**Exhibit10.1**

 

 

 
|                                    | ** ** | ** ** |
|------------------------------------|------------|------------|
| ** **                         |       |
| **ASSET  PURCHASE AGREEMENT**      |       |
| ** **                         |       |
| **BETWEEN**                        |       |
| ** **                         |       |
| **MVP  GROUP INTERNATIONAL, INC.** |       |
| ** **                         |       |
| **AND**                            |       |
| ** **                         |       |
| **CANDLE  CORPORATION OF AMERICA** |       |
| ** **                         |       |
| **dated  as of**                   |       |
| ** **                         |       |
| **April  27, 2007**                |       |
| ** **                         | ** ** | ** ** |
|                                    | ** ** | ** ** |
|                                    |            |            |  |

** **

 

 

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**TABLEOF CONTENTS**

** **
|                |       |                                             |       | Page   |
|----------------|------------|--------------------------------------------------|------------|--------|
|           |       |                                             |       |   |
|           |       |                                             |       |   |
| **SECTION 1.** | ** ** | **DEFINITIONS**                                  | ** ** | **1**  |
|           |       |                                             |       |   |
| **SECTION 2.** | ** ** | **BASIC TRANSACTION**                            | ** ** | **8**  |
|           |       |                                             |       |   |
|           | (A)        | Purchase and Sale of Assets                      |       | 8      |
|           | (B)        | Assumption of Liabilities                        |       | 8      |
|           | (C)        | Purchase Price                                   |       | 8      |
|           | (D)        | The Closing                                      |       | 8      |
|           | (E)        | Deliveries at the Closing                        |       | 9      |
|           | (F)        | Purchase Price Allocation                        |       | 9      |
|           | (G)        | Net Asset Value Adjustment                       |       | 9      |
|           |       |                                             |       |   |
| **SECTION 3.** | ** ** | **SELLER’S REPRESENTATIONS AND WARRANTIES** | ** ** | **11** |
|           |       |                                             |       |   |
|           | (A)        | Organization of Seller                           |       | 12     |
|           | (B)        | Authorization of Transaction                     |       | 12     |
|           | (C)        | Non-contravention                                |       | 12     |
|           | (D)        | Brokers’ Fees                               |       | 12     |
|           | (E)        | Title to Assets                                  |       | 12     |
|           | (F)        | Selected Financial Data                          |       | 13     |
|           | (G)        | [RESERVED]                                       |       | 14     |
|           | (H)        | Leased Real Property                             |       | 14     |
|           | (I)        | Acquired Intellectual  Property                  |       | 15     |
|           | (J)        | Acquired Tangible Assets                         |       | 17     |
|           | (K)        | Acquired Inventory                               |       | 17     |
|           | (L)        | Acquired Contracts                               |       | 17     |
|           | (M)        | Acquired Receivables                             |       | 17     |
|           | (N)        | Environmental, Health, and  Safety Matters       |       | 18     |
|           | (O)        | Legal Compliance                                 |       | 19     |
|           | (P)        | Tax Matters                                      |       | 19     |
|           | (Q)        | Litigation                                       |       | 19     |
|           | (R)        | Product Warranty; Product  Liability             |       | 19     |
|           | (S)        | Solvency                                         |       | 20     |
|           | (T)        | Employees                                        |       | 20     |
|           | (U)        | Accounts Payable                                 |       | 20     |
|           | (V)        | Acquired Assets                                  |       | 20     |
|           |       |                                             |       |   |
| **SECTION 4.** | ** ** | **BUYER’S REPRESENTATIONS AND WARRANTIES**  | ** ** | **20** |
|           |       |                                             |       |   |
|           | (A)        | Organization of Buyer                            |       | 20     |
|           | (B)        | Ownership of Buyer                               |       | 20     |
|           | (C)        | Authorization of  Transaction                    |       | 20     |
|           | (D)        | Non-contravention                                |       | 21     |
|           | (E)        | Brokers’ Fees                               |       | 21     |
|                |            |                                                  |            |        |  |  |

 

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| **SECTION 5.**  | ** ** | **[RESERVED]**                                        | ** ** | **21** |
|-----------------|------------|-------------------------------------------------------|------------|--------|
|            |       |                                                  |       |   |
| **SECTION 6.**  | ** ** | **POST-CLOSING COVENANTS**                            | ** ** | **21** |
|            |       |                                                  |       |   |
|            | (A)        | General                                               |       | 21     |
|            | (B)        | Transition                                            |       | 22     |
|            | (C)        | Non-Competition                                       |       | 22     |
|            | (D)        | Preservation of Records                               |       | 24     |
|            | (E)        | Release of Guaranty                                   |       | 24     |
|            | (F)        | Wal-Mart Relationship                                 |       | 24     |
|            | (G)        | Employee Matters                                      |       | 25     |
|            |       |                                                  |       |   |
| **SECTION 7.**  | ** ** | **CONDITIONS TO OBLIGATION TO CLOSE**                 | ** ** | **25** |
|            |       |                                                  |       |   |
|            | (A)        | Conditions to Buyer’s  Obligation                |       | 25     |
|            | (B)        | Conditions to Seller’s Obligation                |       | 26     |
|            |       |                                                  |       |   |
| **SECTION 8.**  | ** ** | **REMEDIES FOR BREACHES OF THIS AGREEMENT**           | ** ** | **27** |
|            |       |                                                  |       |   |
|            | (A)        | Survival of Representations  and Warranties           |       | 28     |
|            | (B)        | Indemnification Provisions  for Buyer’s Benefit  |       | 28     |
|            | (C)        | Indemnification Provisions  for Seller’s Benefit |       | 28     |
|            | (D)        | Limitations                                           |       | 29     |
|            | (E)        | Matters Involving Third  Parties                      |       | 29     |
|            | (F)        | Determination of Adverse  Consequences                |       | 29     |
|            | (G)        | Exclusive Remedy                                      |       | 30     |
|            | (H)        | Blyth Guaranty                                        |       | 30     |
|            |       |                                                  |       |   |
| **SECTION 9.**  | ** ** | **[RESERVED]**                                        | ** ** | **30** |
|            |       |                                                  |       |   |
| **SECTION 10.** | ** ** | **MISCELLANEOUS**                                     | ** ** | **30** |
|            |       |                                                  |       |   |
|            | (A)        | Press Releases and Public  Announcements              |       | 30     |
|            | (B)        | No Third-Party  Beneficiaries                         |       | 31     |
|            | (C)        | Entire Agreement                                      |       | 31     |
|            | (D)        | Succession and Assignment                             |       | 31     |
|            | (E)        | Payments to Buyer                                     |       | 31     |
|            | (F)        | Counterparts                                          |       | 31     |
|            | (G)        | Headings                                              |       | 32     |
|            | (H)        | Notices                                               |       | 32     |
|            | (I)        | Governing Law                                         |       | 33     |
|            | (J)        | Amendments and Waivers                                |       | 33     |
|            | (K)        | Severability                                          |       | 33     |
|            | (L)        | Expenses                                              |       | 33     |
|            | (M)        | Construction                                          |       | 33     |
|            | (N)        | Incorporation of Exhibits  and Schedules              |       | 33     |
|            | (O)        | Confidentiality Agreement                             |       | 33     |
|                 |            |                                                       |            |        |  |  |

** **

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**Schedules and Exhibits**
| Schedules           |   |   |   |                                         |
|---------------------|--------|--------|--------|----------------------------------------------|
|                |   |   |   |                                         |
| Schedule 1A         |   | — |   | Acquired Contracts                           |
| Schedule 1B         |   | — |   | Acquired Intellectual Property               |
| Schedule 2          |   | — |   | Assumed Purchase Orders                      |
| Schedule 3          |   | — |   | Excluded Assets                              |
| Schedule 4          |   | — |   | Purchase Price Allocation                    |
|                |   |   |   |                                         |
| Exhibits            |   |   |   |                                         |
|                |   |   |   |                                         |
| Exhibit A           |   | — |   | Forms of Assignments                         |
| Exhibit B           |   | — |   | Form of Assumption                           |
| Exhibit C           |   | — |   | Selected Financial Data                      |
| Exhibit D           |   | — |   | Transition Services Agreement                |
| Exhibit E           |   | — |   | Form of Opinion of Seller’s Counsel     |
| Exhibit F           |   | — |   | Forms of Opinions of Buyer’s Counsel    |
| Exhibit G           |   | — |   | Form of Overstock Inventory Agreement        |
| Exhibit H           |   | — |   | Form of Patent License Agreement             |
| Exhibit I           |   | — |   | Form of Trademark License Agreement          |
| Disclosure Schedule |   | — |   | Exceptions to Representations and Warranties |
|                     |        |        |        |                                              |  |  |

 

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**ASSETPURCHASE AGREEMENT**

This Asset Purchase Agreement (this “Agreement”) is entered intoas of April 27, 2007, by and between MVP GROUP INTERNATIONAL, INC., a Kentuckycorporation (“Buyer”), CANDLE CORPORATION OF AMERICA, a New Yorkcorporation (“Seller”), and, solely for purposes of Section 8(h),Blyth, Inc., a Delaware corporation (“Blyth”).  Buyer and Seller are referred to collectivelyherein as the “Parties.”

WHEREAS, Buyer desires to purchase from Seller certain assets used in(and assume certain of the liabilities of Seller related to) the BlythHomescents International mass merchandiser candle and pot pourri businessconducted under the trademarks “Carolina”, “Kate’s Original Recipe” and “Florasense”(the “Business”); and

WHEREAS, Seller desires to sell to Buyer such assets and assign toBuyer such liabilities.

Now, therefore, in consideration of the foregoing premises and themutual promises herein made and the representations, warranties and covenantsherein contained, and for other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, the Parties agree as follows.

# Section 1.               Definitions.

“Acquired Assets” means all of Seller’s right, title, andinterest in and to the following, and only the following, specified assets:

(a)           the Leased RealProperty;

(b)           the AcquiredBentonville Assets;

(c)           the Acquired MemphisAssets;

(d)           the Assumed PurchaseOrders;

(e)           the Acquired Receivables;

(f)            the Acquired Contracts;

(g)           the Acquired Intellectual Property;

(h)           the Acquired Inventory; and

(i)            the AcquiredRights.

provided, however, that theterm “Acquired Assets” shall not include any of the Excluded Assets.

“Acquired Bentonville Assets” means all of the tangible assetsof Seller that are used to operate the Bentonville Facility.

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“Acquired Contracts” means the agreements, contracts, leases,subleases and other similar arrangements (in each case, whether written ororal), and rights thereunder listed on Schedule 1A.

“Acquired Intellectual Property” means (i) the IntellectualProperty listed on Schedule 1B, provided, that, to the extent thatSeller uses any unregistered trademarks or fragrance names in connection withthe Business that are not listed on Schedule 1B, such unregisteredtrademarks or fragrance names shall be Acquired Intellectual Property unlessexpressly excluded on Schedule 3 (Excluded Assets) and (ii) thecopyright or other proprietary right embodied in any original works ofauthorship either created by Seller or for which Seller has obtained theintellectual property rights and which are transferred into Buyer’s physicalpossession pursuant hereto.

“Acquired Inventory” means the finished goods inventory of theBusiness listed on Exhibits INV 2.0 and 3.0 to the Closing Date NetAsset Value Statement, which includes current and active inventory andinventories related to the Assumed Purchase Orders, but excludes excess andobsolete inventory and raw material inventory.

“Acquired Memphis Assets” means the tangible assets listed on ExhibitsPPE and CIP to the Closing Date Net Asset Value Statement.

“Acquired Receivables” means the accounts, notes, and otherreceivables listed on Exhibits AR 1.0 and AR 1.1 to the Closing Date NetAsset Value Statement after deduction of the Sterno-related accounts, notes andother receivables listed in Exhibits AR 2.0 and AR 2.1 to the ClosingDate Net Asset Value Statement (without duplication).

“Acquired Rights” means all rights of Seller arising on or afterthe Closing Date associated with the Acquired Contracts and all rights of Sellerassociated with the Acquired Receivables.

“Additional Assurances” has the meaning set forth in Section10(o) below.

“Adverse Consequences” means all actions, suits, proceedings,hearings, investigations, charges, complaints, claims, demands, injunctions,judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,reasonable amounts paid in settlement, liabilities, obligations, taxes, liens,losses, expenses, and fees, including court costs and reasonable attorneys’fees and expenses.

