyer as follows:

3.01  Organization And Authority.

     (a) Each Seller Entity is a corporation  duly organized,  validly  existing
and in good standing under the laws of its jurisdiction of incorporation and has
all  requisite  corporate  power and  authority  to own,  lease and  operate its
properties and to conduct the Business as it is currently being  conducted.  The
Seller is duly qualified or licensed to do business as a foreign corporation and
is in good standing in each jurisdiction in which the property owned,  leased or
operated by it relating to the Business or the nature of the Business  conducted
by it makes such qualification  necessary,  except in those  jurisdictions where
the  failure  to have such power and  authority  or to be so duly  qualified  or
licensed and in good standing  would not have a material  adverse  effect on the
business, assets, results of operations or financial condition of the Business.

     (b) Each of the  Seller  Entities  has all  requisite  corporate  power and
authority  to enter  into this  Agreement  and any  instruments  and  agreements
contemplated herein required to be executed and delivered by it pursuant to this
Agreement (including,  as applicable,  the Bill of Sale, the Puerto Rico Bill of
Sale,  the  Mexican  Bill of Sale,  the  Canadian  Bill of Sale,  the Deed,  the
Trademark  Assignments,  the  Assignment  and  Assumption  Agreement,  the Lease
Assignment and Assumption  Agreements,  the Transition Services  Agreement,  the
Trademark Licenses, the Subordination Non-Disturbance and Attornment Agreements,
the  Landlord  Lien  Waivers and any Other  Instruments,  which are  referred to
collectively herein, as the "Seller Related  Instruments") and to consummate the
transactions  contemplated  hereby and  thereby.  The  execution,  delivery  and
performance  of  this  Agreement  and the  Seller  Related  Instruments  and the
consummation of the transactions  contemplated hereby and thereby have been duly
authorized by all  necessary  corporate  action on the part of the Seller.  This
Agreement has been, and each of the Seller Related  Instruments,  shall be, duly
executed and delivered by the relevant Seller Entity(ies) and shall constitute a
legal,  valid and binding  obligation  of such Seller  Entity(ies),  enforceable
against such Seller  Entity(ies)  in  accordance  with their  respective  terms,
except that (a) such  enforcement may be subject to any bankruptcy,  insolvency,
reorganization,  moratorium, fraudulent transfer or other laws, now or hereafter
in effect,  relating  to or limiting  creditors'  rights  generally  and (b) the
remedy of specific  performance  and  injunctive  and other  forms of  equitable
relief may be subject to equitable  defenses and to the  discretion of the court
before which any proceeding therefor may be brought.

3.02  No Violation; Consents and Approvals.

     (a) The execution and delivery of this Agreement and the Seller Related
Instruments do not, and the consummation of the transactions contemplated hereby
or thereby and compliance with the terms hereof or thereof will not (i) conflict
with, or result in any violation of or default under, other than immaterial
violations of or defaults under: (A) any provision of the charter or bylaws of
any of the Seller Entities or (B) any judgment, order or decree, statute, law,
ordinance, rule or regulation, other than immaterial judgments, orders, decrees,
statutes, laws, ordinances, rules or regulations, applicable to the Seller, the
Business or the Acquired Assets; or (ii) conflict with, or result in any
violation of, or constitute a default (or an event or condition which, with
notice or lapse of time or both, would constitute a default) under, other than
immaterial conflicts, violations or defaults, or result in the termination of,
or accelerate the performance required by, or cause the acceleration of the
maturity of, any liability or obligation, other than immaterial liabilities or
obligations, pursuant to, or result in the creation or imposition of any
Encumbrance under, any contract, note, bond, mortgage, hypothecation, agreement,
indenture, license, lease (capitalized or operating), commitment or other
instrument or obligation, other than immaterial contracts, notes, bonds,
mortgages, hypothecations, agreements, indentures, licenses, leases,
commitments, instruments or obligations, by which the Business or the Acquired
Assets may be bound or affected (collectively, "Contracts").

     (b) Except as set forth on Schedule  3.02, no consent,  approval,  order or
authorization  of, or  registration,  declaration  or filing with,  any federal,
state, county, municipal or local court,  administrative agency or commission or
other governmental or regulatory  entity,  body,  authority or  instrumentality,
domestic or foreign  including,  without  limitation,  Mexican and Puerto  Rican
(collectively,  "Government Authorities"),  or any third party is required to be
obtained  or made by or with  respect  to the  Seller  in  connection  with  the
execution,  delivery and  performance  of this  Agreement or the Seller  Related
Instruments or the consummation by the Seller of the  transactions  contemplated
hereby or thereby or the conduct of the Business by the Buyer after the Closing,
except  where  the  failure  to  obtain  such   consent,   approval,   order  or
authorization, or to register, declare or file would not have a material adverse
effect on the business, assets, operations,  financial condition or prospects of
the Business  (hereinafter,  a "Material  Adverse Effect") or a material adverse
effect on the Seller's  ability to consummate the  transactions  contemplated by
this Agreement.

     3.03 Financial  Statements.  Schedule 3.03(a) sets forth: (i) the unaudited
balance sheet of the Business as of December 29, 2000, and the unaudited  income
statement  and  statement of cash flows of the Business for the fiscal year then
ended (collectively, the "Business Financial Statements") and (ii) the unaudited
balance sheet of the Business as of September 30, 2001 and the unaudited  income
statement  and  statement  of cash flows of the  Business for the nine (9) month
period then ended (the "Interim Business Financial  Statements").  Except as set
forth on Schedule  3.03(b),  each of the Business  Financial  Statements and the
Interim  Business  Financial  Statements  have been prepared in conformity  with
generally  accepted  accounting  principles,  consistently  applied ("GAAP") and
fairly  present the financial  condition and the results of operations  and cash
flows  of the  Business  as of the  date and for the  period  indicated  and are
consistent  with the Books and Records,  except for the absence of footnotes and
subject,  in the case of the Interim Business  Financial  Statements,  to normal
recurring year-end adjustments which cannot be determined except at year end.

     3.04  Absence  of  Undisclosed  Liabilities.  Except  for  liabilities  and
obligations  (a) set  forth in  Schedule  3.04,  (b)  reflected  on the  Interim
Business Financial  Statements,  (c) incurred in the ordinary course of business
during the period from the date of the Interim Business Financial  Statements to
the date hereof, or (d) which are immaterial to the Business, the Seller has not
incurred,  and is not subject to, any  liabilities  or obligations of whatsoever
nature, direct or indirect,  whether accrued,  fixed or contingent,  relating to
the Business or the Acquired Assets.

     3.05 Absence of Certain Changes or Events. Except as may be permitted under
Section 5.01 of this  Agreement,  during the period from the date of the Interim
Business  Financial  Statements  to the date  hereof:  (a) the Business has been
operated in the ordinary  course,  consistent with past practice,  (b) there has
been no event,  change or development  which,  individually or in the aggregate,
has had a Material  Adverse Effect;  and (c) the Seller has not taken any action
which,  if taken  after the  execution  and  delivery of this  Agreement,  would
constitute a breach or violation of Section 5.01 hereof.

     3.06 Title to Acquired Assets.

     (a) The Seller has, or will  immediately  prior to the Closing,  have good,
valid and marketable  title to all of the Acquired  Assets.  The Acquired Assets
are owned by the Seller as set forth on Schedule  3.06(a)  free and clear of all
Encumbrances of any nature whatsoever, other than the Permitted Encumbrances and
subject to the  Assumed  Liabilities,  and, at  Closing,  title to the  Acquired
Assets will vest in the Buyer,  free of all  Encumbrances  other than  Permitted
Encumbrances and subject to the Assumed Liabilities, and no third party has been
granted  any option to  purchase,  use,  lease or encumber  any of the  Acquired
Assets. This Subsection does not relate to real property (immovable property) or
interests in real property (immovable property).

     (b) Schedule 3.06(b)(i) sets forth a true, correct and complete list of all
real property  (immovable  property)  and interests in real property  (immovable
property)  owned  by the  Seller  and  used in the  Business  (the  "Owned  Real
Property")  and  sets  forth a  complete  list of all real  property  (immovable
property)  and  interests in real property  (immovable  property)  leased by the
Seller and used in the Business (the "Leased Property").  A legal description of
the Owned Real  Property  is set forth at  Schedule  3.06(b)(ii).  Except as set
forth on  Schedule  3.06(b)(i),  the Seller has (i) good,  valid and  marketable
title to the Owned Real Property and (ii) good, valid and enforceable  interests
in the Leased Property,  with the exclusive right to use land, where applicable,
occupy such Leased  Property,  in each case free and clear of all  Encumbrances,
easements,  covenants,  rights-of-way  and  other  restrictions  of  any  nature
whatsoever,  excepting (A) liens for Taxes,  assessments and other  governmental
charges  which are not due and payable or which may  hereafter  be paid  without
penalty or which are being  contested in good faith by appropriate  proceedings,
for  which  adequate   reserve  has  been  made;   (B)   easements,   covenants,
rights-of-way and other  restrictions of record;  (C) zoning laws and other land
use restrictions that would not have a Material Adverse Effect; (D) Encumbrances
specifically  reflected  as such in the  Business  Financial  Statements  or the
Interim Business Financial Statements; (E) Encumbrances arising solely by action
of the Buyer;  (F) other  Encumbrances  that  would not have a Material  Adverse
Effect; (G) any deemed Permitted  Encumbrances  pursuant to Section 6.13 hereof;
and (H) inchoate interests of mechanics, materialmen and landlords that have not
yet ripened into  mechanics',  materialmen's or landlords' liens (the exceptions
referred to in clauses (A) through (H) above being herein collectively  referred
to as the "Permitted Encumbrances").

     (c) The Seller Related Instruments, when duly executed and delivered by the
relevant Seller  Entities to the Buyer,  and the delivery of the Acquired Assets
at the Closing will  effectively  convey to the Buyer good, valid and marketable
title to all of the Acquired Assets,  subject only to the Permitted Encumbrances
and Assumed Liabilities.

     (d)  Except  as set  forth on  Schedule  3.06(b)(i),  the  Seller is not in
default in any material respect under any lease covering all or a portion of the
Leased Property,  nor is there any matter which with the giving of notice or the
passage of time, or both,  would  constitute  such a default by the Seller under
any such lease. To the Seller's  knowledge,  there is no default in any material
respect by any landlord under any lease of Leased Property, nor any matter which
with the giving of notice or the passage of time, or both, would constitute such
a default  by any such  landlord  under  such  leases.  The  Seller has made all
payments  required to be paid to the  landlords  under the leases for the Leased
Property.

     3.07 Intellectual Property.

     (a) Schedule 3.07(a)(i) sets forth a true, correct and complete list of all
patents,  trademarks  (registered or unregistered),  trade names, service marks,
assumed names, copyrights and all applications therefor owned, filed or licensed
by the  Seller and used  solely in or  necessary  solely for the  conduct of the
Business  (collectively,  the  "Intellectual  Property")  and,  with  respect to
registered   trademarks,   all   jurisdictions  in  which  such  trademarks  are
registered. Schedule 3.07(a)(ii) sets forth a true, correct and complete list of
all patents,  trademarks  (registered  or  unregistered),  trade names,  service
marks, assumed names,  copyrights and all applications  therefor  (collectively,
the "Retained Intellectual Property") owned, filed or licensed by the Seller and
used in or  necessary  for both (i) the  conduct  of the  Business  and (ii) the
Retained  Businesses.  Schedule  3.07(a)(iii)  sets  forth  a list  of  patents,
trademarks  (registered or unregistered),  trade names,  service marks,  assumed
names and  copyrights  which (i)  relate  solely  to the  Business  and (ii) are
neither used in nor  necessary  for the conduct of the Business  (the  "Inactive
Intellectual Property").

     (b) The Seller is the sole and exclusive owner of the Intellectual Property
and the Retained  Intellectual  Property for which it is identified as the owner
thereof on either Schedule  3.07(a)(i) or Schedule  3.07(a)(ii).  The Seller has
the full right to use (without  payment,  except for payment in conjunction with
filing,  maintenance,  continuation  or  extension  of rights) the  Intellectual
Property and the Retained  Intellectual Property in the conduct of the Business,
as currently  conducted.  The Seller has received no written  notice of any such
claim that (i) the  operations  of the Seller or the Business  infringe  upon or
conflict  with the rights of any other  person in  respect  of any  Intellectual
Property or Retained  Intellectual Property with respect to the Business or (ii)
any Intellectual  Property, any Retained Intellectual Property or the use by the
Seller or the Business of such  Intellectual  Property or Retained  Intellectual
Property is invalid or unenforceable.  None of the Intellectual  Property or the
Retained  Intellectual  Property  (i)  is,  to  the  Seller's  knowledge,  being
infringed  upon by any other person or (ii) is subject to any  judgment,  order,
decree or agreement restricting the use thereof. Except as set forth in the last
sentence of Section 3.07(a),  the Seller makes no  representations or warranties
of any kind  whatsoever  with  respect to the  Inactive  Intellectual  Property,
including  without  limitation,  with  respect to  ownership of or rights to the
Inactive Intellectual Property.

     3.08 Litigation.

     (a) Schedule  3.08(a) sets forth (i) a true,  correct and complete  list of
any  and  all  claims,  actions,  suits,  proceedings,   notices  of  violation,
investigations  and  inquiries  relating to the Business or the Acquired  Assets
("Litigation")  other than routine collection  matters pending,  asserted or, to
the knowledge of the Seller,  threatened by or before any Government  Authority,
or by or on behalf of any third party,  and (b) a description  of all Litigation
dismissed,  settled or  compromised  since April 23,  1999,  other than  routine
collection matters.

     (b) There is no  Litigation  pending  or, to the  knowledge  of the Seller,
threatened  against the Seller, the Business or the Acquired Assets by or before
any  Government  Authority,  or  by or on  behalf  of  any  third  party,  which
challenges the validity of this  Agreement or any Seller  Related  Instrument or
which, if adversely  determined,  would (i) adversely  affect the ability of the
Seller to consummate  the  transactions  contemplated  by this  Agreement or any
Seller Related Instrument or (ii) have a Material Adverse Effect.

     (c) The Seller is not subject to any continuing  judgment,  order,  ruling,
closing agreement or decree of any Government Authority applicable  specifically
to the Business or the Acquired Assets or in default with respect thereto.

     3.09 Employee Benefit Plans.

     (a) Except as set forth in  Schedule  3.09(a),  neither  the Seller nor any
person (as defined in Section 3(9) of the Employee  Retirement  Income  Security
Act of 1974, as amended  ("ERISA")) that is or has been a member of any group of
persons  described in Section  414(b),  (c), (m) or (o) of the Internal  Revenue
Code of 1986, as amended (the "Code"), including the Seller ("ERISA Affiliate"),
maintains or contributes  to, nor have they  maintained or  contributed  to, any
"employee  pension  benefit  plans"  as  defined  in  Section  3(2) of  ERISA or
applicable  Mexican  provisions,  "welfare  benefit plans" as defined in Section
3(1) of ERISA or applicable Mexican provisions  (including,  without limitation,
all medical,  health,  dental, vision and other welfare benefit plans), or stock
bonus, stock option, restricted stock, stock appreciation right, stock purchase,
bonus,  incentive,  deferred compensation,  severance, or vacation plans, or any
other  employee  benefit  plan,  program,  policy or  arrangement  maintained or
contributed  to by the  Seller  or any of its ERISA  Affiliates  or to which the
Seller or any of its  ERISA  Affiliates,  contributes  or is  obligated  to make
payments  thereunder  or otherwise  may have any  liability  (collectively,  the
"Employee Benefit Plans").

     (b) Except as set forth in Schedule 3.09(a),  neither the Seller nor any of
its ERISA Affiliates has any liability (including any contingent liability under
Section 4204 of ERISA) with respect to any multiemployer plan defined as such in
Section  3(37)  of ERISA to which  contributions  are or have  been  made by the
Seller or any of its ERISA  Affiliates  or as to which the  Seller or any of its
ERISA  Affiliates  may have  liability  and that is covered by Title IV of ERISA
("Multiemployer  Plan") covering employees (or former employees) employed in the
United  States,  Mexico  and  Puerto  Rico.  Neither  the  Seller  nor any ERISA
Affiliate has incurred any  liability or taken any action that could  reasonably
be  expected to cause it to incur any  liability  (i) on account of a partial or
complete  withdrawal  (within  the  meaning of  Section  4205 and 4203 of ERISA,
respectively)  with  respect  to any  Multiemployer  Plan or (ii) on  account of
unpaid contributions to any such Multiemployer Plan.

     (c) Except as set forth in  Schedule  3.09(a),  for each  employee  pension
benefit  plan  listed in  Schedule  3.09(a)  that is  intended  to  satisfy  the
provisions of Section  401(a) of the Code and/or  Section  1165(a) of the Puerto
Rico Internal  Revenue Code of 1994,  as amended (the "PR Code"),  to the extent
applicable,  (i) the Seller has obtained a favorable  determination  letter from
the IRS and/or the Puerto Rico  Department of the Treasury (the "PR  Treasury"),
to the extent applicable, to such effect, (ii) none of the determination letters
has been revoked by the IRS and/or the PR  Treasury,  nor has the IRS and/or the
PR  Treasury  given any  indication  to the Seller that it intends to revoke any
such determination  letter, (iii) no such employee pension benefit plan which is
a funded pension plan and no trust  established  thereunder has any  accumulated
funding deficiency within the meaning of Section 302(a) of ERISA and Section 412
of the Code,  whether or not  waived,  and no tax has been  imposed  pursuant to
Section  4971 of the Code in  respect  thereof,  (iv) the  current  value of the
assets of each such employee pension benefit plan that is subject to Title IV of
ERISA exceeds the actuarially  determined  present value of the accrued benefits
(whether or not vested) under each such plan,  determined  on an ongoing  basis,
(v) no  reportable  event  within  the  meaning  of  Section  4043 of  ERISA  or
prohibited  transaction  within the meaning of Section 406 of ERISA has occurred
with  respect to any employee  pension  benefit plan and no tax has been imposed
pursuant to Section 4975 or 4976 of the Code and/or  Section 1409 of the PR Code
(to the extent  applicable) in respect thereof,  (vi) the Seller has incurred no
liability to the Pension Benefit Guaranty  Corporation (the "PBGC") with respect
to any such  employee  pension  benefit  plan which is a pension plan subject to
Title IV of ERISA (except for premiums  due),  and (vii) the Seller has made all
filings  required  by  ERISA,  the  Code  and/or  the PR  Code  (to  the  extent
applicable)  as to each of such  Employee  Benefit  Plans  and all  notices  and
disclosures  required  by  ERISA,  the Code  and/or  the PR Code (to the  extent
applicable)  have been provided to the  participants.  No condition exists which
could subject the Seller or any ERISA  Affiliate to a penalty under Section 4071
of ERISA.  Neither the PBGC nor the Seller or any ERISA Affiliate has instituted
proceedings  to terminate any employee  pension  benefit plan that is subject to
Title IV of  ERISA,  and the PBGC  has not  informed  the  Seller  or any  ERISA
Affiliate of its intent to  institute  proceedings  to terminate  any such plan.
With respect to each  Employee  Benefit Plan in which  employees of the Business
participate that is subject to Title IV of ERISA, the actuarial assumptions used
by each such plan are reasonable, and true and correct copies of the most recent
actuarial reports have been furnished to the Buyer.

     (d) For each  welfare  benefit plan listed in Schedule  3.09(a)  which is a
"group health plan" within the meaning of Section  5000(b)(1)  of the Code,  the
Seller has complied with the notice and  continuation  coverage  requirements of
Section 4980B of the Code, the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), and Part 6 of Subtitle B of Title I of ERISA and the
regulations  thereunder,  to the extent such  requirements  are applicable.  The
Seller shall remain obligated, in accordance with COBRA, to provide continuation
coverage to those of its covered employees, former employees and their qualified
beneficiaries  entitled to receive  COBRA  continuation  coverage  under a group
health  plan  sponsored  by the  Seller or an ERISA  Affiliate  on  account of a
qualifying  event  occurring  either prior to the Closing Date or as a result of
the consummation of the transactions contemplated by this Agreement.

     (e) All  contributions  to, and payments from,  the Employee  Benefit Plans
listed in Schedule 3.09(a) which are required to have been made by the Seller or
any of its ERISA  Affiliates  with respect to any period ending on or before the
Closing Date (including any required  installment  payments under Section 412(m)
of the Code), in accordance with such Employee  Benefit Plans,  have been timely
made.  All premiums due to the PBGC with respect to all Employee  Benefit  Plans
for any period ending on or before the Closing Date have been timely paid.

     (f)  There  are no claims  pending  by or on behalf of any of the  Employee
Benefit
Plans listed in Schedule 3.09(a), by any employee or beneficiary covered under
any such Plan, or otherwise involving any such Plan (other than routine claims
for benefits).

