Document:

ex_10-14.htm

    
      

      

    

    Exhibit
      10.14

    
      

      
        
          

        

      

      ADDENDUM
        TO DISTRIBUTION AGREEMENT ENTERED ON MARCH 1ST, 2005.

      

      Dated:                                July
        6, 2005

      

      
        	
                BY
                  AND BETWEEN:

              	
                TÉLIPHONE
                  INC., a body politic and corporate, duly incorporated according
                  to law,
                  having a place of business at 1080 Beaver Hall, suite 1555, Montreal,
                  Quebec, H2Z 1S8 herein represented by George Metrakos, President,
                  duly
                  authorized as he so declares,

              

      

      

      
        	
                 

              	
                hereinafter
                  referred to as “TÉLIPHONE”

              

      

      

      
        	
                AND:

              	
                MSBR
                  Communications Inc., a body politic and corporate duly incorporated
                  according to law, having a place of business of at 710 Richelieu
                  #105,
                  Beloeil  QC, Canada J3G 5E8, herein represented by Benoit
                  Ratthé, President, duly authorized as he so
                  declares,

              

      

      

      
        	
                 

              	
                hereinafter
                  referred to as “DISTRIBUTOR”

              

      

      

      
        	
                 

              	
                 

              

      

       

      
        PREAMBLE

         

      

      WHEREAS
        Téliphone and Distributor wish to extend the Territory to include the city
        of
        Ottawa, Ontario, Canada (“Ottawa”).

      

      WHEREFORE
        THE PARTIES HERETO HAVE AGREED AS FOLLOWS:

      

      Distributor
        will receive the same conditions and rights to appoint Re-sellers in
        Ottawa.

      

      Distributor
        will receive the same commission structure as in the rest of the
        Territory.

      

      Distributor
        will receive web sales from customers whose address is found within
        Ottawa.

      

      Distributor
        and Teliphone agree that Teliphone will most likely appoint another distributor
        for the Territory of Ontario, Canada in the future.  As a result,
        Teliphone agrees that any Re-sellers appointed by Distributor (MSBR) will
        remain
        under their direction, and that any web sales made within Ottawa will be
        split
        (ie. 12.5% each on recurring revenues as defined in the formal Agreement)
        between both distributors evenly.

       

      WHEREFORE
        THE PARTIES HERETO HAVE SIGNED WITH DATE EFFECTIVE ON THE DATE AND PLACE
        FIRST
        MENTIONED HEREINABOVE.

      

      
        	TÉLIPHONE
                INC	 	 	Distributor:
                MSBR Communications Inc.	 
	 	 	 	 	 
	per: 	 	 	per: 	 
	 	 	 	 	 
	
                /s/
                  George Metrakos

              	 	 	
                /s/
                  Benoit Ratthé

              	 
	
                George
                  Metrakos, President    

              	 	 	
                Benoit
                  Ratthé, President

              	 
	
                 

              	 	 	
                 

              	 
	July
                6, 2005	 	 	July
                6, 2005	 
	Date	 	 	Date	 

      

                                                                                

      
        
          

        

      

    

    
      Téliphone
        Inc.

      1080
        Beaver Hall, suite 1555

      Montréal,
        Québec, Canada H2Z 1S8

      (514)
        313-6000, 877 TELIPHONE

       www.teliphone.cainfo@teliphone.caex10_01.htm

    
      

    

    EXHIBIT
      10.01

    EXECUTION
      COPY

    Asset
      Purchase Agreement

     

    This
      ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of the
      10th day of
      September, 2007, by and among  S&A Purchasing Corp., a New York
      corporation (the “Buyer”), S&A Supply, Inc., a Massachusetts corporation
      (the “Company”), S&A Realty, Inc., a  Massachusetts corporation
      (“Realty”), S&A Management, Inc., a Massachusetts corporation (“Management,”
and together with Realty and the Company, the “Sellers,” and each individually
      sometimes referred to herein as a “Seller”), Nancy A. Mead (“Nancy”), Nancy A
      Mead and Thomas H. Mead, Trustees of The Discretionary Trust (“Trustees”), under
      The Rodney P. Mead Revocable Trust (the “Trust”), dated January 12,1999, Sarah
      Mead (“Sarah”), Brian Mead (“Brian”) and Adam Mead (“Adam”).  Nancy,
      the Trustees, Sarah, Brian and Adam are the sole shareholders of each of the
      Sellers and are collectively referred to herein as the “Shareholders.” Nancy and
      the Trustees are sometimes referred to herein as the “Majority Shareholders” and
      Sarah, Brian and Adam are sometimes referred to herein as the “Minority
      Shareholders.” Colonial Commercial Corp., a New York corporation and the sole
      shareholder of the Buyer (“Colonial”), is countersigning this Agreement with
      regard to Section 2(e) only.

     

    Recitals

     

    
      	
               

            	
              1.

            	
              The
                Company operates a heating and plumbing supply business and an electrical
                wholesale business (the electrical wholesale business together with
                the
                heating and plumbing supply business, the “Business”) in four locations,
                one of which also serves as the Company’s corporate office and
                distribution center.

            

    

     

    
      	
               

            	
              2.

            	
              Buyer
                desires to purchase the Business and selected assets of the Company,
                and
                to assume selected liabilities of the
                Company.

            

    

     

    
      	
               

            	
              3.

            	
              The
                Company desires to sell such assets and to cause Buyer to assume
                such
                liabilities.

            

    

     

    
      	
               

            	
              4.

            	
              Management
                performs certain administrative services for the
                Company.

            

    

     

    
      	
               

            	
              5.

            	
              Buyer
                desires to purchase selected assets from Management and to assume
                selected
                liabilities of Management related to the operation of the
                Company.

            

    

     

    
      	
               

            	
              6.

            	
              Management
                desires to sell such selected assets and to cause Buyer to assume
                such
                liabilities.

            

    

     

    
      	
               

            	
              7.

            	
              Buyer
                desires to lease the three parcels of real property set forth on
                Schedule
                1(f), two of which are owned by Realty and one of which is owned
                by the
                Company (the three parcels of real property are defined herein as
                the
                "Owned Real Estate").

            

    

     

    
      	
               

            	
              8.

            	
              The
                Company and Realty desire to lease the Owned Real Estate to the
                Buyer.

            

    

     

    Certain
      definitions related to this Agreement are set forth in Section 27.

     

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

    Agreement

     

    NOW,
      THEREFORE, in consideration of the premises and of the mutual covenants
      contained herein, the parties agree as follows:

     

    
      	
              1.

            	
              Sale
                and Purchase of Assets.

            

    

     

    
      	
            	
              (a)

            	
              On
                the terms and subject to the conditions of this Agreement, at the
                Closing
                referred to in Section 5, the Sellers shall sell, convey, assign,
                transfer
                and deliver to Buyer, and Buyer shall purchase, acquire and accept
                delivery of the following assets and properties (the
                “Assets”):

            

    

     

    
      	
               

            	
              (A)

            	
              Merchandise
                inventory as of the Valuation Date (which is the close of business
                on the
                second business day prior to the Closing) that is new and unused
                and in
                its original packaging (the “Merchandise Inventory”); the Merchandise
                Inventory will be physically counted by the Buyer and the Sellers
                jointly
                with each leaving with a printed priced list of the inventory, some
                of
                which will be hand-written. The term “Merchandise Inventory Value” means
                the book value of the Merchandise Inventory as of the Valuation
                Date.  Book value of inventory shall be calculated at Sellers’
                average cost.  Book value shall include a provision for reserve
                for inventory that as of the Closing has not been sold for a period
                of
                eighteen (18) months or inventory in excess of a twelve (12) month
                supply
                (“Inventory Reserve”).  The Merchandise Inventory Value shall
                not include the book value of defective or damaged
                goods.

            

    

     

    
      	
               

            	
              (B)

            	
              Trade
                accounts receivable as of the Valuation Date (the “Trade
                Receivables”).  “Trade Receivables Value” means the value of the
                Trade Receivables as of the Valuation Date less the value of the
                Past Due
                Receivables as of the Valuation Date.  Past Due Receivables
                means any account from any customer whose balance in the over 90
                days old
                aging category exceeds 25 percent of the total account balance of
                such
                customer at the Closing (“Excluded Accounts”), plus, for any account that
                is not an Excluded Account, amounts from any customer that at the
                Closing
                is more than 90 days past due (“90 Day Past Due Receivables”). The Trade
                Receivables will be printed in detail and are subject to the provisions
                set forth in Section 4.

            

    

     

    
      	
               

            	
              (C)

            	
              Trade
                Receivables service charges shall be excluded from Trade Receivables,
                but
                will be paid to Sellers in accordance with Section
                4(c).

            

    

     

    
      	
               

            	
              (D)

            	
              The
                prepaid and other assets of the Sellers (“Prepaid and other Assets”) that
                are listed in Schedule 1(a)(D). The Buyer will share excess rebate
                distributions that are included in Prepaid and other Assets with
                the
                Sellers in proportion to when the purchases took place. The “Prepaid and
                other Assets Value” means the book value of the Prepaid and other Assets
                as set forth in such Schedule,  is subject to adjustment after
                the Closing as provided in Section 3 to account for such events as
                expenses a party may pay on account of the other party for bills
                that
                crossed their respective periods of operation (e.g., telephone and
                other
                utility bills).

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (E)

            	
              The
                fixed assets (the “Fixed Assets”) of the Sellers that are as set forth on
                Schedule 8(v);  provided, however, that Buyer’s purchase of the
                auto and trucks included in Fixed Assets is subject to the assignment
                of
                the Sellers’ auto and truck financing arrangement to Buyer)) at the
                depreciated value of the Fixed Assets (the “Fixed Assets Value”), as set
                forth on the books and records of the Sellers, as of the Valuation
                Date;

            

    

     

    
      	
               

            	
              (F)

            	
              The
                Sellers’ rights from and after the Closing under the North Adams, MA real
                estate lease that is set forth in Schedule 1(a)(F) (the “Real Estate
                Lease”);

            

    

     

    
      	
               

            	
              (G)

            	
              Credit
                applications and customer guarantees in the form used by the Sellers
                in
                its normal operations of business.

            

    

     

    
      	
               

            	
              (H)

            	
              [Intentionally
                Deleted].

            

    

     

    
      	
               

            	
              (I)

            	
              All
                proprietary knowledge, Trade Secrets, Confidential Information, computer
                software and licenses, formulae, designs and drawings, quality control
                data, processes (whether secret or not), methods, inventions and
                other
                similar know-how or rights Used in the conduct of the Sellers’ business,
                including, but not limited to, the areas of manufacturing, marketing,
                advertising and personnel training and recruitment, together with
                all
                other Intangible Rights Used in connection with the Sellers’ business,
                including all files, manuals, documentation and source and object
                codes
                related thereto as well as all files, manuals, documentation relating
                to
                Past-Due Receivables and inventory that is not Merchandise Inventory
                (as
                defined above);

            

    

     

    
      	
               

            	
              (J)

            	
              All
                utility, security and other deposits and prepaid expenses which are
                assignable;

            

    

     

    
      	
               

            	
              (K)

            	
              the
                Sellers’ business as a going concern and its franchises, Permits and other
                authorizations of Governmental Authorities (to the extent such Permits
                and
                other authorizations of Governmental Authorities are transferable)
                and
                third parties, licenses, telephone numbers for all locations, facsimile
                numbers, website addresses, post office boxes, customer lists, vendor
                lists, referral lists and contracts, advertising materials and data,
                restrictive covenants, choses in action and similar obligations owing
                to
                the Sellers from its present and former shareholders, officers, employees,
                agents and others, together with all books, databases, operating
                data and
                records (including financial, accounting and credit records), files,
                papers, records and other data of the Sellers relative to the operation of
                the Sellers’ business, i.e., inventory, customer records, vendor records,
                etc.  Notwithstanding the foregoing, the Sellers and Buyer shall
                for a period of not less than three years make their records for
                transactions through the Closing available to the other on request
                for
                review and copying (whether for the purpose of facilitating the
                preparation of SEC reports for Buyer’s affiliates or otherwise), and they
                shall not destroy their respective records without first offering
                to
                deliver the same to the other
                party.