“Affiliate” has the meaning set forth in Rule 12b-2 of theregulations promulgated under the Securities Exchange Act.

“Agent” has the meaning set forth in Section 10(d) below.

“Assumed Accounts Payable” means the accounts payable listed on ExhibitsAP 1.0, AP 2.0, AP 3.0 and AP 4.0 to the Closing Date Net Asset ValueStatement.

“Assumed Accrued Expenses” means the accrued expenses listed on ExhibitsAE, AE 1.0 and AE 2.0 to the Closing Date Net Asset Value Statement.

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“Assumed Liabilities” means the following, and only thefollowing, liabilities of the Seller:

(a)                                  theAssumed Accounts Payable;

(b)                                 theAssumed Purchase Orders;

(c)                                  theAssumed Accrued Expenses;

(d)                                 allobligations of Seller under the Acquired Contracts arising or accruing on orafter the Closing Date;

(e)                                  allobligations of Seller under the Leases arising or accruing on or after theClosing Date;

(f)                                    allobligations arising out of Buyer’s operation of the Bentonville Facility on orafter the Closing Date; and

(g)                                 allobligations arising out of Buyer’s operation of the Memphis Facility on orafter the Closing Date;

provided,however, that the term “Assumed Liabilities” shall not includeany of the Excluded Liabilities.

“Assumed Purchase Orders” means the open inventory purchaseorders related to the Business as of 11:59 p.m., New York City time on theClosing Date to be listed on the updated Schedule 2 to be deliveredpursuant to Section 2(g)(i), below.

“Bentonville Facility” means the office facility of Sellerlocated at 210 North Walton Blvd, Suite 21/22, Bentonville, Arkansas.

“Blocked Account” has the meaning set forth in Section 10(e)below.

“Business” has the meaning set forth in the preface above.

“Buyer” has the meaning set forth in the preface above.

“Buyer Closing Date Net Asset Value Statement” has the meaningset forth in Section 2(g) below.

“Cash” means cash and cash equivalents (including marketablesecurities and short-term investments).

“CERCLA” has the meaning set forth in Section 3(n) below.

“Closing” has the meaning set forth in Section 2(d)below.

“Closing Date” has the meaning set forth in Section 2(d)below.

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“Closing Date Net Asset Value” means the Net Asset Value, as of11:59 p.m., New York City time, on the Closing Date.

“Closing Date Net Asset Value Statement” has the meaning setforth in Section 2(g) below; provided, however, that pending delivery ofthe Closing Date Net Asset Value Statement as provided in such Section 2(g),the term Closing Date Net Asset Value Statement shall mean Exhibit Cattached hereto, except that, to the extent that any of the assets andliabilities shown on such Exhibit C have changed between the FinancialStatement Date and the Closing Date, such Exhibit C shall be deemed tobe adjusted to reflect such changes in the assets and liabilities shown thereonduring the period from the Financial Statement Date to and including theClosing Date.

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

“Confidentiality Agreement” means that certain ConfidentialityAgreement dated July 11, 2006 by and between the Buyer and Blyth.

“Confidential Information” has the meaning ascribed to such termin the Confidentiality Agreement.

“Disclosure Schedule” has the meaning set forth in Section 3below.

“Environmental, Health, and Safety Requirements” means all federal,state, local, and foreign statutes, regulations, ordinances, and similarprovisions having the force or effect of law, all judicial and administrativeorders and determinations, and all common law concerning public health andsafety, worker health and safety, and pollution or protection of theenvironment, including all those relating to the presence, use, production,generation, handling, transportation, treatment, storage, disposal,distribution, labeling, testing, processing, discharge, release, threatenedrelease, control, or cleanup of any hazardous materials, substances, or wastes,chemical substances or mixtures, pesticides, pollutants, contaminants, toxicchemicals, petroleum products or byproducts, asbestos, polychlorinatedbiphenyls, noise, or radiation.

“Excluded Assets” means (i) the Excluded Inventory and (ii) theassets of the Seller that are listed on Schedule 3.

“Excluded Inventory” means the raw material inventory of theBusiness listed on Exhibit INV 1.0 to the Closing Date Net Asset ValueStatement.

“Excluded Liabilities” means any liability or obligation ofSeller other than those set forth in the definition of “Assumed Liabilities”,including: (a) any liability arising out of or relating to the operation of theBusiness by Seller or Seller’s leasing, ownership or operating of real property(other than any such operation or leasing for or on behalf of Buyer pursuant tothe Transition Services Agreement), including any liability relating toproducts manufactured or distributed by or for the Seller; (b) any liabilityunder any Acquired Contract that arises out of or relates to any breach of suchAcquired Contract that occurred prior to the Closing Date; (c) any liability ofSeller or any of Seller’s Affiliates for Taxes, including any liability ofSeller or any of Seller’s Affiliates for Taxes as a result of Seller’soperation of the Business or Taxes payable by Seller or any of Seller’sAffiliates that will arise as a result of the sale of the Assets pursuant to 

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this Agreement; (d) any liability of Seller or any ofSeller’s Affiliates that is not an Assumed Accrued Expense and that relates topayroll, vacation, sick leave, workers’ compensation, unemployment benefits,pension benefits, health care plans or benefits or other employee plans orbenefits of any kind for Seller’s employees or former employees or both, inevery case arising out of and relating to Seller’s employment of such employeesor former employees and including any liability of Seller under any employment,severance, retention or termination agreement with any employee of Seller orany of Seller’s Affiliates; (e) any liability of Seller under this Agreement orother document executed in connection with the transactions contemplatedhereby; and (f) any liability of Seller based upon Seller’s acts or omissionsoccurring after the Closing.

“Final Closing Date Net Asset Value” has the meaning set forthin Section 2(g) below.

“Financial Statement Date” means March 24, 2007.

“GAAP” means United States generally accepted accountingprinciples as in effect from time to time, consistently applied.

“Guaranty” has the meaning set forth in Section 6(e)below.

“Improvements” has the meaning set forth in Section 3(h)below.

“Indemnified Party” has the meaning set forth in Section 8(d)below.

“Indemnifying Party” has the meaning set forth in Section8(d) below.

“Intellectual Property” means: (a) inventions (whetherpatentable or unpatentable and whether or not reduced to practice),improvements thereto, and patents, patent applications, and patent disclosures,together with reissuances, continuations, continuations-in-part, revisions,extensions, and reexaminations thereof, (b) trademarks, service marks, tradedress, logos, slogans, trade names, Internet domain names and telephonenumbers, together with translations, adaptations, derivations, and combinationsthereof and including goodwill associated therewith, and applications,registrations, and renewals in connection therewith, (c) websites, graphics,designs, labels, packaging and other copyrightable works, copyrights, andapplications, registrations, and renewals in connection therewith, (d) productspecifications, formulations, trade secrets and confidential businessinformation (including ideas, research and development, know-how, formulas,compositions, manufacturing and production processes and techniques, technicaldata, designs, drawings, specifications, customer and supplier lists, pricingand cost information, and business and marketing plans and proposals), (e)computer software (including source code, executable code, data, databases, andrelated documentation), (f) advertising and promotional materials, (g) otherproprietary rights, and (h) copies and tangible embodiments thereof (inwhatever form or medium).

“Key Customers” means the Persons identified as customers in theSales Figures.

“Knowledge” means actual knowledge of Charles Leichtweis, StevenKosmalski, or Robert B. Goergen, Jr. after reasonable investigation.

“Lease Consent” has the meaning set forth in Section 7(a)below.

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“Leased Real Property” means the real property leased by Sellerand located at 210 North Walton Blvd, Suite 21/22, Bentonville, Arkansas and6100 Holmes Road, Memphis, Tennessee.

“Leases” means the lease agreements or other contracts,including all amendments, extensions, renewals, guaranties, and otheragreements with respect thereto, pursuant to which Seller holds any interest inany Leased Real Property.

“Lenders” has the meaning set forth in Section 10(d)below.

“Lien” means any mortgage, pledge, lien, right of way, easement,encroachment, encumbrance, charge, claim or other security interest orrestriction on use other than (a) liens for Taxes not yet due and payable orfor Taxes that the taxpayer is contesting in good faith through appropriate proceedingsand as to which appropriate reserves have been established and (b) purchasemoney liens and liens securing rental payments under capital leasearrangements.

“Material Adverse Effect” means any effect that would bematerially adverse to the ability of any Party to consummate timely thetransactions contemplated hereby in accordance with the terms set forth herein.

“Memphis Facility” means Seller’s distribution center located at6100 Holmes Road, Memphis, Tennessee.

“Net Asset Value” means the difference between (a) the sum ofthe values of the Acquired Inventory, the Acquired Receivables, and theAcquired Memphis Assets less (b) the amount of the Assumed Accounts Payable andthe Assumed Accrued Expenses, in each case determined in accordance with the Seller’sPast Practice.

“Net Asset Value Adjustment” means the adjustment to thePurchase Price provided for in Section 2(g).

“New Employees” has the meaning set forth in Section 3(t)below.

“Ordinary Course of Business” means the ordinary course of theSeller’s business as presently conducted it being understood and agreed thatthe Seller and certain of its Affiliates are currently undertaking arestructuring of the North American wholesale mass home fragrance businessconducted by Seller and such Affiliates (including the Business) with theeffect, among other things, of reducing the size and scope of such business,and reducing the aggregate income of such business, and that all action(s)taken in connection with such restructuring are, and for purposes of thisAgreement shall be deemed to be, in the ordinary course of the Seller’sBusiness.

“Overstock Inventory Agreement” means the agreement to beentered into on the date hereof by and between Buyer and Seller regarding thetransfer to Buyer by Seller of certain overstock inventory of Seller related tothe Business, the sale of such overstock inventory by Buyer and the division ofrevenues from such sales, substantially in the form of Exhibit G hereto.

“Party” has the meaning set forth in the preface above.

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“Patent License Agreement” means the Patent License Agreement tobe entered into by and between Buyer and Seller, substantially in the form of ExhibitH hereto.

“Person” means an individual, a partnership, a corporation, alimited liability company, an association, a joint stock company, a trust, ajoint venture, an unincorporated organization, any other business entity or agovernmental entity (or any department, agency, or political subdivisionthereof).

“Projections” has the meaning set forth in Section 3(f)below.

“Purchase Price” has the meaning set forth in Section 2(c)below.

“Real Property Laws” has the meaning set forth in Section3(h) below.

“Release of Guaranty” has the meaning set forth in Section6(e) below.

“Restricted Business” means selling Restricted Products in theRestricted Territories.

“Restricted Customers” means Albertson’s, Big Lots, Boscovs,Dollar General, Family Dollar, Fred Meyer, HEB, Kohls, Kroger, Longs, MichaelsStores, Publix**,** Rite Aid, Ross, Stein Mart, TJXCorp., Value City Dept., and Wal-Mart.

“Restricted Products” means candles, private label liquid or drypot pourri and private label incense.

“Restricted Territories” has the meaning set forth in Section6(c) below.

“Sales Figures” has the meaning set forth in Section 3(f)below.

“Securities Exchange Act” means the Securities Exchange Act of1934, as amended.

“Selected Financial Data” has the meaning set forth in Section3(f) below.

“Seller’s Past Practice” means the practices and procedures(including, with respect to assumptions and estimates and methods of valuationof inventory) used by Seller in the Ordinary Course of Business in valuingassets and liabilities of the Seller for purposes of preparing financialstatements of the Seller in accordance with GAAP, which practices andprocedures have been disclosed to Buyer insofar as they relate to the valuationof the assets and liabilities of the Seller that are included in the Net AssetValue.

“Seller” has the meaning set forth in the preface above.

“Tax” or “Taxes” means any federal, state, local, orforeign taxes, charges, fees, imposts or other assessments, including thoserelated to income, gross receipts, license, payroll, employment, excise,severance, stamp, occupation, premium, windfall profits, environmental (includingtaxes under Code §59A), customs duties, capital stock, franchise, profits,withholding, social security (or similar), unemployment, disability, realproperty, personal property, sales, use, transfer, registration, value added,alternative or add-on minimum, estimated, or other tax of any 

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kind whatsoever, whether computed on a separate orconsolidated, unitary or combined basis or in any other manner, including anyinterest, penalty, or addition thereto, whether disputed or not.