     (g) Each of the Employee Benefit Plans listed in Schedule 3.09(a) has been,
and is being,  operated and  administered in all respects in accordance with its
terms and in compliance with  applicable  laws,  including,  but not limited to,
ERISA, the Code and/or the PR Code (to the extent applicable). No investigation,
audit or dispute  relating to each of such Employee  Benefit Plans is pending or
threatened  before  any  Government  Authority  in Puerto  Rico or  Mexico.  All
Employee  Benefit  Plans  outside of the  United  States,  if any (the  "Foreign
Plans"),  are in compliance  with all applicable  laws and  regulations and have
been  operated in accordance  with such plans'  respective  terms.  There are no
unfunded  liabilities  under  or in  respect  of  the  Foreign  Plans,  and  all
contributions  or other  payments  required  to be made to or in  respect of the
Foreign  Plans prior to the Closing Date have been made or will be made prior to
the Closing Date.

     (h)  Neither  the Seller  nor any ERISA  Affiliate  has any formal  plan or
commitment,  whether legally  binding or not, to create any additional  Employee
Benefit Plan or modify or change any existing  Employee  Benefit Plan that would
affect  any  employee  or  terminated  employee  of the  Business  or any  ERISA
Affiliate.

     (i) No amounts payable under the Employee  Benefit Plans listed in Schedule
3.09(a) will fail to be deductible  for federal income tax purposes by virtue of
Section  280G of the Code  and/or for Puerto Rico  income Tax  purposes  (to the
extent applicable).

     (j) Neither the Seller nor any ERISA Affiliate maintains or contributes to,
or has maintained or contributed to, or is committed, whether legally binding or
not, to create,  any Employee Benefit Plan for any retired or former employee of
the Business or any ERISA Affiliate.

     (k) With respect to any Employee  Benefit Plans which the Buyer is assuming
(the "Assumed Plans"), the Seller has delivered to the Buyer a current, accurate
and complete copy of and, to the extent applicable, (i) each plan (including all
amendments thereto, (ii) any related trust agreement,  annuity contract or other
funding  instrument,  (iii) any summary plan description and summary of material
modifications,  (iv) the most  recently  filed Form 5500  relating  to each such
plan,  (v) the most  recently  received  determination  letter from the Internal
Revenue Service, and (vi) the most recently prepared financial statements.

     (l) (i)  Each  Assumed  Plan  has  been  established  and  administered  in
accordance  with its terms and in compliance  with the applicable  provisions of
any legal  requirements and other  applicable laws, rules and regulations;  (ii)
with  respect to any Assumed  Plan,  no actions,  suits or claims are pending or
threatened,  no facts or  circumstances  exist which could give rise to any such
actions,  suits or claims; (iii) all insurance premiums required to be paid with
respect to each  Assumed  Plan as of the Closing have been or will be paid prior
thereto;  (iv) all contributions  required to be made prior to the Closing under
the terms of any Assumed Plan, for benefits  attributable to service on or prior
to the Closing;  (v) no Assumed Plan  provides for an increase in benefits on or
after the  Closing;  and (vi) each  Assumed  Plan may be amended  or  terminated
without material obligation or liability.

     3.10 Employees; Employee Relations.

     (a) Schedule 3.10(a) sets forth (i) the name,  seniority (years of service)
and current  annual salary (or rate of pay) and other  compensation  (including,
without  limitation,   normal  bonus,  profit-sharing  and  other  compensation)
currently payable by the Seller to each Business Employee,  (ii) any increase to
become  effective after the date of this Agreement in the total  compensation or
rate of total compensation payable by the Seller to each such Business Employee,
(iii) any  increase to become  payable  after the date of this  Agreement by the
Seller to  employees  related to the  Business  (other than those  specified  in
clause (i)),  (iv) all  presently  outstanding  loans and  advances  (other than
routine travel  advances to be repaid or formally  accounted for within 60 days)
made by the Seller to, or made to the Seller by, any Business Employee,  (v) all
other transactions between the Business and any Business Employee or director or
officer of the Business since April 23, 1999 resulting in aggregate  payments to
such  person in excess of $5,000  during  such  period and (vi) all  accrued but
unpaid vacation pay owing to each Business  Employee.  "Business  Employees" are
all of the employees of the Seller solely employed in the Business,  all of whom
are identified on Schedule 3.10(a).  All of the employees employed at any of the
five  (5)  facilities  which  constitute  a part of the  Business  are  Business
Employees.

     (b) Except as disclosed in Schedule  3.10(b),  the Seller is not a party to
any  employment  contract  with  any  individual  or  employee  employed  in the
Business,  either  express or implied,  oral or written.  Except as disclosed in
Schedule  3.10(b),  the Seller  has  received  no  written  notices of any legal
proceedings,  charges,  complaints  or  similar  actions  that  exist  under any
federal,  state,  local or foreign laws  affecting the  employment  relationship
between the Seller and any Business Employee, including, but not limited to: (i)
anti-discrimination  statutes such as Title VII of the Civil Rights Act of 1964,
as amended (or similar state,  local or foreign laws prohibiting  discrimination
because of race, sex, religion,  national origin, age, disability and the like);
(ii) the Fair Labor Standards Act or other federal, state,  municipal,  local or
foreign  laws  regulating  hours of work,  wages,  overtime  and  other  working
conditions;  (iii) requirements imposed by federal, state,  municipal,  local or
foreign  governmental  contracts;  (iv) laws with  respect to tortious  conduct,
including,  without  limitation,  slander,  false  light,  invasion  of privacy,
negligent  hiring or retention,  intentional  infliction of emotional  distress,
assault and battery or loss of consortium; (v) laws requiring severance payments
or other payments to terminated  employees;  or (vi) the Occupational Safety and
Health Act, as amended,  as well as any similar federal,  state or foreign laws,
or other  regulations  respecting  safety in the  workplace;  and the Seller has
received no written notices of any proceedings,  charges, or complaints that are
threatened under any such laws or regulations. As it relates to the Business, to
the knowledge of the Seller,  no facts or  circumstances  have been discussed by
the  Seller  with  any  Business  Employee  which  would  give  rise to any such
proceedings,  charges,  complaints  or claims.  The Seller is not subject to any
settlement  or consent  decree  with any  present or former  employee,  employee
representative  or any  Government  Authority  which  relates  to  the  Business
relating to claims of  discrimination  or other claims in respect to  employment
practices and policies;  except as disclosed on Schedule 3.10(b),  no Government
Authority  has issued a judgment,  order,  decree or finding with respect to the
labor and employment  practices (including practices relating to discrimination)
of the Seller relating to the Business.

     (c) [INTENTIONALLY OMITTED]

     (d) Except as  disclosed  in Schedule  3.10(d)(i),  (i) the Seller is not a
party to, nor bound by, the terms of any  collective  bargaining  agreement with
respect  to the  Business,  (ii) the  Seller is in  compliance  in all  material
respects with all applicable Laws respecting employment and employment practices
with  respect to the  Business,  (iii) the Seller has no knowledge of any unfair
labor practice  charge or complaint  against the Seller which has been discussed
with the Seller by any union since April 23, 1999,  with regard to any charge or
complaint which,  based on such discussions,  the Seller reasonably  believes is
likely to be filed with the National  Labor  Relations  Board or similar body in
any foreign  country  with  respect to the  Business or of any  grievance or any
arbitration  proceeding arising out of or under collective bargaining agreements
pending with respect to the Business, (iv) to the knowledge of the Seller, there
is no labor strike,  slowdown or work stoppage  pending  against the Seller with
respect to the Business  and (v) there are no  collective  bargaining  agreement
provisions  which  require  assumption of a collective  bargaining  agreement or
hiring of  bargaining  unit  employees in the event of any sale of the Business.
The  Seller has not  received  written  notice of the  intent of any  Government
Authority responsible for the enforcement of labor or employment laws to conduct
an investigation of or relating to the Seller, with respect to the Business, and
to the knowledge of the Seller, no such  investigation is in progress.  Attached
as Schedule 3.10(d)(ii) hereto is a copy of the Collective Bargaining Agreement.

     (e) Each employee of the Business on long-term or short-term  disability or
presently  receiving payments under any applicable health and safety legislation
has been identified in Schedule 3.10(e).

     (f) Set forth on Schedule 3.10(f),  with respect to each Business Employee,
is  an  identification  of  all  bonuses  (including,  without  limitation,  any
transition bonus or retention  bonus),  vacation pay, fringe benefits,  and sick
days.

     3.11  Certain  Contracts  and  Arrangements.  Schedule  3.11(a)  lists  all
Contracts  related  to the  Business  and/or  the  Acquired  Assets by which the
Seller,  the Business  and/or the Acquired  Assets are bound or affected,  other
than (a) such  Contracts as may be terminated by the Buyer at any time after the
Closing  without  liability,  penalty or premium upon notice of 120 days or less
and (b) such Contracts  which will not result in future annual  expenditures  or
receipts  by the  Business  or by the Buyer at any time of $25,000 or more (such
Contracts to be listed are hereinafter collectively referred to as the "Material
Contracts"). Except as set forth on Schedule 3.11(a), true, correct and complete
copies of all such Material  Contracts  have been delivered or made available to
the Buyer.  Except as described on Schedule 3.11(a),  there are no oral Material
Contracts  relating to the Business  and/or the Acquired  Assets.  Except as set
forth on Schedule 3.11(a),  neither the Seller,  nor, to the Seller's knowledge,
any other party to such Material  Contract is in breach of or in default  under,
other than  immaterial  breaches or defaults,  any such Material  Contract.  The
Seller has received no written  notices that any such  Material  Contract is not
the legal,  valid and  binding  obligation  of the  respective  parties  thereto
enforceable in accordance with their terms; and, except as made available to the
Buyer prior to the date hereof,  no Material  Contracts  have been amended.  The
Seller has received no written notices of any defenses, offsets or counterclaims
which  have been  asserted  or which may be made nor has the  Seller  waived any
rights under any Material Contract.

      Set forth on Schedule 3.11(b) hereto is a list of all capitalized leases
which constitute Material Contracts.

     3.12 Compliance with Laws, Licenses, Etc. The Business and the ownership by
the  Seller  of the  Acquired  Assets  complies  in all  respects  with all laws
(including,  without  limitation,  Environmental  Laws),  statutes,  ordinances,
rules, regulations and orders of all Government Authorities  (collectively,  the
"Laws"), except where the failure to so comply would not have a Material Adverse
Effect.  The Seller  possesses  all material  permits,  certificates,  licenses,
approvals and other authorizations  required in connection with the operation of
the Business and the Acquired Assets under applicable Laws.

     3.13  Insurance.  The  Seller  maintains  policies  of fire  and  casualty,
liability  (including,   without  limitation,   products  liability),   workers'
compensation  and other forms of insurance  with respect to the Business and the
Acquired  Assets in such amounts,  with such  deductibles and against such risks
and losses, as when taken together with self insurance maintained by the Seller,
are  reasonable for the Business and the Retained  Businesses  taken as a whole.
Schedule 3.13 sets forth a true, correct and complete list of all such insurance
policies  (including  insurer,  named  insured,  type  of  coverage,  limits  of
insurance, required deductibles and co-payments, annual premiums, retentions and
loss runs).  All such  policies are in full force and effect,  all premiums with
respect  thereto  covering all periods up to and including the Closing Date have
been  paid,  or will be paid on or prior to the  Closing  Date,  and no  pending
written notice of default,  cancellation or termination with respect to any such
policy has been received by the Seller.  Such  policies:  (a) are sufficient for
compliance in all material respects with all requirements of applicable Laws and
all Material Contracts;  (b) are valid, outstanding and enforceable policies; or
(c) will remain in full force and effect  through the Closing  Date  without the
payment of additional premiums. Except as set forth in Schedule 3.13, the Seller
has received no written notice of any pending or threatened disputes relating to
coverage or other disputed claims under any of the foregoing insurance policies.
Schedule  3.13 also  lists all  workers'  compensation  claims  relating  to the
Business that are current, pending or settled since April 23, 1999. There are no
notices  of  assessment,  provisional  assessment,  reassessment,  supplementary
assessment,  penalty assessment,  increased assessment or retrospective premiums
received  by  the  Seller   relating   to  the   Business   (collectively,   the
"Assessments") or any other communications  related thereto which the Seller has
received  from any worker's  compensation  board or similar  authorities  in any
jurisdiction where the Business is carried on and there are no assessments which
will be unpaid at the Closing Date.

     3.14  Brokers.  No broker,  finder or financial  advisor or other person is
entitled to any brokerage fees, commissions, finders' fees or financial advisory
fees in connection with the  transactions  contemplated  hereby by reason of any
action  taken  by the  Seller  or any of its  Affiliates,  directors,  officers,
employees, representatives or agents.

     3.15 Inventories; Accounts Receivable.

     (a)  The  Inventory  is of a  quality  usable  in the  ordinary  course  of
business,  and items of  finished  goods in the  Inventory  are  salable  in the
ordinary course of business. The Inventory is reflected in the Books and Records
of the Seller on a first-in-first-out basis in accordance with GAAP consistently
applied,  valued at the lower of cost or market.  The quantities of all finished
goods  Inventory are reasonable  and are at adequate  levels for the Business in
its  normal  course  consistent  with past  practice  and  taking  into  account
customary  seasonality.  Set forth on Schedule  3.15(a) is a listing of: (i) all
finished goods  Inventory  items,  like items of which have not been sold by the
Seller since March 31, 2001; and (ii) all raw materials and packaging  Inventory
items,  of which like items have not been used in production by the Seller since
March 31, 2001 (collectively, the "Obsolete Inventory").  Schedule 3.15(a) shall
be updated by the Seller as of the last fiscal  month end of the Seller prior to
the Closing Date.

     (b) Set forth on Schedule  3.15(b) is an aggregate  summary of all accounts
receivable, promissory notes, contract rights, commercial paper, debt securities
and other  rights  of the  Seller  to  receive  money,  excluding  any  accounts
receivable  which may exist from  Affiliates  of the Seller (other than accounts
receivable  from  Business  Employees  hired by the Buyer)  ("the  Receivables")
reflected as assets of the Business in the Interim Business Financial Statements
showing the name of the account debtor,  maker or obligor,  the aggregate unpaid
balance, the age of the Receivables and, if applicable,  the maturity dates, the
interest rates and any collateral securing such obligations. Except as set forth
on Schedule 3.15(b), all Receivables reflected in the Interim Business Financial
Statements or acquired since that date are legal, valid and binding  obligations
of the  obligors  and the  Seller has no  knowledge  of any fact  impairing  the
collectability  of such  Receivables  in accordance  with their terms net of the
reserves shown on the Interim Business  Financial  Statements.  The reserves for
doubtful  Receivables  and  uncollectible  accounts  reflected  in  the  Interim
Business  Financial  Statements,  are net of fully  accrued  amounts  for future
deductions  by customers  of the Business  relating to sales booked on or before
the date of the Interim  Business  Financial  Statements,  were  established  in
accordance  with GAAP  consistently  applied and are adequate and  calculated in
accordance  with the Seller's  past  practices.  Except as set forth on Schedule
3.15(b),  since June 30, 2001,  the Seller has not (a)  written-off,  cancelled,
committed or become obligated to cancel or write-off any Receivables aggregating
more than $10,000 of  Receivables  reflected in the Interim  Business  Financial
Statements,  (b) disposed of or transferred any  Receivables  except through the
collection  thereof in accordance  with their terms or (c) acquired or permitted
to be created any  Receivables  except in the  ordinary  course of its  business
consistent with the past practice.

     3.16 Environmental Matters. Except as set forth in Schedule 3.16 and as the
sole representation and warranty involving the Environmental Laws:

     (a) Representations and Warranties.

          (1)  None of the Acquired Assets or Leased Property or the Seller with
               respect to the Business is in violation of or noncompliance with,
               any  Environmental  Laws in connection  with the ownership,  use,
               maintenance  or operation of, or conduct of the  Business,  which
               would give rise to Material Environmental Liability;

          (2)  Without in any manner limiting the generality of (1) above:

               (i)  Except as would not create Material Environmental  Liability
                    under Environmental Laws (including,  without limitation, by
                    obtaining  necessary  Environmental  Permits as  hereinafter
                    defined),   to  the  Seller's   knowledge  no  Materials  of
                    Environmental Concern have been used, generated,  extracted,
                    mined,  beneficiated,   manufactured,  stored,  treated,  or
                    disposed of, or in any other way released (and no release is
                    threatened),  on,  under or about  the  Acquired  Assets  or
                    Leased Property;

               (ii) There  are  no  Environmental   Claims  known,   pending  or
                    threatened  against the Seller  which relate to the Business
                    or any Acquired Asset or Leased  Property which would likely
                    give rise to Material Environmental Liability;

               (iii)The  Seller  has,  and has  timely  filed  applications  for
                    renewal of, all Environmental Permits required for operation
                    of the  Business.  As to the  Business,  the  Seller has all
                    environmental and pollution  control equipment  necessary to
                    comply  with  all  Environmental  Laws  (including,  without
                    limitation,  compliance with all such required Environmental
                    Permits)   and   operation  of  the  Business  as  presently
                    conducted  is in  material  compliance  with all  terms  and
                    conditions of such Environmental  Permits, and a list of all
                    such Environmental Permits is identified on Schedule 3.16;

               (iv) To the  Seller's  knowledge,  there are no storage  tanks or
                    solid  waste  management  units  located  on  or  under  any
                    Acquired  Asset and there are no Materials of  Environmental
                    Concern on any  Acquired  Asset in  quantities  which  would
                    require   reporting   to  any   governmental   authority  or
                    Remediation  to comply with  Requirements  of  Environmental
                    Laws;

               (v)  The Seller has not been named as a  potentially  responsible
                    party in connection with the Business,  Acquired Assets,  or
                    Leased  Property  under CERCLA or  comparable  Environmental
                    Laws,  and no Acquired  Asset is subject to any lien arising
                    under Environmental Laws;

               (vi) The Seller has not  received  any written  notice of (A) its
                    status as a potentially responsible party for response costs
                    as to any facility based upon waste generation activities of
                    the Business, or the Acquired Assets or Leased Property; (B)
                    the migration of Materials of Environmental  Concerns from a
                    neighboring  facility  onto  an  Acquired  Asset  or  Leased
                    Property;  or (C)  any  release  or  threatened  release  of
                    Materials of Environmental  Concern,  or of any violation of
                    or remedial obligation under, Environmental Laws or Permits,
                    relating to the ownership,  use,  maintenance,  operation of
                    any  Acquired  Asset;  which as to items  3.16(a)(vi)(A)-(C)
                    above  would  likely  give  rise to  Material  Environmental
                    Liability  under any  Environmental  Law, nor has the Seller
                    voluntarily  undertaken Remediation or other decontamination
                    or cleanup costing $25,000 or more of any Acquired Asset;

               (vii)The  Seller  is  not  aware  of  any   requirement   of  any
                    Environmental  Laws that will  individually  require  future
                    compliance  costs  in  connection  with  the  ownership  and
                    operation of the Acquired Assets or the Business on the part
                    of the  Buyer in  excess  of  Twenty-Five  Thousand  Dollars
                    ($25,000)  above costs  currently  expended in the  ordinary
                    course of business;

               (viii) There  are  no  present  or  past   events,   conditions,
                    circumstances,  activities, practices, incidents, actions or
                    plans  known to the  Seller  which  will  prevent  continued
                    compliance at or by any Acquired Asset with  Requirements of
                    Environmental  Laws or which may give rise to any common law
                    or  statutory  liability  under  Environmental  Laws  at  an
                    Acquired  Asset,  in either event which would give rise to a
                    Material Environmental Liability;

               (ix) The Seller has not  received  any  written  report or notice
                    that the  Acquired  Assets or Leased  Property  contain  any
                    asbestos containing materials, or polychlorinated  biphenyls
                    in any form nor any wetland  areas,  habitat for  endangered
                    species or other  land  subject  to  restricted  development
                    under Environmental Laws.