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (L)

            	
              all
                rights of the Sellers in and to the name S&A Supply, Inc. and any
                other name that incorporates the word S&A and all variants thereof,
                and all other trade names, trademarks and slogans Used in its business,
                all variants thereof and all goodwill associated
                therewith;

            

    

     

    
      	
               

            	
              (M)

            	
              to
                the extent assignable under applicable law, all of Sellers’ rights under
                any insurance policy or contract of insurance or indemnity (or similar
                agreement) under which Sellers’ are an insured, named as an additional
                insured or is otherwise a beneficiary, and all proceeds realized
                in
                connection therewith;

            

    

     

    
      	
               

            	
              (N)

            	
              certificates
                and copies of all insurance policies, all as set forth on Schedule
                8(a)(N);

            

    

     

    
      	
               

            	
              (O)

            	
              all
                other property and rights of every kind or nature Used by the Sellers
                in
                the operation of its business;

            

    

     

    
      	
               

            	
              (P)

            	
              all
                other purchase orders, Customer orders, and other rights under contracts
                in the ordinary course.

            

    

     

    
      	
               

            	
              (Q)

            	
              the
                verbal Kohler distribution agreement (“Kohler Distribution Agreement”),
                provided, however, that it is expressly understood among the parties
                that
                the Kohler Distribution Agreement shall not be part of the Assets
                in the
                event the Sellers after using their best efforts fail to obtain the
                necessary consents required to assign such distribution agreement
                to the
                Buyer.

            

    

     

    
      	
            	
              (b)

            	
              Notwithstanding
                the foregoing, the following assets and properties (“Excluded Assets”) are
                not included in the Assets:

            

    

     

    
      	
               

            	
              (A)

            	
              Cash

            

    

     

    
      	
               

            	
              (B)

            	
              Loan
                Receivable due from each of S&A Management, Inc.,  S&A
                Realty, Inc. and the Shareholder, each such Loan Receivable as defined
                in
                the Company’s audited Balance Sheet for the year ended December 31, 2006
                (“2006 Audited Balance Sheet”);

            

    

     

    
      	
               

            	
              (C)

            	
              The
                current and non-current portion of the Note Receivable due from
                Shareholders set forth in the 2006 Audited Balance
                Sheet;

            

    

     

    
      	
               

            	
              (D)

            	
              The
                life insurance policy, and the cash value of life insurance set forth
                in
                the 2006 Audited Balance Sheet;

            

    

     

    
      	
               

            	
              (E)

            	
              prepaid
                insurance, it being understood that Buyer will obtain its own policies,
                and prepaid taxes, due from employees or due from other affiliates
                of the
                Sellers.

            

    

     

    
      	
               

            	
              (F)

            	
              any
                and all contracts or policies of insurance that are used to pay or
                fund
                benefits under any employee benefit plan, as such term is defined
                in
                Section 3(3) of the Employee Retirement Income Security Act of
                1974.

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      	
            	
              (c)

            	
              It
                is specifically understood and agreed by the parties hereto that
                the Buyer
                is acquiring, and each Seller is selling, all of the tangible and
                intangible assets attributable to or Used by the Company in its Business,
                except the Excluded Assets. Any cash proceeds (inclusive of checks,
                money
                orders and credit card transactions) of the Excluded Assets received
                by
                the Buyer subsequent to the date of Closing shall be remitted by
                Buyer to
                the Company (and Company shall receive such remittance on behalf
                of the
                Sellers) within ten (10) days from receipt. Conversely, any cash
                proceeds
                (inclusive of checks, money orders and credit card transactions)
                of the
                Assets received by the Sellers subsequent to the date of Closing
                shall be
                remitted by the Sellers to Buyer within ten (10) days from
                receipt.

            

    

     

    
      	
            	
              (d)

            	
              The
                aforesaid assets and properties to be transferred to the Buyer hereunder,
                but not including the Excluded Assets, are hereinafter collectively
                referred to as the “Assets.”

            

    

     

    
      	
            	
              (e)

            	
              Method
                of Conveyance.

            

    

     

    
      	
               

            	
              (A)

            	
              The
                sale, transfer, conveyance, assignment and delivery by the Sellers
                of the
                Assets to the Buyer in accordance with Section 1(a) hereof shall
                be
                effected on the Closing Date by the Sellers’ execution and delivery to the
                Buyer of one or more Bills of Sale, Assignments and other conveyance
                instruments with respect to the Sellers’ transfer of Intangible Rights,
                real property interests and other Assets in form and scope reasonably
                satisfactory to Buyer (collectively the “Conveyance
                Documents”).  At the Closing, good, valid and marketable
                title to all of the Assets shall be transferred, conveyed, assigned
                and
                delivered by the Company to the Buyer pursuant to the Conveyance
                Documents, free and clear of any and all Liens, excepting Assumed
                Obligations (as defined below).

            

    

     

    
      	
            	
              (f)

            	
              Real
                Estate. It is specifically understood and agreed by the parties hereto
                that concurrent with the Closing, Buyer shall execute leases for
                the three
                parcels of real property included in the Owned Real Estate .  A
                copy of said leases (“Owned Real Estate Leases”) to be delivered by
                Sellers, fully executed by landlords at the Closing, are annexed
                hereto
                and designated Exhibits (f)(A), 1(f)(B), and 1(f)(C) . In addition
                thereto, except as otherwise disclosed on Schedule 1(f)(D), Sellers
                shall
                at the Closing deliver a certificate of occupancy for each of the
                leased
                premises permitting Buyer to utilize the premises for the business
                purposes being purchased pursuant to the terms of this
                agreement.

            

    

     

    
      	
            	
              (g)

            	
              Assumed
                Obligations.  The Buyer hereby assumes, effective as of the
                Closing, and the Buyer hereby agrees, effective as of the Closing,
                to
                satisfy and discharge as the same shall become
                due:

            

    

     

    
      	
               

            	
              (A)

            	
              all
                trade accounts payable and accrued expenses that have been incurred
                in the
                ordinary course of the Company’s business consistent with the
                representations and warranties set forth in this Agreement (“Trade
                Accounts Payable”);

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
      	
            	
              (B)

            	
              the
                Sellers’ liabilities and other obligations arising subsequent to the
                Closing under the Real Estate Lease set forth on Schedule 1(a)(F)
                and each
                of the Auto and Truck Leases and the Auto and Truck Loans listed
                on
                1(g)(B); and

            

    

     

    
      	
               

            	
              (C)

            	
              the
                expense accounts payable, customer deposits payable, payments for
                unreconciled stock receipts (merchandise received but for which no
                invoice
                has been received as of the Valuation Date) listed on Schedule 1(g)(C)
                hereto (collectively the “Assumed
                Obligations”).

            

    

     

    
      	
            	
              (h)

            	
              [Intentionally
                Deleted].
                

            

    

     

    
      	
            	
              (i)

            	
              Excluded
                Liabilities.  Except as expressly set forth in Section 1(g),
                the Buyer shall not assume or be responsible at any time for any
                liability, obligation, debt or commitment of the Sellers, whether
                absolute
                or contingent, accrued or unaccrued, asserted or unasserted, or otherwise
                (the “Excluded Liabilities”).  Without limiting the generality
                of the foregoing, Sellers and Shareholders expressly acknowledge
                and agree
                that the Sellers shall retain, and that Buyer shall not assume or
                otherwise be obligated to pay, perform, defend or discharge, any
                liability
                or obligation:

            

    

     

    
      	
               

            	
              (A)

            	
              incident
                to, arising out of or incurred with respect to, this Agreement and
                the
                transactions contemplated hereby (including any and legal or other
                fees
                and expenses, all sales, income or other taxes arising out of the
                transactions contemplated hereby; without limiting the generality
                of the
                foregoing, the Sellers shall promptly file an application for a Waiver
                of
                Tax Lien under the Massachusetts General Law, Chapter 62C §§ 51 and 52,
                with the Massachusetts Department of Revenue (“Waiver of Tax Lien”) and
                shall remit any and all sales taxes due in respect of the sale of
                assets
                contemplated in this transaction to be paid by Sellers at
                Closing);

            

    

     

    
      	
               

            	
              (B)

            	
              for
                taxes whether measured by income or
                otherwise;

            

    

     

    
      	
               

            	
              (C)

            	
              in
                connection with any Plan or Benefit Program or Agreement (as defined
                in
                Section8(k)), including, without limitation, any liability of the
                Sellers
                under ERISA;

            

    

     

    
      	
               

            	
              (D)

            	
              under
                any foreign, federal, state or local law, rule, regulation, ordinance,
                program, Permit, or other Legal Requirement relating to health, safety,
                Hazardous Materials and environmental matters applicable to the Sellers’
                business and/or the facilities Used by the Sellers (whether or not
                owned
                by the Sellers);

            

    

     

    
      	
               

            	
              (E)

            	
              pertaining
                to products sold or manufactured or services performed or other actions
                taken or omitted by the Sellers prior to the Closing
                Date;

            

    

     

    
      	
               

            	
              (F)

            	
              relating
                to any default taking place before the Closing Date under any of
                the
                Assumed Obligations to the extent such default created or increased
                the
                liability or obligation; or

            

    

     

    
      	
               

            	
              (G)

            	
              the
                consulting agreement by and between Management and Richard J. Aloisi,
                dated April 6, 2004.

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (H)

            	
              Sellers
                and the Majority Shareholders jointly and severally agree to satisfy
                and
                discharge the Excluded Liabilities as the same shall become
                due.

            

    

     

    
      	
              2.

            	
              Payment
                for Assets

            

    

     

    
      	
            	
              (a)

            	
              As
                payment in full for the Assets being acquired by the Buyer hereunder
                and
                the non-compete covenants set forth in Section 13(d) hereof, Buyer
                shall
                pay to the Company (and Company shall receive such payment on behalf
                of
                the Sellers) in the manner set forth in this Section 2, (i) the
                Merchandise Inventory Value, plus the Trade Receivables Value, plus
                the
                Prepaid Asset Value, plus the Fixed Asset Value, plus $10,000 in
                respect
                of the non-compete covenants set forth in Section 13(d), plus $315,000
                in
                respect of goodwill, less (ii)  the face value of all trade
                accounts payable and accrued expenses and other liabilities and
                obligations that are assumed at the Closing by the Buyer under Section
                1(g)(A) and 1(g)(C) less accrued vacation and sick pay through the
                Closing
                of the business employees of the Sellers, but subject to further
                adjustment as provided in Section 3 (such amount, as so adjusted
                from time
                to time, is referred to herein as the “Purchase Price"). It is expressly
                understood by the parties that the Purchase Price will not be adjusted
                downward in the event Sellers, after using their best efforts, fail
                to
                obtain the necessary consents required to assign the Kohler Distribution
                Agreement.

            

    

     

    
      	
            	
              (b)

            	
              In
                preparation for the Closing, the parties will prepare an estimate
                (the
                “Estimated Purchase Price”) of the actual Purchase Price by conducting the
                joint physical inventory and other procedures that are set forth
                in
                Section 1(a)(A) with the appropriate detailed listings and schedule.
                In
                order to plan for and facilitate the Closing, the Sellers will also
                provide Buyer with an estimated summary of the foregoing on the Valuation
                Date. Attached hereto and made a part hereof as Schedule 2(b) is
                the June
                30, 2007 unaudited internal Balance Sheet of the Company that shall
                be
                delivered by Sellers pursuant to Section 6 and an example of the
                purchase
                price calculation in connection therewith attached hereto and made
                a part
                hereof.

            

    

     

    
      	
            	
              (c)

            	
              On
                the Closing Date, the Buyer shall make payment of the Estimated Purchase
                Price as follows: Buyer shall deliver to the Company (and Company
                shall
                receive on behalf of the Sellers) by wire transfer of 5% of the Estimated
                Purchase Price (the “Escrow Amount”) to Martinelli
                Discenza P.C., as escrow agent (the “Escrow Agent"), and by wire
                transfer of the balance thereof to the Company.  The Escrow
                Amount shall be held by the Escrow Agent pursuant to the terms and
                conditions hereunder and pursuant to the terms and conditions of
                the
                Escrow Agreement attached hereto as Exhibit 2(c) (the “Escrow
                Agreement”).