“Tax Benefit” has the meaning set forth in Section 8(e)below.

“Tax Return”means any return, declaration, report, claim for refund, or information returnor statement relating to Taxes, including any schedule or attachment thereto,and including any amendment thereof.

“Third-Party Claim” has the meaning set forth in Section 8(d)below.

“Trademark License Agreement” means the Trademark LicenseAgreement to be entered into by and between Buyer and Seller, substantially inthe form of Exhibit I hereto.

“Transaction Documents” has the meaning set forth in Section3(b) below.

“Transition Services Agreement” means the Transition ServicesAgreement to be entered into by and between Buyer and Seller, substantially inthe form of Exhibit D hereto.

# Section 2.               BasicTransaction.

## (a)           Purchase and Saleof Assets.  On and subject tothe terms and conditions of this Agreement, Buyer agrees to purchase fromSeller, and Seller agrees to sell, transfer, convey, and deliver to Buyer, allof the Acquired Assets at the Closing for the consideration specified below inthis Section 2.

## (b)           Assumption ofLiabilities.  On and subjectto the terms and conditions of this Agreement, Buyer agrees to assume andbecome responsible for all of the Assumed Liabilities at the Closing.  Buyer will not assume or have anyresponsibility, however, with respect to any other obligation or liability ofSeller not included within the definition of Assumed Liabilities.

## (c)           PurchasePrice.  The Buyer agrees to pay tothe Seller $21,830,000 (the “Purchase Price”), by delivery of cash,payable by wire transfer or delivery of other immediately available funds.  The Purchase Price is subject to adjustmentas provided in Section 2(g) below.

## (d)           The Closing.  The closing of the transactionscontemplated by this Agreement (the “Closing”) shall take place at theoffices of Nelson Mullins Riley & Scarborough LLP, in Atlanta, Georgia,commencing at 10:00 a.m. local time on the date hereof (the “Closing Date”)and the effective time of the Closing shall be 11:59 p.m. New York City time onthe Closing Date;

 

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## (e)           Deliveriesat the Closing.  At theClosing, (i) Seller will deliver to Buyer the various certificates,instruments, and documents referred to in Section 7(a) below; (ii) Buyerwill deliver to Seller the various certificates, instruments, and documents referredto in Section 7(b) below; (iii) Seller will execute, acknowledge (ifappropriate), and deliver to Buyer (A) an assignment in the form of ExhibitA and (B) such other instruments of sale, transfer, conveyance, andassignment as Buyer and its counsel may reasonably request; (iv) Buyer willexecute, acknowledge (if appropriate), and deliver to Seller (A) an assumptionin the form attached hereto as Exhibit B and (B) such other instrumentsof assumption as Seller and its counsel may reasonably request; and (v) Buyerwill deliver to Seller the consideration specified in Section 2(c)above.

## (f)            Purchase Price Allocation.  The Purchase Price is beingallocated among the Acquired Assets by the Parties as set forth on Schedule4 and if the Purchase Price is adjusted pursuant to Section 2(g),below, such adjusted Purchase Price will be allocated in a manner consistentwith the allocation set forth on Schedule 4.  Such allocation is intended to comply withthe requirements of Section 1060 of the Internal Revenue Code of 1986, asamended.  Seller and Buyer shall fileForm 8594 with their respective Tax Returns consistent with suchallocation.  The Parties shall treat andreport the transaction contemplated by this Agreement in all respectsconsistently for purposes of any federal, state or local Tax, including thecalculation of gain, loss and basis with reference to the Purchase Priceallocation made pursuant to this Section 2(f).  Theparties shall not take any action or position inconsistent with the obligationsset forth in this Agreement.  Selleragrees**to indemnify and hold Buyer and itsAffiliates harmless and Buyer hereby agrees to indemnify and hold Sellerharmless, from and against any and all losses, liabilities and expenses(including additional income taxes and reasonable fees and disbursements ofcounsel) that may be incurred by the indemnified party as a result of thefailure of the indemnifying party so to report the sale and purchase of theAcquired Assets as required by applicable laws.

## (g)           NetAsset Value Adjustment.

### (i)            Nolater than ten (10) business days after the Closing, the Seller shall deliverto the Buyer an unaudited statement of the Closing Date Net Asset Value whichwill be in the same format as Exhibit C hereto, including with respect toexhibits and schedules (the “Closing Date Net Asset Value Statement”),together with (A) a certificate of an authorized officer of the Seller statingthat the Closing Date Net Asset Value Statement was prepared in accordance withSeller’s Past Practice and (B) an updated Schedule 2 (listing of AssumedPurchase Orders) which updated Schedule 2 will be in the same format as Schedule2 attached hereto and will reflect the open purchase orders related to theBusiness as of 11:59 p.m., New York City time on the Closing Date.  The Buyer shall notify the Seller, inwriting, within ten (10) business days of Seller’s delivery of the Closing DateNet Asset Value Statement whether it agrees or disagrees with the Closing DateNet Asset Value as shown on the Closing Date Net Asset Value Statement.  If the Buyer agrees with the Closing Date NetAsset Value Statement, then the Closing Date Net Asset Value shall be deemed tobe the Final Closing Date Net Asset Value (as defined below) and, subject tothe provisions of the last sentence of Section 2(g)(v), below, therelevant Party shall make the payment, if any, required of it pursuant to suchSection 2(g)(v).

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### (ii)           Ifthe Buyer disagrees with the Closing Date Net Asset Value as shown on theClosing Date Net Asset Value Statement, then as soon as practicable followingthe Closing Date (but not later than 30 days after the date upon which Sellerdelivers the Closing Date Net Asset Value Statement), the Buyer shall prepareand deliver to the Seller, its own statement of the Net Asset Value as of 11:59p.m., New York City time, on the Closing Date (the “Buyer Closing Date NetAsset Value Statement” and the Closing Date Net Asset Value as reflected onthe Buyer Closing Date Net Asset Value Statement being referred to herein as the“Buyer Determined Closing Date Net Asset Value”), which Buyer ClosingDate Net Asset Value Statement shall have been have reviewed and approved, inwriting, by a nationally recognized accounting or inventory valuation firmreasonably acceptable to Seller, as fairly presenting the Closing Date NetAsset Value.  In preparing the BuyerClosing Date Net Asset Value Statement, the Buyer shall be entitled to haveaccess to the books and records of the Seller and the work papers of the Sellerprepared in connection with the preparation of the Closing Date Net Asset ValueStatement and shall be entitled to discuss such books and records and workpapers with the Seller and those persons responsible for the preparationthereof.  The Buyer Closing Date NetAsset Value Statement shall be prepared in accordance with Seller’s PastPractice determined as if Seller had not sold the Acquired Assets to the Buyerand had instead continued to operate the Business on and after the ClosingDate.  In the event that in preparing theBuyer Closing Date Net Asset Value Statement the Buyer conducts a physicalinventory, the Seller shall be entitled to have one or more representativespresent during the conduct of such physical inventory.

### (iii)          Inthe event that the Seller does not agree with the Buyer Determined Closing DateNet Asset Value as reflected on the Buyer Closing Date Net Asset ValueStatement, the Seller shall so inform the Buyer in writing within 30 days afterthe Seller’s receipt thereof, such writing to set forth the objections of theSeller in reasonable detail.  If theSeller and the Buyer cannot reach agreement as to any disputed matter relatingto the Closing Date Net Asset Value within 15 days after notification by theSeller to the Buyer of a dispute, they shall forthwith refer the dispute to anationally recognized accounting firm mutually agreeable to the Seller and theBuyer for resolution, with the understanding that: (i) the Closing Date NetAsset Value, as finally determined by such firm, shall not be less than theamount thereof shown in Buyer’s Closing Date Net Asset Value Statement norgreater than the amount thereof shown in the Seller’s objection deliveredpursuant to this clause (ii); and (ii) such firm shall resolve all disputeditems within 20 days after such disputed items are referred to it.  If the Buyer and the Seller are unable toagree on the choice of an accounting firm, then Grant Thornton LLP shall serveas the accounting firm.  If GrantThornton LLP is unwilling to so serve, the Buyer and the Seller shall select anationally recognized accounting firm by lot (after excluding their respectiveregular outside accounting firms, if applicable, and the accounting firm thatinitially reviewed and approved the Buyer Closing Date Net Asset Value Statementas set forth in Section 2(g)(ii)). The decision of any such accounting firm under this clause (ii) withrespect to all disputed matters relating to the Closing Date Net Asset Valueshall be deemed final and conclusive and shall be binding upon the Seller andthe Buyer.  In addition, if the Sellerdoes not object to the Buyer Determined Closing Date Net Asset Value within the30-day period referred to above, the Buyer Determined Closing Date Net AssetValue as reflected on the Buyer Closing Date Net Asset Value Statement as soprepared shall be deemed final and conclusive and binding upon the Seller andthe Buyer.

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### (iv)          TheSeller shall be entitled to have access to the books and records of the Buyerand the work papers of the Buyer prepared in connection with the preparation ofthe Buyer Closing Date Net Asset Value Statement and shall be entitled todiscuss such books and records and work papers with the Buyer and those personsresponsible for the preparation thereof. The accounting firm selected pursuant to Section 2(g)(iii) shallbe entitled to have access to the books and records of the Buyer and the Sellerand the work papers of the Buyer and the Seller prepared in connection with thepreparation of the Closing Date Net Asset Value Statement and the Buyer ClosingDate Net Asset Value Statement and shall be entitled to discuss such books andrecords and work papers with the Buyer and the Seller and those personsresponsible for the preparation thereof.

### (v)           Ifthe Closing Date Net Asset Value as finally determined pursuant to this Section2(g) (the “Final Closing Date Net Asset Value”) exceeds $15,375,000,then, subject to the provisions of the last sentence of this Section 2(g)(v),the Purchase Price shall be increased by an amount equal to the amount of suchexcess.  If the Final Closing Date NetAsset Value is less than $15,375,000, then, subject to the provisions of thelast sentence of this Section 2(g)(v), the Purchase Price shall bedecreased by an amount equal to the amount of such shortfall.  Notwithstanding the foregoing, no adjustmentshall be made to the Purchase Price pursuant to this Section 2(g) unlessthe amount of such adjustment as determined pursuant to this Section 2(g)(v)equals or exceeds $200,000; provided, that if the amount of such adjustmentas so determined equals or exceeds $200,000, the entirety of such adjustmentshall be made and paid as set forth in Section 2(g)(vi), below.

### (vi)          If,pursuant to Section 2(g)(i) or Section 2(g)(v), Buyer is required to make apayment to Seller, Buyer shall pay such amount by wire transfer to such accountas shall be designated by the Seller, in writing, in cash to the Seller withinfive (5) business days after the date upon which the Closing Date Net AssetValue is deemed final and conclusive pursuant to this Section 2(g).  If, pursuant to Section 2(g)(i) or Section2(g)(v), Seller is required to make a payment to Buyer, Seller shall pay suchamount by wire transfer to the Blocked Account or such other account as shallbe designated by Buyer, in writing, after the date hereof, in cash to the Buyerwithin five (5) business days after the date upon which the Closing Date NetAsset Value is deemed final and conclusive pursuant to this Section 2(g).

### (vii)         Ifthe Final Closing Date Net Asset Value is determined by an accounting firmunder Section 2(g)(iii), and such determination results in a payment tothe Seller, then the Buyer shall pay the aggregate fees and expenses of theaccounting firm selected to finally determine the Closing Date Net Asset Value.  If the Final Closing Date Net Asset Value isdetermined by an accounting firm under Section 2(g)(iii), and suchdetermination results in a payment to the Buyer, or results in no payment toeither Buyer or Seller, then the Seller shall pay the aggregate fees andexpenses of the accounting firm selected to finally determine the Closing DateNet Asset Value.

# Section 3.               Seller’sRepresentations and Warranties.  Sellerrepresents and warrants to Buyer that the statements contained in this Section3 are correct and complete as of the date of this Agreement and will becorrect and complete as of the Closing Date (as though made then and as thoughthe Closing Date were substituted for the date of this Agreement throughoutthis Section 3), except as set forth in the disclosure scheduleaccompanying this 

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# Agreement (the “DisclosureSchedule”).  The Disclosure Schedulewill be arranged in paragraphs corresponding to the lettered and numberedparagraphs contained in this Section 3 and the other sections of thisAgreement pursuant to which disclosure is made or items are referred to in theDisclosure Schedule.