     (b)  Definitions.  For purposes of this Agreement,  the following initially
          capitalized  words and phrases  will have the meanings set forth below
          when used in this Agreement:

          (1)  "Environmental  Claim"  means any claim;  complaint;  proceeding;
               litigation;  demand;  action;  cause of action; suit; loss; cost,
               including,  but not limited to,  attorneys'  fees,  diminution in
               value, and expert's fees; damage; punitive damage; fine, penalty,
               expense,   liability,   criminal  liability,   strict  liability,
               judgment,  governmental  or  private  investigation  and  testing
               liability  or  potential   liability  for  investigatory   costs,
               governmental  response costs, natural resource damages,  property
               damage, personal injury, fines, penalties; notification of status
               of being potentially  responsible for clean-up of any facility or
               for  being  in  violation  or  in  potential   violation  of  any
               requirement  of  Environmental   Law;   proceeding;   consent  or
               administrative  orders,  agreements  or decrees;  lien;  personal
               injury  or death  of any  person;  or  property  damage,  whether
               threatened,  sought,  brought or  imposed,  that is related to or
               that  seeks to  recover  Damages  related  to, or seeks to impose
               liability  for:  (i)  improper  use  of  treatment  of  wetlands,
               pinelands or other protected land or wildlife;  (ii) noise; (iii)
               radioactive  materials (including naturally occurring radioactive
               materials    ("NORM");    (iv)    explosives;    (v)   pollution,
               contamination,    preservation,   protection,    decontamination,
               remediation or clean-up of the air,  surface water,  groundwater,
               or  soil;  (vi)  solid,   gaseous  or  liquid  waste  generation,
               handling,  discharge,  release,  threatened  release,  treatment,
               storage, disposal or transportation; (vii) exposure of persons or
               property to  Materials of  Environmental  Concern and the effects
               thereof;  (viii) the  release  or  threatened  release  (into the
               indoor or outdoor environment),  generation,  extraction, mining,
               beneficiating, manufacture, processing, distribution in commerce,
               use, transfer,  transportation,  treatment,  storage, disposal or
               Remediation of Materials of  Environmental  Concern;  (ix) injury
               to,  death of or threat to the  health or safety of any person or
               persons caused by Materials of Environmental Concern.

          (2)  "Environmental Laws" means any and all laws, rules,  regulations,
               ordinances,  orders, consent agreements, orders on consent now or
               hereafter in effect of any applicable foreign,  federal, state or
               local   executive,    legislative,    judicial,   regulatory   or
               administrative agency, board or authority or any binding judicial
               or administrative decision relating to health, worker protection,
               the environment, or a community's right to know.

          (3)  "Environmental    Permits"    means   all   permits,    licenses,
               certificates,     registrations,      identification     numbers,
               applications,  consents, approvals, variances, notices of intent,
               and exemptions necessary for the ownership,  use and/or operation
               of  the  Acquired  Assets  or  Leased  Property  to  comply  with
               Requirements of Environmental Laws.

          (4)  "Material  Environmental  Liability" means liability or potential
               liability, in an amount of $25,000 or more based on an individual
               event or  $25,000  for more  than one  event  over a one (1) year
               period.

          (5)  "Materials of Environmental  Concern" means: (i) those substances
               included within the statutory  and/or  regulatory  definitions or
               listings of  "hazardous  substance,"  "medical  waste,"  "special
               waste,"  "hazardous  waste,"  "extremely  hazardous   substance,"
               "regulated   substance,"   "hazardous   materials,"   or   "toxic
               substances," or analogous terms under any Environmental Law; (ii)
               any  material,  waste  or  substance  which is or  contains:  (A)
               petroleum,  oil  or  a  fraction  thereof,  (B)  explosives,  (C)
               radioactive  materials (including naturally occurring radioactive
               materials),   or  (D)  solid   wastes  that  pose   imminent  and
               substantial  endangerment  to health or the  environment or (iii)
               any and all  substances  in, on or under the Leased  Property  in
               Nogales,  Mexico or the Business property in Ciudad Acuna, Mexico
               regulated  pursuant to, or that could result in the imposition of
               liability  under,  SH&E  Law,   including,   without  limitation,
               petroleum and petroleum products,  polychlorinated  biphenyls and
               polychlorinated   biphenyl-containing   equipment,  asbestos  and
               asbestos-containing  materials,  and "Hazardous  Substances",  as
               defined  pursuant  to SH&E Law.  To the  extent  that the laws or
               regulations  of  any   applicable   state,   local,   or  foreign
               jurisdiction  establish  a meaning  for any term  defined  herein
               through reference to federal  Environmental Laws which is broader
               than the meaning  under such  federal  Environmental  Laws,  such
               broader meaning shall apply.

          (6)  "Remediation"  means any remedial action necessary to comply with
               the  requirements of  Environmental  Laws and (ii) responding to,
               removing,  remediating  or  monitoring  the release of threatened
               release of Materials of  Environmental  Concern at, on, in, about
               or under,  the air,  soil,  surface  water,  groundwater  or soil
               vapor.

          (7)  "SH&E Law" means any and all rules and  regulations  stemming out
               of  the  General  Law of  Ecological  Balance  and  Environmental
               Protection  in  Mexico  and  related  State and  Municipal  laws,
               regulations  and ordinances,  including,  but not limited to, air
               emissions, water sources and discharges, solid waste disposal and
               treatment,  noise and  energy  levels,  and  others  relating  to
               pollution,  water,  the protection of the  environment or natural
               resources,  release,  emission,  discharge,  or  disposal  of any
               material or substance,  environmental restoration, safety, health
               or environmental  aspects of property transfer,  natural resource
               damage,  pipeline  closure,   production   registration,   hazard
               communication, or human health or safety.

     3.17 Sufficiency of the Acquired Assets.  The Acquired Assets, the Excluded
Assets and the Retained  Intellectual  Property  constitute  all of the material
assets, properties, licenses, rights, permits and contracts which are being used
on the date hereof in the Business as  conducted  on the date hereof.  Except as
set forth on Schedule 3.17, each item of machinery and equipment in the Acquired
Assets  is in good  operating  condition  and  repair,  ordinary  wear  and tear
excepted.

     3.18 Affiliate  Transactions.  Schedule 3.18 sets forth a true, correct and
complete  list of all  Contracts to or by which the Seller,  the Business or the
Acquired Assets, on the one hand, and any of Seller's  Affiliates,  on the other
hand, are a party or are otherwise bound or affected,  and by which the Business
or any Acquired Asset is bound or affected or pursuant to which the Business has
made or is obligated to make payments or incur expenses to or for the benefit of
the   Seller   or  any  of  its   Affiliates   (collectively,   the   "Affiliate
Transactions"). Other than the transactions contemplated by this Agreement, each
Affiliate  Transaction  will  terminate  at or prior to the Closing  without any
payment by or liability  to the  Business and without any adverse  effect on any
Acquired Asset.

     3.19 Taxes.  Except as  specifically  identified  and described in Schedule
3.19:

     (a) The Seller has or,  prior to the  Closing,  will have  timely  paid all
Taxes due and payable or claimed to be due and  payable by any taxing  authority
with respect to the Business or the Acquired Assets. There are no pending or, to
the Seller's knowledge,  threatened actions or proceedings for the assessment or
collection  of Taxes  against  the Seller  with  respect to the  Business or the
Acquired  Assets.  The reserves for unpaid current Taxes of the Seller set forth
in  the  Business  Financial  Statements  and  the  Interim  Business  Financial
Statements  are  adequate  for the payment of all  material  Taxes of the Seller
through the dates thereof.  There are no Tax liens or special assessments on the
Acquired  Assets  and,  to the  Seller's  knowledge,  no  taxing  authority  has
threatened  any such lien or special  assessment  with  respect to the  Acquired
Assets. There are no requests for information  currently  outstanding that could
affect the Taxes owed by the Seller  relating to the  Business  or the  Acquired
Assets.

     (b) The  amounts  of Taxes  withheld  by or on  behalf of the  Seller  with
respect  to all  compensation  paid  to:  (i)  employees  of the  Seller  ; (ii)
non-employees  of the Seller for  services  rendered  by such  persons in Puerto
Rico; and (iii) nonresident individuals or foreign corporations not engaged in a
trade or  business  in Puerto  Rico,  for all  periods  ending on or before  the
Closing  Date have been (or will be, as the case may be) proper and accurate and
all deposits  required with respect to compensation  paid to such employees have
been (or will be) made in compliance with the provisions of all applicable Laws,
except in each  case,  for any  failure to  withhold  such Taxes or to make such
deposits that shall have no adverse  affect upon all or any part of the Business
or result in any liability to the Buyer or its Affiliates.

     (c) No federal,  state, local or foreign audits or other  administrative or
court  proceedings are presently  pending or threatened with regard to any Taxes
or Tax Returns of the Seller  that may have any  adverse  affect upon all or any
part of the  Business  and the  Seller  has not  been  contacted  by any  taxing
authority or representative  thereof regarding pending tax audits related to any
Taxes or Tax Returns of the Seller that may have any adverse  affect upon all or
any part of the Business.

     (d) The Seller is not a party to any  agreement  providing for the payment,
indemnity allocation or sharing of Taxes that would have any adverse effect upon
all or any part of the Business.

     (e) None of the Acquired Assets is property which is required to be treated
as being owned by any other person pursuant to the so-called "safe harbor lease"
provisions of Section  168(f)(8) of the Code (as in effect prior to amendment by
the Tax Reform Act of 1986) or is "tax-exempt  use property"  within the meaning
of Section 168 of the Code.

     (f) None of the Acquired Assets directly or indirectly secures any debt the
interest on which is tax exempt under Section 103(a) of the Code.

     (g) To the  Seller's  knowledge,  no Tax debt with  respect to the Acquired
Assets has been sold or  transferred  in any way by the  Commonwealth  of Puerto
Rico.

     (h) For purposes of this Agreement: (i) the term "Taxes" means all federal,
state, local, foreign (including,  without limitation, Mexican and Puerto Rican)
and other net income,  gross income,  gross  receipts,  sales,  use, ad valorem,
property, assets, transfer, franchise, profits, license, lease, service, service
use, withholding,  payroll,  employment,  excise, severance,  stamp, occupation,
premium,  property,  windfall  profits,  customs,  duties or other taxes,  fees,
assessments or charges of any kind whatever,  together with any interest and any
penalties,  additions to tax or additional amounts with respect thereto, and the
term "Tax" means any one of the foregoing Taxes; and (ii) the term "Tax Returns"
means all returns, declarations,  reports, statements,  value-added tax returns,
asset tax returns and other  documents  required to be filed in respect of Taxes
and any amendments to the foregoing  documents,  and the term "Tax Return" means
any one of the foregoing Tax Returns.

     3.20  Warranties.  Schedule 3.20 sets forth a complete list of all material
warranties  made by the Seller with respect to products of the Business  sold by
the Seller since April 23, 1999,  if any,  copies of which have been or will, on
or prior to September 10, 2001, be provided to the Buyer.

     3.21 Motor Vehicles.  Each motor vehicle,  if any, included in the Acquired
Assets has current  registrations  and licenses  required by applicable  Laws to
operate  such  motor  vehicle  as  presently  operated  in  connection  with the
Business.

     3.22 Customers and Suppliers.  Schedule 3.22 sets forth a true, correct and
complete  list of the thirty (30) largest  customers  and the  twenty-five  (25)
largest  suppliers of the Business for the fiscal year ending  December 29, 2000
and for the six (6) month period ended June 30,  2001,  which list  contains the
name of such customer or supplier, its address, telephone number, contact person
and telephone  number and the amount of business done with each such customer or
supplier  during  each  such  period.  Such  customers  of the  Business  as are
identified  on Schedule  3.22  hereto  accounted  for no less than  seventy-five
percent  (75%) of the gross  revenues of the Business for the fiscal year ending
December  29,  2000.  Except as set forth on  Schedule  3.22,  the Seller has no
knowledge  that any such  customer or supplier of the Business  will cease to do
business  with the Business  after the Closing.  Except as set forth in Schedule
3.22,  the Seller is not  required  to provide  any  bonding or other  financial
security  arrangements  in  connection  with  any  transactions  with any of its
customers or suppliers.

     3.23 Condition of the Property.  Except as set forth on Schedule 3.23, each
piece of Owned Real Property and Leased  Property (each a "Property") has access
to and from  dedicated  public rights of way  adjoining  the Property;  (b) each
Property is in material  compliance  with all applicable  Laws,  building codes,
fire and life safety  codes,  building or use  restrictions,  subdivision  laws,
zoning  ordinances and other similar Laws affecting the Property  and/or the use
thereof;  (c) each  Property  is in  material  compliance  with  all  easements,
covenants, restrictions and other encumbrances affecting the Property and/or the
use thereof; (d) the Seller has all material certificates of occupancy, licenses
and permits  necessary  for the use and  operation  of the Property as presently
being used and operated;  (e) all utilities  necessary for the use and operation
of  the  Property  as  presently  used  and  operated  are  available;  (f)  the
improvements on the Property,  including, without limitation, (i) the roof, roof
deck, roof membrane, roof covering, floor, subflooring,  foundation,  slab, load
bearing walls and other  structural  elements of the  improvements  and (ii) all
heating,  ventilating,  air  conditioning,  mechanical,  electrical and plumbing
systems and all wiring,  cable and conduit for the  improvements,  have been and
are being regularly and properly  maintained and are in good operating order and
condition,  normal  wear and tear  excepted;  (g) there is no pending or, to the
Seller's  knowledge,  threatened  action in eminent domain or condemnation  with
respect to the Property or the improvements  thereon or any portion thereof; (h)
there are no  pending  or, to the  Seller's  knowledge,  threatened  general  or
special  assessments  affecting  the  Property,  nor is or has the Property been
subject to any special tax  exemption or  category;  and (i) no person or entity
other than the Seller (or any  Affiliate  of the  Seller)  has any right to use,
occupy or, with  respect to the Owned Real  Property,  purchase the Property (or
any part thereof).

     3.24  Customer  Deposits.  The Seller has received no customer  deposits or
customer prepayments other than those listed on Schedule 3.24, and such deposits
or prepayment  amounts relate to unfilled purchase orders and have been received
in the ordinary course of business, consistent with past practice.

     3.25 Promotional Obligations.  Schedule 3.25 lists all material trade-fixed
and  annual-based  volume-related  promotions of the Business,  which  includes,
without  limitation,  all  volume  rebates,   cooperative  advertising  fees  or
arrangements, volume-related promotions or allowances, business development fund
amounts or allowances,  slotting fees and early payment  discounts payable or to
become  payable  in respect of the  Business  as of the date of this  Agreement.
Schedule   3.25  shall  be  updated  by  the  Seller  as  of  the  Closing  Date
(collectively hereinafter, the "Promotional Obligations").

IV.   REPRESENTATIONS AND WARRANTIES OF THE BUYER

      The Buyer represents and warrants to the Seller as follows:

     4.01  Organization And Authority.  The Buyer is a limited liability company
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Delaware,  and has all requisite power and authority to enter into this
Agreement and any instruments and agreements  contemplated herein required to be
executed and delivered pursuant to this Agreement (including, as applicable, the
Undertaking,  the Assignment and Assumption Agreement,  the Lease Assignment and
Assumption  Agreements,  the  Transition  Services  Agreement  and the Trademark
Licenses,  which are  referred  to  collectively  herein as the  "Buyer  Related
Instruments")  and  to  consummate  the  transactions  contemplated  hereby  and
thereby. The execution, delivery and performance of this Agreement and the Buyer
Related Instruments and the consummation of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the
Buyer.  This Agreement has been, and each of the Buyer Related  Instruments,  as
applicable,  shall  be,  duly  executed  and  delivered  by the  Buyer and shall
constitute  the legal,  valid and binding  obligation of the Buyer,  enforceable
against the Buyer in accordance with its terms, except that (a) such enforcement
may  be  subject  to any  bankruptcy,  insolvency,  reorganization,  moratorium,
fraudulent  transfer or other laws,  now or hereafter in effect,  relating to or
limiting creditors' rights generally and (b) the remedy of specific  performance
and injunctive  and other forms of equitable  relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

     4.02 No Violation; Consents and Approvals.

     (a) The  execution  and delivery of this  Agreement  and the Buyer  Related
Instruments do not, and the consummation of the transactions contemplated hereby
or thereby and compliance with the terms hereof or thereof will not (i) conflict
with,  or result in any  violation of or default  under,  other than  immaterial
violations  of or  defaults  under:  (A) any  provision  of the  certificate  of
formation  or  limited  liability  company  agreement  of the  Buyer  or (B) any
judgment,  order or decree, statute, law, ordinance,  rule or regulation,  other
than immaterial judgments, orders, decrees, statutes, laws, ordinances, rules or
regulations  applicable to the Buyer;  or (ii)  conflict  with, or result in any
violation  of, or  constitute  a default (or an event or condition  which,  with
notice or lapse of time or both, would  constitute a default) under,  other than
immaterial  conflicts,  violations or defaults, or result in the termination of,
or accelerate  the  performance  required by, or cause the  acceleration  of the
maturity of, any liability or obligation,  other than immaterial  liabilities or
obligations,  pursuant  to, or  result  in the  creation  or  imposition  of any
Encumbrance under, any contract, note, bond, mortgage, hypothecation, agreement,
indenture,  license,  lease  (capitalized  or  operating),  commitment  or other
instrument  or  obligation,  other  than  immaterial  contracts,  notes,  bonds,
mortgages,    hypothecations,    agreements,   indentures,   licenses,   leases,
commitments,  instruments  or  obligations  to which  the Buyer is a party or by
which the Buyer may be bound or affected.

     (b) Except as set forth on Schedule  4.02, no consent,  approval,  order or
authorization  of, or  registration,  declaration or filing with, any Government
Authority,  or any third  party is  required  to be  obtained or made by or with
respect to the Buyer in connection with the execution,  delivery and performance
of this Agreement or the Buyer Related  Instruments or the  consummation  by the
Buyer of the  transactions  contemplated  hereby or  thereby,  except  where the
failure to obtain  such  consent,  approval,  order or  authorization  of, or to
register,  declare  or file  would  not have a  material  adverse  effect on the
Buyer's ability to consummate the transactions contemplated by this Agreement.

     4.03  Brokers.  No broker,  finder or financial  advisor or other person is
entitled to any brokerage fees, commissions, finders' fees or financial advisory
fees in connection with the  transactions  contemplated  hereby by reason of any
action  taken  by  the  Buyer  or any of  its  directors,  officers,  employees,
representatives or agents.

     4.04 Litigation.  There is no Litigation pending or, to the knowledge after
due  inquiry  by the  Buyer,  threatened  against  the  Buyer by or  before  any
Government  Authority,  or by or on behalf of any third party,  which challenges
the validity of this  Agreement or any Buyer  Related  Instrument  or which,  if
adversely  determined,  would  adversely  affect  the  ability  of the  Buyer to
consummate the transactions  contemplated by this Agreement or any Buyer Related
Instrument.

     4.05  Available  Funds.  Subject to the  contingency  that no source of the
Buyer's  financing  shall have defaulted  under its  obligations to provide such
financing to the Buyer,  the Buyer will have,  on the Closing  Date,  sufficient
funds available to it to perform all of its obligations under this Agreement and
the  Buyer  Related  Instruments,  including,  without  limitation,  to pay  the
Purchase Price in accordance  with the terms of this Agreement and to assume the
Assumed Liabilities.

V.   COVENANTS OF THE PARTIES

     5.01 Conduct of the Business.  Except as  contemplated  by this  Agreement,
during the period  from the date of this  Agreement  to the  Closing  Date,  the
Seller will conduct the Business in the ordinary course of business,  consistent
with past practice and, to the extent consistent therewith, use all commercially
reasonable  efforts  to  preserve  its  current  relationships  with  customers,
suppliers and others having  business  dealings  with it.  Without  limiting the
generality of the foregoing,  and,  except as  contemplated  by this  Agreement,
during the period from the date of this  Agreement to the Closing Date,  without
the prior written consent of the Buyer, the Seller will not:

     (a) increase by more than ten percent (10%) the rate of compensation of, or
increase  by more than ten percent  (10%) any  benefit  to, any  employee of the
Business, except as may be required by any Employee Benefit Plan, or as required
by law;

     (b) with regard to the  Business,  enter into,  adopt or amend any Employee
Benefit Plan or employment or severance agreement,  except as may be required by
law;

     (c) (i) sell,  lease,  transfer or otherwise dispose of any of the Acquired
Assets,  other  than in the  ordinary  course  of  business,  or (ii)  mortgage,
hypothecate or encumber any of the Acquired Assets, other than Inventory sold in
the ordinary course of business, except for Permitted Encumbrances;

     (d) except in the ordinary course of business,  materially modify, amend or
terminate any Contract to be assumed by the Buyer  pursuant to this Agreement or
materially alter the terms (including,  without limitation,  such terms relating
to the pricing of any  products  or  services)  upon which the Seller  transacts
business with any of the customers of the Business;

     (e) enter into any contract (other than in the ordinary course of business)
(i)  obligating  the Seller to expend more than $25,000 in  connection  with the
Business,  or (ii)  relating to the  Acquired  Assets and  extending  beyond the
Closing Date, other than in the ordinary course of business;

     (f) commit any action which would result in any material  adverse change to
any of the Acquired Assets (other than normal wear and tear and depreciation);

     (g) commit any action which would result in any insurance  policy  relating
exclusively  to the Business  naming the Seller or the Business as a beneficiary
or a loss payee being cancelled or terminated; or

     (h) agree, whether in writing or otherwise, to do any of the foregoing.