            

    

     

    
      	
            	
              
                (d)

              

            	
              [Intentionally
                Deleted].

            

    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (e)

            	
               

            

    

     

    
      	
               

            	
              (A)

            	
              In
                the event Buyer fails to perform any of its obligations hereunder
                or under
                the employment and consulting agreements entered into by Buyer pursuant
                to
                this Agreement, Sellers’ shall provide Buyer written notice (a “Failure
                Notice”) specifying such failure and requiring such failure be remedied
                within 30 days, provided, however, that if any such failure cannot
                with
                due diligence be remedied by Buyer within a period of 30 days, if
                Buyer
                commences to remedy such failure within such 30 day period and thereafter
                prosecutes such remedy with reasonable diligence, the period of time
                for
                remedy of such failure shall be extended so long as Buyer prosecutes
                such
                remedy with reasonable diligence.  Colonial hereby agrees to
                perform such failed obligation on behalf of the Buyer in the event
                Buyer
                shall have failed to remedy such failure in accordance with the prior
                sentence and Sellers provide Colonial with a written notice specifying
                the
                obligation that Buyer failed to cure along with a copy of the Failure
                Notice.

            

    

     

    
      	
               

            	
              (B)

            	
              In
                the event Buyer fails to perform any of its obligations in accordance
                with
                the terms of any lease agreement entered into by Buyer pursuant to
                this
                Agreement, Sellers’ shall provide Buyer written notice (“Failure Notice”)
                specifying such failure and requiring such failure be remedied within
                30
                days, provided, however, that if any such failure cannot with due
                diligence be remedied by Buyer within a period of 30 days, if Buyer
                commences to remedy such failure within such 30 day period and thereafter
                prosecutes such remedy with reasonable diligence, the period of time
                for
                remedy of such failure shall be extended so long as Buyer prosecutes
                such
                remedy with reasonable diligence.  Colonial hereby agrees to
                perform such failed obligation on behalf of the Buyer in the event
                Buyer
                shall have failed to remedy such failure in accordance with the prior
                sentence and Sellers provide Colonial with a written notice specifying
                the
                obligation that Buyer failed to cure along with a copy of the Failure
                Notice.

            

    

     

    
      	
               

            	
              (C)

            	
              In
                the event Buyer contests any of the matters set forth in a Failure
                Notice,
                Buyer and Seller shall resolve such dispute exclusively by arbitration
                by
                the American Arbitration Association in Great Barrington, Massachusetts.
                Notwithstanding anything set forth in Section 2(e), in the event
                a Failure
                Notice is arbitrated in accordance with this section, Colonial’s
                obligations under Section 2(e) shall be subject to the finding of
                Buyer’s
                failure to perform by such
                arbitration.

            

    

     

    
      	
              3.

            	
              Adjustment
                of Purchase Price.

            

    

     

    
      	
            	
              (a)

            	
              The
                Sellers and the Buyer agree to meet on or about 130 days subsequent
                to the
                Closing (“Adjustment Date”) to determine amounts due among the parties in
                accordance with Section 4 and to resolve any questions, errors or
                omissions that might have occurred in the Purchase Price calculation
                and
                to reallocate responsibility for certain expenses, (i.e., gas and
                electric, telephone, etc.) which cover the period prior to and after
                the
                date of Closing.  

            

    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (b)

            	
              If
                the Purchase Price is adjusted downward, Brian on behalf of the Sellers,
                and the Buyer shall forthwith jointly direct the Escrow Agent to
                release
                to Buyer from Escrow the amount by which the Purchase Price is adjusted
                downward. To the extent that such reduced amount exceeds the amounts
                then
                available for release from escrow by the Escrow Agent, Sellers and
                the
                Majority Shareholders shall jointly and severally pay the excess
                to Buyer
                forthwith.

            

    

     

    
      	
            	
              (c)

            	
              If
                the Purchase Price is adjusted upward, Buyer shall forthwith pay
                to the
                Company, and the Company shall receive on behalf of the Sellers,
                the
                amount by which the Purchase Price is adjusted
                upward.

            

    

     

    
      	
            	
              (d)

            	
              In
                the event that there is any dispute on whether any party is required
                to
                sign any direction to the Escrow Agent hereunder, such dispute shall
                be
                resolved exclusively by arbitration by the American Arbitration
                Association in Great Barrington, Massachusetts. In the event that
                the
                parties agree that a direction to the Escrow Agent is required to
                a given
                extent but dispute whether such direction is required for any excess
                amount, then the parties shall execute such direction for to the
                given
                amount as to which there is no dispute, and the dispute on the excess
                amount shall be submitted to arbitration as
                aforesaid.

            

    

     

    
      	
              4.

            	
              Certain
                Other Agreements:

            

    

     

    
      	
            	
              (a)

            	
              Buyer
                may on the Adjustment Date reassign to the Sellers any Trade Receivable
                purchased by the Buyer and not paid by a customer in the ordinary
                course
                (without resort to litigation) by the Adjustment Date; Reassigned
                Trade
                Receivables actually reassigned by Buyer to Sellers is termed “Uncollected
                Accounts”. Buyer agrees not
                to conduct business with any customer who is the debtor on any Uncollected
                Accounts within the earlier of (i) one year of such re-assignment;
                (ii)
                the time Sellers shall have been paid in full on such Uncollected
                Accounts, and (iii) the time Sellers in their sole discretion shall
                consent and allow Buyer to conduct business with such
                customer.

            

    

     

    
      	
            	
              (b)

            	
              Sellers
                and Buyer shall on the Adjustment Date calculate the total dollar
                amount
                of the collected Past Due Receivables (the “Collected Past Due Receivables
                Accounts”). If the dollar amount of the Collected Past Due Receivables
                Accounts exceeds the dollar amount of the Uncollected Accounts, then
                the
                Purchase Price shall be adjusted upward by such excess amount. If
                the
                dollar amount of the Uncollected Accounts exceeds the dollar amount
                of the
                Collected Past Due Receivables Accounts, then the Purchase Price
                shall be
                adjusted downward by such excess amount.  Buyer agrees not to
                conduct business with any
                customer who is the debtor on any Uncollected Past Due Accounts
                until the earlier of (i) one year after the Adjustment
                Date;  (ii) the Seller has been paid in full, or and (iii) the time Sellers
                in their
                sole discretion shall consent and allow Buyer to conduct business
                with
                such customer.

            

    

     

    
      	
            	
              (c)

            	
              Service
                charges accrued at the Closing shall be paid to Sellers within sixty
                (60)
                days of date collected.  Buyer has the option of compromising
                accrued service charges in its sole discretion by utilizing its best
                business judgment.

            

    

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (d)

            	
              Should
                Buyer fail to receive full credit for any purchased, but defective
                inventory within 75 days after the Closing, Buyer will reassign such
                defective inventory to the Sellers and the Purchase Price shall be
                adjusted downward by the amount Buyer paid to the Sellers for such
                inventory.

            

    

     

    
      	
            	
              (e)

            	
              Purchase
                Price adjustments shall be paid in accordance with Section
                3.

            

    

     

    
      	
            	
              (f)

            	
              The
                Sellers will at the Closing pay in full, to the employees or other
                persons
                entitled to receive the same, all accruals through the Closing under
                all
                of its profit sharing plans and other employee benefit
                payments.

            

    

     

    
      	
              5.

            	
              Closing.

            

    

     

    
      	
            	
              (a)

            	
              The
                Closing of this transaction will take place at the office of Oscar
                Folger,
                521 5th
                Avenue, 24th
                Floor, New
                York, N.Y. 10175, or at the
                request of Buyer, at the offices of counsel to any lender providing
                financing in connection with the transactions contemplated hereby,
                at 10:00 a.m. on or before September 10, 2007 or, at the request
                of either
                party on a later date but not later than October 1,
                2007.

            

    

     

    
      	
            	
              (b)

            	
              The
                day on which the Closing actually takes place is herein sometimes
                referred
                to as the Closing Date.

            

    

     

    
      	
              6.

            	
              Audited
                Financial Statements.  Sellers have delivered to Buyer
                copies of audited financial statements of the Company for the years
                ended
                December 31, 2006, 2005, 2004 and 2003 (the “Audited Financial
                Statements”) prepared by the Company’s certified public
                accountant.  Sellers have delivered to Buyer copies of interim
                unaudited financial statements for the fiscal quarters ended March
                31,
                2006, June 30, 2006, and September 30, 2006 (the “Interim 2006
                Statements”) and for the fiscal quarters ended March 31, 2007 and June 30,
                2007 (the “Interim 2007 Statements”).  Ninety days (90)
                subsequent to the Closing, Sellers shall deliver to Buyer a copy
                of an
                interim unaudited financial statement for the fiscal period ending
                on the
                Closing Date.  Additionally, the Sellers have provided similar
                interim statements for 2003, 2004 and 2005.  The term “Balance
                Sheet” means the unaudited balance sheet dated as of June 30, 2007 that
                is
                included in the Interim 2007 Statements.  The Audited Financial
                Statements and the Interim 2007 Statements shall be complete and
                correct,
                shall have been prepared from the books and records of the Company
                in
                accordance with generally accepted accounting principles consistently
                applied and maintained throughout the periods indicated and shall
                fairly
                present the financial condition of the Company as at their respective
                dates and the results of its operations for the periods covered thereby,
                subject to normal year-end adjustments and
                accruals.

            

    

     

    
      	
              7.

            	
              Other
                Transactions at Closing; Further
                Assurances.

            

    

     

    
      	
            	
              (a)

            	
              At
                the Closing, the Sellers will deliver to
                Buyer:

            

    

     

    
      	
               

            	
              (A)

            	
              the
                Conveyance Documents;

            

    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (B)

            	
              a
                certificate executed by each of the Sellers to the effect that the
                conditions set forth in Section 12  have been
                satisfied;

            

    

     

    
      	
               

            	
              (C)

            	
              possession
                of all originals and copies of agreements, instruments, documents,
                deeds,
                books, records, files and other data and information included within
                the
                Assets;.

            

    

     

    
      	
               

            	
              (D)

            	
              Releases
                of all Liens on any of the Assets other than for Liens relating to
                each of
                the Auto and Truck Leases and Auto and Truck Loans assumed by
                Buyer;

            

    

     

    
      	
               

            	
              (E)

            	
              copies
                of the certificate of incorporation of each of the Sellers certified
                as of
                a date within 10 days of the Closing Date by the Secretary of State
                of the
                State of  Massachusetts;

            

    

     

    
      	
               

            	
              (F)

            	
              a
                certificate from the Secretary of State of the State
                of  Massachusetts as to the good standing of each of the Sellers
                as of a date within 10 days of the Closing
                Date;

            

    

     

    
      	
               

            	
              (G)

            	
              [Intentionally
                Deleted];

            

    

     

    
      	
               

            	
              (H)

            	
              copies
                of the bylaws of each of the Sellers, certified by its Secretary
                as a true
                and correct copy thereof as of the Closing
                Date;

            

    

     

    
      	
               

            	
              (I)

            	
              all
                consents from shareholders, lenders and other third parties as are
                required to consummate the sale of the Assets, except that it is
                expressly
                understood by the parties that consents for the Kohler Distribution
                Agreement may not be obtained, notwithstanding Sellers’ best efforts to
                obtain such consents;

            

    

     

    
      	
               

            	
              (J)

            	
              all
                consents from shareholders, lenders and other third parties as are
                required to enter into the leases of the Owned Real
                Estate;

            

    

     

    
      	
               

            	
              (K)

            	
              all
                consents from shareholders, lenders and other third parties as are
                required to execute the Owned Real Estate Leases,
                and,

            

    

     

    
      	
               

            	
              (L)

            	
              With
                respect to the Owned Real Estate Leases, the execution and delivery
                of  a landlord’s agreement by each landlord  in
                substantially the same form attached as Exhibit (7)(a)(L) (the “Landlord’s
                Agreement”), as well as all consents from shareholders, lenders, and other
                third parties as are required for the Buyer to acquire Seller’s rights
                under the Real Estate Lease;

            

    

     

    
      	
               

            	
              (M)

            	
              all
                consents from shareholders, lenders and other third parties as are
                required to consummate the assignment of all contracts, , except
                that it
                is expressly understood by the parties that consents for the Kohler
                Distribution Agreement may not be obtained, notwithstanding Sellers’ best
                efforts to obtain such consents;

            

    

     

    
      	
               

            	
              (N)

            	
              a
                copy of the resolutions of the Board of Directors of each of the
                Sellers,  together with any and all required resolutions or
                consents of the shareholders thereof, approving the execution and
                delivery
                of this Agreement and the consummation of all of the transactions
                contemplated hereby, duly certified by an officer of each of the
                Sellers;
                and

            

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (O)

            	
              all
                documents required to be delivered to Buyer under the provisions
                of this
                Agreement or as may reasonably by requested by Buyer and its
                counsel.