## (a)           Organization ofSeller.  Seller is acorporation duly organized, validly existing, and in good standing under thelaws of the jurisdiction of its incorporation, with full corporate power andauthority to conduct its business as now being conducted by it, to own and usethe properties it purports to own and use, and to perform its obligations underthe Acquired Contracts.

## (b)           Authorizationof Transaction.  Seller hasfull corporate power and authority to execute and deliver this Agreement andthe documents contemplated hereby (the “Transaction Documents”) and toperform its obligations thereunder.  ThisAgreement constitutes, and the other Transaction Documents when executed willconstitute, the valid and legally binding obligation of Seller, enforceableagainst it in accordance with its terms and conditions.  The execution, delivery and performance ofthe Transaction Documents have been duly authorized by Seller.

## (c)           Non-contravention.  Neither the execution and delivery ofthis Agreement, nor the consummation of the transactions contemplated hereby(including the assignments and assumptions referred to in Section 2above), will (i) violate any constitution, statute, regulation, rule,injunction, judgment, order, decree, ruling, charge, or other restriction ofany government, governmental agency, or court to which Seller or the AcquiredAssets are subject or any provision of the charter or bylaws of Seller or (ii)conflict with, result in a breach of, constitute a default under, result in theacceleration of, create in any party the right to accelerate, terminate,modify, or cancel, or require any notice under any agreement, contract, lease,license, instrument, or other arrangement to which Seller is a party or bywhich it is bound or to which any of its assets is subject (or result in theimposition of any Lien upon any of its assets), except (other than with respectto any Acquired Assets) where the violation, conflict, breach, default,acceleration, termination, modification, cancellation, failure to give notice,or Lien would not have a Material Adverse Effect.  The Seller does not need to give any noticeto, make any filing with, or obtain any authorization, consent, or approval ofany government or governmental agency in order for the Parties to consummatethe transactions contemplated by this Agreement (including the assignments andassumptions referred to in Section 2 above), except where the failure togive notice, to file, or to obtain any authorization, consent, or approvalwould not have a Material Adverse Effect.

## (d)           Brokers’ Fees.  Seller has no liability or obligationto pay any fees or commissions to any broker, finder, or agent with respect tothe transactions contemplated by this Agreement for which Buyer could becomeliable or obligated.

## (e)           Title to Assets.  Seller has good and marketable titleto, or a valid leasehold interest in, the Acquired Assets, free and clear ofany Liens or restriction on transfer. Subject to the Lease Consent which will be obtained prior to Closing,Seller has the right to transfer the Acquired Assets to Buyer, free and clearof any Liens.

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## (f)            SelectedFinancial Data.      Attachedhereto as Exhibit C****are thefollowing financial data (the “Selected Financial Data”):

### (i)            The value of theAcquired Bentonville Assets, as of the Financial Statement Date, determined inaccordance with Seller’s Past Practice;

### (ii)           the value of theAcquired Memphis Assets, as of the Financial Statement Date, determined inaccordance with Seller’s Past Practice;

### (iii)          the value of theAcquired Inventory, as of the Financial Statement Date, determined inaccordance with Seller’s Past Practice;

### (iv)          the value of theAcquired Receivables, as of the Financial Statement Date, determined inaccordance with Seller’s Past Practice;

### (v)           the obligations ofthe Seller in respect of the Assumed Accounts Payables, as of the FinancialStatement Date, determined in accordance with Seller’s Past Practice;

### (vi)          the expensesincurred by the Seller in operating the Bentonville Facility during the periodFebruary 1, 2006 through January 31, 2007;

### (vii)         the expensesincurred by the Seller in operating the Memphis Facility during the periodFebruary 1, 2006 through January 31, 2007;

### (viii)        the sales ofproducts by the Seller to the Key Customers in connection with the conduct ofthe Business during the period February 1, 2006 through January 31, 2007 (the “SalesFigures”); and

### (ix)           the projections asof January 4, 2007 with respect to sales of products by the Seller to the KeyCustomers in connection with the conduct of the Business during the periodFebruary 1, 2007 through January 31, 2008 (the “Projections”).

The Selected Financial Data (other than the Projections) fairly presentthe values, obligations and expenses set forth therein and are based upon thebooks and records of the Seller, which have been maintained in accordance withGAAP.  The Projections were (a) preparedby management of the Seller in good faith, (b) were based on assumptionsbelieved by management of the Seller to be reasonable in light of currentconditions and current facts known at the time made and (c) represent goodfaith estimates by management of the Seller as to the sales by the Seller tothe customers described therein in connection with the conduct of the Businessfor the periods indicated; provided, however, that, absent ashowing of bad faith on the part of the management of the Seller, nothingcontained in the Projections shall be deemed to constitute a representation orwarranty by Seller as to future sales of products by the Seller in connectionwith the conduct of the Business to such customers prior to the Closing, or bythe Buyer to such customers in connection with the business conducted by theBuyer with the Acquired Assets after the Closing (it being understood that suchestimates and projections are subject to uncertainties and contingencies thatare beyond the control of the Seller and its management).

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## (g)           [RESERVED]

## (h)           LeasedReal Property.

### (i)            Section3(h)(i) of the Disclosure Schedule sets forth the address of each parcel ofLeased Real Property, and a true and complete list of all Leases for each suchLeased Real Property (including the date, term and termination date, and nameof the parties to such Lease document). Seller has delivered to Buyer a true and complete copy of each suchLease document. Except as set forth in Section 3(h)(i) of the DisclosureSchedule, with respect to each of such Leases:

#### (A)          such Lease is legal,valid, binding, enforceable and in full force and effect;

#### (B)           except for thoseLeases for which Lease Consents are obtained, the transactions contemplated bythis Agreement do not require the consent of any other party to such Lease,will not result in a breach of or default under such Lease, and will nototherwise cause such Lease to cease to be legal, valid, binding, enforceableand in full force and effect on identical terms following the Closing;

#### (C)           Seller’s possessionand quiet enjoyment of the Leased Real Property under such Lease has not****been disturbed and, to the Knowledge ofSeller, there are no disputes with respect to such Lease;

#### (D)          Seller is not and, tothe Knowledge of the Seller, no other party to any Lease is, in breach of ordefault under such Lease; and, to the Knowledge of Seller, no event hasoccurred or circumstance exists that, with the delivery of notice, the passageof time or both, would constitute such a breach or default, or permit thetermination, modification or acceleration of rent under such Lease;

#### (E)           no security depositor portion thereof deposited with respect to such Lease has been applied inrespect of a breach of or default under such Lease that has not beenredeposited in full;

#### (F)           Seller does not owe,and will not owe in the future, any brokerage commissions or finder’s fees withrespect to such Lease;

#### (G)           the other party tosuch Lease is not an Affiliate of, and otherwise does not have any economicinterest in, Seller;

#### (H)          Seller has notsubleased, licensed or otherwise granted any Person the right to use or occupythe Leased Real Property or any portion thereof; and

#### (I)            Seller has notcollaterally assigned or granted any other Lien in such Lease or any interesttherein.

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### (ii)           All buildings, structures, fixtures, building systems andequipment, and all components thereof, included in the Leased Real Property(the “Improvements”) are in good condition and repair, reasonable wearand tear excepted.

### (iii)          To the Knowledge of Seller, the Leased Real Property is incompliance with all applicable building, zoning, subdivision, health and safetyand other land use laws, including the Americans with Disabilities Act of 1990,as amended, and all insurance requirements affecting the Leased Real Property(collectively, the “Real Property Laws”).  Seller has not received any notice ofviolation of any Real Property Law.

### (iv)          Each parcel of Leased Real Property has direct access to apublic street adjoining the Leased Real Property or has access to a publicstreet via insurable easements benefiting such parcel of Leased Real Property,and such access is not dependent on any land or other real property interestthat is not included in the Leased Real Property. None of the Improvements orany portion thereof is dependent for its access, use or operation on any land,building, improvement or other real property interest that is not included inthe Leased Real Property.

### (v)           All water, oil, gas, electrical, steam, compressed air,telecommunications, sewer, storm and waste water systems and other utilityservices or systems for the Leased Real Property have been installed and areoperational and sufficient for the operation of the Business as currentlyconducted thereon.

### (vi)          Seller’s use or occupancy of the Leased Real Property orany portion thereof and the operation of the Business as currently conducted isnot dependent on a “permitted non-conforming use” or “permitted non-conformingstructure” or similar variance, exemption or approval from any governmentalauthority.

### (vii)         None of the Leased Real Property or any portion thereof islocated in a flood hazard area (as defined by the Federal Emergency ManagementAgency).

## (i)            AcquiredIntellectual Property.

### (i)            Tothe Knowledge of Seller: (a) no third party has interfered with, infringedupon, misappropriated, or violated the Acquired Intellectual Property or isdoing any of the aforesaid at this time; and (b) no Acquired IntellectualProperty interferes with, infringes upon or violates the intellectual propertyrights of any third-party.  No copyrightedor copyrightable material included in the Acquired Intellectual Propertyinfringes upon or violates the copyrights of any third party.  No know-how, process, formula, or productincluded in the Acquired Intellectual Property violates any trade secret of anythird party.

### (ii)           Section3(i)(ii) of the Disclosure Schedule identifies: (a) each license,agreement, or other permission that Seller has granted to any third party withrespect to any of the Acquired Intellectual Property (together with anyexceptions); and (b) each license, agreement, or other permission that has beengranted to Seller with respect to any of the Acquired IntellectualProperty.  All of the items identified onSection 3(i)(ii) of the Disclosure Schedule constitute AcquiredContracts.  With respect to each itemlisted on Schedule 1(b) and 

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### on Section 3(i)(ii) or Section 3(i)(iv) of the DisclosureSchedule, as well as each other item of Acquired Intellectual Property:

#### (A)          Seller possesses allright, title, and interest in and to the item, free and clear of any Lien,license, or other restriction, and Seller is not obligated to pay any royaltieswith respect thereto;

#### (B)           the item is notsubject to any outstanding injunction, judgment, order, decree, ruling, orcharge;

#### (C)           no action, suit, proceeding,hearing, investigation, charge, complaint, claim, or demand is pending or, tothe Knowledge of Seller, is threatened that challenges the legality, validity,enforceability, use, or ownership of the item;

#### (D)          Seller has neveragreed to indemnify any Person for or against any interference, infringement,misappropriation, or other conflict with respect to the item;

#### (E)           no loss orexpiration of the item is threatened, pending, or reasonably foreseeable; and

#### (F)           Schedule 1Bincludes all fictional names, trade marks, trade names and service marks thathave been registered with the applicable governmental authority, including theUnited States Patent and Trademark Office or the equivalent national trademarkoffice in any foreign jurisdiction, including the European Union, all of whichare currently in compliance with all applicable laws, and are valid andenforceable.  Section 3(i)(ii)(F)of the Disclosure Schedule includes a list of some selected common lawtrademarks consisting of unregistered fragrance names that are used in theBusiness (the “Fragrance Names”). Notwithstanding anything to the contrary herein, Seller makes norepresentations or warranties with respect to any Fragrance Names (including,without limitation, any Fragrance Names not listed on Section 3(i)(ii)(F)of the Disclosure Schedule), including, without limitation, with respect to theexistence or extent of common law trademark rights therein or with respect towhether use of such names may violate any third party’s rights.  Neither the inclusion of any fragrance namein Section 3(i)(ii)(F) of the Disclosure Schedule nor anything else inthis Agreement shall constitute an admission by Seller as to the existence ofany protectable rights in such fragrance names or be relied upon by Purchaserto assert rights against Seller or its licensees hereafter.

### (iii)          Section 3(i)(iii) of the Disclosure Scheduleidentifies each material item of Acquired Intellectual Property that any thirdparty owns and Seller uses pursuant to license, sublicense, agreement, orpermission. Seller has delivered to Buyer correct and complete copies of allsuch licenses, sublicenses, agreements, and permissions (as amended todate).  All of the items identified on Section3(i)(iii) of the Disclosure Schedule constitute Acquired Contracts.  With respect to each such item of usedIntellectual Property required to be identified in Section 3(i)(iii) ofthe Disclosure Schedule:

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#### (A)          Sellerhas not granted any sublicense or similar right with respect to the license,sublicense, agreement, or permission; and

#### (B)           no loss orexpiration of the item is threatened, pending, or reasonably foreseeable,except for patents expiring at the end of their statutory terms (and not as aresult of any act or omission by Seller, including without limitation, afailure by Seller to pay any required maintenance fees).