     5.02 Access to Information; Confidentiality.

     (a) During the period from the date of this  Agreement  through the Closing
Date, the Seller will give the Buyer and its authorized  Affiliates,  employees,
agents, advisors, accountants,  attorneys, engineers, environmental consultants,
financing sources and representatives reasonable access during customary working
hours to all plants, offices,  warehouses,  facilities,  employees and Books and
Records of the Seller relating to the Business as they may reasonably request.

     (b) Each Party will hold and will cause its Affiliates,  employees, agents,
advisors,   accountants,   attorneys,   engineers,   environmental  consultants,
representatives  and financing  sources to hold any information which such Party
receives in connection with the  transactions  contemplated by this Agreement in
strict  confidence  and in  accordance  with  and  subject  to the  terms of the
Confidentiality  Agreement  dated as of July 20, 2001 between the Buyer and ASR,
as may be amended or modified by the Parties (the "Confidentiality Agreement").

     (c) Solely with respect to the  Acquired  Assets and  documents  reasonably
available to Seller, the Seller, at its sole cost and expense,  shall provide to
the Buyer  reasonable  access (at all corporate  offices of the Business) to all
records and information  concerning all  Environmental  Permits and Materials of
Environmental  Concern, used, stored,  generated,  treated or disposed of by the
Seller,  all  environmental  or safety studies  conducted by or on behalf of the
Seller and all reports,  correspondence  or filings to Governmental  Authorities
concerning  the  compliance  of the  Acquired  Assets  or the  operation  of the
Business with  Requirements of  Environmental  Laws, all policies and procedures
manuals or  guidelines  utilized  by the Seller to comply with  Requirements  of
Environmental Laws, and any other information  reasonably requested by the Buyer
pertaining  to  environmental,  health,  and safety  issues (the  "Environmental
Information").  The Seller agrees that the Buyer shall have the right to inspect
the  Environmental  Information and the Acquired Assets,  and, with the Seller's
written  approval  (which  may be  granted  or  withheld  in the  Seller's  sole
discretion),  perform  subsurface or other  invasive  investigations,  including
without  limitation,  air  monitoring and soil,  groundwater,  and surface water
analysis, at the Acquired Assets;  provided,  regarding all such inspections and
investigations:  (i) the Buyer will present to the Seller its scope or scopes of
work to be performed for the Seller's review and approval; (ii) the costs, risks
and  expenses  associated  therewith  will be  borne  by the  Buyer;  (iii)  the
Confidentiality  Agreement shall govern;  (iv) the Buyer will not interfere with
the operations of the Business;  (v) the Buyer shall restore the Acquired Assets
to  substantially  the same condition in which they existed prior to the Buyer's
or its agent's or representative's  performance of such invasive investigations,
including,  without  limitation,  plugging and  abandoning any borings or wells;
(vi) the Seller  shall be  entitled  to have a  representative  present  for all
inspections  and  investigations;  (vii) the Buyer shall provide the Seller with
reasonable prior advance written notice of inspection or  investigation  and all
such  inspections or  investigations  will be during normal business hours;  and
(viii) upon the Seller's written request the Buyer shall provide the Seller with
a copy of all  information  and  material  generated,  obtained or procured as a
result of the inspection or investigation.  Prior to any invasive investigation,
the Buyer shall  provide to the Seller  evidence  that the Buyer (or the Buyer's
professional  representatives)  maintain adequate  insurance to cover any damage
which may  reasonably  result from such  investigation,  which  insurance  shall
identify the Seller as a named  insured  party.  The costs  associated  with the
disposal of any investigation derived waste will be borne by the Buyer; provided
that the Buyer shall execute manifests and related documents.

     5.03 Commercially  Reasonable Efforts.  Subject to the terms and conditions
of this Agreement,  each of the Parties hereto will use commercially  reasonable
efforts to take,  or cause to be taken,  all  action,  and to do, or cause to be
done,  all  things  necessary,  proper or  advisable  under  applicable  Laws to
consummate  the  transactions  contemplated  by this  Agreement  at the earliest
practicable date.

     5.04 Consents.  The Parties will use their commercially  reasonable efforts
to obtain all licenses, permits,  authorizations,  consents and approvals of all
third  parties and  Government  Authorities  necessary  in  connection  with the
consummation  of the  transactions  contemplated  by this Agreement prior to the
Closing and all costs and expenses  associated with such efforts shall be shared
equally  by the  Buyer,  on the one hand,  and the  Seller,  on the other  hand;
provided,  however that this covenant  shall in no way limit the  representation
and warranty set forth in Section 3.16.  Each of the Parties hereto will make or
cause to be made all filings and submissions  under Laws applicable to it as may
be  required  for the  consummation  of the  transactions  contemplated  by this
Agreement.  The Buyer and the  Seller  will  cooperate  fully with each other in
exchanging  such  information  and  assistance as any of the Parties  hereto may
reasonably request in connection with the foregoing.

     5.05 Public Announcements. Neither of the Parties hereto shall, without the
approval of the other Party (which may not be unreasonably  withheld),  make any
press release or other public  announcement  or  communicate  with any customer,
competitor or supplier of the Seller concerning the transactions contemplated by
this Agreement,  except through the terms of certain letter agreements and press
releases,  the forms of which have been  agreed to by the  Parties and except as
and to the extent that such Party shall  determine  is required  by: (i) Law; or
(ii) stock  exchange  requirements  (which  determination  shall be made by such
Party based upon the advice of its counsel), in which case the other Party shall
be  advised  a  reasonable  amount  of  time  in  advance  of  such  release  or
announcement  and the Parties  shall use their best  efforts to cause a mutually
agreeable release or announcement to be issued.

     5.06  Notification of Certain Matters.  The Seller shall give prompt notice
to the Buyer,  and the Buyer  shall give  prompt  notice to the  Seller,  of the
occurrence, or non-occurrence,  of any event the occurrence or non-occurrence of
which would be reasonably likely to cause (a) any  representation or warranty of
the Seller or the Buyer,  as the case may be,  contained in this Agreement to be
untrue or inaccurate in any material respect at or prior to the Closing, (b) the
Seller or the  Buyer,  as the case may be, to fail to comply  with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder,  (c) the commencement of any Environmental  Claims or
inspection  by  any  Governmental   Authority  with  responsibility  to  enforce
Environmental Laws likely to result in Material Environmental  Liability, or (d)
a material adverse change to the Business;  provided, however, that the delivery
of any notice pursuant to this Section 5.06 shall not limit or otherwise  affect
the remedies available hereunder to the Party receiving such notice.

     5.07 Supplemental Disclosure.  Each Party shall have the right from time to
time  prior to the  Closing  to  supplement  or amend  such  Party's  disclosure
schedules hereto (the  "Schedules")  with respect to (a) any matter that existed
as of the date of this  Agreement and should have been set forth or described in
the Schedules and (b) any matter hereafter  arising which, if existing as of the
date of this Agreement, would have been required to be set forth or described in
the Schedules;  provided,  however,  that with respect to clause (a) above,  any
such  supplemental or amended  disclosure shall not be deemed to cure any breach
of any  representation or warranty made in this Agreement as of the date of this
Agreement unless so consented to by the other Party.

     5.08 Records Pertaining to the Business

     (a) Turnover of Books and Records. See Section 1.04(g).

     (b) Retention of Records. The Seller shall, for a period of seven (7) years
after the Closing Date,  neither dispose of nor destroy any of Books and Records
without first  offering to turn over  possession of copies thereof to the Buyer,
at the Buyer's  expense,  by written  notice to the Buyer,  at least thirty (30)
days prior to the proposed date of such  disposition or  destruction.  The Buyer
shall,  for a period of seven (7) years after the Closing Date,  neither dispose
of nor destroy any of the Books and Records  without first offering to turn over
possession of copies thereof to the Seller, at the Seller's expense,  by written
notice to the Seller,  at least thirty (30) days prior to the  proposed  date of
such disposition or destruction.

     (c) Access to  Records.  After the Closing  Date,  the Seller  shall,  upon
reasonable notice, allow the Buyer and its advisors, accountants,  attorneys and
representatives  access to all  business  records and files of the Seller  which
pertain in part to the Business (it being  understood that the Seller may redact
from such  records  such  information  that does not  pertain to the  Business),
during customary working hours at the principal place of business of the Seller,
or at any location  where such records are stored,  and the Buyer shall have the
right, at the Buyer's expense, to make copies of any such records and files.

     (d) Assistance with Records.  After the Closing Date, for a period of seven
(7) years following the Closing Date: (i) the Seller shall make available to the
Buyer, upon reasonable advance written request,  and at reasonable times, at the
Buyer's expense:  (x) employees,  agents or advisors of the Seller to assist the
Buyer in locating and obtaining  records and files  maintained by the Seller and
(y) any of the employees,  agents or advisors of the Seller whose  assistance or
participation  is  reasonably  required  by the  Buyer in  anticipation  of,  or
preparation  for,  any  existing  or future  third party  actions,  Tax or other
matters in which the Business is involved  and which  relates to the Business or
the Acquired Assets; and (ii) the Buyer shall make available to the Seller, upon
reasonable  advance written  request,  and at reasonable  times, at the Seller's
expense: (x) employees,  agents or advisors of the Buyer to assist the Seller in
locating and obtaining  records and files maintained by the Buyer and (y) any of
the employees, agents or advisors of the Buyer whose assistance or participation
is reasonably required by the Seller in anticipation of, or preparation for, any
existing  or future  third  party  actions,  Tax or other  matters  in which the
Business is involved and which relates to the Business.

     5.09 No  Solicitation.  Except with respect to the Buyer and its Affiliates
until November 30, 2001, the Seller shall not, and shall cause its subsidiaries,
officers, directors,  employees, agents and representatives (including,  without
limitation,  any investment  banker,  attorney or accountant  retained by any of
them) not to, (a) initiate or solicit, directly or indirectly,  any inquiries or
the making of any  proposal  with  respect to a merger,  consolidation,  sale of
shares of capital stock or similar transaction  involving the Acquired Assets or
any  purchase  of all or any  significant  portion  of the  Acquired  Assets (an
"Acquisition  Transaction")  or (b) engage in any  negotiations  concerning,  or
provide to any other person any information or data relating to the Business for
the  purposes  of,  or have any  discussions  with any  person  relating  to, or
otherwise  cooperate in any way with, or assist or participate in, facilitate or
encourage  any  effort or  attempt  by any other  person to seek or  effect,  an
Acquisition Transaction.  The Seller shall promptly advise the Buyer of any such
inquiry or proposal the Seller may receive.

     5.10 Motor  Vehicles.  The Seller  shall take all  actions  and prepare all
documents  necessary  to effect the  transfer to the Buyer of all motor  vehicle
licenses and  registrations  pertaining to  automobiles,  trucks and other motor
vehicles  that are part of the  Acquired  Assets  in  compliance  with the motor
vehicle  registration,  licensing and other applicable laws of any jurisdictions
where such  motor  vehicles  are  registered  or  licensed.  All such  documents
evidencing the transfer of licenses and  registrations  required hereby shall be
delivered  to the  Buyer  or to the  appropriate  Governmental  Authorities  for
processing within thirty (30) days following the Closing.

     5.11 Other Actions.  The Buyer and the Seller will each take all such other
and further actions,  consistent with this Agreement and the related agreements,
as the other may reasonably request.

     5.12 Bulk Sales Compliance.  The Buyer and the Seller waive compliance with
the provisions of all applicable Laws relating to bulk transfers or bulk sales.

     5.13 Discharge of Claims.  The Seller shall cause all  Encumbrances  on any
Acquired  Asset  other  than the  Permitted  Encumbrances  to be  terminated  or
otherwise  discharged  at or prior to the  Closing,  and shall pay all costs and
expenses incurred in connection therewith.  The Seller shall discharge or caused
to be  discharged  all of the  liabilities  of the Business that are not Assumed
Liabilities  and as to which  neither  the Seller nor any  counterparty  has any
dispute  upon  the  latter  to  occur  of (i)  the due  date  of such  liability
(including  any  applicable  grace period) and (ii) twelve (12) months after the
Closing; provided,  however, that the Seller shall not be obligated to discharge
any such liability to the extent that the party to whom the liability is due has
any liability or obligation to the Seller.

     5.14 Bank Accounts. The Seller shall cooperate with the Buyer in making all
necessary or desirable  arrangements  so that checks or other payments  received
after the Closing Date on all  Receivables  arising out of the  operation of the
Business  which are  Acquired  Assets may be  deposited  into the  Buyer's  bank
accounts without endorsement by the Seller. The Seller shall execute and deliver
to the Buyer all documents and instruments and take all actions as the Buyer may
reasonably request in order to effectuate the foregoing.

     5.15  Financial  Information.  The Seller will  deliver to the Buyer within
fifteen  (15)  business  days after the end of each  calendar  month  which ends
between the date of the  Agreement  and the Closing Date an income  statement of
the Business, setting forth in each case in comparative form the figures for the
then current month, and the figures for the corresponding period in the previous
fiscal year. Each such income  statement shall be  substantially  in the form of
the Business Income  Statements and Interim Business Income Statements set forth
on Schedule 3.03.

VI.  ADDITIONAL AGREEMENTS

     6.01 Tax Matters.  The Buyer shall pay all the expenses relating to (a) all
sales,  use and transfer Taxes arising out of the  transactions  contemplated by
this Agreement; and (b) all transfer,  conveyance,  filing, recording, stamp and
any similar Tax, fee or duty (including,  without  limitation,  any notarial fee
regarding  such  transfer and any expense  related  thereto,  including  but not
limited to internal revenue stamps and registry  vouchers)  arising out of or in
connection with the Owned Real Property or other real property,  the transfer of
which is effected  pursuant to this  Agreement and any related  agreements.  The
Seller shall use its commercially reasonable efforts to cooperate fully with the
Buyer  in the  Buyer's  efforts  to  obtain  a  grant  of Tax  exemption  or any
applicable Tax benefits with respect to the Business or the Acquired Assets.

     6.02 Tax Certificates. On or before the Closing, each Seller Entity that is
transferring  a United  States  real  property  interest  within the  meaning of
Section 897 of the Code shall provide the Buyer with a certificate in accordance
with  Treasury  Regulation  1.1445-2  stating  that such  Seller  Entity that is
transferring  a United  States  real  property  interest  within the  meaning of
Section 897 of the Code is not a foreign  person.  With  respect to the Acquired
Assets located in the Commonwealth of Puerto Rico, on or before the Closing, the
Seller shall  provide the Buyer with a Negative Debt  Certificate  issued by the
Center for the Collection of Municipal Revenue.  The relevant Seller Entity(ies)
shall also provide the Buyer with a letter  representing that it is engaged in a
trade  or  business  in  Puerto  Rico,  and  thus,  that  it is not  subject  to
withholding taxes under Section 1150 of the Puerto Rico Internal Revenue Code of
1994, in accordance with Article 1152-2 of the Regulations thereunder.

     6.03 Proration of Taxes and Utilities. Real estate (immovable) and personal
(movable)  property Taxes  relating to the Business and the Acquired  Assets for
the year of the Closing  assessed by any taxing authority shall be prorated on a
daily basis as of the Closing  Date.  If the Closing Date occurs  before the Tax
rate is fixed for the current year, the apportionment of the Taxes shall be upon
the basis of the Tax rate for the preceding year applied to the latest  assessed
valuation, but any difference between the ad valorem Taxes actually paid and the
amount used in  determining  the  proration  shall be  recomputed  and  adjusted
between the Parties upon receipt of written evidence of the payment thereof.  If
the ad valorem  Taxes  actually paid exceed the amount used in  determining  the
proration, the Seller shall remit to the Buyer the difference between the amount
of such Taxes  allocated to the Seller pursuant to such proration and the amount
of such  Taxes  allocable  to the Seller  based upon the actual  amount of Taxes
paid,  and if the ad valorem Taxes actually paid is less than the amount used in
determining  the  proration,  the Buyer shall remit to the Seller the difference
between  the  amount of such Taxes  allocated  to the  Seller  pursuant  to such
proration  and the amount of such Taxes  allocable  to the Seller based upon the
actual  amount of Taxes  paid.  If the Buyer or the Seller  should  subsequently
receive any refund of such real estate or personal  property Taxes,  such refund
shall be similarly  apportioned  and the Party receiving such refund shall remit
to the other its proportionate  part thereof.  All municipal or utility charges,
water rates, water meter charges,  sewer charges, costs of fuel and like charges
with respect to the  operation of the Business and the Acquired  Assets shall be
apportioned  as of the Closing Date based on meter  readings  taken on such date
or,  if  meter  readings  are not  taken  on such  date  such  other  reasonable
allocation as is appropriate under the  circumstances.  Real estate  (immovable)
and personal  (movable) property Taxes relating to the Business and the Acquired
Assets  for  years  prior to the  year of  Closing  shall be paid by the  Seller
regardless of whether the assessment is made after Closing Date.

     6.04 Covenant Not to Compete.

     (a) The Seller  acknowledges that the Buyer would be irreparably damaged if
the trade secret,  confidential  and/or  proprietary  information  of the Seller
relating  to the  Business  were  disclosed  or utilized on behalf of any person
which is in competition in any respect,  directly or indirectly,  with the Buyer
or the  Business.  The  Seller  further  acknowledges  that  the  covenants  and
agreements contained in this Section 6.04 are a material part of this Agreement,
and that, without such covenants and agreements,  the Buyer would not furnish to
the Seller the consideration for which this Agreement  provides.  In furtherance
of this Section 6.04 and to secure the  interests  of the Buyer  hereunder,  the
Seller hereby covenants and agrees that, except as otherwise  expressly provided
herein,  from and after the Closing Date and until the second annual anniversary
of the Closing Date,  neither the Seller nor any of its Affiliates  will: (i) in
any geographic area in which Buyer or the Business  conducts its business on the
date hereof, engage in a business which competes with the Business (a "Competing
Business") in any manner, directly or indirectly, including, without limitation:
(A)  soliciting any customer of the Buyer or the Business to purchase any Cotton
Products of the Business from anyone other than the Buyer or the  Business;  and
(B) assisting any person in any way to do, or attempt to do, anything prohibited
by the foregoing, whether by the ownership,  control,  management,  operation or
financing  of such  person;  (ii) solicit or recruit for hire other than through
general  advertising  any employees or persons who have worked for the Seller or
the Business  within one (1) year prior to the Closing  Date,  who were hired by
the Buyer on the Closing Date, and who were not terminated by the Buyer prior to
the time of such solicitation or recruitment, or (iii) interfere with or attempt
to disrupt  relationships,  contractual  or  otherwise,  between  the Buyer,  as
successor  to the  Business,  and any of its  employees,  agents,  suppliers  or
contractors.  Notwithstanding  the foregoing:  (x) the Seller and its Affiliates
shall be permitted to become the registered or beneficial  owner of (A) up to 5%
of any class of capital  stock of a Competing  Business  publicly  traded on any
nationally recognized stock exchange, provided that the Seller or such Affiliate
does not actively  participate  in the business of such  corporation  or (B) any
Competing Business which in the then most recent fiscal year earned no more than
one-third of its revenues from the sale of Cotton Products; provided that within
nine (9) months of the closing of any such transaction, Seller or such Affiliate
divests the portion of such  Competing  Business  relating to the sale of Cotton
Products;  and (y) the Seller and its Affiliates  shall be permitted to sell the
Bulk Products.  For purposes of this  Agreement,  the term "Bulk Products" shall
refer to bulk irregular cotton swabs identified on Schedule 1.01(b).

     (b) In  furtherance of this Section 6.04 and to secure the interests of the
Buyer  hereunder,  the Seller  covenants  and agrees  that,  except as otherwise
provided herein,  from and after the Closing Date, neither the Seller nor any of
its  Affiliates  will  use  for its  benefit  or  disclose  to any  person,  any
proprietary  information  relating  to the  Business  (but only to the extent to
which it relates to the Business) not obtained or developed by the Seller or any
of its Affiliates  outside of the Business unless such  proprietary  information
(i) is, at the time such use first commences,  part of the public domain through
no action of the Seller or its Affiliates;  (ii) was already or becomes known to
the Seller or its Affiliates other than through the Business; (iii) is disclosed
to the Seller or its Affiliates by a third party who is not in breach or default
of any confidentiality obligation to the Buyer; (iv) is independently discovered
or developed by the Seller or its Affiliates; (v) is required to be disclosed by
law, rule,  regulation or order  applicable to the Seller or its Affiliates,  in
response  to any  subpoena  or other  legal  process or in  connection  with any
litigation  to which the  Seller  or its  Affiliates  is a party;  or (vi) as it
relates solely to the financial  performance of the Business, is being disclosed
to existing or prospective financing sources in the ordinary course of business.