            

    

     

    
      	
            	
              (b)

            	
              On
                the Closing Date, Buyer shall deliver or cause to be delivered to
                the
                Company, and the Company shall receive on behalf of the Sellers,
                the
                following:

            

    

     

    
      	
               

            	
              (A)

            	
              payment
                of the Estimated Purchase Price in accordance with Section
                2(c);

            

    

     

    
      	
               

            	
              (B)

            	
              a
                copy of the resolutions of the Board of Directors of
                Buyer,  together with any and all required resolutions or
                consents of the shareholders thereof, approving the execution and
                delivery
                of this Agreement and the consummation of all of the transactions
                contemplated hereby, duly certified by an officer of
                Buyer;

            

    

     

    
      	
               

            	
              (C)

            	
              a
                copy of the resolutions of the Board of Directors of Colonial approving
                Colonial’s obligations set forth in Section 2(e), duly certified by an
                officer of Colonial.

            

    

     

    
      	
               

            	
              (D)

            	
              a
                certificate executed by an authorized officer of the Buyer, on behalf
                of
                the Buyer, to the effect that the conditions set forth in Section
                12(a)(B)
                have been satisfied;

            

    

     

    
      	
               

            	
              (E)

            	
              such
                other documents as may be required pursuant to this Agreement or
                as may
                reasonably be requested by the Company and their
                counsel.

            

    

     

    
      	
            	
              (c)

            	
              At
                the Closing: 

            

    

     

    
      	
               

            	
              (A)

            	
              Buyer
                and Brian shall execute and deliver an employment agreement in the
                form of
                Exhibit 7(c)(A);

            

    

     

    
      	
               

            	
              (B)

            	
              Buyer
                and Adam shall execute and deliver an employment agreement in the
                form of
                Exhibit 7(c)(B);

            

    

     

    
      	
               

            	
              (C)

            	
              Sellers
                shall deliver executed lease agreements and Landlord’s Agreements and the
                landlord under the Real Estate Lease shall have consented to the
                Buyer’s
                occupancy of the premises in the same manner as held by
                Sellers;

            

    

     

    
      	
               

            	
              (D)

            	
              Buyer
                and Nancy shall execute and deliver a consulting agreement in the
                form of
                Exhibit 7(c)(D).

            

    

     

    
      	
              8.

            	
              The
                Sellers and the Majority Shareholders hereby jointly and severally
                represent and warrant to Buyer (i.e. the liability of Sellers and
                the
                Majority Shareholders for the breach of any representation or warranty
                is
                joint and several, in the sense that Buyer may proceed against any
                one or
                more Sellers and Majority Shareholders for all or any part of such
                liability) and the Minority Shareholders hereby severally represent
                and
                warrant (i.e. the liability of the Minority Shareholders is several,
                in
                the sense that Buyer can proceed against any Minority Shareholder
                for only
                that portion of the total liability for such breach that is proportional
                to his pro rata ownership interest in the Company)  to Buyer
                that: 

            

    

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (a)

            	
              Corporate
                Existence, etc.  Each Seller is a corporation duly organized,
                validly existing and in good standing under the laws of Massachusetts;
                it
                has all requisite corporate power and authority and is entitled to
                carry
                on its business as now being conducted and to own, lease or operate
                its
                properties as and in the places where such business is now conducted
                and
                such properties are now owned, leased or operated; and it is duly
                qualified, licensed or domesticated and in good standing as a foreign
                corporation authorized to do business in the states listed on Schedule
                8‎(a),
                which are the only states where the nature of the activities conducted
                by
                it or the character of the properties owned, leased or operated by
                it
                require such qualification, licensing or domestication.  Each
                Seller has delivered to Buyer true and complete copies of its certificate
                of incorporation and all amendments thereto, certified by the Secretary
                of
                State of the State of Massachusetts, and the by laws of each Seller
                as
                presently in effect, certified as true and correct by its
                Secretary.

            

    

     

    
      	
            	
              (b)

            	
              Authority,
                Approval and Enforceability.  This Agreement has been duly
                executed and delivered by each Seller and each Shareholder, and the
                Sellers and the Shareholders have all requisite power and legal capacity
                to execute and deliver this Agreement and all Collateral Agreements
                executed and delivered or to be executed and delivered in connection
                with
                the transactions provided for hereby, to consummate the transactions
                contemplated hereby and by the Collateral Agreements, and to perform
                its
                obligations hereunder and under the Collateral Agreements.  This
                Agreement and each Collateral Agreement to which each Seller and
                each
                Shareholder are a party constitutes, or upon execution and delivery
                will
                constitute, the legal, valid and binding obligation of such party,
                enforceable in accordance with its terms, except as such enforcement
                may
                be limited by general equitable principles or by applicable bankruptcy,
                insolvency, moratorium, or similar laws and judicial decisions from
                time
                to time in effect which affect creditors’ rights
                generally.

            

    

     

    
      	
            	
              (c)

            	
              Capitalization
                and Corporate Records.

            

    

     

    
      	
               

            	
              (A)

            	
              All
                issued and outstanding shares of the Sellers’ capital stock are owned
                beneficially and of record by the
                Shareholders.

            

    

     

    
      	
               

            	
              (B)

            	
              The
                copies of the Certificate of Incorporation and Bylaws of each Seller
                provided to Buyer are true, accurate, and complete and reflect all
                amendments made through the date of this
                Agreement.

            

    

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (d)

            	
              Taxes.  All
                taxes, including, without limitation, income, property, sales, use,
                franchise, added value, employees' income withholding and social
                security
                taxes, imposed by the United States or by any foreign country or
                by any
                state, municipality, subdivision or instrumentality of the United
                States
                or of any foreign country, or by any other taxing authority, which
                are due
                or payable by the Sellers and the Shareholders, and all interest
                and
                penalties thereon, whether disputed or not, have been paid in full,
                all
                tax returns required to be filed in connection therewith have been
                accurately prepared and duly and timely filed and all deposits required
                by
                law to be made by the Sellers with respect to employees' withholding
                taxes
                have been duly made.  The Sellers and the Shareholders have not
                been delinquent in the payment of any foreign or domestic tax, assessment
                or governmental charge or deposit and have no tax deficiency or claim
                outstanding, proposed or assessed against it, and there is no basis
                for
                any such deficiency or claim.  The Sellers’ federal income tax
                returns have never been audited by the Internal Revenue Service for
                all of
                its fiscal years through the year ended 2006, there is not now in
                force
                any extension of time with respect to the date on which any tax return
                was
                or is due to be filed by or with respect to the Sellers, or any waiver
                or
                agreement by it for the extension of time for the assessment of any
                tax.
                Sellers can receive upon request from the Massachusetts Department
                of
                Revenue a certificate that certifies the good standing of, and the
                payment
                of taxes by, each of the Sellers as of the date of the signing of
                the
                Agreement.

            

    

     

    
      	
            	
              (e)

            	
              Bulk
                Sales Tax.  There are no bulk sales taxes due under this
                Agreement.

            

    

     

    
      	
            	
              (f)

            	
              The
                Sellers’ capital stock issued and outstanding as of the date hereof shall
                constitute all of the outstanding shares of capital stock of Sellers
                as of
                the Closing Date.  The Shareholders are the sole shareholders of
                the Sellers as of the date hereof and shall be the sole shareholders
                of
                the Sellers at the Closing Date. Other
                than the Sellers’ capital stock owned by the Shareholders, the Sellers
                have not issued any other capital stock or other security instruments
                and
                are not committed or obligated to do so in the future. There are
                no
                outstanding subscriptions, options, warrants, calls, contracts, demands,
                commitments, convertible securities or other agreements or arrangements
                of
                any character or nature whatever under which the Sellers, or the
                Shareholders, are or may become obligated to issue, assign or transfer,
                and there are no rights of first refusal, preemptive rights or similar
                rights with respect to any such
                shares.

            

    

     

    
      	
            	
              (g)

            	
              Primary
                Beneficiary.  Nancy is the primary beneficiary of the
                Trust.

            

    

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (h)

            	
              No
                Shareholders Defaults or Consents.  The execution and delivery
                of this Agreement and the Collateral Agreements by the Shareholders
                and
                the performance by each of the Shareholders of its respective obligations
                hereunder and thereunder will not violate or conflict with any provision
                of law or any judgment, award or decree or any indenture, agreement
                or
                other instrument to which such Shareholder is a party, or by which
                the
                properties or assets of such Shareholder is bound or affected, or
                conflict
                with, result in a breach of or constitute (with due notice or lapse
                of
                time or both) a default under, any such indenture, agreement or other
                instrument, in each case except to the extent that such violation,
                default
                or breach could not reasonably be expected to delay or otherwise
                significantly impair the ability of the parties to consummate the
                transactions contemplated hereby.

            

    

     

    
      	
            	
              (i)

            	
              No
                Company Defaults or Consents

            

    

     

    
      	
               

            	
              (A)

            	
              Neither
                the execution and delivery of this Agreement nor the carrying out
                of any
                of the transactions contemplated hereby
                will:

            

    

     

    
      	
               

            	
              (1)

            	
              violate
                or conflict with any of the terms, conditions or provisions of each
                of the
                Sellers’ Certificate of Incorporation or  bylaws
                ;

            

    

     

    
      	
               

            	
              (2)

            	
              violate
                any Legal Requirements applicable to either the Sellers or the
                Shareholders;

            

    

     

    
      	
               

            	
              (3)

            	
              violate,
                conflict with, result in a breach of, constitute a default under
                (whether
                with or without notice or the lapse of time or both), or accelerate
                or
                permit the acceleration of the performance required by, or give any
                other
                party the right to terminate, any Contract or Permit binding upon
                or
                applicable to either the Sellers or the
                Shareholders;

            

    

     

    
      	
               

            	
              (4)

            	
              result
                in the creation of any lien, charge or other encumbrance on any Properties
                of the Sellers; or

            

    

     

    
      	
               

            	
              (5)

            	
              require
                the Shareholders or the Sellers to obtain or make any waiver, consent,
                action, approval or authorization of, or registration, declaration,
                notice
                or filing with, any private non-governmental third party or any
                Governmental Authority.

            

    

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (j)

            	
              No
                Proceedings.  No suit, action or other proceeding is pending or,
                to the Knowledge (as defined below) of the Sellers and Shareholders,
                threatened before any Governmental Authority seeking to restrain
                the
                either the Sellers or the Shareholders or prohibit their entry into
                this
                Agreement or prohibit the Closing, or seeking damages against either
                the
                Sellers or the Shareholders or the Properties as a result of the
                consummation of this Agreement. The term “Knowledge” shall mean, for
                purposes of this Agreement, the actual knowledge of either the Sellers
                or
                the Shareholders, or any of the other directors, officers or managerial
                personnel of the Sellers with respect to the matter in question,
                and such
                knowledge as Shareholders and Sellers or any of the other directors,
                officers or managerial personnel of the Sellers reasonably should
                have
                obtained (i) in the performance of their duties to the Sellers and/or
                (ii)
                upon diligent investigation and inquiry into the matter in
                question.