### (iv)          Section 3(i)(iv) of the Disclosure Scheduleidentifies each patent or registration that has been issued to Seller which isused in the operation of the Business and identifies each pending patentapplication or application for registration that Seller has made with respectto any of the Intellectual Property used by Seller in the Business. Seller hasdelivered to Buyer correct and complete copies of all such patents, registrationsand applications (as amended to date).  Section3(i)(iv) of the Disclosure Schedule also identifies each material trademarkand Internet domain name used in the operation of the Business.

### (v)           TheAcquired Intellectual Property constitutes all of the material IntellectualProperty used by Seller in the operation of the Business.

## (j)            AcquiredTangible Assets.  Themachinery, equipment, and other tangible assets included in the Acquired Assetsare free from material defects (patent and latent), have been maintained inaccordance with normal industry practice, and are in good operating conditionand repair (subject to normal wear and tear).

## (k)           AcquiredInventory.  The AcquiredInventory consists of manufactured and processed parts, work in process, andfinished goods, all of which is fit for the purpose for which it was procuredor manufactured, and none of which is obsolete, excess, damaged, ordefective.  Inventory now on hand thatwas purchased after the Financial Statement Date and inventory purchased pursuantto the Assumed Purchase Orders but not yet on hand was purchased in theOrdinary Course of Business at a cost not exceeding market prices prevailing atthe time of purchase.

## (l)            AcquiredContracts  Schedule 1Acontains a list of, and Seller has delivered to Buyer a correct and completecopy of, each written Acquired Contract (as amended to date) and a writtensummary setting forth the material terms and conditions of each oral AcquiredContract.  With respect to Seller, and,to the best knowledge of Seller, each other party to each Acquired Contract:(A) the agreement is legal, valid, binding and enforceable in accordance withits terms, and in full force and effect; (B) no party is in material breach ordefault, and no event has occurred that with notice or lapse of time wouldconstitute a material breach or default, or permit termination, modification,or acceleration, under the agreement; and (C) no party has repudiated anyprovision of the agreement.

## (m)          AcquiredReceivables.

The Acquired Receivables are all of the receivables related to thatportion of the Business conducted with the Acquired Assets.  All Acquired Receivables are validreceivables subject to no setoffs or counterclaims and are current and collectiblein accordance with their terms and at their recorded amounts, subject only tothe reserve for bad debts, charge-backs and the like set 

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forth in Exhibits CB, CB 1.0, CB 2.0, CB 3.0 and CB4.0 to the Closing Date Net Asset Value Statement (without duplication).

## (n)           Environmental,Health, and Safety Matters.

### With respect to theoperations conducted at any Leased Real Property:

### (i)            Sellerhas complied and is in compliance, in each case in all material respects, withall Environmental, Health, and Safety Requirements.

### (ii)           Withoutlimiting the generality of the foregoing, Seller has obtained, has complied,and is in compliance with, in each case in all respects, all material permits,licenses and other authorizations that are required pursuant to Environmental,Health, and Safety Requirements for the occupation of the Leased Real Propertyand the operation of its business as conducted thereon; and a list of all suchmaterial permits, licenses and other authorizations is set forth in Section3(n)(ii) of the Disclosure Schedule.

### (iii)          Sellerhas not received any written or oral notice, report or other informationregarding any actual or alleged material violation of Environmental, Health,and Safety Requirements, or any material liabilities or potential materialliabilities (whether accrued, absolute, contingent, unliquidated or otherwise),including any material investigatory, remedial or corrective obligations,relating to the operations conducted at the Leased Real Property arising underEnvironmental, Health, and Safety Requirements.

### (iv)          Sellerhas not, at any Leased Real Property, treated, stored, disposed of, arrangedfor or permitted the disposal of, transported, handled, manufactured,distributed, or released any substance, including without limitation anyhazardous substance, or owned or operated any Leased Real Property or facilitythereon (and no such property or facility is contaminated by any suchsubstance) so as to give rise to any current or future material liabilities,including any material liability for response costs, corrective action costs,personal injury, property damage, natural resources damages or attorney fees,pursuant to the Comprehensive Environmental Response, Compensation andLiability Act of 1980, as amended (“CERCLA”) or the Solid Waste DisposalAct, as amended or any other Environmental, Health, and Safety Requirements.

### (v)           Neitherthis Agreement nor the consummation of the transactions that are the subject ofthis Agreement will result in any material obligations for site investigationor cleanup, or notification to or consent of government agencies or thirdparties, pursuant to any of the so-called “transaction-triggered” or “responsibleproperty transfer” Environmental, Health, and Safety Requirements.

### (vi)          Sellerhas not, at any Leased Real Property, designed, manufactured, sold, marketed,installed, or distributed products or other items containing asbestos.

### (vii)         Sellerhas furnished to Buyer all environmental audits, reports and other materialenvironmental documents relating to the Leased Real Property that are in itspossession.

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(o)           Legal Compliance.  Sellerhas complied in all material respects with all applicable laws (includingrules, regulations, codes, plans, injunctions, judgments, orders, decrees,rulings, and charges thereunder and including the Foreign Corrupt Practices Act,15 U.S.C. 78dd-1, et seq.) of federal, state, local, and foreign governments(and all agencies thereof), and no action, suit, proceeding, hearing,investigation, charge, complaint, claim, demand, or notice has been filed orcommenced against any of them alleging any failure so to comply.

## (p)           Tax Matters.

### (i)            Seller has filedall material Tax Returns that it was required to file. All such Tax Returnswere correct and complete in all material respects. All material Taxes owed bySeller (whether or not shown on any Tax Return) have been paid.  Seller is not currently the beneficiary ofany extension of time within which to file any income Tax Return.  Seller has withheld and paid all Taxesrequired to have been withheld and paid in connection with amounts paid orowing to any employee, independent contractor, creditor, stockholder, or otherthird party, and all Forms W-2 and 1099 required with respect thereto have beenproperly completed and timely filed.

### (ii)           There is nomaterial dispute or claim concerning any Tax liability of Seller either: (A)claimed or raised by any authority in writing; or (B) as to which Seller hasKnowledge.

(q)           Litigation. Section 3(q) of the Disclosure Schedule sets forth each instancein which Seller: (i) is subject to any outstanding injunction, judgment, order,decree, ruling, or charge; or (ii) is a party or, to the Knowledge of Seller,is threatened to be made a party to any action, suit, proceeding, hearing, orinvestigation of, in, or before any court or quasi-judicial or administrativeagency of any federal, state, local, or foreign jurisdiction or before anyarbitrator, in either case, affecting the Business or the Acquired Assets.

## (r)            ProductWarranty; Product Liability.

### (i)            Substantiallyall of the products manufactured, sold, leased, and delivered by Seller in theoperation of the Business have conformed in all material respects with allapplicable contractual commitments and all express and implied warranties, andSeller has no material liability (whether known or unknown, whether asserted orunasserted, whether absolute or contingent, whether accrued or unaccrued,whether liquidated or unliquidated, and whether due or to become due) forreplacement or repair thereof or other damages in connection therewith.

### (ii)           Seller hasno material liability (whether known or unknown, whether asserted orunasserted, whether absolute or contingent, whether accrued or unaccrued,whether liquidated or unliquidated, and whether due or to become due) arisingout of any injury to individuals or property as a result of the ownership,possession, or use of any product manufactured, sold, leased, or delivered bySeller in its operation of that portion of the Business conducted with theAcquired Assets.

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(s)           Solvency. Seller is not now insolvent and will not be rendered insolvent by any ofthe transactions contemplated hereby.  Asused in this Section 3(s), “insolvent” means that the sum of the debtsand other probable liabilities of Seller exceed the present fair saleable valueof Seller’s assets.

(t)            Employees.  Section3(t)(i) of the Disclosure Schedule sets forth the name, annual salary forthe fiscal year ended January 31, 2007, bonus paid in respect of fiscal yearended January 31, 2007, hiring date and accrued vacation for each of the employeesto be offered employment by Buyer (the “New Employees”).  None of the New Employees has received anyraise or compensation in the last 6 months except in the Ordinary Course ofBusiness.  Seller is not nor has it beenin a material dispute with any of the New Employees, and, to the Knowledge ofSeller, Seller has no reason to believe that any New Employee will not acceptemployment with Buyer.

### (ii)           Section3(t)(ii) of the Disclosure Schedules sets forth a list of all workers’compensation claims filed against Seller or any of its Affiliates from January1, 2000 through April 20, 2007 by any New Employee.

(u)           Accounts Payable.  The Assumed Accounts Payable are relatedsolely to the Business and were incurred in the Ordinary Course of Business.

(v)           Acquired Assets.  The Acquired Assets, in conjunction with theExcluded Assets, certain Intellectual Property to be licensed by Seller toBuyer pursuant to the Patent License Agreement and certain assets to be madeavailable by Seller to Buyer pursuant to the Transition Services Agreement,constitute all of the material assets that are currently utilized by the Sellerto operate that portion of the Business conducted by Seller with the assetsbeing purchased by Buyer.

Section 4.               Buyer’s Representations andWarranties.  Buyer representsand warrants to Seller that the statements contained in this Section 4are correct and complete as of the date of this Agreement and will be correctand complete as of the Closing Date (as though made then and as though theClosing Date were substituted for the date of this Agreement throughout this Section4).

(a)           Organization of Buyer.  Buyer is a corporation duly organized,validly existing, and in good standing under the laws of the jurisdiction ofits incorporation, with full corporate power and authority to conduct itsbusiness as now being conducted by it and to own and use the properties itpurports to own and use.

## (b)           Ownershipof Buyer.  As of the date hereof, allissued and outstanding shares of capital stock of the Buyer are held by thepersons and in the amounts set forth in Section 4(b) of the DisclosureSchedule.

## (c)           Authorization ofTransaction.  Buyer has fullcorporate power and authority to execute and deliver the Transaction Documentsand to perform its obligations thereunder. This Agreement constitutes, and the other Transaction Documents whenexecuted will constitute, the valid and legally binding obligation of Buyer,enforceable against it in accordance with its 

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## terms and conditions.  Theexecution, delivery and performance of the Transaction Documents have been dulyauthorized by Buyer.

## (d)           Non-contravention.  Neither the execution and delivery ofthis Agreement, nor the consummation of the transactions contemplated hereby(including the assignments and assumptions referred to in Section 2above), will (i) violate any constitution, statute, regulation, rule,injunction, judgment, order, decree, ruling, charge, or other restriction ofany government, governmental agency, or court to which Buyer is subject or any provisionof its charter or bylaws or (ii) conflict with, result in a breach of,constitute a default under, result in the acceleration of, create in any partythe right to accelerate, terminate, modify, or cancel, or require any noticeunder any agreement, contract, lease, license, instrument, or other arrangementto which Buyer is a party or by which it is bound or to which any of its assetsare subject, except where the violation, conflict, breach, default,acceleration, termination, modification, cancellation, failure to give notice,or Lien would not have a Material Adverse Effect.  Buyer does not need to give any notice to,make any filing with, or obtain any authorization, consent, or approval of anygovernment or governmental agency in order for the Parties to consummate thetransactions contemplated by this Agreement (including the assignments andassumptions referred to in Section 2 above), except where the failure togive notice, to file, or to obtain any authorization, consent, or approvalwould not have a Material Adverse Effect.

## (e)           Brokers’ Fees.  Buyer has no liability or obligationto pay any fees or commissions to any broker, finder, or agent with respect tothe transactions contemplated by this Agreement for which Seller could becomeliable or obligated.