     (c) The Seller  acknowledges  and  agrees  that if the Seller or any one or
more of its  Affiliates  breaches any provision of this Section 6.04, any remedy
at law would be inadequate and that the Buyer,  in addition to seeking  monetary
damages in  connection  with any such  breach,  shall be  entitled  to  specific
performance and temporary or permanent  injunctive and other equitable relief to
prevent or restrain a breach of this Section  6.04 or to enforce the  provisions
hereof, without the necessity of proving actual damage and without the necessity
of posting bond or other security. The Seller agrees to pay all reasonable costs
and  expenses  (including  reasonable  attorneys'  fees and all  costs of court)
incurred by the Buyer in connection with the enforcement of this Section 6.04 if
the  Buyer  prevails,  and the  Buyer  agrees  to pay all  reasonable  costs and
expenses (including  reasonable  attorneys' fees and costs of court) incurred by
the  Seller in  connection  therewith  if the  Seller  or any of its  Affiliates
prevails.

     (d) The Seller and the Buyer  intend that the  provisions  of this  Section
6.04 be enforced to the fullest  extent  permissible  under the Laws  applied in
each jurisdiction in which enforcement is sought. The Seller and the Buyer agree
that, if any covenant or provision of this Section  6.04, or a portion  thereof,
is found to be invalid,  void, illegal, or incapable of being enforced, in whole
or in part,  by reason of any rule of law or public  policy,  such  covenant  or
provision or portion  thereof  shall be deemed  severable  from the remainder of
this Section 6.04, which shall remain independent and enforceable.  Furthermore,
the Seller and the Buyer agree that,  if any  provision of this Section 6.04, or
any  part  hereof,  shall  be held by a court of  competent  jurisdiction  to be
invalid or unenforceable, this Section 6.04 shall be amended to revise the scope
of such  provision,  to make it enforceable  to the fullest extent  permitted by
applicable  Law, if possible,  or to delete such  provision  or such part,  such
revision or deletion to apply only with respect to the operation of this Section
6.04 in the jurisdiction of such court.

     6.05 Environmental  Covenants.  The Seller agrees that prior to the Closing
Date it shall take all  commercially  reasonably  steps to transfer to the Buyer
all assignable Environmental Permits, as defined in Section 3.16, and assist the
Buyer in obtaining  non-assignable  Environmental Permits. The Buyer agrees that
until the fifth anniversary of the Closing Date it shall not perform,  or prompt
or instigate any Governmental Authority or other person to perform, any invasive
subsurface environmental testing on any of the Owned Real Property or the Leased
Property,  unless  (A)  necessary  (as  reasonably  determined  by the Buyer) to
investigate any known condition or conditions which could give rise to liability
under Environmental Law which such conditions have been disclosed by the Seller,
(B)  required by any  Environmental  Law  reasonably  necessary  to mitigate any
potential sanction under any Environmental Law, as reasonably  determined by the
Buyer,  (C) required by any  Governmental  Authority or any binding  judicial or
administrative decision relating to health, worker protection,  the environment,
or a  community's  right to know,  (D)  required  to defend  Buyer  against  any
Environmental Claim, as reasonably  determined by the Buyer, (E) required by any
third  party  doing  business  with the Buyer  (including,  without  limitation,
landlords,  mortgagees,  parties  loaning  (or  proposing  to loan) funds to the
Buyer,  parties making (or proposing to make) an equity investment in the Buyer,
any  purchaser  or  potential  purchaser of all or any part of any parcel of the
Owned Real Property or any  subtenants,  sublessees,  or assignees of all or any
part of any parcel of the Leased  Property),  as  reasonably  determined  by the
Buyer or (F) all or any part of the Owned  Real  Property  is sold or  otherwise
conveyed  to a party that is not an  Affiliate  of the Buyer,  at which time the
Buyer's  obligation under this sentence shall cease as to that part of the Owned
Real Property that is sold or otherwise conveyed.

     6.06  Employee  Matters.  (a) The Seller has provided the Buyer  reasonable
access to the Business  Employees for the purpose of interviewing such employees
for possible employment following the Closing. The Buyer has notified the Seller
(the "Proposed  Employment Offer Notice") of the names of the Business Employees
to be offered  employment with the Buyer,  and their  respective  salary or wage
rates, bonus  opportunities and benefits.  The Proposed  Employment Offer Notice
reflects that the Buyer is to offer  employment to ninety  percent (90%) or more
of the salaried  Business  Employees and to ninety  percent (90%) or more of the
hourly Business Employees. It is hereby expressly acknowledged and agreed by the
Parties that the Buyer shall have no  obligations  whatsoever  to the Seller for
any Business  Employees to whom the Buyer has not extended offers of employment,
nor for any actions  taken by the Seller as to any  Business  Employees  who may
have  claims with  regard to such  actions by the Seller,  except as provided in
Section  10.05(e)  hereof.  Effective as of the Closing  Date,  the Seller shall
terminate  from  the  Business  all  Business  Employees  who  are  not  offered
employment by the Buyer. The Buyer acknowledges and agrees that in no event will
the Buyer fail to offer  employment at any single site to  thirty-three  percent
(33%) or more of the employees or fifty (50) or more employees.  Also, the Buyer
acknowledges and agrees that it will offer employment, effective as of the first
day following the Closing Date, to all of the Business  Employees  listed on the
Proposed  Employment Offer Notice at salary or wage rates,  bonus  opportunities
and  benefits  not  different  than  those  stated for the  respective  Business
Employee on the Proposed Employment Offer Notice. Should the Buyer fail to offer
employment,  effective as of the first day following the Closing Date, to all of
the  Business  Employees  set forth in the Proposed  Employment  Offer Notice at
salary or wage rates, bonus  opportunities and benefits not different than those
set forth for the respective  Business Employee in the Proposed Employment Offer
Notice, the Parties  acknowledge and agree that the Seller shall, in addition to
any  other  rights  under  this  Agreement,  have the  right to  terminate  this
Agreement at any time prior to the Closing.

     (b) The Buyer expressly  acknowledges  and agrees that at Closing the Buyer
shall assume the  Collective  Bargaining  Agreement.  Employment by the Buyer of
those Business Employees who are covered by the Collective  Bargaining Agreement
shall be on terms and  conditions  consistent  with such  Collective  Bargaining
Agreement  or such  other  terms  and  conditions  as agreed to by Buyer and the
applicable union.

     (c) The Seller shall be responsible for, and shall indemnify and hold Buyer
harmless against and in respect of any liability,  loss, claim, damage,  expense
or deficiency (including attorneys' fees and costs) that arises under the Worker
Adjustment and Retraining Notification Act ("WARN") or other similar statutes or
regulations of any jurisdiction ("WARN Liabilities") on account of actions taken
by the Seller on or before the Closing Date. The Buyer shall be responsible for,
and shall indemnify and hold the Seller harmless  against and in respect of WARN
Liabilities  on account of,  actions  taken by the Buyer after the Closing Date.
The Seller  expressly  acknowledges  and agrees that the Seller  shall be solely
responsible for the payment of all severance obligations,  if any, incurred with
respect to any Business  Employees who are not offered  employment by the Buyer.
The Buyer  expressly  acknowledges  and agrees  that it will take all  necessary
steps  such  that  there  are no WARN  Liabilities  incurred  as a result of the
transactions contemplated by this Agreement.

     (d)  Effective  as of the  Closing,  the Buyer shall  assume and become the
sponsoring  employer  of:  (i)  the  Megas  Beauty  Care,  Inc.  Union  Employee
Retirement Plan (the "Union Plan"), in which the participants  consist solely of
Business  Employees whose terms and conditions of employment are governed by the
Collective Bargaining Agreement;  and (ii) the Megas Beauty Care, Inc. Incentive
Savings Plan and the Megas  Beauty/St.  Louis Employee Savings Plan (the "401(k)
Plans") and shall  enter into an  Assumption  and  Substitution  Agreement  with
respect  thereto.  In the event that the Buyer and the Seller agree prior to the
Closing  Date that the Buyer  should  not  assume  either or both of the  401(k)
Plans, they agree to work together to effect a transfer of assets from either or
both of such 401(k) Plans to a 401(k) plan or plans maintained or established by
the Buyer in a manner that satisfies the  requirements  of Section 414(l) of the
Code. The Seller shall  cooperate with the Buyer  post-Closing  in obtaining and
providing to the Buyer such  information as is necessary for the  preparation of
the annual information  return,  Form 5500, and any required financial statement
for the Union Plan for the plan year in which the Closing occurs.

     (e)  Effective  as of the  Closing,  the  Buyer  shall  establish  a  trust
qualified  under  Section  501(a)  of the  Code,  and,  as soon  as  practicable
following the Closing,  (i) the Seller shall cause the trustee of the trust that
currently holds the assets of the Union Plan (the "Master Trust") to transfer or
otherwise pay to the trust so established by the Buyer in cash all of the assets
of the Union Plan (as  determined by such trustee in  accordance  with its books
and records maintained for the purpose of providing separate  accounting for the
assets of each plan  participating in the Master Trust) reduced by the allocable
share  of all  fees  and  expenses  incurred  by the  Union  Plan to the date of
transfer  and (ii) on the  Closing  Date,  the Seller  shall pay to the Buyer an
amount in cash equal to $158,172. The Buyer and the Seller agree to take any and
all action,  including  the filing of any  documents  required  by Federal  law,
necessary to facilitate such transfer of assets.

     6.07  The  Buyer's  Financing.  The  Buyer  has  provided  to the  Seller a
commitment letter from the Buyer's financing sources in the form attached hereto
as Exhibit V (the "Final Commitment Letter"). The Buyer agrees that in the event
that its financing sources default under the Final Commitment  Letter, the Buyer
will use commercially  reasonable  efforts  (including,  without  limitation the
expenditure of reasonable  attorneys fees and expenses) to seek any  recoverable
damages  and  equitable  relief from such  financing  sources as a result of the
financing sources' default.

     6.08 The  Promotional  Obligations.  (a) The  Buyer and the  Seller  hereby
expressly covenant and agree that, if the Promotional Obligations shall not have
been satisfied in their  entirety by the Seller by the time of the Closing,  the
Seller shall be responsible  only for the actual aggregate  customer  deductions
for such Promotional  Obligations not satisfied by the time of the Closing which
are in excess of the reserves therefore on the Statement or the Final Statement,
as applicable.  To the extent to which the actual aggregate customer  deductions
relating to such Promotional  Obligations is less than the reserves  therefor on
the Statement or the Final Statement, as applicable,  the Buyer shall pay to the
Seller  the amount of such  difference.  The  obligations  of the Seller and the
Buyer  hereunder  shall be for a period  of twelve  (12)  months  following  the
Closing.  At such time as the  reserve  therefor on the  Statement  or the Final
Statement,  as  applicable  has been  reduced  to zero,  and on a monthly  basis
thereafter until the expiration of the twelve (12) month period  hereunder,  the
Buyer shall provide the Seller with an invoice  detailing in a reasonable manner
the deductions relating to such Promotional  Obligations and any excess over the
reserve  due to the Buyer from the  Seller.  The Seller  shall pay such  invoice
within ten (10) days of receipt.  Within ten (10) days of the  expiration of the
twelve (12) month period  hereunder,  the Buyer shall provide the Seller with an
accounting of any remaining amount of the reserves, together with payment to the
Seller of such amount.

     (b) In the  event of a  dispute  relating  to any  Promotional  Obligation,
whether  raised by the  Seller  or by a  customer,  the  Seller  shall  have the
exclusive  right to resolve such dispute with the customer.  In connection  with
any such dispute,  the Buyer shall provide the Seller with reasonable  access to
all records and information concerning such Promotional  Obligation.  The Seller
shall be entitled  to dispute  any  Promotional  Obligation  with any  customer,
provided that such dispute will not have a material adverse effect on the Buyer.
Any provision of this Section 6.08 to the contrary  notwithstanding,  the Seller
shall not be permitted to delay any payments owing to the Buyer pursuant to this
Section on account of any disputes between the Seller and any customer  relating
to any Promotional Obligations;  should the Seller be successful in resolving in
its favor any such dispute with a customer and the customer  pays such  disputed
Promotional  Obligation to the Buyer,  the Buyer shall be obligated to return to
the Seller such disputed amounts received by the Buyer, provided that no amounts
are owed by the Seller to the Buyer pursuant to this Section 6.08.

     6.09 The Transition Services Agreement.  The Parties expressly  acknowledge
and agree that,  in order to ensure an effective  transition  of the Business to
the Buyer,  it will be necessary  for the Buyer and ASR, on the Closing Date, to
enter into an agreement  pursuant to the terms of which ASR shall provide to the
Buyer certain transition services from and after the Closing Date.  Accordingly,
ASR and the Buyer  hereby  expressly  covenant  and agree,  effective  as of the
Closing  Date,  to enter into an agreement  substantially  in the form  attached
hereto as Exhibit J (the "Transition Services Agreement"). ASR agrees to use its
best  efforts  to  cooperate  with the  Buyer in order  to  effect  the  orderly
transition of the Business  operations  contemplated by the Transition  Services
Agreement; provided that ASR shall not provide to the Buyer any pricing or other
competitively sensitive information regarding the Business.

     6.10  Insurance.  The  Seller  hereby  expressly  covenants  and  agrees to
maintain in effect,  for a period of two (2) years  following  the Closing Date,
insurance policies of similar terms,  conditions and limitations of liability to
those  referenced on Schedule 3.13  pertaining to product and general  liability
claims,  to cover claims made against the Business  with respect to the products
which were both  manufactured  and sold prior to the  Closing  Date.  The Seller
hereby  expressly  covenants  and agrees to purchase and deliver to the Buyer at
Closing,  at the Seller's  sole cost and  expense,  and maintain in effect for a
period of ten (10) years following the Closing Date, a single premium  insurance
policy in the form  attached  hereto as Exhibit N with policy limits of not less
than Ten Million Dollars ($10,000,000) and a retention of not greater than Three
Million  Dollars   ($3,000,000)   from  Indian  Harbor  Insurance  Company  (the
"Environmental  Insurance Policy"); such policy to name the Buyer and the lender
under the Final  Commitment  Letter as loss payees.  The Seller hereby expressly
covenants  and agrees that it has or will provide all  information  required by,
requested by, or necessary for the carrier to issue the Environmental  Insurance
Policy.  Notwithstanding  any other provision of this Agreement to the contrary,
(i) the rights of the Buyer under the  Environmental  Insurance Policy shall not
be limited in any respect by this Agreement,  (ii) the rights of the Buyer under
any  provision  of this  Agreement  shall not be limited  in any  respect by the
operation of the Environmental  Insurance  Policy,  (iii) although the Buyer may
pursue  recovery  simultaneously  under  this  Agreement  and the  Environmental
Insurance  Policy,  the Buyer  shall not be  entitled  to recover  more than one
hundred  percent  (100%) of its Damages  arising out of the same set of facts or
circumstances  and (iv) to the  extent the  Buyer's  lender  recovers  under the
Environmental  Insurance  Policy for Damages of the Buyer such recovery shall be
deemed a recovery by the Buyer of its Damages.

     6.11 Certain  Releases.  The Seller hereby  covenants and agrees,  upon the
request of the Buyer: (i) after the execution and delivery of this Agreement, to
release Michael Haverdill from the terms of any and all contractual  obligations
which he may have with the Seller or any of the  Seller's  Affiliates,  it being
expressly  understood that, if the Closing does not occur, such release shall be
only for the time period prior to the date the Agreement is terminated, and that
until the Closing Date, such release shall only be effective with respect to the
Buyer;  and  (ii) to  release  Scott  Schaefer  from  the  terms  of any and all
contractual obligations which he may have with the Seller or any of the Seller's
Affiliates,  it being expressly understood that such release shall be contingent
upon the extension and acceptance by Scott Schaefer of an offer of employment by
the Buyer.

     6.12  Investigations  by Government  Authorities.  The Buyer and the Seller
covenant and agree to promptly notify the other Party of such Party's receipt of
any complaint or claim filed by or with, or any investigation  initiated by, any
Government Authority relating to transactions contemplated by this Agreement and
to provide the other Party with a copy thereof. The Buyer and the Seller further
covenant  and agree to use their  respective  best  efforts  to assist the other
Party in the defense or  investigation  thereof and shall  promptly  send to the
other Party copies of any documents received by such Party which relate thereto.
If any such complaint, claim or investigation is commenced, the termination date
of this  Agreement (set forth in Section  9.01(g)  hereof) and the provisions of
Section  5.09 hereof  shall be extended for a period of time equal to the number
of days  comprising  the period of time from the date such  complaint,  claim or
investigation  commenced until the date it is finally resolved,  but in no event
later than March 31,  2002.  Upon  resolution  of any such  complaint,  claim or
investigation which constitutes a Material Adverse Effect,  either the Seller or
the Buyer may terminate  this  Agreement.  If after Closing any federal or state
governmental agency of the United States or another country determines that this
Agreement is in violation of the  antitrust  laws  enforced by such agency,  the
Buyer will use good faith efforts to negotiate a consent decree with such agency
that does not include  rescission of this Agreement before the agency orders (by
consent or otherwise) rescission of this Agreement. The Seller agrees that after
Closing  it  shall  not  prompt  or  instigate  any  Governmental  Authority  to
investigate the Buyer or the Business,  unless required of the Seller by Law, or
required of the Seller to defend itself or required of the Seller to mitigate or
avoid liability or damages that could be sought from the Seller.

     6.13 Review Period. The Buyer has notified the Seller, in writing,  of such
objections as Buyer may have to any exception contained in the title commitments
or matter shown on the surveys obtained by the Buyer and covering the Owned Real
Property and/or the Leased  Property.  Any exceptions or matters not objected to
by the Buyer in writing  prior to the date hereof shall be deemed  waived by the
Buyer and shall be deemed  Permitted  Encumbrances.  The  Seller  shall have the
option to (a) cure,  remove,  provide for the  satisfaction of, or provide for a
title  company's  insurance  over  any  such  objections;  provided  that if all
objections made by the Buyer can be satisfied  solely by the payment of a sum of
less than $25,000,  the Seller shall be responsible to effectuate  such cure, or
(b) in the event that all of the Buyer's  objections  cannot be satisfied by the
payment of less than  $25,000 or cannot be  reasonably  cured  within the "Title
Cure Period" (defined hereinbelow),  the Seller will advise the Buyer in writing
on or before  the end of the Title  Cure  Period of such fact or facts,  and the
Buyer will have the option,  to be exercised within five (5) business days after
receipt of the Seller's  notice,  to either waive such objections and proceed to
the  Closing,  whereupon  such  waived  title  objections  shall  also be deemed
Permitted  Encumbrances,  or terminate this Agreement,  and neither Party hereto
shall have any further  obligations one to the other  hereunder,  except for the
indemnities or provisions  expressly  stated to survive the  termination of this
Agreement.   If  the  Buyer's   objections  (which  may  not  include  Permitted
Encumbrances or Assumed  Liabilities)  cannot be cured or removed by the Closing
Date,  the Seller may at its option have the right to adjourn  the Closing  Date
for a  period  of up to  sixty  (60)  days to  attempt  to cure or  remove  such
exceptions or defects (the "Title Cure Period").  In the event the Seller, using
diligent, good faith efforts, does not cure such matters prior to the Closing or
prior to the  expiration  of the Title  Cure  Period,  if  applicable,  and such
matters  materially  adversely  affect the  related  property or have a Material
Adverse  Effect,  the Buyer  shall have the right to either (1)  terminate  this
Agreement and neither Party hereto shall have any further obligations one to the
other  hereunder,  except for the indemnities or provisions  expressly stated to
survive in this Agreement, or (2) waive such title objections and proceed to the
Closing,  whereupon such waived title  objections shall also be deemed Permitted
Encumbrances.

     6.14 The  Trademark  Licenses.  With respect to the  Retained  Intellectual
Property  identified on Schedule 6.14 hereto (the  "Licensed  Trademarks"),  the
Buyer and certain of the Seller Entities shall, on the Closing Date,  enter into
trademark  licenses  pursuant to which such Seller  Entities  shall  license the
Licensed  Trademarks  to the Buyer (the  "Trademark  Licenses").  The  Trademark
Licenses shall be substantially in the form attached hereto as Exhibit K hereto.

     6.15 [INTENTIONALLY OMITTED]

     6.16  Termination  of  Confidentiality   Obligations.  The  Parties  hereby
expressly  acknowledge and agree that, upon the consummation of the transactions
contemplated  by this  Agreement  at the  Closing,  any and all  confidentiality
obligations of the Buyer or any of its  Affiliates  with respect to the Acquired
Assets and the Assumed Liabilities pursuant to Section 5.02(b) of this Agreement
or the Confidentiality Agreement shall terminate.