            

    

     

    
      	
            	
              (k)

            	
              Employee
                Benefit Matters

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(k)(A) provides a description of each of the following, if any,
                which is
                sponsored, maintained or contributed to by the Sellers for the benefit
                of
                the employees or agents of the Sellers which has been so sponsored,
                maintained or contributed to at any time during the Sellers’ existence or
                with respect to which each of the Sellers has or may have any actual
                or
                contingent liability:

            

    

     

    
      	
               

            	
              (1)

            	
              each
                “employee benefit plan,” as such term is defined in Section 3(3) of the
                Employee Retirement Income Security Act of 1974 (“ERISA”) (including, but
                not limited to, employee benefit plans, such as foreign plans, which
                are
                not subject to the provisions of ERISA) (“Plans”);
                and,

            

    

     

    
      	
               

            	
              (2)

            	
              each
                personnel policy, employee manual or other written statements of
                rules or
                policies concerning employment, stock option plan, collective bargaining
                agreement, bonus plan or arrangement, incentive award plan or arrangement,
                vacation and sick leave policy, severance pay policy or agreement,
                deferred compensation agreement or arrangement, consulting agreement,
                employment contract and each other employee benefit plan, agreement,
                arrangement, program, practice or understanding which is not described
                in
                Section 8(k)(A)(1) (“Benefit Program or
                Agreement”).

            

    

     

    
      	
               

            	
              (B)

            	
              True,
                correct and complete copies of each of the Plans (if any), and related
                trusts, if applicable, including all amendments thereto, have been
                furnished to Buyer.  There has also been furnished to Buyer,
                with respect to each Plan required to file such report and description,
                the three most recent reports on Form 5500 and the summary plan
                description.  True, correct and complete copies or descriptions
                of all Benefit Programs or Agreements have also been furnished to
                Buyer.

            

    

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (C)

            	
              Except
                as otherwise set forth in Schedule
                8(k)(C),

            

    

     

    
      	
               

            	
              (1)

            	
              Each
                Seller does not contribute to or have an obligation to contribute
                to, and
                each Seller has not at any time contributed to or had an obligation
                to
                contribute to, and each Seller does not have any actual or contingent
                liability under, a multiemployer plan within the meaning of Section
                3(37)
                of ERISA (“Multiemployer Plan”) or a multiple employer plan within the
                meaning of Section 413(b) and (c) of the
                Code.

            

    

     

    
      	
               

            	
              (2)

            	
              Each
                Seller has substantially performed all obligations, whether arising
                by
                operation of law or by contract, required to be performed by it in
                connection with the Plans and the Benefit Programs and Agreements,
                and to
                the Knowledge of each Seller, there have been no defaults or violations
                by
                any other party to the Plans or Benefit Programs or
                Agreements;

            

    

     

    
      	
               

            	
              (3)

            	
              All
                reports and disclosures relating to the Plans required to be filed
                with or
                furnished to governmental agencies, Plan participants or Plan
                beneficiaries have been filed or furnished in accordance with applicable
                law in a timely manner, and each Plan and each Benefit Program or
                Agreement has been administered in substantial compliance with its
                governing documents;

            

    

     

    
      	
               

            	
              (4)

            	
              Each
                of the Plans intended to be qualified under Section 401 of the Code
                satisfies the requirements of such Section and has received a favorable
                determination letter from the Internal Revenue Service regarding
                such
                qualified status and has not, since receipt of the most recent favorable
                determination letter, been amended or operated in a way which could
                adversely affect such qualified
                status;

            

    

     

    
      	
               

            	
              (5)

            	
              There
                are no actions, suits or claims pending (other than routine claims
                for
                benefits) or, to the Knowledge of each Seller, threatened against,
                or with
                respect to, any of the Plans or Benefit Programs or Agreements or
                their
                assets;

            

    

     

    
      	
               

            	
              (6)

            	
              All
                contributions required to be made to the Plans pursuant to their
                terms and
                provisions and applicable law have been made
                timely;

            

    

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (7)

            	
              As
                to any Plan subject to Title IV of ERISA, there has been no event
                or
                condition which presents the material risk of Plan termination, no
                accumulated funding deficiency, whether or not waived, within the
                meaning
                of Section 302 of ERISA or Section 412 of the Code has been incurred,
                no
                reportable event within the meaning of Section 4043 of ERISA (for
                which
                the disclosure requirements of Regulation Section 2615.3 promulgated
                by
                the Pension Benefit Guaranty Corporation (“PBGC”) have not been waived)
                has occurred, no notice of intent to terminate the Plan has been
                given
                under Section 4041 of ERISA, no proceeding has been instituted under
                Section 4042 of ERISA to terminate the Plan, there has been no termination
                or partial termination of the Plan within the meaning of Section
                411(d)(3)
                of the Code, no liability to the PBGC has been incurred, and the
                assets of
                the Plan equal or exceed the aggregate present value of the benefit
                liabilities (within the meaning of Section 4001(a)(16) of ERISA)
                under the
                Plan, computed on a “plan termination basis” based upon reasonable
                actuarial assumptions and the asset valuation principles established
                by
                the PBGC;

            

    

     

    
      	
               

            	
              (8)

            	
              None
                of the Plans nor any trust created thereunder or with respect thereto
                has
                engaged in any “prohibited transaction” or “party-in-interest transaction”
                as such terms are defined in Section 4975 of the Code and Section
                406 of
                ERISA which could subject any Plan, each Seller or any officer, director
                or employee to a tax or penalty on prohibited transactions or
                party-in-interest transactions pursuant to Section 4975 of the Code
                or
                Section 502(i) of ERISA;

            

    

     

    
      	
               

            	
              (9)

            	
              To
                the Knowledge of each Seller, there is no matter pending (other than
                routine qualification determination filings) with respect to any
                of the
                Plans or Benefit Programs or Agreements before the Internal Revenue
                Service, the Department of Labor or the
                PBGC;

            

    

     

    
      	
               

            	
              (10)

            	
              Each
                trust funding a Plan, which trust is intended to be exempt from federal
                income taxation pursuant to Section 501(c)(9) of the Code, satisfies
                the
                requirements of such section and has received a favorable determination
                letter from the Internal Revenue Service regarding such exempt status and
                has not, since receipt of the most recent favorable determination
                letter,
                been amended or operated in a way which would adversely affect such
                exempt
                status.

            

    

     

    
      	
               

            	
              (11)

            	
              Each
                Seller has no obligation to provide health benefits or death benefits
                to
                its former employees, except as specifically required by
                law;

            

    

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (12)

            	
              Neither
                the execution and delivery of this Agreement nor the consummation
                of any
                or all of the transactions contemplated hereby will: (A) entitle
                any
                current or former employee of any Seller to severance pay, unemployment
                compensation or any similar payment, (B) accelerate the time of payment
                or
                vesting or increase the amount of any compensation due to any such
                employee or former employee, or (C) directly or indirectly result
                in any
                payment made to or on behalf of any person to constitute a “parachute
                payment” within the meaning of Section 280G of the
                Code;

            

    

     

    
      	
            	
              (13)

            	
              Each
                Seller has not incurred any liability or taken any action, and no
                action
                or event has occurred that could cause the Company to incur any liability
                (A) under Section 412 of the Code or Title IV of ERISA with respect
                to any
                “single-employer plan” within the meaning of Section 4001(a)(15) of ERISA
                that is not a Plan, or (B) to any Multiemployer Plan, including without
                limitation an account of a partial or complete withdrawal within
                the
                meaning of Sections 4203 and 4205 of
                ERISA.

            

    

     

    
      	
            	
              (14)

            	
              Since
                January 1, 2000, there have not been any (i) work stoppages, labor
                disputes or other significant controversies between the Company and
                any
                employee, (ii) labor union grievances or organizational efforts,
                or (iii)
                unfair labor practice or labor arbitration proceedings pending or
                threatened.

            

    

     

    
      	
               

            	
              (D)

            	
              Except
                as set forth in Schedule 8(k)(A), each Seller is not a party to any
                agreement, and each has not established any policy or practice, requiring
                such Seller to make a payment or provide any other form or compensation
                or
                benefit to any person performing services for such Seller upon termination
                of such services which would not be payable or provided in the absence
                of
                the consummation of the transactions contemplated by this
                Agreement.

            

    

     

    
      	
               

            	
              (E)

            	
              Schedule
                8(k)(E)(i) sets forth by number and employment classification the
                approximate numbers of employees employed by each Seller as of the
                date of
                this Agreement, and, except as set forth on Schedule 8(k)(E) (ii),
                none of
                said employees are subject to union or collective bargaining agreements
                with such Seller.

            

    

     

    
      	
               

            	
              (F)

            	
              Neither
                the Buyer nor any of its Affiliates shall have any liability or
                obligations under or with respect to the Workers Adjustment Retraining
                Notification Act in connection with any of the transactions contemplated
                in connection herewith.

            

    

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (l)

            	
              Financial
                Statements; Liabilities; Accounts Receivable;
                Inventories

            

    

     

    
      	
               

            	
              (A)

            	
              The
                Audited Financial Statements and the Interim 2007 Statements that
                the
                Sellers and the Shareholders provided in accordance with Section
                6 shall
                be complete and correct, shall have been prepared from the books
                and
                records of the Company in accordance with generally accepted accounting
                principles consistently applied and maintained throughout the periods
                indicated and shall fairly present the financial condition of the
                Company
                as at their respective dates and the results of its operations for
                the
                periods covered thereby, subject to normal year-end adjustments and
                accruals.

            

    

     

    
      	
               

            	
              (B)

            	
              Except
                for (i) the liabilities reflected on the Company’s June 30, 2007 balance
                sheet included with the Interim 2007 Statements attached as Schedule
                8(l)(B)(a), (ii) trade payables and accrued expenses incurred since
                June
                30, 2007 in the ordinary course of business, none of which are material,
                and (iii) executory contract obligations under (x) Contracts listed
                on
                Schedule 8(s), and/or (y) Contracts not required to be listed on
                Schedule
                8(s), the Sellers have no liabilities or obligations (whether accrued,
                absolute, contingent, known, unknown or otherwise, and whether or
                not of a
                nature required to be reflected or reserved against in a balance
                sheet in
                accordance with GAAP).

            

    

     

    
      	
               

            	
              (C)

            	
              The
                accounts receivable reflected on the June 30, 2007 balance sheets
                and all
                of the Trade Receivables arising since June 30, 2007 (the “Balance Sheet
                Date”) arose from bona fide transactions in the ordinary course of
                business, and the goods and services involved have been sold, delivered
                and performed to the account obligors, and no further filings (with
                Governmental Authorities, insurers or others) are required to be
                made, no
                further goods are required to be provided and no further services
                are
                required to be rendered in order to complete the sales and fully
                render
                the services and to entitle the Company to collect the accounts receivable
                in full.  No such accounts receivable has been assigned or
                pledged to any other person, firm or corporation, and, except only
                to the
                extent fully reserved against as set forth in the June 30, 2007 balance
                sheets, no defense or set-off to any such account has been asserted
                by the
                account obligor or exists.

            

    

     

    
      	
               

            	
              (D)

            	
              The
                Merchandise Inventory as of the Closing Date shall consist of items
                of a
                quality, condition and quantity consistent with normal seasonally-adjusted
                Inventory levels of the Company and be usable and saleable in the
                ordinary
                and usual course of business for the purposes for which
                intended.  The Merchandise Inventory is valued on the Company’s
                books of account in accordance with GAAP at the Company’s average
                cost.

            

    

     

    
      	
            	
              (m)

            	
              Sellers
                (i) have and will have as of the Closing Date legal and beneficial
                ownership of the Properties and the Owned Real Estate; and (ii) have
                not,
                and are not in default in performance of any covenant, agreement,
                term,
                provision or condition contained in the Real Estate
                Lease.