# Section 5.               **[RESERVED]**

# Section 6.               Post-ClosingCovenants.  The Parties agreeas follows with respect to the period following the Closing:

## (a)           General.  Each Party shall, at the request ofany other Party from time to time and at any time, whether on or after theClosing Date, and without further consideration, execute and deliver suchdeeds, assignments, transfers, assumptions, conveyances, powers of attorney,receipts, acknowledgments, acceptances and assurances as may be reasonablynecessary to procure for the Party so requesting, and its successors andassigns, or for aiding and assisting in collecting and reducing to possession,any and all of the Acquired Assets, or for the assumption of the AssumedLiabilities, or to otherwise satisfy and perform the obligations of the Partieshereunder.  Without limiting thegenerality of the foregoing, Seller shall, upon the request of Buyer, in atimely manner on and after the Closing Date execute and deliver to Buyer suchother documents, releases, assignments and other instruments as may bereasonably required to effectuate completely the transfer and assignment toBuyer of, and to vest fully in Buyer, Seller’s rights to, the AcquiredAssets.  In furtherance of the foregoing,Seller shall accumulate weekly the proceeds of any Acquired Receivablesreceived by it and such proceeds shall be remitted to Buyer no later than thethird business day following the last day of the week in which received andshall be held in trust for the benefit of Buyer until so remitted.

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## (b)           Transition.  Seller will not take any action thatis designed to or could reasonably be anticipated to discourage any lessor,licensor, customer, supplier, or other business associate of Seller frommaintaining the same business relationships with Buyer after the Closing as itmaintained with Seller prior to the Closing. Seller will promptly forward to Buyer any amounts received in respect ofany Acquired Receivable.

## (c)           Non-Competition.

### (i)            Inconsideration of the Purchase Price and the assumption by Buyer of the AssumedLiabilities, for a period of five (5) years from the Closing Date (the “RestrictedPeriod”), Seller and its Affiliates shall not, except as provided in Section6(c)(v), below, sell in the United States or its territories, Mexico orCanada (the “Restricted Territories”) Restricted Products to theRestricted Customers.

### (ii)           Duringthe Restricted Period, Seller and its Affiliates shall not, directly orindirectly through another entity, (x) induce or attempt to induce any customerto cease doing Restricted Business with Buyer or any of its Affiliates, (y)induce or attempt to induce any supplier, licensee, licensor, franchisee orother business relation of Buyer or any of its Affiliates to terminate itsRestricted Business related relationship with Buyer or such Affiliate or (z)interfere with the Restricted Business related relationship between Buyerand/or such Affiliate and any such customer, supplier, licensor, licensee orfranchisee (including by making any negative statements or communications tosuch customer, supplier, licensor, licensee or franchisee about the RestrictedBusiness of Buyer or such Affiliates) with the goal of disrupting suchRestricted Business related relationship;

### (iii)          Duringthe Restricted Period, Seller and its Affiliates shall not, directly orindirectly through another entity, solicit, induce or conspire with or attemptto solicit, induce or conspire with any employee or officer of Buyer or any ofits Affiliates to leave the employ of Buyer or any of its Affiliates, or tocompete in the Restricted Business against the Buyer or any of its Affiliatesor interfere with the employment relationship between Buyer or any of itsAffiliates and any employee or officer of Buyer or such Affiliate(s) in any waythat is adverse to such employment relationship;

### (iv)          Duringthe Restricted Period, Seller and its Affiliates shall not divert or attempt todivert any or all of the Restricted Business of Buyer’s or any of Buyer’sAffiliate’s customers or suppliers from Buyer or its Affiliates in violation ofthis Agreement or applicable law (including any applicable trade secrets law).

### (v)           Notwithstandinganything to the contrary contained in this Agreement, Seller and its Affiliatesshall be entitled to sell, and shall not be restricted in any way from selling,to any Person and whether in the Restricted Territories or otherwise:

#### (A)          Non-fragrancedcandles and non-candle products under the brand names Sterno®, Ambria® or Handy Fuel®;

#### (B)           candles and candle-related products tocustomers other than Wal-Mart where such candles and candle-related products donot constitute more than 

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#### 10% of the aggregate salesby Seller and/or its Affiliates to customers other than Wal-Mart; and

#### (C)           candles and candleproducts sold to customers other than Wal-Mart under the brand name ColonialCandleTM orany related brand name.

### (vi)          Thecovenants in this Section 6(c) are severable and separate, and theunenforceability of any specific covenant in this Section 6(c) is notintended by any Party to, and shall not, affect the provisions of any othercovenant in this Section 6(c).  Ifany court of competent jurisdiction shall determine that the scope, time, orterritorial restrictions set forth in this Section 6(c) are unreasonableas applied to Seller, the Parties acknowledge their mutual intention andagreement that those restrictions be enforced to the fullest extent the courtdeems reasonable, and that they thereby shall be reformed to that extent asapplied to Seller.

### (vii)         Allof the covenants in this Section 6(c) are intended by each Party heretoto be, and shall be construed as, an agreement independent of any otherprovision in this Agreement and the existence of any claim or cause of actionof Seller against Buyer, whether predicated on this Agreement or otherwise,shall not constitute a defense to the enforcement by Buyer of any covenant inthis Section 6(c).  It isspecifically agreed that the time periods specified in Section 6(c)(i)shall be computed by excluding from that computation any time during whichSeller has been found by a court of competent jurisdiction to have been inviolation of any provision of Section 6(c)(i).

### (viii)        Buyerand Seller hereby agree that this Section 6(c) is a material andsubstantial part of this Agreement, and absent Seller agreeing to be bound bythis Section 6(c), Buyer would not have consummated the Acquisition.

### (ix)           Theparties hereto agree that money damages would not necessarily be an adequateremedy for any breach of this Section 6(c).  Because of the difficulty in measuring theeconomic losses that may be incurred by Buyer as a result of any breach bySeller of the covenants in this Section 6(c) and because of theimmediate and irreparable damage that could be caused to Buyer for which itwould have no other adequate remedy, Seller agrees that Buyer may enforce theprovisions of this Section 6(c) by any equitable or legal means,including seeking an appropriate injunction or restraining order against Sellerif a breach of any of those provisions occurs. Therefore, in the event of a breach or threatened breach of this Section6(c), Buyer or its successors or assigns may, in addition to other rightsand remedies existing in their favor, apply to any court of competentjurisdiction for specific performance and/or injunctive or other relief(temporary and/or permanent), in order to enforce, or prevent any violationsof, the provisions hereof.

### (x)            Notwithstandinganything to the contrary contained in this Agreement:

#### (A)          nothing in thisAgreement shall or shall be deemed to prohibit the running by Seller or any ofSeller’s Affiliates of general advertisements, not specifically addressed toBuyer or its Affiliates, offering employment or the hiring of any person whoresponds to any such general advertisement; and

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#### (B)           neither Seller norany of its Affiliates shall be restricted from owning, and each shall beentitled to be the owner of, not more than five percent (5%) of the outstandingsecurities of any class of an entity, whether engaged in the Restricted Businessor not, which is publicly traded, so long as Seller has no active participationin the business of such entity.

(d)           Preservationof Records.  Seller shall preserveand keep copies of all data (to the extent not physically transferred to theBuyer at or after the Closing, with the Memphis Facility or otherwise) relatedto that portion of the Business conducted with the Acquired Assets, includingcustomer lists, referral sources, research and development reports, productionreports, any performance testing results on products, service and warrantyrecords, financial and accounting records, creative materials, advertisingmaterials, promotional materials, correspondence and other similar documentsfor a period of five (5) years from the Closing Date and shall make suchdocuments available to Buyer as may be reasonably required by Buyer inconnection with, among other things, the conduct by the Buyer of the Businessconducted with the Acquired Assets and shall permit Buyer to make and keepcopies of such records, at Seller’s sole cost and expense.  In addition, Seller shall, and shall causeits Affiliates to, preserve and keep the financial records held by it relatingto the Business for a period of three (3) years from the Closing Date and shallmake such records available to Buyer as may be reasonably required by Buyer inconnection with, among other things, the conduct by the Buyer of the Businessconducted with the Acquired Assets, any insurance claims, governmentalinvestigations, or securities offerings and shall permit Buyer to make and keepcopies of such records, at Buyer’s sole cost and expense.

(e)           Releaseof Guaranty.  Buyer will usecommercially reasonable efforts to cooperate with Seller in obtaining a release(the “Release of Guaranty”) of the guaranty of Blyth of the obligationsof Seller under the Lease with respect to the Memphis****Facility(the “Guaranty”).  Withoutlimiting the foregoing, as soon as practicable and, in any event, no later thanthirty (30) days from the Closing Date, Buyer shall obtain or provide to thelandlord under the Lease with respect to the Memphis Facility a letter ofcredit or other credit enhancement acceptable to such landlord and Buyer assecurity for Buyer’s performance under the lease and in substitution for theGuaranty.

(f)            Wal-Mart Relationship.  Seller shall cooperate with the Buyer, andthe Buyer shall cooperate with the Seller, in endeavoring to ensure that thecustomer relationship, with respect to the Business only, of Seller withWal-Mart shall transfer to Buyer from and after the Closing.  Without limiting the generality of theforegoing, (i) Buyer shall take reasonable steps to assure Wal-Mart that Buyershall be, and shall continue to be, able to service the customer relationshipwith Wal-Mart including, without limitation, through the continued maintenanceand operation of the Memphis Facility and the Bentonville Facility, supportingradio frequency identification (RFID) programs and maintenance of existingservice levels and receivables terms; and (ii) Buyer and Seller shall cooperatein making such presentations to Wal-Mart as are necessary or advisable tofacilitate the transfer of the aforedescribed customer relationship withWal-Mart from Seller to Buyer, including, without limitation, by making appropriatepersonnel available and providing available data to the extent not subject toconflicting confidentiality agreements or requirements.

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(g)           EmployeeMatters.  No later than five (5)business days after the Closing, Buyer shall (A) offer employment on an at-willbasis, to those persons listed in Section 6(g)(A) of the DisclosureSchedule, such offer of employment to be on terms that are comparable to thoseupon which such persons were, immediately prior to the Closing, employed bySeller including, without limitation, as to compensation and benefits (it beingunderstood and agreed that the provisions of this Section 6(g) are notfor the benefit of any of the persons listed in Section 6(g)(A) of theDisclosure Schedule and shall not, and shall not be construed to, give or vestin any of such persons any right or entitlement to employment or continuedemployment or to a particular level of compensation or benefits with or fromeither Seller or Buyer) and (B) make appropriate arrangements to transitionthose persons set forth on Section 6(g)(A) and Section 6(g)(B) ofthe Disclosure Schedule who have been offered and accepted employment with theBuyer to the payroll accounting and other human resources systems of Buyer andto Buyer’s benefit plans. Seller agrees that, after Closing, Buyer may, butshall not be required to, offer employment, on an at-will basis, to thosepersons listed in Section 6(g)(B) of the Disclosure Schedule.  Buyer acknowledges and agrees that, in theevent that Buyer does not, for any reason, offer employment to any of thepersons listed in Section 6(g)(A) or Section 6(g)(B) of theDisclosure Schedule, Seller may, but shall not be required to, retain any ofsuch persons as employees of Seller and utilize any of such persons to provideservices to Buyer pursuant to the Transition Services Agreement, including,without limitation, services set forth on Exhibit A thereto, in which eventBuyer shall pay to Seller the consideration provided for in, and in the mannerprovided in, Section 4.1 of the Transition Services Agreement, whichconsideration shall be in addition to the consideration specified in Exhibit Ato the Transition Services Agreement and shall be calculated taking intoaccount stay bonuses or other incentives, if any, paid or provided by Seller toany or all of such persons so retained. Seller agrees that any such stay bonuses or other incentives, if any,will be calculated and determined in a manner consistent with the manner inwhich stay bonuses currently set forth on Exhibit A to the Transition ServicesAgreement were determined.