     6.17 The  Puerto  Rico  Lease.  With  regard to the  lease  for the  Leased
Property in the  Commonwealth  of Puerto Rico (the  "Puerto  Rico  Lease"),  the
Parties hereby expressly acknowledge and agree that: (i) the Seller shall assign
the Puerto Rico Lease to the Buyer or its  designated  Affiliate  on or prior to
the Closing;  (ii) the Parties shall use their respective best efforts to obtain
the  consent of the  landlord  to the  assignment  of the Puerto Rico Lease (the
"Puerto Rico Consent") at the lowest cost practicable;  (iii) should the Parties
be  unable to obtain  the  Puerto  Rico  Consent,  such that the Buyer  shall be
evicted the premises,  the Seller shall  indemnify the Buyer against any and all
Damages, as hereinafter defined,  resulting from such eviction;  and (iv) should
the Buyer or its  Affiliate  be  required  to enter  into a new  lease  with the
existing  landlord  at an  aggregate  rental  rate  which is  higher  than  that
currently  payable  under the terms of the Puerto Rico Lease,  the Seller  shall
reimburse the Buyer or its Affiliate  for the amount of such  difference  during
such period of time which  corresponds  to the balance of the current term under
the Puerto Rico Lease,  excluding any renewals or extensions  thereof;  provided
that,  in no event shall the Seller be obligated  to make  payments to the Buyer
under  this  Section  6.17 in  excess of  $75,000  in the  aggregate.  The Buyer
acknowledges and agrees that failure to obtain the Puerto Rico Consent shall not
be a breach of this  Agreement  by the Seller.  Notwithstanding  anything to the
contrary set forth in this Agreement,  including without  limitation,  Article X
hereof,  the  remedies  provided  in this  Section  6.17  shall  be the  Buyer's
exclusive remedy for the subject matter set forth in this Section 6.17.

     6.18  Treatment of Bulk Products.  With respect to the Bulk  Products,  the
Parties hereby  acknowledge and agree that: (i) the Bulk Products,  in such form
as they exist at the time of the Closing,  shall  constitute  Excluded Assets of
which the Seller  shall retain the  ownership  following  the Closing;  (ii) the
Seller shall bear any and all of the costs  associated  with the  warehousing of
the Bulk  Products;  (iii) for a period of six (6) months  following the Closing
and to the extent the Buyer has the man power  capability  to repackage and ship
such Bulk  Products,  the Buyer shall  repackage  and/or ship the Bulk  Products
pursuant to the prior written  instructions of the Seller; (iv) the Seller shall
be solely  responsible  for the freight costs and expenses  associated with such
shipment  by the  Buyer  of the Bulk  Products;  and (v) any  costs or  expenses
associated with any additional  repacking or repackaging of the Bulk Products to
be shipped by the Buyer shall be charged by the Buyer, at cost, to the Seller.

     6.19  Tax  Credit  Agreement.  With  respect  to that  certain  Tax  Credit
Agreement (herein so called),  Tax Credit Authority No. ECDD 97-65, dated August
11, 1998, by and between the State of Ohio, Tax Credit  Authority and Megas, the
Seller hereby expressly  agrees to use its best efforts:  (a) within thirty (30)
days  after the date of this  Agreement,  to  deliver  to the Buyer an  original
Release  of the Tax  Credit  Agreement  executed  on behalf of Megas in form and
substance  reasonably  acceptable  to the State of Ohio and the  Buyer;  and (b)
thereafter,  to  cooperate  in good faith with the Buyer and assist the Buyer in
its  efforts to  negotiate  and execute a new Tax Credit  Agreement  between the
Buyer (or its Affiliate) and the State of Ohio.

     6.20 Enterprise Zone Contract. With respect to that certain Enterprise Zone
Contract  dated as of August 1, 1977,  by and between the City of Cleveland  and
Megas (the "Enterprise Contract"), the Seller hereby expressly agrees to use its
best efforts:  (a) within forty-five (45) days after the date of this Agreement,
to deliver to the Buyer a written  Consent to  Assignment  executed on behalf of
the City of Cleveland,  Ohio, and in form and substance reasonably acceptable to
the  Buyer,  which  consent  approves  in all  respects  the  assignment  of the
Enterprise  Contract  from Megas to the Buyer or an Affiliate of the Buyer;  and
(b) within five days after the Buyer's  receipt of such  consent,  to deliver to
the Buyer an  original  Assignment  of  Enterprise  Zone  Contract,  in form and
substance  reasonably  acceptable  to the Buyer,  executed on behalf of Megas in
favor of the Buyer or an Affiliate of the Buyer.

     6.21  Nogales  Sublease  Additional  Rent.  In the event the Buyer,  or its
Affiliate,  does not elect to extend  the term of that  certain  Sublease  dated
September 29, 1999 by and between Collectron International Management,  Inc., as
lessor  ("Collectron"),  and  Megas,  as  lessee,  covering  real  property  and
improvements located at Calle Jesus Garcia No. 6, Nogales,  Sonora,  Mexico (the
"Sublease"),   as  provided  in  that  certain  letter  amendment  (the  "Letter
Amendment") to the Sublease to be dated  November  2001,  Seller will timely pay
the  additional  rent in the  amount of  $38,871.60  required  under the  Letter
Amendment in the manner  provided in the Letter  Amendment.  The  obligation  of
Seller to timely pay the  additional  rent as provided  herein shall survive the
Closing.

     6.22 [INTENTIONALLY OMITTED]

     6.23 Certain Landlord Lien Waivers. On or before thirty (30) days following
the Closing, the Seller shall use its commercially reasonable efforts to deliver
to the Buyer a Landlord Lien Waiver in the form  attached  hereto as Exhibit G-2
from the  landlord  under the  Puerto  Rico Lease and from the  landlord  of the
property in Ciudad  Acuna,  Mexico where certain  property,  plant and equipment
constituting the Acquired Assets is located.

     6.24 The Puerto Rico Grant. With respect to the grant of the Industrial Tax
Exemption issued to Megas PR, Case No.  00-135-I-116  (the "Puerto Rico Grant"),
the Seller shall take such actions and use its commercially  reasonable  efforts
to cooperate  fully with the Buyer in the Buyer's efforts to obtain the transfer
of such  Puerto  Rico Grant to the Buyer,  including,  but not  limited  to, the
execution and filing of any joint  applications  with the Puerto Rican Office of
Industrial  Tax  Exemption,  the issuance or  provision  of any other  consents,
instructions or information,  and the taking of any actions necessary to achieve
such transfer.

VII. CONDITIONS TO OBLIGATIONS OF THE SELLER

     7.01   Conditions.   The  obligations  of  the  Seller  to  consummate  the
transactions contemplated by this Agreement are subject to the fulfillment at or
prior to the Closing of each of the  following  conditions  (any or all of which
may be waived in whole or in part by the Seller):

     (a) Representations and Warranties. The representations and warranties made
by the Buyer in this  Agreement  that are qualified as to  materiality  shall be
true, correct and complete as of the date when made and at and as of the Closing
Date, as though such  representations  and warranties were made at and as of the
Closing  Date,  and the  representations  and  warranties  of the  Buyer in this
Agreement that are not so qualified  shall be true,  correct and complete in all
material respects as of the date when made and at and as of the Closing Date, as
though such  representations  and warranties  were made at and as of the Closing
Date.

     (b)  Performance.  The Buyer  shall have  performed  and  complied,  in all
material respects,  with all agreements,  obligations,  covenants and conditions
required by this  Agreement to be so performed or complied  with by the Buyer at
or prior to the Closing.

     (c) Compliance Certificate.  The Buyer shall have delivered to the Seller a
certificate, dated as of the Closing Date, executed by a duly authorized officer
of the  Buyer,  certifying  the  fulfillment  of  the  conditions  specified  in
Subsections 7.01(a) and 7.01(b) hereof.

     (d) No  Injunction.  On the Closing Date,  there shall not be in effect any
judgment,   order,   injunction  or  decree  issued  by  a  court  of  competent
jurisdiction  restraining or prohibiting the  consummation  of the  transactions
contemplated by this Agreement.

     (e)  Execution  of  Documents.  The Seller  shall have  received  the Buyer
Related  Instruments,  in each case,  duly executed by each Party thereto (other
than the Seller).

     (f) Consents.  The Seller shall have obtained all authorizations,  consents
and approvals of all Government  Authorities and all third parties  necessary in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement as set forth on Schedule 7.01(f)(i). The Buyer shall have obtained all
authorizations,  consents and approvals of all  Government  Authorities  and all
third parties  necessary in connection with the consummation of the transactions
contemplated by this Agreement as set forth on Schedule 7.01(f)(ii).

     (g) Opinion of Counsel.  The Buyer  shall have  delivered  to the Seller an
opinion of legal counsel to the Buyer, dated the Closing Date,  substantially in
the form of Exhibit L hereto.

     (h) The  Cleveland  Agreement.  The  Cleveland  Agreement  shall  have been
executed and delivered by the parties  thereto and become  binding in accordance
with its terms.

VIII. CONDITIONS TO OBLIGATIONS OF THE BUYER

     8.01   Conditions.   The   obligations  of  the  Buyer  to  consummate  the
transactions contemplated by this Agreement are subject to the fulfillment at or
prior to the Closing of each of the  following  conditions  (any or all of which
may be waived in whole or in part by the Buyer):

     (a) Representations and Warranties. The representations and warranties made
by the Seller in this Agreement  that are qualified as to  materiality  shall be
true, correct and complete as of the date when made and at and as of the Closing
Date, as though such  representations  and warranties were made at and as of the
Closing  Date,  and the  representations  and  warranties  of the Seller in this
Agreement that are not so qualified  shall be true,  correct and complete in all
material respects as of the date when made and at and as of the Closing Date, as
though such  representations  and warranties  were made at and as of the Closing
Date. The Parties  expressly  acknowledge and agree that the term "material" for
purposes of the previous sentence shall be determined solely by reference to the
Business.

     (b)  Performance.  The Seller shall have  performed  and  complied,  in all
material respects,  with all agreements,  obligations,  covenants and conditions
required by this  Agreement to be so performed or complied with by the Seller at
or prior to the Closing.

     (c) No Material  Adverse Effect.  There shall not have been, since the date
of this Agreement,  any event or occurrence which has had or would reasonably be
expected to result in a Material  Adverse Effect,  and the Seller shall not have
sustained  any loss or  damage  to the  Acquired  Assets  or the  Business  that
materially affects its ability to operate the Business in the ordinary course of
business or the ability of the Buyer to operate the Business after the Closing.

     (d)  Compliance  Certificate.  Each  of  the  Seller  Entities  shall  have
delivered to the Buyer a certificate, dated the Closing Date, executed by a duly
authorized  officer of such Seller  Entity,  certifying  the  fulfillment of the
conditions specified in Subsections 8.01(a), 8.01(b) and 8.01(c) hereof.

     (e) No  Injunction.  On the Closing Date,  there shall not be in effect any
judgment,   order,   injunction  or  decree  issued  by  a  court  of  competent
jurisdiction  restraining or prohibiting the  consummation  of the  transactions
contemplated by this Agreement.

     (f)  Execution  of  Documents.  The Buyer  shall have  received  the Seller
Related  Instruments,  in each case,  duly executed by each Party thereto (other
than the Buyer).

     (g) [INTENTIONALLY OMITTED]

     (h) Consents.  The Seller shall have obtained all authorizations,  consents
and approvals of all Government  Authorities and all third parties  necessary in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement,  as set forth on Schedule  7.01(f)(i).  The Buyer shall have obtained
all authorizations, consents and approvals of all Government Authorities and all
third parties  necessary in connection with the consummation of the transactions
contemplated by this Agreement as set forth on Schedule 7.01(f)(ii).

     (i) Transfer of Acquired Assets.  At the Closing,  the Seller shall deliver
to the Buyer all Acquired Assets, including,  without limitation,  all Contracts
and Intellectual Property, sold pursuant to this Agreement.

     (j) [INTENTIONALLY OMITTED]

     (k) Opinion of Counsel.  The Seller  shall have  delivered  to the Buyer an
opinion of legal counsel to the Seller, dated the Closing Date, substantially in
the form of Exhibit M hereto.

     (l) Survey. The Buyer shall have received a copy of a current ALTA lender's
survey  of each  Owned  Real  Property  addressed  to the  Buyer  and the  title
insurance company,  signed and certified by a licensed  professional engineer or
registered  surveyor,  bearing  current date,  registration  number and seal and
sufficient for title insurance companies to delete the standard survey exception
from the title insurance policies.

     (m)  Title  Insurance  Policies.   A  title  insurance  company  reasonably
satisfactory  to the Buyer shall be  unconditionally  committed  to issue to the
Buyer at the  Closing,  at the  expense  of the  Buyer,  an  owner's  policy (or
leasehold  policy,  as  applicable)  of title  insurance  with  respect  to each
Acquired Asset which is real property or an interest in real property other than
the Puerto Rico Lease, with extended coverage and other customary  endorsements,
subject  only to the  Permitted  Encumbrances  and Assumed  Liabilities  (to the
extent applicable to each such Acquired Asset).

     (n) Leases.  The Seller  shall have  obtained  the  waivers,  consents  and
estoppel certificates of any landlord for any property leased from a third party
set forth on Schedule  8.01(n) to the  assignment of any such lease to the Buyer
at the Closing in form and substance reasonably satisfactory to the Buyer.

     (o) Indebtedness.  The Seller shall have provided to the Buyer evidence, in
form and substance  reasonably  satisfactory to the Buyer, that all Encumbrances
on  the  Acquired   Assets  (other  than  Permitted   Encumbrances   or  Assumed
Liabilities) have been terminated or otherwise discharged.

     (p) The  Trademark  Licenses.  The Buyer and the relevant  Seller  Entities
shall have entered into the Trademark Licenses.

     (q) Funding.  At the Closing,  the Buyer's debt  financing  sources fund in
accordance with the Final Commitment Letter.

     (r) The Pomfret Lease. The Buyer shall have entered into a written lease
agreement with the landlord of the Leased Property located in Pomfret,
Connecticut, substantially in the form attached hereto as Exhibit Q (the
"Pomfret Lease").

     (s)  The  Collectron  Agreement.  The  Buyer  shall  have  entered  into an
agreement   with   Collectron   International   Management,   Inc.,  an  Arizona
corporation,  substantially  in the form attached  hereto as Exhibit S (the "New
Collectron Agreement").

     (t) The  Cleveland  Lease  Amendment.  The Buyer shall have entered into an
amendment  of the  lease  for  the  Leased  Property  in  Cleveland,  Ohio  (the
"Cleveland Lease") with the landlord under the Cleveland Lease, substantially in
the form attached hereto as Exhibit T (the "Cleveland Lease Amendment").

     (u) The Cleveland Agreement. Each of ASR, Megas, the Buyer and the landlord
under the Cleveland  Lease  (Weston  Property  Investments  III, Ltd. and Weston
Design/Build,  Inc.) shall have  entered  into an  agreement  relating to, among
other things, the repairs of the roof of the building that is the subject of the
Cleveland  Lease,  in the form  attached  hereto as  Exhibit  U (the  "Cleveland
Agreement);  and the Cleveland Agreement shall have become binding in accordance
with its terms.

IX.  TERMINATION, AMENDMENT AND WAIVER

     9.01  Termination.  This  Agreement  may,  without  the  need of  judicial,
arbitral or other resolution or declaration,  be terminated and the transactions
contemplated hereby may be abandoned:

     (a) at any time, by mutual written agreement of the Buyer and the Seller;

     (b) by the Buyer,  in writing:  if any of the conditions to the obligations
of the Buyer  contained  in Section 8.01 of this  Agreement  shall not have been
satisfied or, if unsatisfied, waived as of the Closing Date;

(c) by the Seller, in writing, if any of the conditions to the obligations of
the Seller contained in Section 7.01 of this Agreement, shall not have been
satisfied or, if unsatisfied, waived as of the Closing Date;

     (d)  by  either  Party,  in  writing,  if  the  other  Party  breaches  the
confidentiality obligations set forth in Section 5.02(b);

     (e) by the Seller, in writing, pursuant to Section 6.06(a) hereof;

     (f) by the Buyer,  in writing,  pursuant to the  provisions of Section 1.06
hereof; or

     (g) at any time after  December  31, 2001,  by the Buyer or the Seller,  in
writing,  if the Closing  shall not have  occurred for any reason,  other than a
breach of this Agreement by the terminating Party.

     9.02  Effect  of  Termination.  In the  event  of the  termination  of this
Agreement and the abandonment of the transactions  contemplated  hereby pursuant
to Section 9.01 hereof,  this Agreement  shall be of no further force or effect,
except that the obligations  provided for in Section 10.01 and the last sentence
of Section 6.07 hereof, the confidentiality  provision contained in Section 5.02
hereof and the  Confidentiality  Agreement  referred  to in said  Section  shall
survive any  termination of this  Agreement.  In the event of the termination of
this  Agreement  pursuant to Section 9.01 hereof as a result of a breach of this
Agreement,  nothing  in  this  Agreement  shall  prejudice  the  ability  of the
non-breaching  Party from seeking damages from any other Party for any breach of
this Agreement, including, without limitation,  attorneys' fees and the right to
pursue any remedy at law or in equity.

     9.03  Amendment,  Modification  and Waiver.  This Agreement may be amended,
modified or supplemented at any time by written agreement of the Parties hereto.
Any failure of a Party to comply with any term or  provision  of this  Agreement
may be waived by the other Party at any time by an instrument in writing  signed
by or on behalf of such other  Party,  but such waiver or failure to insist upon
strict  compliance with such term or provision shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure to comply.

X.  FEES  AND  EXPENSES; SURVIVAL OF REPRESENTATIONS AND WARRANTIES; AND
    INDEMNIFICATION

     10.01  Fees and  Expenses.  Whether  or not the  transactions  contemplated
hereby are  consummated  pursuant  hereto,  the Buyer,  on the one hand, and the
Seller, on the other hand, shall pay all fees and expenses respectively incurred
by them or on  their  behalf  in  connection  with  or in  anticipation  of this
Agreement and the  consummation of the  transactions  contemplated  hereby.  The
Buyer shall pay any costs to retitle or transfer the Acquired Assets.

     10.02 Survival of  Representations  and  Warranties and Covenants.  (a) The
representations  and  warranties  in this  Agreement  and in any other  document
delivered in connection  herewith shall survive the Closing and shall  terminate
upon the  expiration  of the  period as set  forth  below;  provided,  that such
representations and warranties shall survive as to any claim properly made prior
to the  termination  of such period  until such claim is fully paid or otherwise
resolved  by the Parties  hereto or by a court of  competent  jurisdiction;  and
provided further, that it is specifically  understood that the expiration of any
survival period or the exhaustion of any indemnity  hereunder shall not have the
effect of or be construed as an assumption by the Buyer or any of its Affiliates
of any  liability  of the  Seller,  the Buyer  having  agreed to assume only the
Assumed Liabilities.

          (i)  The  representations  and  warranties  set forth in Section  3.09
               (Employee  Benefit  Plans) shall survive until the  expiration of
               thirty  (30) days  following  the  expiration  of the  applicable
               statute of  limitations  with respect to the matters set forth in
               such Section.

          (ii) The  representations  and  warranties  set forth in Section  3.16
               (Environmental Matters) shall survive until the fifth anniversary
               of the Closing Date.

          (iii)The  representations  and  warranties  set forth in Section  3.19
               (Taxes)  shall  survive  until thirty (30) days after the date on
               which the last applicable  limitation period under applicable Tax
               Laws expires with respect to any taxation  year which is relevant
               in determining any liability under this Agreement with respect to
               Tax matters.

          (iv) The  representations  and  warranties  set forth in Section  3.01
               (Organization  and  Authority),  Section  3.06 (Title to Acquired
               Assets) and  Section  4.01  (Organization  and  Authority)  shall
               survive indefinitely the Closing hereunder.

          (v)  All other  representations and warranties shall survive until the
               second anniversary of the Closing Date.

     (b) Any provision of this  Agreement to the contrary  notwithstanding,  the
Parties  expressly  acknowledge  and agree that: (i) any covenants  entered into
pursuant to this Agreement  which by their express terms may be fully  performed
prior to the Closing  shall  survive  only until the second  anniversary  of the
Closing  Date;  and (ii) any covenants  entered into pursuant to this  Agreement
which by their  express  terms  cannot be fully  performed  prior to the Closing
shall  survive  for a period of time equal to thirty (30) days after such period
of time as is prescribed  for any such  covenants  pursuant to the terms of this
Agreement, or if no time period is prescribed herein, indefinitely.