            

    

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (n)

            	
              Absence
                of Certain Changes

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as otherwise set forth in Schedule 8(n)(A) attached hereto, since
                the
                Balance Sheet Date, there has not
                been:

            

    

     

    
      	
               

            	
              (1)

            	
              any
                event, circumstance or change that had or might have a material adverse
                effect on the business, operations, prospects, Properties, financial
                condition or working capital of the
                Sellers;

            

    

     

    
      	
               

            	
              (2)

            	
              any
                damage, destruction or loss (whether or not covered by insurance)
                that had
                or might have a material adverse effect on the business, operations,
                prospects, Properties or financial condition of the Sellers;
                or

            

    

     

    
      	
               

            	
              (3)

            	
              any
                material adverse change in the Sellers’ vendor or supplier relations or
                in  Sellers’ sales patterns, pricing policies, accounts
                receivable or accounts payable.

            

    

     

    
      	
               

            	
              (B)

            	
              Except
                as otherwise set forth in Schedule 8(n)(B) attached hereto, since
                the
                Balance Sheet Date, each Seller has not done any of the
                following:

            

    

     

    
      	
               

            	
              (1)

            	
              merged
                into or with or consolidated with, any other corporation or acquired
                the
                business or assets of any Person;

            

    

     

    
      	
               

            	
              (2)

            	
              purchased
                any securities of any Person;

            

    

     

    
      	
               

            	
              (3)

            	
              created,
                incurred, assumed, guaranteed or otherwise become liable or obligated
                with
                respect to any indebtedness, or made any loan or advance to, or any
                investment in, any person, except in each case in the ordinary course
                of
                business and as set forth on Schedule
                8(n)(B)(3);

            

    

     

    
      	
               

            	
              (4)

            	
              made
                any change in any existing election, or made any new election, with
                respect to any tax law in any jurisdiction which election could have
                an
                effect on the tax treatment of the Seller or the Seller’s business
                operations;

            

    

     

    
      	
               

            	
              (5)

            	
              entered
                into, amended or terminated, or waived any of the Company’s rights under,
                any agreement specified in Schedule
                8(s);

            

    

     

    
      	
            	
              (6)

            	
              sold,
                transferred, leased, mortgaged, encumbered or otherwise disposed
                of, or
                agreed to sell, transfer, lease, mortgage, encumber or otherwise
                dispose
                of, any Properties except (i) in the ordinary course of business
                and as
                set forth on Schedule 8(n)(B)(6), or (ii) pursuant to any agreement
                specified in Schedule 8(s);

            

    

     

    
      	
               

            	
              (7)

            	
              settled
                any claim or litigation, or filed any motions, orders, briefs or
                settlement agreements in any proceeding before any Governmental Authority
                or any arbitrator;

            

    

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (8)

            	
              incurred,
                approved or entered into any agreement or commitment to make, any
                individual or a group of individually-related expenditures in excess
                of
                $25,000 (other than those required pursuant to any agreement specified
                in
                Schedule 8(s));

            

    

     

    
      	
               

            	
              (9)

            	
              maintained
                its books of account other than in the usual, regular and ordinary
                manner
                in accordance with generally accepted accounting principles and on
                a basis
                consistent with prior periods or made any change in any of its accounting
                methods or practices that would be required to be disclosed under
                GAAP;

            

    

     

    
      	
               

            	
              (10)

            	
              adopted
                any Plan or Benefit Program or Agreement, or granted any increase
                in the
                compensation payable or to become payable to directors, officers
                or
                employees (including, without limitation, any such increase pursuant
                to
                any bonus, profit-sharing or other plan or commitment), other than
                merit
                increases to non-officer employees in the ordinary course of business
                and
                consistent with past practice;

            

    

     

    
      	
               

            	
              (11)

            	
              suffered
                any extraordinary losses or waived any rights of material
                value;

            

    

     

    
      	
               

            	
              (12)

            	
              made
                any payment to any Affiliate or forgiven any indebtedness due or
                owing
                from any Affiliate to the Company;

            

    

     

    
      	
               

            	
              (13)

            	
              (A)
                liquidated Inventory or accepted product returns other than in the
                ordinary course, (B) accelerated receivables, (C) delayed payables,
                or (D)
                changed in any material respect the Company’s practices in connection with
                the payment of payables or the collection of
                receivables;

            

    

     

    
      	
               

            	
              (14)

            	
              engaged
                in any one or more activities or transactions with an Affiliate or
                outside
                the ordinary course of business;

            

    

     

    
      	
               

            	
              (15)

            	
              declared,
                set aside or paid any dividends, or made any distributions or other
                payments in respect of its equity securities, or repurchased, redeemed
                or
                otherwise acquired any such
                securities;

            

    

     

    
      	
               

            	
              (16)

            	
              amended
                its Certificate of Incorporation or bylaws;
                or

            

    

     

    
      	
               

            	
              (17)

            	
              committed
                to do any of the foregoing.

            

    

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (o)

            	
              Compliance
                with Laws

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as otherwise set forth in Schedule 8(o), each Seller is and has been
                in
                compliance in all respects with any and all Legal Requirements applicable
                to such Seller, other than failures to so comply that would not have
                an
                adverse effect on the business, operations, prospects, Properties
                or
                financial condition of such Seller.  Except as otherwise set
                forth in Schedule 8(o), each Seller (i) has not received or entered
                into
                any citations, complaints, consent orders, compliance schedules,
                or other
                similar enforcement orders or received any written notice from any
                Governmental Authority or any other written notice that would indicate
                that there is not currently compliance with all such Legal Requirements,
                except for failures to so comply that would not have an adverse effect
                on
                the business, operations, prospects, Properties or financial condition
                of
                such Seller, and (ii) is not in default under, and no condition exists
                (whether covered by insurance or not) that with or without notice
                or lapse
                of time or both would constitute a default under, or breach or violation
                of, any Legal Requirement or Permit applicable to such
                Seller.

            

    

     

    
      	
               

            	
              (B)

            	
              Without
                limiting the generality of Section 8(o), each Seller has not received
                notice of and there is no basis for, any claim, action, suit,
                investigation or proceeding that might result in a finding that such
                Seller is not or has not been in compliance with Legal Requirements
                relating to (a) the development, testing, manufacture, packaging,
                distribution and marketing of products, (b) employment, safety and
                health,
                (c) environmental protection, building, zoning and land use and/or
                (d) the
                Foreign Corrupt Practices Act and the rules and regulations promulgated
                thereunder.

            

    

     

    
      	
            	
              (p)

            	
              Litigation

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as otherwise set forth in Schedule 8(p), there are no claims, actions,
                suits, investigations or proceedings against each Seller pending
                or, to
                the Knowledge of such Seller or any Shareholder, threatened in any
                court
                or before or by any Governmental Authority, or before any arbitrator,
                that
                might have an adverse effect (whether covered by insurance or not)
                on the
                business, operations, prospects, Properties or financial condition
                of such
                Seller or on their ability to consummate the transactions contemplated
                hereby, and there is no basis for any such claim, action, suit,
                investigation or proceeding.  Schedule 8(p) also includes a true
                and correct listing of all material actions, suits, investigations,
                claims
                or proceedings that were pending, settled or adjudicated since January
                1,
                2002.

            

    

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (q)

            	
              Special
                Provisions Regarding Asbestos
                Claims

            

    

     

    
      	
               

            	
              (A)

            	
              The
                Sellers and the Majority Shareholders hereby jointly and severally
                represent and warrant to Buyer (i.e. the liability of Sellers and
                the
                Majority Shareholders for the breach of any representation or warranty
                is
                joint and several, in the sense that Buyer may proceed against any
                one or
                more Sellers and Majority Shareholders for all or any part of such
                liability) and the Minority Shareholders hereby severally represent
                and
                warrant (i.e. the liability of the Minority Shareholders is several,
                in
                the sense that Buyer can proceed against any Minority Shareholder
                for only
                that portion of the total liability for such breach that is proportional
                to his pro rata ownership interest in the Company)  to Buyer
                that:

            

    

     

    
      	
            	
               

            	
              (1)

            

    

     

    
      	
               

            	
              (a)

            	
              Each
                Seller has not, since the time any Shareholder purchased equity in,
                or was
                an Affiliate with, any one of the Sellers in April 16, 1993, sold
                any
                asbestos or asbestos containing products and is not a defendant in
                any
                lawsuit related to same.

            

    

     

    
      	
               

            	
              (b)

            	
              To
                its Knowledge, each Seller has not prior to April 16, 1993 sold any
                asbestos or asbestos containing products and is not a defendant in
                any
                lawsuit related to same.

            

    

     

    
      	
               

            	
              (2)

            	
              Other
                than as set forth in Schedule 8(q)(2), each Seller has maintained
                asbestos
                related insurance since the time such Seller was incorporated and
                that
                there are no gaps of coverage for asbestos related
                insurance.

            

    

     

    
      	
               

            	
              (B)

            	
              Sellers
                and Majority Shareholders shall jointly and severally fully indemnify,
                protect, reimburse, and hold harmless Buyer from and against any
                and all
                damages, liabilities and claims for personal injury due to, or alleged
                to
                be due to, exposure to asbestos in connection with Sellers’ business,
                operations or premises at any time prior to the Closing (an "asbestos
                claim").

            

    

     

    
      	
               

            	
              (C)

            	
              In
                any such action or proceeding, Buyer shall have the right to retain
                its
                own counsel; but the fees and expenses of such counsel shall be at
                its own
                expense unless (i) the Indemnifying Party and Buyer shall have mutually
                agreed to the retention of such counsel or (ii) the named parties
                to any
                suit, action or proceeding (including any impleaded parties) include
                both
                the Indemnifying Party and the Buyer and representation of all parties
                by
                the same counsel would be inappropriate due to actual or potential
                conflict of interests between them.

            

    

     

    
      	
               

            	
              (D)

            	
              An
                Indemnifying Party shall not be liable under this Agreement for any
                settlement effected without its consent of any claim, litigation
                or
                proceeding in respect of which indemnity may be sought
                hereunder.

            

    

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (E)

            	
              The
                Indemnifying Party may settle any claim without the consent of Buyer,
                but
                only if the sole relief awarded is monetary damages that are paid
                in full
                by the Indemnifying Party. Buyer shall, subject to its reasonable
                business
                needs, use reasonable efforts to minimize the indemnification sought
                from
                the Indemnifying Party under this
                Agreement.

            

    

     

    
      	
               

            	
              (F)

            	
              If
                an asbestos claim is made against Buyer, Buyer shall, within ten
                days
                after receiving written notice of such claim, give notice to the
                Company
                in the manner provided elsewhere in this Agreement for notices
                hereunder.

            

    

     

    
      	
               

            	
              (G)

            	
              If
                Sellers assume the defense of an asbestos claim at its own expense,
                then
                (x) it shall within 20 days inform Buyer of such assumption in writing,
                and (y) notwithstanding any contrary provision in this Section, Seller
                shall not incur any expense for Buyer’s
                counsel.

            

    

     

    
      	
            	
              (r)

            	
              Real
                Property

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(r)(A) sets forth a list of all real property or any interest therein
                (including without limitation any option or other right or obligation
                to
                purchase any real property or any interest therein) currently owned,
                or
                ever owned, by each Seller, in each case setting forth the street
                address
                and legal description of each property covered thereby (the "Owned
                Premises”)

            

    

     

    
      	
               

            	
              (B)

            	
              Schedule
                8(r)(B) sets forth a list of all leases, licenses or similar agreements
                relating to the Sellers’ use or occupancy of real estate owned by a third
                party (“Leases”), true and correct copies of which have previously been
                furnished to Buyer, in each case setting forth (i) the lessor and
                lessee
                thereof and the commencement date, term and renewal rights under
                each of
                the Leases, and (ii) the street address and legal description of
                each
                property covered thereby (the “Leased Premises”).  The Leases
                and all guaranties with respect thereto, are in full force and effect
                and
                have not been amended in writing or otherwise, and no party thereto
                is in
                default or breach under any such Lease.  No event has occurred
                which, with the passage of time or the giving of notice or both,
                would
                cause a material breach of or default under any of such
                Leases.  Neither the Sellers nor its agents or employees have
                received written notice of any claimed abatements, offsets, defenses
                or
                other bases for relief or
                adjustment.