# Section 7.               Conditionsto Obligation to Close.

(a)           Conditions to Buyer’s Obligation.  The obligation of Buyer to consummatethe transactions to be performed by it in connection with the Closing issubject to satisfaction of the following conditions:

### (i)            the representationsand warranties set forth in Section 3 above shall be true and correct inall material respects (except for those representations and warrantiesqualified by “material,” which shall be true and correct in all respects) atand as of the Closing Date;

### (ii)           Seller shall haveperformed and complied with all of its covenants hereunder in all materialrespects (other than those covenants contained in Section 2(e) whichshall have been complied with in all respects) through the Closing;

### (iii)          no action, suit, orproceeding shall be pending before (or that could come before) any court orquasi-judicial or administrative agency of any federal, state, local, orforeign jurisdiction or before (or that could come before) any arbitratorwherein an unfavorable injunction, judgment, order, decree, ruling, or chargewould (A) prevent consummation of any of 

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### thetransactions contemplated by this Agreement, (B) cause any of the transactionscontemplated by this Agreement to be rescinded following consummation or (C)adversely affect the right of Buyer to own the Acquired Assets (and no suchinjunction, judgment, order, decree, ruling, or charge shall be in effect);

### (iv)          Seller shall havedelivered to Buyer a certificate, executed by an authorized officer of Seller,to the effect that each of the conditions specified above in Section7(a)(i)-(iii) is satisfied in all respects;

### (v)           the Buyer and theSeller shall have entered into each of the Transition Services Agreement,Patent License Agreement, the Overstock Inventory Agreement and the TrademarkLicense Agreement and all of the same shall be in full force and effect;

### (vi)          Buyer shall havereceived from counsel to Seller an opinion in form and substance as set forthin Exhibit E attached hereto, addressed to Buyer and on which Buyer’slenders shall be entitled to rely, and dated as of the Closing Date;

### (vii)         all actions to betaken by Seller in connection with consummation of the transactionscontemplated hereby and all certificates, opinions, instruments, and otherdocuments required to effect the transactions contemplated hereby will bereasonably satisfactory in form and substance to Buyer;

### (viii)        Seller shall haveobtained and delivered to Buyer a written consent for the assignment of theLease for the Memphis Facility (the “Lease Consent”), in form andsubstance reasonably satisfactory to Buyer;

### (ix)           no damage ordestruction or other change shall have occurred with respect to any of theLeased Real Property or any portion thereof that, individually or in theaggregate, would materially impair the use or occupancy of the Leased RealProperty;

### (x)            Buyer shall haveobtained financing in form and substance reasonably satisfactory to it and itscounsel, necessary to consummate the transactions contemplated hereby and theconditions precedent to such financing shall have been satisfied; and

### (xi)           Buyer shall havehad substantive diligence discussions with Wal-Mart regarding Wal-Mart’srelationship with Seller and its continued relationship with Buyer, andWal-Mart shall not have advised Buyer that it intends to adversely change therelationship between Wal-Mart, on the one hand, and Buyer and Buyer’s Wal-Martrelationship management team, on the other, from that currently in existencebetween Wal-Mart, on the one hand, and Seller and Seller’s Wal-Martrelationship management team, on the other.

Buyer may waive any condition specified in this Section 7(a) ifit executes a writing so stating at or prior to the Closing.

(b)           Conditions to Seller’s Obligation.  The obligation of Seller to consummatethe transactions to be performed by it in connection with the Closing issubject to satisfaction of the following conditions:

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(i)            the representations and warrantiesset forth in Section 4 above shall be true and correct in all materialrespects (except for those representations and warranties qualified by “material,”which shall be true and correct in all respects) at and as of the Closing Date;

### (ii)           Buyer shall haveperformed and complied with all of its covenants hereunder in all materialrespects (other than those covenants contained in Section 2(e) whichshall have been complied with in all respects) through the Closing;

### (iii)          no action, suit, orproceeding shall be pending before any court or quasi-judicial oradministrative agency of any federal, state, local, or foreign jurisdiction orbefore any arbitrator wherein an unfavorable injunction, judgment, order,decree, ruling, or charge would (A) prevent consummation of any of thetransactions contemplated by this Agreement or (B) cause any of thetransactions contemplated by this Agreement to be rescinded followingconsummation (and no such injunction, judgment, order, decree, ruling, orcharge shall be in effect);

### (iv)          Buyer shall havedelivered to Seller a certificate, executed by an authorized officer of Buyer,to the effect that each of the conditions specified above in Section7(b)(i)-(iii) is satisfied in all respects;

### (v)           Seller and Buyershall have received all material authorizations, consents, and approvals ofgovernments and governmental agencies referred to in Section 3(c) and Section4(c) above;

### (vi)          the Buyer and theSeller shall have entered into each of the Transition Services Agreement,Patent License Agreement, the Overstock Inventory Agreement and the TrademarkLicense Agreement and all of the same shall be in full force and effect;

### (vii)         Seller shall havereceived from counsel and local counsel to Buyer opinions in form and substanceas set forth in Exhibit F attached hereto, addressed to Seller and datedas of the Closing Date;

### (viii)        all actions to betaken by Buyer in connection with consummation of the transactions contemplatedhereby and all certificates, opinions, instruments, and other documentsrequired to effect the transactions contemplated hereby will be reasonablysatisfactory in form and substance to Seller;

### (ix)           the execution,delivery and performance of this Agreement, and all other related matters,shall have been approved by the Boards of Directors of Seller and of Blyth; and

### (x)            Buyer shall havepaid the Purchase Price to Seller.

Seller may waive any condition specified in this Section 7(b) ifit executes a writing so stating at or prior to the Closing.

# Section 8.               Remediesfor Breaches of This Agreement.

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## (a)           Survival ofRepresentations and Warranties.  Allof the representations and warranties of Buyer and Seller contained in thisAgreement shall survive the Closing and continue in full force and effect for aperiod of fifteen months thereafter; provided, however, that therepresentations and warranties contained in: (i) Sections 3(b), 3(d)and 3(e) and Sections 4(b) and (d) shall survive theClosing and continue in full force and effect indefinitely; and (ii) Sections3(n) and (p) shall survive the Closing and continue in full forceand effect until the 90th day following the applicable statute oflimitations.

## (b)           IndemnificationProvisions for Buyer’s Benefit.  

### (i)            In the event Sellerbreaches any of its representations, warranties, and covenants contained inthis Agreement, and, provided that Buyer makes a written claim forindemnification against Seller pursuant to Sections 8(d) and 10(g)below within the survival period (if there is an applicable survival periodpursuant to Section 8(a) above), then Seller agrees to indemnify Buyerfrom and against the entirety of any Adverse Consequences Buyer may suffer(including any Adverse Consequences Buyer may suffer after the end of anyapplicable survival period) resulting from, arising out of, relating to, in thenature of, or caused by the breach; provided, however, that (A)Seller shall not have any obligation to indemnify Buyer from and against anyAdverse Consequences resulting from, arising out of, relating to, in the natureof, or caused by the breach of any representation or warranty of Sellercontained in Section 3(c) or Sections 3(f)-(u) above unless anduntil Buyer has suffered Adverse Consequences by reason of all such breaches inexcess of a $300,000 aggregate deductible (after which point Seller will beobligated only to indemnify Buyer from and against further such AdverseConsequences) and (B) (other than with respect to Seller’s representations andwarranties contained in Sections 3(a), (b), (d), (e),(n) and (p) as to which the aggregate ceiling will be an amountequal to the Purchase Price), there will be a $6,000,000 aggregate ceiling onthe obligation of Seller to indemnify Buyer from and against AdverseConsequences resulting from, arising out of, relating to, in the nature of, orcaused by breaches of the representations and warranties of Seller.

### (ii)           Seller agrees toindemnify Buyer from and against the entirety of any Adverse Consequences Buyermay suffer resulting from, arising out of, relating to, in the nature of, orcaused by any liability of Seller that is not an Assumed Liability,indefinitely.

## (c)           IndemnificationProvisions for Seller’s Benefit.

### (i)            In the event Buyerbreaches any of its representations, warranties, and covenants contained inthis Agreement, and, provided that Seller makes a written claim forindemnification against Buyer pursuant to Sections 8(d) and 10(g) belowwithin the survival period (if there is an applicable survival period pursuantto Section 8(a) above), then Buyer agrees to indemnify Seller from andagainst the entirety of any Adverse Consequences suffered (including anyAdverse Consequences suffered after the end of any applicable survival period)resulting from, arising out of, relating to, in the nature of, or caused by thebreach.

### (ii)           Buyer agrees toindemnify Seller from and against the entirety of any Adverse Consequencessuffered resulting from, arising out of, relating to, in the nature of, orcaused by any Assumed Liability.

 

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## (d)           Limitations.  Notwithstanding the foregoing, noindemnification for any Adverse Consequences shall be made pursuant to this Section8 if and to the extent that such Adverse Consequences were taken intoaccount in determining whether or not any adjustment would be made to thePurchase Price pursuant to Section 2(g) (whether or not any suchadjustment was, in fact, made) or the amount of any such adjustment.

## (e)           Matters InvolvingThird Parties.

### (i)            If any third partynotifies any Party (the “Indemnified Party”) with respect to any matter(a “Third-Party Claim”) that may give rise to a claim forindemnification against the other Party (the “Indemnifying Party”) underthis Section 8, then the Indemnified Party shall promptly notify theIndemnifying Party thereof in writing; provided, however, that nodelay on the part of the Indemnified Party in notifying the Indemnifying Partyshall relieve the Indemnifying Party from any obligation hereunder unless (andthen solely to the extent) the Indemnifying Party is thereby actually andmaterially prejudiced.

### (ii)           The IndemnifyingParty will have the right to assume the defense of the Third-Party Claim withcounsel of its choice reasonably satisfactory to the Indemnified Party at anytime within 15 business days after the Indemnified Party has given notice ofthe Third-Party Claim; provided, however, that the IndemnifyingParty must conduct the defense of the Third-Party Claim actively and diligentlythereafter in order to preserve its rights in this regard; and provided furtherthat the Indemnified Party may retain separate co-counsel at its sole cost andexpense and participate in the defense of the Third-Party Claim.

### (iii)          So long as theIndemnifying Party has assumed and is conducting the defense of the Third-PartyClaim in accordance with Section 8(e)(ii) above, (A) the IndemnifyingParty will not consent to the entry of any judgment on or enter into anysettlement with respect to the Third-Party Claim without the prior writtenconsent of the Indemnified Party (not to be unreasonably withheld) unless thejudgment or proposed settlement involves only the payment of money damages bythe Indemnifying Party and does not impose an injunction or other equitablerelief upon the Indemnified Party and (B) the Indemnified Party will notconsent to the entry of any judgment or enter into any settlement with respectto the Third Party Claim without the prior written consent of the IndemnifyingParty (not to be unreasonably withheld).

### (iv)          In the event theIndemnifying Party does not assume and conduct the defense of the Third-PartyClaim in accordance with Section 8(e)(ii) above, however, (A) theIndemnified Party may defend against, and consent to the entry of any judgmenton or enter into any settlement with respect to, the Third-Party Claim in anymanner it reasonably may deem appropriate (and the Indemnified Party need notconsult with, or obtain any consent from, the Indemnifying Party in connectiontherewith) and (B) the Indemnifying Party will remain responsible for any AdverseConsequences the Indemnified Party may suffer resulting from, arising out of,relating to, in the nature of, or caused by the Third-Party Claim to thefullest extent provided in this Section 8.

## (f)            Determination of Adverse Consequences.  Indemnificationpayments under this Section 8 shall be paid by the Indemnifying Partywithout reduction for any Tax Benefits available to the Indemnified Party. However,to the extent that the Indemnified Party 

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## recognizes Tax Benefits as a result of any Adverse Consequences, theIndemnified Party shall pay the amount of such Tax Benefits (but not in excessof the indemnification payment or payments actually received from theIndemnifying Party with respect to such Adverse Consequences) to theIndemnifying Party as such Tax Benefits are actually recognized by theIndemnified Party.  For this purpose, theIndemnified Party shall be deemed to recognize a tax benefit (“Tax Benefit”)with respect to a taxable year if, and to the extent that, the IndemnifiedParty’s cumulative liability for Taxes through the end of such taxable year,calculated by excluding any Tax items attributable to the Adverse Consequencesfrom all taxable years, exceeds the Indemnified Party’s actual cumulativeliability for Taxes through the end of such taxable year, calculated by takinginto account any Tax items attributable to the Adverse Consequences and thereceipt of indemnification payment under this Section 8 for all taxableyears (to the extent permitted by relevant Tax law and treating such Tax itemsas the last items taken into account for any taxable year).  All indemnification payments under this Section8 shall be deemed adjustments to the Purchase Price.