     10.03 Indemnification Obligations of the Seller. Upon the terms and subject
to the conditions of this Article X, the Seller agrees to indemnify,  defend and
hold  harmless  the  Buyer  and its  Affiliates,  managers,  members,  officers,
employees, agents and representatives  (collectively,  the "Buyer Group") at any
time after  consummation of the Closing,  from and against all demands,  claims,
actions or causes of action, assessments,  losses, damages,  liabilities,  costs
and expenses, including, without limitation,  interest, penalties and reasonable
attorneys',  consultants,  engineers and environmental  professionals'  fees and
expenses  (collectively,  "Damages"),  resulting to, imposed upon or incurred by
the Buyer Group,  or any one of them,  directly or  indirectly,  by reason of or
resulting  from:  (a)  liabilities,  obligations  or claims  (whether  absolute,
accrued,  contingent or otherwise, but excluding (1) the Assumed Liabilities and
(2) any Environmental  Claims (including,  without  limitation,  any liabilities
described  in the  last  sentence  of  Section  1.08)  written  notice  of which
Environmental  Claims are not  provided  to the Seller by the Buyer on or before
the fifth  anniversary  of the  Closing  Date) of or  against  the  Seller,  the
Business or the Acquired  Assets  relating to the conduct of the Business or the
Acquired  Assets on or before the Closing Date,  existing as of the Closing Date
or arising  out of facts,  conditions  or  circumstances  occurring  at or prior
thereto, whether or not such liabilities, obligations or claims are disclosed in
a Schedule to this Agreement;  (b) a breach of any representation or warranty of
the Seller contained in or made pursuant to this Agreement or the Seller Related
Instruments or any facts or circumstances constituting such a breach and written
notice of which is  provided  to the Seller by the Buyer  within the time limits
set forth in Section 10.02; provided, however, that for purposes of this Article
X any such breach (but only as it relates to a breach of the representations and
warranties contained in Sections 3.02(a),  3.04, 3.06(d) and 3.11 (excluding the
defined term  "Material  Contracts")  shall be determined  without regard to any
qualification  for  "immaterial"  or  "material"  contained  in the text of such
representations and warranties; (c) a breach of any covenant or agreement of the
Seller  contained in or made  pursuant to this  Agreement or the Seller  Related
Instruments or any facts or circumstances  constituting  such a breach,  written
notice  of which is  provided  to the  Seller  by the  Buyer  on or  before  the
expiration of the survival  period for such covenant or agreement as provided in
Section 10.02(b);  (d) any intentional  misrepresentation  made by the Seller in
connection  with the  transactions  contemplated by this Agreement or the Seller
Related Instruments;  (e) any Environmental Claim asserted against the Buyer for
which the Buyer may become  liable,  the facts or  circumstances  giving rise to
which occurred on or before the Closing Date,  (including without limitation any
Claim relating to CERCLA  investigation  of the plant facility located in Valley
Park,  Missouri identified in ASR's Form 10-K) and written notice of which Claim
is provided to the Seller by the Buyer on or before the fifth anniversary of the
Closing  Date;  (f) the presence of Materials of  Environmental  Concern in, on,
under,  at or  emanating  from,  any  Acquired  Asset or Leased  Property  or in
connection  with the Business on or prior to the Closing Date and written notice
of which  Claim is  provided  to the  Seller by the Buyer on or before the fifth
anniversary  of  the  Closing  Date;  (g)  any  violation  of   Requirements  of
Environmental Law by the Seller or any other party, at the Leased Property,  the
Owned Property or any Business  Facility the facts or circumstances  giving rise
to which  occurred  in whole or in part prior to the  Closing  Date and  written
notice of which  Claim is  provided  to the Seller by the Buyer on or before the
fifth anniversary of the Closing Date; (h) any liability of the Seller for Taxes
arising  prior to the  Closing  Date or related to periods  prior to the Closing
Date;  (i)  claims  for COBRA  coverage  made by or on behalf of any  current or
former  employees  of the Seller and their  qualified  beneficiaries  other than
claims for COBRA coverage made by or on behalf of any Business  Employees  hired
by the Buyer and subsequently terminated by the Buyer (collectively,  "Claims");
and (j) pre-Closing liabilities, obligations, or claims of or against the Seller
or any of Seller's  Affiliates,  including but not limited to Megas Beauty Care,
Inc.,  relating to (1) that certain Tax Credit  Agreement,  Tax Credit Authority
No. ECDD 97-65,  dated  August 11, 1998,  by and between the State of Ohio,  Tax
Credit  Authority and Megas Beauty Care,  Inc., and (2) that certain  Enterprise
Zone Contract,  dated as of August 1, 1977, by and between the City of Cleveland
and Megas Beauty Care, Inc. If (i) the Buyer continues the Seller's  pre-Closing
course of conduct for a facility  process of the Business and (ii) the Seller is
not  notified  of a Claim  arising out of or in  connection  with such course of
conduct  on or before  the  first  anniversary  of the  Closing  Date,  then the
indemnification by the Seller pursuant to Sections  10.03(e),  (f) or (g) hereof
shall be prorated  based on the time period  during which the process  failed to
comply with  Environmental  Laws,  with the time period of  noncompliance  on or
before the Closing Date  (regardless of facility  ownership)  being allocated to
the  Seller  and the  time  period  of  noncompliance  after  the  Closing  Date
(regardless  of  facility   ownership)   being  allocated  to  the  Buyer.   The
indemnification  set forth in Sections 10.03 (f) and (g) shall include,  without
limitation, any and all costs incurred by any member of the Buyer Group owing to
any  investigation  of the  Leased  Property  or  Business  or any  remediation,
response,   cleanup,   removal  or  restoration  required  to  comply  with  any
requirements of Environmental Law, including,  without  limitation,  in order to
obtain a regulatory  closure and the costs associated with correcting any matter
that  constitutes a breach of Section 3.16 and written  notice of which Claim is
provided  to the Seller by the Buyer on or before the fifth  anniversary  of the
Closing Date, and the costs of repairing or restoring the Acquired  Assets,  the
Leased  Property or the Business after the  performance  of any such  corrective
action or closure.  This  indemnification  provision  is  expressly  intended to
include,  and does  include,  any Claims or  Environmental  Claims  arising as a
result of any strict liability (including,  without limitation, strict liability
arising  under  Environmental  Laws)  imposed or threatened to be imposed on any
member of the  Buyer  Group in  connection  with any of the  indemnified  events
described in this Section.  The right of indemnification  hereunder shall not be
affected,  diminished or reduced as a result of any investigations made by or on
behalf of the Buyer  prior to the  Closing  Date and the Buyer may rely upon all
representations and warranties made by the Seller hereunder, notwithstanding any
such investigations.  The Parties expressly acknowledge and agree that, although
the Buyer may pursue multiple theories of recovery under this Section, the Buyer
shall not be entitled to recover  more than one  hundred  percent  (100%) of its
Damages arising out of the same set of facts or circumstances.

     10.04  Limitation  on the  Liability of the Seller.  Any  provision of this
Agreement  to the  contrary  notwithstanding,  the  liability  of the  Seller to
indemnify  the  members of the Buyer  Group  pursuant  to Section  10.03  hereof
against any Damages  sustained by reason of any Claim shall be limited to Claims
as to which  any such  member of the Buyer  Group has given the  Seller  written
notice thereof on or prior to the expiration of the applicable  time periods set
forth in Section  10.02  hereof,  whether or not any Damages have then  actually
been sustained. Any provision of this Agreement to the contrary notwithstanding,
other  than the last  sentence  of this  Section  10.04,  in no event  shall the
aggregate amount of the Seller's indemnity obligations pursuant to Section 10.03
exceed  the  amount of  $4,750,000  (the  "Claims  Limit").  Subject to the last
sentence of this  Section  10.04,  in no event shall the Seller be liable to the
Buyer unless and until all claims for which Damages are recoverable by the Buyer
under Section 10.03 exceed $100,000 (the "Basket"); provided, however, that once
the level of  Damages  exceeds  the  amount of the  Basket,  the Buyer  shall be
entitled to receive  only the amount of such  Damages in excess of the amount of
the Basket (up to the Claims  Limit) and  provided,  further,  that any  Damages
incurred by the Buyer as a consequence of the Seller's breach of Section 6.08 of
this  Agreement  shall not be  subject to the Basket but shall be subject to the
Claims  Limit.  Other than with respect to (i) Damages  resulting  from fraud or
(ii) any rights of any member of the Buyer Group  which  arise under  common law
(other than breach of  contract) or any federal,  state or local  statutory  Law
(including,  without limitation,  all rules, regulations,  orders thereunder and
all judicial and administrative interpretations thereof) which relate in any way
to  any  environmental  matters  or  any  Materials  of  Environmental  Concern,
including,  without  limitation,  any  Environmental  Claim or any  violation or
alleged  violation at or related to the Acquired Assets and/or by the Seller, in
connection with the Business,  of any Environmental  Laws, the remedies provided
in this  Article X are the  Buyer's  exclusive  remedy  against  the  Seller for
Damages  arising from or in connection  with this  Agreement,  the  transactions
contemplated   hereby,  the  Business,   the  Acquired  Assets  or  the  Assumed
Liabilities.  Anything to the contrary  herein  notwithstanding,  the  following
claims shall not be subject to the Basket or the Claims Limit,  claims  relating
to: (i) fraud,  (ii)  intentional or willful  breach of any covenant,  (iii) the
representations  contained in Sections 3.01 and 3.06, (iv) liabilities which are
not Assumed Liabilities and (v) any breach of the covenants contained in Section
6.06(d) and (e).

     10.05 Indemnification  Obligations of the Buyer. Upon the terms and subject
to the  conditions of this Article X, the Buyer agrees to indemnify,  defend and
hold harmless the Seller,  its Affiliates,  directors,  officers,  shareholders,
employees, agents and representatives (collectively,  the "Seller Group") at any
time after  consummation of the Closing,  from and against all Damages  asserted
against,  resulting to, imposed upon or incurred by the Seller Group, or any one
of  them,  directly  or  indirectly,   by  reason  of  or  resulting  from:  (a)
liabilities,  obligations or claims (whether  absolute,  accrued,  contingent or
otherwise)  relating to the conduct of the Business or the  Acquired  Assets and
arising out of facts,  conditions or  circumstances  occurring after the Closing
Date and not described in Section 10.03; (b) a breach of any  representation  or
warranty of the Buyer  contained  in or made  pursuant to this  Agreement or the
Buyer Related  Instruments  or any facts or  circumstances  constituting  such a
breach  provided,  however,  that for purposes of this Article X any such breach
(but  only as it  relates  to a breach  of the  representations  and  warranties
contained  in  Section  4.02(a))  shall  be  determined  without  regard  to any
qualification  for  "immaterial"  or  "material"  contained  in the text of such
representation  and  warranty;  (c) a breach of any covenant or agreement of the
Buyer  contained  in or made  pursuant to this  Agreement  or the Buyer  Related
Instruments or any facts or circumstances  constituting  such a breach,  written
notice  of  which is  provided  to the  Buyer by the  Seller  on or  before  the
expiration of the survival  period for such covenant or agreement as provided in
Section 10.02(b);  (d) the Assumed Liabilities;  and (e) any illegal pre-Closing
employment  actions  or  omissions  of the Buyer with  respect  to any  Business
Employee (collectively,  the "Seller Claims"). The Parties expressly acknowledge
and agree that,  although  the Seller may pursue  multiple  theories of recovery
under this  Section,  the Seller  shall not be entitled to recover more than one
hundred  percent  (100%) of its Damages  arising out of the same set of facts or
circumstances.

     10.06  Limitation  on the  Liability  of the Buyer.  Any  provision of this
Agreement  to the  contrary  notwithstanding,  the  liability  of the  Buyer  to
indemnify  the  members of the Seller  Group  pursuant to Section  10.05  hereof
against any Damages  sustained by reason of any Seller Claim shall be limited to
Seller  Claims as to which any such  member  of the  Seller  Group has given the
Buyer written  notice  thereof on or prior to the  expiration of the  applicable
time  periods set forth in Section  10.02,  whether or not any Damages have then
actually  been  sustained.  Any  provision  of this  Agreement  to the  contrary
notwithstanding, other than the last sentence of this Section 10.06, in no event
shall the  aggregate  amount of the Buyer's  indemnity  obligations  pursuant to
Section  10.05  exceed the Claims  Limit.  Subject to the last  sentence of this
Section  10.06,  in no event shall the Buyer be liable to the Seller  unless and
until all claims for which Damages are  recoverable  by the Seller under Section
10.05  exceed  the  Basket;  provided,  however,  that once the level of Damages
exceeds  the amount of the Basket,  the Buyer shall be entitled to receive  only
the  amount of such  Damages  in excess of the  amount of the  Basket (up to the
Claims Limit) and provided  further that any Damages incurred by the Seller as a
consequence of the Buyer's breach of Section 6.08 of this Agreement shall not be
subject to the Basket, but shall be subject to the Claims Limit. Other than with
respect to Damages resulting from fraud, the remedies provided in this Article X
are the Seller's  exclusive  remedy for Damages  arising in connection with this
Agreement,  the  transaction  contemplated  hereby,  the Business,  the Acquired
Assets  or  the   Assumed   Liabilities.   Anything  to  the   contrary   herein
notwithstanding,  the following claims shall not be subject to the Basket or the
Claims Limit,  claims relating to: (i) fraud, (ii) intentional or willful breach
of any  covenant;  (iii) the  representations  contained in Section  4.01,  (iv)
Section 10.05(d) and (v) Section 10.05(e).

     10.07 Response Action.  If any investigation or monitoring or any clean-up,
containment,   restoration,  removal  or  other  Remediation  (collectively  the
"Response Action") is required under any applicable  Environmental Law and which
involves a claim  properly made by the Buyer under  Section  10.03  hereof,  the
Seller shall  either  perform or cause to be  performed  the Response  Action in
compliance with Requirements of Environmental  Laws, or shall promptly reimburse
Buyer for the cost of such Response Action.  In the event that the Seller elects
to perform the Response Action, all Response Action shall be performed by one or
more contractors and consulting engineers, selected by the Seller and reasonably
approved  in advance in writing  by the Buyer,  and under the  supervision  of a
consulting engineer.  The Seller shall bear responsibility for fees and expenses
of the consulting engineer.  Otherwise, the Buyer shall select the contractor(s)
and the  consulting  engineer.  All costs and expenses of such  Response  Action
shall be paid either directly,  or in the form of reimbursement to the Buyer, by
the Seller  including,  without  limitation,  the charges of such  contractor(s)
and/or the consulting engineer,  and the Buyer's reasonable  attorneys' fees and
costs incurred in connection with monitoring or review of such Response  Action.
In the event the Seller shall fail to timely commence, or cause to be commenced,
or fail to diligently  prosecute to completion,  such Response Action, the Buyer
may cause  such  Response  Action to be  performed,  and all costs and  expenses
thereof, or incurred in connection therewith, shall be Damages.

     10.08 Conditions of Indemnification. The obligations and liabilities of the
Seller,  on the one hand, and of the Buyer,  on the other hand, to indemnify the
Buyer Group or the Seller Group, as the case may be, with respect to claims made
by third parties shall be subject to the following terms and conditions:

     (a) The indemnified party will give the indemnifying party prompt notice of
any such claim, and the indemnifying party shall have the right to undertake the
defense thereof, at the indemnifying party's expense, by representatives  chosen
by the indemnifying party and reasonably acceptable to the indemnified party.

     (b) If the indemnifying  party,  within thirty (30) days (unless applicable
Laws provide for a shorter time period for a required  response) after notice of
any such claim,  fails to assume the defense of the  indemnified  party  against
which such claim has been asserted,  the  indemnified  party shall (upon further
notice to the  indemnifying  party)  have the right to  undertake  the  defense,
compromise or settlement of such claim on behalf of and for the account and risk
of the indemnifying party, at the indemnifying  party's expense,  subject to the
right of the indemnifying  party to assume the defense of such claim at any time
prior to settlement, compromise or final determination thereof.

     (c) If, in the opinion of the indemnified party's legal counsel, a conflict
of interest  with  respect to any claim  exists  between the  indemnified  party
against which a claim has been asserted and the  indemnifying  party,  then such
indemnified party shall have the right to retain its own counsel with respect to
such claim;  provided that the reasonable  fees and expenses of one such counsel
shall be at the expense of the indemnifying party.

     (d) Any provision of this Article X to the contrary notwithstanding, (i) if
there is a reasonable  probability  that a claim may  materially  and  adversely
affect the  indemnified  party other than as a result of money  damages or other
money payments,  the indemnified party shall have the right, at its own cost and
expense, to defend, compromise or settle such claim; provided,  however, that if
such claim is settled without the indemnifying  party's consent, the indemnified
party  shall  be  deemed  to  have  waived  all  rights  hereunder  against  the
indemnifying  party for money  damages  arising out of such claim,  and (ii) the
indemnifying  party shall not,  without the written  consent of the  indemnified
party,  settle or  compromise  any claim or consent to the entry of any judgment
which  does not  include  as an  unconditional  term  thereof  the giving by the
claimant  or the  plaintiff  to the  indemnified  party  of a  release  from all
liability in respect of such claim.

     10.09 Waiver of Special Damages.  THE BUYER AND THE SELLER HAVE EACH AGREED
TO WAIVE ANY RIGHT TO  RECEIVE  PUNITIVE,  CONSEQUENTIAL,  SPECIAL  OR  INDIRECT
DAMAGES  RELATING  IN ANY  WAY TO THIS  AGREEMENT  OR THE  PURCHASE/SALE  OF THE
BUSINESS AND/OR THE ACQUIRED ASSETS,  IRRESPECTIVE OF THE LEGAL THEORY ASSERTED,
WITH THE EXCEPTION OF FRAUD.

XI.  MISCELLANEOUS

     11.01 Further Assurances.  From time to time after the Closing Date, at the
request of any Party hereto and at the expense of the Party so  requesting,  the
Buyer and the Seller  shall  execute and deliver to such  requesting  Party such
documents  and take such other action as such  requesting  Party may  reasonably
request in order to consummate more  effectively the  transactions  contemplated
hereby.

     11.02  Notices.  All  notices,   requests,   demands,   waivers  and  other
communications  required or permitted to be given under this Agreement  shall be
in writing and shall be deemed to have been duly given if delivered by hand,  by
overnight delivery service,  or by facsimile  transmission  (receipt of which is
confirmed):

      (a)   If to the Buyer, to:

            U. S. Cotton, LLC
            590 Laser Road
            Rio Rancho, New Mexico  87124-4517
            Attention:  Anthony Thomas
            Facsimile No.:  (505) 892-0977

            with a copy to:

            Locke Liddell & Sapp LLP
            2200 Ross Avenue, Suite 2200
            Dallas, Texas  75201-6776
            Attention:  Charles C. Reeder, Esq.
            Facsimile No.:  (214) 740-8800

      (b)   If to the Seller, to:

            American Safety Razor Company
            240 Cedar Knolls Road, #401
            Cedar Knolls, New Jersey  07927
            Attention: J. Andrew Bolt
            Facsimile No.:  (973)   326-9004

            J.W. Childs Associates, L.P.
            One Federal Street, 21st floor
            Boston, Massachusetts  02110
            Attention:  Adam L. Suttin
            Facsimile No.:  (617) 753-1101

            with a copy to:

            Kaye Scholer LLP
            425 Park Avenue
            New York, New York  10022
            Attention:  Stephen C. Koval, Esq.
            Facsimile No.:  (212) 836-8689


or to such other person or address as any Party shall specify by notice in
writing to the other Party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date on which so
hand-delivered, on the next day following their distribution by overnight
delivery service and on the date on which faxed and confirmed, except for a
notice of change of address, which shall be effective only upon receipt thereof.

     11.03 Entire Agreement. The preamble to this Agreement forms a part of this
Agreement. This Agreement, the Exhibits,  Schedules and other documents referred
to  herein  which  form  a  part  hereof  (including,  without  limitation,  the
Confidentiality Agreement referred to in Section 5.02 hereof) contain the entire
understanding  of the Parties  hereto with respect to the subject matter hereof.
This Agreement  supersedes all prior  agreements  and  understandings,  oral and
written, with respect to its subject matter.

     11.04  Severability.  Should any provision of this Agreement for any reason
be  declared  invalid  or  unenforceable,  such  decision  shall not  affect the
validity or  enforceability  of any of the other  provisions of this  Agreement,
which other provisions shall remain in full force and effect and the application
of such invalid or  unenforceable  provision to persons or  circumstances  other
than those as to which it is held invalid or unenforceable shall be valid and be
enforced to the fullest extent permitted by Law.

     11.05 Binding Effect; Assignment.  This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties  hereto and
their respective  successors and permitted  assigns,  but except as contemplated
herein,  neither this Agreement nor any of the rights,  interests or obligations
hereunder  shall be assigned,  directly or indirectly,  by either of the Parties
hereto without the prior written consent of the other Party hereto,  except that
the Buyer may without such consent collaterally assign its rights, interests and
obligations  hereunder,  in whole or in part, to an Affiliate of the Buyer or to
an agent for the Buyer's lenders;  provided,  however, that no assignment by the
Buyer shall relieve the Buyer of any of its obligations hereunder.

     11.06 Third-Party  Beneficiaries.  This Agreement is not intended and shall
not be deemed to confer upon or give any person,  except the Parties  hereto and
their respective successors and permitted assigns, any remedy, claim, liability,
reimbursement,  cause of  action  or other  right  under  or by  reason  of this
Agreement.