            

    

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (C)

            	
              With
                respect to each Owned Premises and Leased Premises, as
                applicable:  (i) the Sellers have good, marketable and insurable
                fee simple interest in the Owned Premises and a valid leasehold interest
                pursuant to a verbal month-to-month lease, such lease terminable
                by either
                party upon 90 days prior termination notice, in the Leased Premises,
                free
                and clear of any Liens, encumbrances, covenants and easements or
                title
                defects that have had or could have an adverse effect on the Sellers’ use
                and occupancy of the Owned Premises and the Leased Premises; (ii)
                the
                portions of the buildings located on the Owned Premises and the Leased
                Premises that are used in the business of the Sellers are each in
                good
                repair and condition, normal wear and tear excepted, and are in the
                aggregate sufficient to satisfy the Sellers’ current and reasonably
                anticipated normal business activities as conducted thereon and,
                to the
                Knowledge of each Seller, there is no latent material defect in the
                improvements on any Owned Premises, structural elements thereof,
                the
                mechanical systems (including, without limitation, all heating,
                ventilating, air conditioning, plumbing, electrical, utility and
                sprinkler
                systems) therein, the utility system servicing each Owned Premises
                and the
                roofs which have not been disclosed to Buyer in writing prior to
                the date
                of this Agreement; and(iii) each Seller has not received notice of
                (A) any
                condemnation, eminent domain or similar proceeding affecting any
                portion
                of the Owned Premises or the Leased Premises or any access thereto,
                and,
                to the Knowledge of each Seller, no such proceedings are contemplated,
                (B)
                any special assessment or pending improvement liens to be made by
                any
                governmental authority which may affect any of the Owned Premises
                or the
                Leased Premises, or (C) any violations of building codes and/or zoning
                ordinances or other governmental regulations with respect to the
                Owned
                Premises or the Leased Premises.

            

    

     

    
      	
            	
              (s)

            	
              Commitments

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as otherwise set forth in Schedule 8(s), each Seller is not a party
                to or
                bound by any of the following, whether written or
                oral:

            

    

     

    
      	
               

            	
              (1)

            	
              any
                Contract that cannot by its terms be terminated by such Seller with
                30
                days’ or less notice without penalty or whose term continues beyond one
                year after the date of this
                Agreement;

            

    

     

    
      	
               

            	
              (2)

            	
              contract
                or commitment for capital expenditures by such Seller in excess of
                $25,000
                per calendar quarter in the
                aggregate;

            

    

     

    
      	
               

            	
              (3)

            	
              lease
                or license with respect to any Properties, real or personal, whether
                as
                landlord, tenant, licensor or
                licensee;

            

    

     

    
      	
               

            	
              (4)

            	
              agreement,
                contract, indenture or other instrument relating to the borrowing
                of money
                or the guarantee of any obligation or the deferred payment of the
                purchase
                price of any Properties;

            

    

     

    
      	
               

            	
              (5)

            	
              partnership
                agreement, joint venture agreement or limited liability company operating
                agreement;

            

    

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (6)

            	
              contract
                with any Affiliate of such Seller (including the Shareholders) relating
                to
                the provision of goods or services by or to such
                Seller;

            

    

     

    
      	
               

            	
              (7)

            	
              agreement
                for the sale of any assets that in the aggregate have a net book
                value on
                the such Seller’s books of greater than
                $5,000;

            

    

     

    
      	
               

            	
              (8)

            	
              agreement
                that purports to limit such Seller’s freedom to compete freely in any line
                of business or in any geographic
                area;

            

    

     

    
      	
               

            	
              (9)

            	
              preferential
                purchase right, right of first refusal, or similar agreement;
                or

            

    

     

    
      	
               

            	
              (10)

            	
              other
                Contract that is material to the business of such
                Seller.

            

    

     

    
      	
               

            	
              (B)

            	
              All
                of the Contracts listed or required to be listed in Schedule 8(s)
                are
                valid, binding and in full force and effect, and the Sellers have
                not been
                notified or advised by any party thereto of such party’s intention or
                desire to terminate or modify any such Contract in any respect, except
                as
                disclosed in Schedule 8(s).  Neither the Sellers nor, to the
                Knowledge of each Seller, any other party is in breach of any of
                the terms
                or covenants of any Contract listed or required to be listed in Schedule
                8(s).  Following the Closing, Buyer will continue to be entitled
                to all of the benefits currently held by the each Seller under each
                Contract listed or required to be listed in Schedule
                8(s).

            

    

     

    
      	
               

            	
              (C)

            	
              Except
                as otherwise set forth in Schedule 8(s), each Seller is not a party
                to or
                bound by any Contract or Contracts the terms of which were arrived
                at by
                or otherwise reflect less-than-arm’s-length negotiations or
                bargaining.

            

    

     

    
      	
            	
              (t)

            	
              Insurance

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(t) hereto is a complete and correct list of all insurance policies
                (including, without limitation, fire, liability, product liability,
                workers’ compensation and vehicular) presently in effect that relate to
                each Seller, or its Properties, including the amounts of such insurance
                and annual premiums with respect thereto, all of which have been
                in full
                force and effect from and after the date(s) set forth on Schedule
                8(t).

            

    

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (u)

            	
              Intangible
                Rights

            

    

     

    
      	
               

            	
              (A)

            	
              Set
                forth on Schedule 8(u) is a list and description of all material
                foreign
                and domestic patents, patent rights, trademarks, service marks, trade
                names, brands and copyrights (whether or not registered and, if
                applicable, including pending applications for registration) owned,
                Used,
                licensed or controlled by each Seller and all goodwill associated
                therewith.  Each Seller owns or has the right to use and shall
                as of the Closing Date own or have the right to use any and all
                information, know-how, trade secrets, patents, copyrights, trademarks,
                tradenames, software, formulae, methods, processes and other intangible
                properties that are necessary or customarily Used by such Seller
                for the
                ownership, management or operation of its Properties (“Intangible Rights”)
                including, but not limited to, the Intangible Rights listed on Schedule
                8(u).  Except as set forth on Schedule 8(u), (i) each Seller is
                the sole and exclusive owner of all right, title and interest in
                and to
                all of the Intangible Rights, and has the exclusive right to use
                and
                license the same, free and clear of any claim or conflict with the
                Intangible Rights of others; (ii) no royalties, honorariums or fees
                are
                payable by Sellers to any person by reason of the ownership or use
                of any
                of the Intangible Rights; (iii) there have been no claims made against
                Sellers asserting the invalidity, abuse, misuse, or unenforceability
                of
                any of the Intangible Rights and no grounds for any such claims exist;
                (iv) each Seller has not made any claim of any violation or infringement
                by others of any of its Intangible Rights or interests therein and,
                to the
                Knowledge of such Seller, no grounds for any such claims exist; (v)
                each
                Seller has not received any notice that it is in conflict with or
                infringing upon the asserted intellectual property rights of others
                in
                connection with the Intangible Rights, and neither the use of the
                Intangible Rights nor the operation of such Seller’s business is
                infringing or has infringed upon any intellectual property rights
                of
                others; (vi) no interest in any of the Intangible Rights has been
                assigned, transferred, licensed or sublicensed by Sellers to any
                person
                other than the Buyer pursuant to this Agreement; (viii) to the extent
                that
                any item constituting part of the Intangible Rights has been registered
                with, filed in or issued by, any Governmental Authority, such
                registrations, filings or issuances are listed on Schedule 8(u) and
                were
                duly made and remain in full force and effect; (ix) to the Knowledge
                of
                each Seller, there has not been any act or failure to act by such
                Seller
                or any of their directors, officers, employees, attorneys or agents
                during
                the prosecution or registration of, or any other proceeding relating
                to,
                any of the Intangible Rights or of any other fact which could render
                invalid or unenforceable, or negate the right to issuance of any
                of the
                Intangible Rights; (x) to the extent any of the Intangible Rights
                constitutes proprietary or confidential information, each Seller
                has
                adequately safeguarded such information from disclosure; and (xi)
                all of
                the Sellers’ current Intangible Rights will remain in full force and
                effect following the Closing without alteration or
                impairment.

            

    

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (v)

            	
              Equipment
                and Other Tangible Property

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(v) sets forth a true and compete list of the Fixed Assets, and
                except as
                set forth on such Schedule, the Fixed Assets are suitable for the
                purposes
                for which intended and in good operating condition and repair consistent
                with normal industry standards, except for ordinary wear and
                tear.

            

    

     

    
      	
            	
              (w)

            	
              Permits;
                Environmental Matters

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(w)(A) contains a true and complete list of all Permits Used by
                each
                Seller in the conduct of the Business, setting forth the grantor,
                grantee,
                the function and the expiration and renewal date of each.  Prior
                to the execution of this Agreement, each Seller has delivered to
                the Buyer
                true and complete copies of all such Permits.  Except as
                otherwise set forth in Schedule 8(w)(A), each Seller has all Permits
                necessary for such Seller to own, operate, use and maintain its Properties
                and to conduct its business and operations as presently conducted
                and as
                expected to be conducted in the future.  Except as otherwise set
                forth in Schedule 8(w)(A), all such Permits are in effect, no proceeding
                is pending or, to the Knowledge of either the Sellers or the Shareholders,
                threatened to modify, suspend or revoke, withdraw, terminate, or
                otherwise
                limit any such Permits, and no administrative or governmental actions
                have
                been taken or, to the Knowledge of either each Seller or each Shareholder,
                threatened in connection with the expiration or renewal of such Permits
                which could adversely affect the ability of such Seller to own, operate,
                use or maintain any of its Properties or to conduct its business
                and
                operations as presently conducted and as expected to be conducted
                in the
                future.  Except as otherwise set forth in Schedule 8(w)(A), (i)
                no violations have occurred that remain uncured, unwaived, or otherwise
                unresolved, or are occurring in respect of any such Permits, other
                than
                inconsequential violations, and (ii) no circumstances exist that
                would
                prevent or delay the obtaining of any requisite consent, approval,
                waiver
                or other authorization of the transactions contemplated hereby with
                respect to such Permits that by their terms or under applicable law
                may be
                obtained only after Closing.  Except as otherwise set forth on
                Schedule 8(w)(A), the execution, delivery and performance by the
                Sellers
                and Buyer of this Agreement and the consummation of the transactions
                contemplated hereby shall not (A) result in or give to any Person
                any
                right of termination, cancellation, acceleration or modification
                in or
                with respect to, (B) result in or give to any Person any additional
                rights
                or entitlement to increased, additional, accelerated or guaranteed
                payments under, or (C) result in the creation or imposition of any
                Lien
                upon each of the Sellers or any of its assets under any
                Permits.

            

    

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (B)

            	
              Except
                as set forth on Schedule 8(w)(B), (i) each Seller has at all times
                been
                and is currently in compliance with all applicable Environmental
                Laws,
                including obtaining and maintaining in effect all Permits required
                by
                applicable Environmental Laws, and (ii), there are no claims, liabilities,
                investigations, litigation, administrative proceedings, whether pending
                or, to the Knowledge of either the Sellers or the Shareholders,
                threatened, or judgments or orders relating to any Hazardous Materials
                (collectively called “Environmental Claims”) asserted or threatened
                against any Seller or relating to any real property currently or
                formerly
                owned, leased or otherwise Used by any Seller.  Neither the
                Sellers nor, to the Knowledge of either Sellers or the Shareholders,
                any
                prior owner, lessee or operator of said real property, has caused
                or
                permitted any Hazardous Material to be used, generated, reclaimed,
                transported, released, treated, stored or disposed of in a manner
                which
                could form the basis for an Environmental Claim against such Sellers
                or
                the Buyer.  Except as set forth on Schedule 8(w)(B), each Seller
                has not assumed any liability of any Person for cleanup, compliance
                or
                required capital expenditures in connection with any Environmental
                Claim.