## (g)           Exclusive Remedy.  Otherthan with respect to the Net Asset Value Adjustment set forth in Section2(g), Buyer and Seller acknowledge and agree that the foregoingindemnification provisions in this Section 8 shall be the exclusiveremedy of Buyer and Seller with respect to the transactions contemplated bythis Agreement; provided that, in the case of fraud or willfulmisrepresentation or breach, the foregoing indemnification provisions shall notbe exclusive, but shall be in addition to any other rights or remedies to whichBuyer and Seller or their respective assigns, as the case may be, may beentitled at law or in equity.  Withoutlimiting the generality of the immediately preceding sentence, but subject tothe proviso contained therein, Buyer and Seller hereby waive any statutory,equitable, or common law rights or remedies relating to any environmentalmatters, including without limitation any such matters arising under anyEnvironmental, Health, and Safety Requirements and including without limitationany arising under CERCLA. Blyth Guaranty. Blyth, as the direct andbeneficial owner of all of the equity interests of Seller, hereby agrees tounconditionally, irrevocably and absolutely guaranty to Buyer and its permittedassigns the prompt and complete payment of all amounts owing to such Person bySeller pursuant to this Section 8. In the event Seller fails or refusesto timely pay any amounts owing Buyer (or its permitted assigns) under this Section8, Buyer (or its permitted assigns) shall make a written demand upon Blythat the address set forth on the signature page hereto to pay such unpaidamounts.

# Section 9.               **[RESERVED]**

# Section 10.             Miscellaneous.

## (a)           Press Releases and Public Announcements.  NoParty shall issue any press release or public announcement relating to thesubject matter of this Agreement without the prior written approval of theother Party; provided, however, that any Party may make anypublic disclosure it believes in good faith is required by applicable law orany listing or trading agreement concerning its publicly traded securities (inwhich case the disclosing Party will advise the other Party prior to making thedisclosure).

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## (b)           No Third-Party Beneficiaries.  ThisAgreement shall not confer any rights or remedies upon any Person other thanthe Parties and their respective successors and permitted assigns.

## (c)           Entire Agreement.  This Agreement (including thedocuments (including, without limitation, the Confidentiality Agreement)referred to herein) constitutes the entire agreement between the Parties andsupersedes any prior understandings, agreements, or representations by orbetween the Parties, written or oral, to the extent they relate in any way tothe subject matter hereof.

## (d)           Succession and Assignment.  ThisAgreement shall be binding upon and inure to the benefit of the Parties namedherein and their respective successors and permitted assigns.  No Party may assign either this Agreement orany of its rights, interests, or obligations hereunder without the priorwritten approval of the other Party; provided, however, thatBuyer may (i) assign any or all of its rights and interests hereunder to one ormore of its Affiliates and (ii) designate one or more of its Affiliates toperform its obligations hereunder (in any or all of which cases Buyernonetheless shall remain responsible for the performance of all of itsobligations hereunder) and (iii) collaterally assign any or all of its rightsand interests hereunder to one or more lenders to the Buyer, including, withoutlimitation, Wachovia Bank, National Association, in its capacity as agent (the “Agent”)for the lenders (the “Lenders”) from time to time party to that certain Loanand Security Agreement by and among the Buyer, the Agent, and the Lenders asthe same may be amended, modified, supplemented, extended, renewed, restated orreplaced from time to time.

## (e)           Paymentsto Buyer.

Seller acknowledges that Buyer has collaterally assigned to the Agentits rights and interests (but not obligations) under this Agreement.  If Seller is required to make a payment toBuyer, Buyer hereby directs the Seller to pay such amount to Buyer by wiretransfer in cash pursuant to the following wire transfer instructions: toWachovia Bank, National Association, Atlanta, Georgia, ABA No. 053-207-766, forcredit to Wachovia Bank, National Association, Account No. 2000028274625 re: MVPGroup International, Inc. (the “Blocked Account”), unless anotheraccount is designated by the Buyer, in writing, after the date hereof.  The Parties agree that amounts payable toBuyer by Seller pursuant to any right of Buyer to indemnification under thisAgreement, or pursuant to Section 2(g) of this Agreement, may be offsetby Seller against amounts payable by Buyer under the Transition ServicesAgreement or the Overstock Inventory Agreement. The Seller agrees (i) that it shall not offset amounts payable by Buyerto it against the proceeds of Acquired Receivables that may be received by itafter the date hereof, such proceeds of Accounts Receivable to be forwarded asprovided in Section 6(a), above and (ii) to provide reasonable notice ofany proposed set off under this Section 10(e).

## (f)            Counterparts.  ThisAgreement may be executed in one or more counterparts (including by means ofelectronic transmission), each of which shall be deemed an original but all ofwhich together will constitute one and the same instrument.

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## (g)           Headings.  The section headingscontained in this Agreement are inserted for convenience only and shall notaffect in any way the meaning or interpretation of this Agreement.

## (h)           Notices.  All notices, requests,demands, claims, and other communications hereunder shall be in writing.  Any notice, request, demand, claim, or othercommunication hereunder shall be deemed duly given on receipt as shown bywritten or electronic records and either (i) delivered personally to therecipient, (ii) sent to the recipient by reputable overnight courier service(charges prepaid), (iii) sent to the recipient by facsimile transmission orelectronic mail, or (iv) mailed to the recipient by certified or registeredmail, return receipt requested and postage prepaid, and addressed to theintended recipient as set forth below:

| If to Seller: |   | Blyth, Inc.                                   |
|---------------|--------|-----------------------------------------------|
|          |   | One East Weaver Street                        |
|          |   | Greenwich, CT 06831                           |
|          |   | Attention: Michael S. Novins, Esq.            |
|          |   | Fax: (203) 552-9168                           |
|          |   |                                          |
| Copy to:      |   | Finn Dixon & Herling LLP                  |
|          |   | 177 Broad Street, 15th Floor             |
|          |   | Stamford, CT 06901-2048                       |
|          |   | Attention: Harold B. Finn III, Esq.           |
|          |   | Fax: (203) 325-5001                           |
|          |   |                                          |
| If to Buyer:  |   | MVP Group International, Inc.                 |
|          |   | 1031 Le Grand Blvd.                           |
|          |   | Charleston, SC 29492                          |
|          |   | Attention:                                    |
|          |   | Fax: (843) 216-8386                           |
|          |   |                                          |
| Copy to:      |   | Nelson Mullins Riley & Scarborough LLP    |
|          |   | 999 Peachtree Street, NE, 14th Floor     |
|          |   | Atlanta, GA 30309                             |
|          |   | Attention: Rusty Pickering, Esq.              |
|          |   | Fax: (404) 817-6035                           |
|          |   |                                          |
| Copy to:      |   | Wachovia Bank, National Association, as Agent |
|          |   | 171 17th Street NW                            |
|          |   | Atlanta, GA 30363                             |
|          |   | Attention: Portfolio Manager - MVP            |
|          |   | Fax: (404) 214-7299                           |

 

Any Party may change the address to which notices, requests, demands,claims, and other communications hereunder are to be delivered by giving theother Party notice in the manner herein set forth.  The copies referred to above in this Section10(h) shall not be required to effectively deliver notice pursuant hereto tothe Parties and the failure of any Party to provide 

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such a copy or to provide a copy as provided for inthe notice provision(s) of any document, instrument or agreement executed inconnection herewith, shall not constitute a breach of this Agreement or of anysuch document, instrument or agreement.

## (i)            Governing Law.  ThisAgreement shall be governed by and construed in accordance with the domesticlaws of the State of New York without giving effect to any choice or conflictof law provision or rule (whether of the New York or any other jurisdiction)that would cause the application of the laws of any jurisdiction other than theState of New York.

## (j)            Amendments and Waivers.  Noamendment of any provision of this Agreement shall be valid unless the sameshall be in writing and signed by Buyer and Seller.  No waiver by any Party of any provision ofthe Agreement or any default, misrepresentation, or breach of warranty orcovenant hereunder, whether intentional or not, shall be valid unless the sameshall be in writing and signed by the Party making such waiver nor shall suchwaiver be deemed to extend to any prior or subsequent default,misrepresentation, or breach of warranty or covenant hereunder or affect in anyway any rights arising by virtue of any prior or subsequent such occurrence.

## (k)           Severability.  Anyterm or provision of this Agreement that is invalid or unenforceable in anysituation in any jurisdiction shall not affect the validity or enforceabilityof the remaining terms and provisions hereof or the validity or enforceabilityof the offending term or provision in any other situation or in any otherjurisdiction.

## (l)            Expenses.  Each of Buyer andSeller shall bear its own costs and expenses (including legal fees andexpenses) incurred in connection with this Agreement and the transactionscontemplated hereby.

## (m)          Construction.  TheParties have participated jointly in the negotiation and drafting of thisAgreement.  In the event an ambiguity orquestion of intent or interpretation arises, this Agreement shall be construedas if drafted jointly by the Parties and no presumption or burden of proofshall arise favoring or disfavoring any Party by virtue of the authorship ofany of the provisions of this Agreement. Any reference to any federal, state,local, or foreign statute or law shall be deemed also to refer to all rules andregulations promulgated thereunder, unless the context requires otherwise.  The word “including” shall mean includingwithout limitation.

## (n)           Incorporation of Exhibits and Schedules.  TheExhibits and Schedules identified in this Agreement are incorporated herein byreference and made a part hereof.

## (o)           Confidentiality Agreement.  TheParties acknowledge and agree that (a) each of the Parties shall be bound byeach and all of the terms, provisions and conditions set forth in theConfidentiality Agreement as if it were an original party thereto, and by doingso, it shall have all of the rights and obligations of a party thereto, withBuyer having the same rights and obligations as MVP (as defined in theConfidentiality Agreement) and Seller having the same rights and obligations asBlyth (as defined in the Confidentiality Agreement) and (b) the ConfidentialityAgreement shall remain in full force and effect notwithstanding the executionand delivery of this Agreement and the consummation of the transactions thatare contemplated hereby; provided, however, that in the eventthat the transactions contemplated hereby are 

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## consummated, Buyer shall be entitled to use, in connection with theconduct of the business conducted by Buyer with the Acquired Assets, theConfidential Information provided to it by Seller to conduct suchbusiness.  Without limiting theforegoing, Buyer and Seller acknowledge that each has heretofore provided, andwill hereafter provide, sensitive Confidential Information to the other andthat each has heretofore granted, and will hereafter grant, access to the other’spersonnel who are critical to the conduct of their respective businesses.Accordingly, each of the Parties further promises and agrees that, in the eventthat this Agreement is terminated for any reason, it will not thereafter (a)use any Confidential Information provided to it by the other Party inconnection with the conduct of a business that is competitive with that of suchother Party, or (b) for a period of three years from the date of suchtermination, hire, engage as a consultant or otherwise engage the services ofany of the other Party’s employees (the “Additional Assurances”). Theforegoing Additional Assurances are intended to supplement the ConfidentialityAgreement and shall be governed by the provisions of Sections 7, 9, 10 and 12of the Confidentiality Agreement, which are incorporated herein and made a parthereof. If the final judgment of a court of competent jurisdiction declaresthat any term or provision of this Section 10(o) is invalid orunenforceable, the Parties agree that the court making the determination ofinvalidity or unenforceability shall have the power to reduce the scope,duration, or area of the term or provision, to delete specific words orphrases, or to replace any invalid or unenforceable term or provision with aterm or provision that is valid and enforceable and that comes closest toexpressing the intention of the invalid or unenforceable term or provision, andthis Section 10(o) shall be enforceable as so modified after theexpiration of the time within which the judgment may be appealed.

*** ** * ***

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement asof the date first above written.
|        | MVP GROUP INTERNATIONAL, INC.        |
|--------|--------------------------------------|
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |   |
|   |                                 | Name: | Troy Propes |   |
|   |                                 | Title: | President |   |
|   |                                 |   |   |   |
|   |                                 |   |   |   |
|   | CANDLE CORPORATION OF AMERICA        |
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |   |
|   |                                 | Name: | Michael Novins |   |
|   |                                 | Title: | Vice President |   |
|   |                                 |   |   |   |
|   |                                 |   |   |   |
|   | SOLELY FOR PURPOSES OF SECTION 8(H): |
|   |                                 |
|   | BLYTH, INC.                          |
|   |                                 |
|   |                                 |
|   | By:                                  |   |   |   |
|   |                                 | Name: | Michael Novins |   |
|   |                                 | Title: | Vice President |   |
|   |                                 | Address: | One East Weaver Street |   |
|   |                                 |   | Greenwich, CT 06831 |   |

 

**SignaturePage to Asset Purchase Agreement**

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