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

     11.08  Interpretation.  The article and section headings  contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the Parties and shall not in any way affect the meaning or  interpretation of
this  Agreement.  As used in this  Agreement,  the term "person"  shall mean and
include an individual, a partnership,  a joint venture, a corporation, a limited
liability  company,  an unlimited  liability company, a trust, an unincorporated
organization and any Government Authority.  As used in this Agreement,  the term
"Affiliate"  shall have the meaning set forth in Rule 12b-2 of the General Rules
and  Regulations of the Securities  Exchange Act of 1934, as amended,  and shall
expressly include any subsidiary of the Seller.  As used in this Agreement,  the
term "including" shall mean by way of example and not by way of limitation,  and
each  accounting  term not otherwise  defined in this  Agreement  shall have the
meaning  assigned  to it in  accordance  with GAAP.  Unless the  context of this
Agreement otherwise requires, (a) words of any gender shall be deemed to include
each other  gender;  (b) words using the  singular or plural  number  shall also
include the plural or singular number, respectively; and (c) the terms "hereof,"
"herein,"  "hereby,"  "hereto,"  and  derivative or similar words shall refer to
this entire Agreement.

     11.09  Specific  Performance.  Each Party  hereto  acknowledges  that money
damages would be both incalculable and an insufficient  remedy for any breach of
this  Agreement  by such Party and that any such  breach  would  cause the other
Party hereto irreparable harm. Accordingly,  each Party hereto also agrees that,
in the  event of any  breach or  threatened  breach  of the  provisions  of this
Agreement  by such Party,  the other Party hereto shall be entitled to equitable
relief  without the  requirement  of proving  actual damage or posting a bond or
other  security,  including in the form of  injunctions  and orders for specific
performance.

     11.10  Governing Law. This  Agreement  shall be governed by the laws of the
State of  Delaware,  without  regard to the  principles  of  conflicts of law or
choice of law thereof, and of the United States of America.

     11.11  Knowledge.  Where  any  representation  or  warranty  of the  Seller
contained  in  this  Agreement  is  expressly  qualified  by  reference  "to the
knowledge  of the  Seller," or "to the best  knowledge of the Seller" or similar
phrases it refers to the  knowledge of the Seller as to the existence or absence
of facts  that are the  subject of such  representations  and  warranties  after
consultation with and due inquiry of Karen August,  Andrew Bolt,  Michael Ferry,
Lawrence Friedman,  James Murphy,  James Nelson,  Greg Tilton, Adam Suttin, Paul
Tonneson,  John Stefan, Ed Noufer,  Nelson Everhart,  Joel Kaplan, John Levinsky
and Mark Ruth.

     11.12 Waiver of Jury Trial. EACH PARTY HEREBY  IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION  HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.

     11.13 Consent to Personal  Jurisdiction;  Agent and Method for Service; and
Choice of Forum.  AS PART OF THE  CONSIDERATION  FOR VALUE RECEIVED  PURSUANT TO
THIS AGREEMENT, AND REGARDLESS OF THE LOCATION OF ANY PRESENT OR FUTURE DOMICILE
OR  PRINCIPAL  PLACE OF BUSINESS  OF ANY PARTY,  EACH PARTY  HEREBY  IRREVOCABLY
CONSENTS IN ADVANCE TO THE PERSONAL  JURISDICTION  OF THE CHANCERY  COURT OF THE
STATE OF DELAWARE,  TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BROUGHT AGAINST
SUCH PARTY BY ANY OTHER PARTY AND  PERTAINING TO THIS AGREEMENT OR TO ANY MATTER
RELATING TO OR ARISING  OUT OF THIS  AGREEMENT.  EACH PARTY,  FOR ITSELF AND ITS
SUCCESSORS AND ASSIGNS,  HEREBY  DESIGNATES AND APPOINTS ITS REGISTERED AGENT IN
THE STATE OF  DELAWARE,  AND ITS  SUCCESSORS  OR ASSIGNS AS ITS LEGAL  AGENT AND
ATTORNEY-IN-FACT UPON WHOM ALL PROCESS AGAINST SUCH PARTY IN ANY SUIT, ACTION OR
PROCEEDING IN RESPECT OF ANY MATTER AS TO WHICH IT WAS SUBMITTED TO JURISDICTION
UNDER THIS SECTION MAY BE SERVED WITH THE SAME EFFECT AS IF IT HAD LAWFULLY BEEN
SERVED WITH SUCH PROCESS IN ITS JURISDICTION OF INCORPORATION OR ORGANIZATION OR
IN ANY JURISDICTION IN WHICH SUCH PARTY LAWFULLY  TRANSACTS  BUSINESS,  IT BEING
EXPRESSLY   UNDERSTOOD  THAT  SUCH  DESIGNATION  AND  APPOINTMENT  SHALL  BECOME
EFFECTIVE WITHOUT FURTHER ACTION ON THE PARTY OF SUCH PARTY.

      SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING IN RESPECT OF
ANY MATTER HEREUNDER MAY BE MADE BY DELIVERY OF THE SAME PERSONALLY OR BY
MAILING THE SAME BY REGISTERED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED
AT THE ADDRESS INDICATED IN THIS SECTION 11.13 WITH A COPY TO SUCH PARTY'S
ADDRESS SPECIFIED UNDER THE NOTICE PROVISIONS OF THIS AGREEMENT, OR BY ANY OTHER
METHOD AUTHORIZED BY THE LAWS OF THE STATE OF DELAWARE.

      AS FURTHER CONSIDERATION FOR VALUE RECEIVED PURSUANT TO THIS AGREEMENT,
AND REGARDLESS OF THE LOCATION OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL
PLACE OF BUSINESS OF ANY OF THE PARTIES, EACH PARTY HEREBY IRREVOCABLY CONSENTS
AND AGREES THAT THE AFORESAID COURT SHALL BE AN APPROPRIATE FORUM FOR SUCH
ACTION.

      EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN SUCH COURT, INCLUDING, WITHOUT
LIMITATION, ANY CLAIM BASED UPON IMPROPER VENUE OR FORUM NON CONVENIENS. EACH OF
THE PARTIES AGREES NOT TO SEEK, AND HEREBY WAIVES, ANY REVIEW OF THE JUDGMENT OF
THE AFORESAID COURT BY ANY COURT OF ANY OTHER STATE, NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT.

XII.  DEFINITIONS AND TERMS

     12.01 Certain Definitions.  As used in this Agreement,  the following terms
shall have the meanings set forth or referenced below:

      "Acquired Assets" shall have the meaning set forth in Section 1.01(a)
hereof.

      "Acquisition Transaction" shall have the meaning set forth in Section 5.09
hereof.

      "Affiliate" shall have the meaning set forth in Section 11.08 hereof.

      "Affiliate Transactions" shall have the meaning set forth in Section 3.18
hereof.

      "Agreement" shall have the meaning set forth in the Preamble hereof.

      "Allocation" shall have the meaning set forth in Section 1.07 hereof.

      "ASR" shall have the meaning set forth in the Preamble hereof.

      "ASR Canada" shall have the meaning set forth in the Preamble hereof.

      "ASR Subsidiaries" shall have the meaning set forth in Section 1.10(e)
hereof.

      "Assessment Date" shall have the meaning set forth in Section 1.06(d)
hereof.

      "Assessments" shall have the meaning set forth in Section 3.13 hereof.

      "Assignment and Assumption Agreement" shall have the meaning set forth in
Section 1.01(c) hereof.

      "Assumed Liabilities" shall have the meaning set forth in Section 1.08
hereof.

      "Assumed Plans" shall have the meaning set forth in Section 3.09(k)
hereof.

      "Audit" shall have the meaning set forth in Section 1.06(a) hereof.

      "Basket" shall have the meaning set forth in Section 10.04 hereof.

      "Bill of Sale" shall have the meaning set forth in Section 1.01(c) hereof.

      "Books and Records" shall have the meaning set forth in Section 1.04(g)
hereof.

      "Bulk Products" shall have the meaning set forth in Section 6.04(a)
hereof.

      "Business" shall have the meaning set forth in the Preamble hereof.

      "Business Employees" shall have the meaning set forth in Section 3.10(a).

      "Business Facility" shall have the meaning set forth in Section 3.16(b)(1)
hereof.

      "Business Financial Statements" shall have the meaning set forth in
Section 3.03 hereof.

      "Buyer" shall have the meaning set forth in the Preamble hereof.

      "Buyer Financial Statements" shall have the meaning set forth in Section
4.06 hereof.

      "Buyer Group" shall have the meaning set forth in Section 10.03 hereof.

      "Buyer Related Instruments" shall have the meaning set forth in Section
4.01 hereof.

      "Buyer Unaudited Interim Financial Statements" shall have the meaning set
forth in Section 4.06 hereof.

      "Canadian Bill of Sale" shall have the meaning set forth in Section
1.10(d) hereof.

      "Canadian Inventory" shall have the meaning set forth in Section 1.10(d)
hereof.

      "Claims" shall have the meaning set forth in Section 10.03 hereof.

      "Claims Limit" shall have the meaning set forth in Section 10.04 hereof.

      "Cleveland Agreement" shall have the meaning set forth in Section 8.01(u)
hereof.

       "Cleveland Lease" shall have the meaning set forth in Section 8.01(t)
hereof.

      "Cleveland Lease Amendment" shall have the meaning set forth in Section
8.01(t) hereof.

      "Closing" shall have the meaning set forth in Section 1.01(a) hereof.

      "Closing Date" shall have the meaning set forth in Section 1.03 hereof.

      "Closing Working Capital" shall have the meaning set forth in Section
1.06(a) hereof.

      "COBRA" shall have the meaning set forth in Section 3.09(d) hereof.

      "Code" shall have the meaning set forth in Section 3.09(a) hereof.

      "Collectron" shall have the meaning set forth in Section 6.21 hereof.

      "Competing Business" shall have the meaning set forth in Section 6.04(a)
hereof.

       "Confidentiality Agreement" shall have the meaning set forth in Section
5.02(b) hereof.

      "Contracts" shall have the meaning set forth in Section 3.02(a) hereof.

      "Cotton Products" shall have the meaning set forth in the Preamble hereof.

      "Damages" shall have the meaning set forth in Section 10.03 hereof.

      "Deeds" shall have the meaning set forth in Section 1.01(c) hereof.

      "Dollars" shall have the meaning set forth in Section 1.02(a) hereof.

      "Employee Benefit Plans" shall have the meaning set forth in Section
3.09(a) hereof.

      "Encumbrances" shall have the meaning set forth in the Preamble hereof.

      "Enterprise Contract" shall have the meaning set forth in Section 6.20
hereof.

      "Environmental Claim" shall have the meaning set forth in Section
3.16(b)(1) hereof.

      "Environmental Information" shall have the meaning set forth in Section
5.02(c) hereof.

      "Environmental Insurance Policy" shall have the meaning set forth in
Section 6.10 hereof.

      "Environmental Laws" shall have the meaning set forth in Section
3.16(b)(2) hereof.

      "Environmental Permits" shall have the meaning set forth in Section
3.16(b)(3) hereof.

      "ERISA" shall have the meaning set forth in Section 3.09(a) hereof.

      "ERISA Affiliate" shall have the meaning set forth in Section 3.09(a)
hereof.

      "Excluded Assets" shall have the meaning set forth in Section 1.01(b)
hereof.

       "Final Commitment Letter" shall have the meaning set forth in Section
6.07 hereof.

      "Final Pension Liability Statement" shall have the meaning set forth in
Section 6.06(f) hereof.

      "Final Statement" shall have the meaning set forth in Section 1.06(a)
hereof.

      "Foreign Plans" shall have the meaning set forth in Section 3.09(g)
hereof.

      "401(k) Plans" shall have the meaning set forth in Section 6.06(d) hereof.

      "GAAP" shall have the meaning set forth in Section 3.03 hereof.

      "Government Authorities" shall have the meaning set forth in Section
3.02(b) hereof.

      "Inactive Intellectual Property" shall have the meaning set forth in
Section 3.07(a) hereof.

      "Including" shall have the meaning set forth in Section 11.08 hereof.

      "Independent Accounting Firm" shall have the meaning set forth in Section
1.06(a) hereof.

      "Independent Actuarial Firm" shall have the meaning set forth in Section
6.06(f) hereof.

      "Initial Purchase Price" shall have the meaning set forth in Section
1.02(a) hereof.

      "Intellectual Property" shall have the meaning set forth in Section
3.07(a) hereof.

      "Interim Business Financial Statements" shall have the meaning set forth
in Section 3.03 hereof.

      "Inventory" shall have the meaning set forth in Section 1.06(b) hereof.

      "Inventory Audit" shall have the meaning set forth in Section 1.06(d)
hereof.

      "Inventory Audit Date" shall have the meaning set forth in Section 1.06(d)
hereof.

      "Inventory Surplus Amount" shall have the meaning set forth in Section
1.06(b) hereof.

      "IRS" shall have the meaning set forth in Section 1.07 hereof.

      "Landlord Lien Waivers" shall have the meaning set forth in Section
1.04(h) hereof.

      "Laws" shall have the meaning set forth in Section 3.12 hereof.

      "Lease Assignment and Assumption Agreement" shall have the meaning set
forth in Section 1.01(c) hereof.

      "Leased Property" shall have the meaning set forth in Section 3.06(b)
hereof.

      "Letter Amendment" shall have the meaning set forth in Section 6.21
hereof.

      "Licensed Trademarks" shall have the meaning set forth in Section 6.14
hereof.

      "Litigation" shall have the meaning set forth in Section 3.08(a) hereof.

      "Master Trust" shall have the meaning set forth in Section 6.06(e) hereof.

      "Material Adverse Effect" shall have the meaning set forth in Section
3.02(b) hereof.

      "Material Contracts" shall have the meaning set forth in Section 3.11
hereof.

      "Material Environmental Liability" shall have the meaning set forth in
Section 3.16(b)(4) hereof.

      "Materials of Environmental Concern" shall have the meaning set forth in
Section 3.16(b)(5) hereof.

      "Megas" shall have the meaning set forth in the Preamble hereof.

      "Megas PR" shall have the meaning set forth in the Preamble hereof.

      "Mercer" shall have the meaning set forth in Section 6.06(f) hereof.

      "Mexican Acquired Assets" shall have the meaning set forth in Section
1.10(b) hereof.

      "Mexico Bill of Sale" shall have the meaning set forth in Section 1.10(b)
hereof.

      "Multiemployer Plan" shall have the meaning set forth in Section 3.09(b)
hereof.

      "New Collectron Agreement" shall have the meaning set forth in Section
8.01(s) hereof.

      "Obsolete Inventory" shall have the meaning set forth in Section 3.15(a)
hereof.

      "Other Instruments" shall have the meaning set forth in Section 1.01(c)
hereof.

      "Owned Real Property" shall have the meaning set forth in Section 3.06(b)
hereof.

      "Parties" shall have the meaning set forth in the Preamble hereof.

      "Party" shall have the meaning set forth in the Preamble hereof.

      "PBGC" shall have the meaning set forth in Section 3.09(c) hereof.

      "Pension Liability Amount" shall have the meaning set forth in Section
6.06(f) hereof.

      "Pension Liability Statement" shall have the meaning set forth in Section
6.06(f) hereof.

      "Permits" shall have the meaning set forth in Section 1.05(d) hereof.

      "Permitted Encumbrances" shall have the meaning set forth in Section
3.06(b) hereof.

      "Person" shall have the meaning set forth in Section 11.08 hereof.

      "Personna" shall have the meaning set forth in the Preamble hereof.

      "Pomfret Lease" shall have the meaning set forth in Section 8.01(r)
hereof.

      "PR Acquired Assets" shall have the meaning set forth in Section 1.10(a)
hereof.

      "PR Code" shall have the meaning set forth in Section 3.09(c) hereof.

      "PR Treasury" shall have the meaning set forth in Section 3.09(c) hereof.

      "Promotional Obligations" shall have the meaning set forth in Section 3.25
hereof.

      "Property" shall have the meaning set forth in Section 3.23 hereof.

      "Proposed Employment Offer Notice" shall have the meaning set forth in
Section 6.06(a) hereof.

      "Puerto Rico Bill of Sale" shall have the meaning set forth in Section
1.10(a) hereof.

      "Puerto Rico Consent" shall have the meaning set forth in Section 6.17
hereof.

      "Puerto Rico Grant" shall have the meaning set forth in Section 6.24
hereof.

      "Puerto Rico Lease" shall have the meaning set forth in Section 6.17
hereof.

      "Purchase Price" shall have the meaning set forth in Section 1.02(a)
hereof.

      "Receivables" shall have the meaning set forth in Section 3.15(b) hereof.

      "Remediation" shall have the meaning set forth in Section 3.16(b)(6)
hereof.

      "Required Working Capital" shall have the meaning set forth in Section
1.06(b) hereof.

      "Requirement(s) of Environmental Law(s)" shall have the meaning set forth
in Section 3.16(b)(7) hereof.

      "Response Action" shall have the meaning set forth in Section 10.07
hereof.

      "Retained Businesses" shall have the meaning set forth in Section 2.01
hereof.

      "Retained Intellectual Property" shall have the meaning set forth in
Section 3.07(a) hereof.

      "Schedules" shall have the meaning set forth in Section 5.07 hereof.

      "Seller" shall have the meaning set forth in the Preamble hereof.

      "Seller Claims" shall have the meaning set forth in Section 10.05 hereof.

      "Seller Entity" shall have the meaning set forth in the Preamble hereof.

      "Seller Group" shall have the meaning set forth in Section 10.05 hereof.

      "Seller Related Instruments" shall have the meaning set forth in Section
3.01(b) hereof.

      "SH&E Law" shall have the meaning set forth in Section 3.16(b)(8) hereof.

      "Statement" shall have the meaning set forth in Section 1.06(a) hereof.

      "Sublease" shall have the meaning set forth in Section 6.21 hereof.

      "Subordination Non-Disturbance and Attornment Agreements" shall have the
meaning set forth in Section 1.04(h) hereof.

      "Tax" or "Taxes" shall have the meaning set forth in Section 3.19(i)
hereof.

      "Tax Return(s)" shall have the meaning set forth in Section 3.19(i)
hereof.

      "Trademark Assignments" shall have the meaning set forth in Section
1.01(c) hereof.

      "Trademark Licenses" shall have the meaning set forth in Section 6.14
hereof.

      "Transition Services Agreement" shall have the meaning set forth in
Section 6.09 hereof.

      "Undertaking" shall have the meaning set forth in Section 1.02(a) hereof.

      "Union Plan" shall have the meaning set forth in Section 6.06(d) hereof.

      "USC Canada" shall have the meaning set forth in Section 1.10(d) hereof.

      "USC Subsidiaries" shall have the meaning set forth in Section 1.10(e)
hereof.

      "Valley Park" shall have the meaning set forth in the Preamble hereof.

      "WARN" and "WARN liabilities" shall have the meanings set forth in Section
6.06 hereof.



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<PAGE>


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

                                    THE BUYER:

                                    U.S. COTTON, LLC,
                                    a Delaware limited liability company


                                    By:/s/Anthony Thomas
                                       ---------------------------------------
                                       Anthony Thomas
                                       President


                                    THE SELLER ENTITIES:

                                    AMERICAN SAFETY RAZOR COMPANY,
                                    a Delaware corporation


                                    By:/s/James D. Murphy
                                       ---------------------------------------
                                       Name: James D. Murphy
                                             ---------------------------------
                                       Title: President
                                              --------------------------------


                                    MEGAS BEAUTY CARE, INC.,
                                    a Delaware corporation


                                    By: /s/James D. Murphy
                                        --------------------------------------
                                       Name: James D. Murphy
                                             ---------------------------------
                                       Title: Chief Executive Officer
                                              --------------------------------


                                    VALLEY PARK REALTY, INC.,
                                    a Missouri corporation


                                    By: /s/James D. Murphy
                                        --------------------------------------
                                         Name: James D. Murphy
                                               -------------------------------
                                         Title: Chief Executive Officer
                                                ------------------------------


                                    MEGAS DE PUERTO RICO, INC.,
                                    a Puerto Rican corporation


                                    By: /s/ James D. Murphy
                                        --------------------------------------
                                         Name: James D. Murphy
                                               -------------------------------
                                         Title: Chief Executive Officer
                                                ------------------------------


                                    AMERICAN SAFETY RAZOR
                                    OF CANADA LIMITED,
                                    a Canadian corporation


                                    By: /s/James D. Murphy
                                        --------------------------------------
                                         Name: James D. Murphy
                                               -------------------------------
                                         Title: Chief Executive Officer
                                                ------------------------------


                             PERSONNA INTERNATIONAL
                                    DE PUERTO RICO, INC.,
                             a Delaware corporation


                                    By: /s/James D. Murphy
                                        --------------------------------------
                                         Name: James D. Murphy
                                               -------------------------------
                                         Title: Chief Executive Officer
                                                ------------------------------