            

    

     

    
      	
               

            	
              (C)

            	
              Except
                as set forth in Schedule 8(w)(C), to the Knowledge of either the
                Sellers
                or the Shareholders, the Owned Premises and the  Leased
                Premises, or, to the Knowledge of either the Sellers or the Shareholders,
                on adjacent parcels of real property, do not presently contain and
                never
                have contained and are presently free from all chemical substances
                or
                pollutants known to be hazardous wastes, hazardous substances, hazardous
                constituents, toxic substances or related materials, whether solid,
                liquid
                or gaseous, including but not limited to asbestos, radioactive materials,
                oil, gasoline, diesel fuel and other hydrocarbons, and any other
                substances defined as "hazardous wastes", "hazardous substances",
                "toxic
                substances", "pollutants", "contaminants", or other similar designations,
                or any other material, the removal, storage or presence of which
                is
                regulated or required and/or the maintenance of which is regulated
                or
                penalized by Massachusetts General Laws Chapter 21E; The Massachusetts
                Contingency Plan, 310 CMR 40.00 et seq.; the Resources Conservation
                Recovery Act, 42 U.S.C. 6901, et seq.; the Comprehensive Environmental
                Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq.;
                the
                Toxic Substances Control Act, 15 U.S.C. 2601, et seq.; the Clean
                Water
                Act, 33 U.S.C. 1251, et seq.; the Safe Drinking Water Act, 42 U.S.C.
                300(f)-300(j) – 10; the Clean Air Act, 42 U.S.C. 7401, et seq.; and rules
                adopted under such statutes, as well as any permits or licenses issued
                under such statutes and rules or any other local, state or federal
                agency,
                authority or governmental unit (collectively, "Hazardous Substances").
                Sellers shall deliver to Buyer within ten days of the execution of
                this
                Agreement by all parties copies of any and all reports or other data
                in
                Sellers’ possession or reasonably accessible to Sellers with respect to
                any of the matters referred to
                herein.

            

    

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (D)

            	
              To
                the best Knowledge of either the Sellers or the Shareholders, the
                Owned
                Premises and the Leased Premises, and to the knowledge of the Sellers
                or
                the Shareholders without having made inquiry, any adjacent parcels
                of real
                property, do not presently contain and never have contained and are
                presently free from any underground tanks or pipes ancillary to
                underground or above-ground tanks (collectively “Tanks”) except as
                disclosed on Schedule 8(w)(D).  To the extend there are any
                Tanks disclosed on Schedule 8(w)(D), such Tanks shall have been properly
                removed or shall have been legally and property de-commissioned and
                abandoned and Seller and Shareholders shall provide written verification
                of such proper removal or de-commissioning and abandonment within
                10 days
                of the execution of this Agreement. Neither Seller, nor to the best
                Knowledge of either the Sellers or the Shareholders, any third party
                has
                engaged in the generation, use, manufacture, treatment, storage or
                disposal of any hazardous substance on the land in violation of any
                applicable environmental law.

            

    

     

    
      	
               

            	
              (E)

            	
              To
                the best Knowledge of either the Sellers or the Shareholders, the
                Owned
                Premises and the Leased Premises are not and never have been listed
                on the
                National Priorities List, the Comprehensive Environmental Response,
                Compensation and Liability Information System or any similar federal,
                state or local list, schedule, log, inventory or
                database.

            

    

     

    
      	
            	
              (x)

            	
              Suppliers
                and Customers

            

    

     

    
      	
               

            	
              (A)

            	
              Schedule
                8(x) sets forth (i) the 10 principal suppliers of the Sellers collectively
                during each of the year ended December 31, 2006, and for the period
                from
                January 1, 2007 through August 31, 2007 and, in the event that the
                Closing
                is subsequent to September 30, 2007, for the period from January
                1, 2007
                through  September 30, 2007, together with the dollar amount of
                goods purchased by the Company from each such supplier during each
                such
                period, and (ii) the 10 principal customers of the Company during
                each of
                the fiscal years ended December 31, 2005 and December 31, 2006, together
                with the dollar amount of goods and/or services sold by the Company
                to
                each such customer during each such period and for each of the fiscal
                quarters ended March 31, 2007, June 30, 2007 and, in the event that
                the
                Closing is subsequent to September 30, 2007, fiscal quarter ended
                September 30, 2007.  Except as otherwise set forth in Schedule
                8(x), each Seller maintains good relations with all suppliers and
                customers listed or required to be listed in Schedule 8(x) as well
                as with
                governments, partners, financing sources and other parties with whom
                such
                Seller has significant relations, and no such party has canceled,
                terminated or made any threat to the such Seller to cancel or otherwise
                terminate its relationship with the such Seller or to materially
                decrease
                its services or supplies to such Seller or its direct or indirect
                purchase
                or usage of the products of such
                Seller.

            

    

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (y)

            	
              Absence
                of Certain Business Practices

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as set forth on Schedule 8(y), neither the Shareholders, the Sellers,
                nor
                any other Affiliate or agent of the Sellers or the Shareholders,
                or any
                other person acting on behalf of or associated with the Sellers,
                acting
                alone or together, have (a) received, directly or indirectly, any
                rebates,
                payments, commissions, promotional allowances or any other economic
                benefits, regardless of their nature or type, from any customer,
                supplier,
                employee or agent of any customer or supplier; or (b) directly or
                indirectly given or agreed to give any money, gift or similar benefit
                to
                any customer, supplier, employee or agent of any customer or supplier,
                any
                official or employee of any government (domestic or foreign), or
                any
                political party or candidate for office (domestic or foreign), or
                other
                person who was, is or may be in a position to help or hinder the
                business
                of the Sellers (or assist the Sellers in connection with any actual
                or
                proposed transaction), in each case which (i) may subject the Sellers
                to
                any damage or penalty in any civil, criminal or governmental litigation
                or
                proceeding, (ii) if not given in the past, may have had an adverse
                effect
                on the assets, business, operations or prospects of the Sellers,
                or (iii)
                if not continued in the future, may adversely affect the assets,
                business,
                operations or prospects of the
                Sellers.

            

    

     

    
      	
            	
              (z)

            	
              Products,
                Services and Authorizations

            

    

     

    
      	
               

            	
              (A)

            	
              To
                the Knowledge of either the Sellers or the Shareholders, each Product
                repaired or distributed by each Seller has been designed, manufactured,
                repaired or distributed in accordance with (i) the specifications
                under
                which the Product is normally and has normally been manufactured,
                and (ii)
                the provisions of all applicable laws, policies, guidelines and any
                other
                governmental requirements.

            

    

     

    
      	
               

            	
              (B)

            	
              Schedule
                8(z)(B) sets forth (i) a list of all Products which at any time have
                been
                recalled, withdrawn or suspended by each Seller, whether voluntarily
                or
                otherwise, including the date recalled, withdrawn or suspended and
                a brief
                description of all completed or pending proceedings seeking the recall,
                withdrawal, suspension or seizure of any Product, (ii) a brief description
                of all completed or pending proceedings seeking the recall, withdrawal,
                suspension or seizure of any Product, and (iii) a list of all regulatory
                letters received by each Seller or any of its agents relating to
                such
                Seller or any of the Products.

            

    

     

    
      	
               

            	
              (C)

            	
              To
                Sellers’ Knowledge, there exists no set of facts which could reasonably be
                expected to furnish a basis for the recall, withdrawal or suspension
                of
                any product registration, product license, repair or overhaul license,
                manufacturing license, wholesale dealers license, export or import
                license
                or other license, approval or consent of any governmental or regulatory
                authority with respect to each Seller or any of its
                Products.

            

    

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (D)

            	
              There
                are no claims existing or to Sellers’ Knowledge threatened under or
                pursuant to any warranty, whether express or implied, on products
                sold by
                each Seller.  There are no claims existing and to Sellers’
                Knowledge, there is no basis for any claim against the Sellers for
                injury
                to persons, animals or property as a result of the sale, distribution
                or
                manufacture of any product by the Sellers, including, but not limited
                to,
                claims arising out of the defective or unsafe nature of its
                products.  Each Seller has full and adequate insurance coverage
                for products liability claims against
                it.

            

    

     

    
      	
               

            	
              (E)

            	
              Set
                forth on Schedule 8(z)(E) is a list of all authorizations, consents,
                approvals, franchises, licenses and permits required by any Person
                (other
                than a Governmental Authority) for the operation of the business
                of the
                Sellers as presently operated (the “Other Person
                Authorizations”).  All of the Other Person Authorizations have
                been duly issued or obtained and are in full force and effect, and
                each
                Seller is in compliance with the terms of all the Other Person
                Authorizations.  Neither the Sellers nor the Shareholders have
                any knowledge of any facts which could be expected to cause them
                to
                believe that the Other Person Authorizations will not be renewed
                by the
                appropriate Person in the ordinary course.  Each of the Other
                Person Authorizations may be assigned and transferred to the Buyer
                in
                accordance with this Agreement and each will continue in full force
                and
                effect thereafter, in each case without (i) the occurrence of any
                breach,
                default or forfeiture of rights thereunder, or (ii) the consent,
                approval,
                or act of, or the making of any filings with, any
                Person.

            

    

     

    
      	
            	
              (aa)

            	
              Transactions
                With Affiliates

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as set forth on Schedule 8(aa) and except for normal advances to
                employees
                consistent with past practices, payment of compensation for employment
                to
                employees consistent with past practices, and participation in scheduled
                Plans or Benefit Programs and Agreements by employees, the Sellers
                have
                not purchased, acquired or leased any property or services from,
                or sold,
                transferred or leased any property or services to, or loaned or advanced
                any money to, or borrowed any money from, or entered into or been
                subject
                to any management, consulting or similar agreement with, or engaged
                in any
                other significant transaction with any Shareholders or any other
                officer,
                director or Shareholders of the Sellers or any
                Affiliates.  Except as set forth on Schedule 8(aa), none of the
                Shareholders nor any other Affiliate of the Sellers is indebted to
                the
                Sellers for money borrowed or other loans or advances, and the Sellers
                are
                not indebted to any such Affiliate.

            

    

     

    
      	
            	
              (bb)

            	
              Schedule
                8 (bb) is a true and complete list of Sellers credit applications
                and
                guarantees provided by Sellers to the Sellers’
                vendors.

            

    

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (cc)

            	
              Other
                Information

            

    

     

    
      	
               

            	
              (A)

            	
              The
                information furnished by the Shareholders and the Sellers to Buyer
                pursuant to this Agreement (including, without limitation, information
                contained in the exhibits hereto, the Schedules identified herein,
                the
                instruments referred to in such Schedules and the certificates and
                other
                documents to be executed or delivered pursuant hereto by the Shareholders
                and/or the Sellers at or prior to the Closing) is not, nor at the
                Closing
                will be, false or misleading in any material respect, or contains,
                or at
                the Closing will contain, any misstatement of material fact, or omits,
                or
                at the Closing will omit, to state any material fact required to
                be stated
                in order to make the statements therein not
                misleading.

            

    

     

    
      	
            	
              (dd)

            	
              The
                representations and warranties contained in this Section shall not
                be
                affected or deemed waived by reason of the fact that Buyer and/or
                its
                representatives knew or should have known that any such representation
                or
                warranty is or might be inaccurate in any
                respect.

            

    

     

    
      	
            	
              (ee)

            	
              Each
                Party agrees and acknowledges that the only representations and warranties
                that Sellers and Shareholders are making are those that are expressly
                set
                forth in this Agreement.

            

    

     

    
      	
              9.

            	
              REPRESENTATIONS
                AND WARRANTIES OF BUYER. Buyer hereby represents and warrants to
                the
                Company that: 

            

    

     

    
      	
            	
              (a)

            	
              Existence
                and Qualification

            

    

     

    
      	
               

            	
              (A)

            	
              Buyer
                is a corporation duly organized, validly existing and in good standing
                under the laws of the State of New York.

            

    

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (b)

            	
              Authority,
                Approval and Enforceability

            

    

     

    
      	
               

            	
              (A)

            	
              This
                Agreement has been duly executed and delivered by Buyer and Buyer
                has all
                requisite company power and legal capacity to execute and deliver
                this
                Agreement and all Collateral Agreements executed and delivered or
                to be
                executed and delivered by Buyer in connection with the transactions
                provided for hereby, to consummate the transactions contemplated
                hereby
                and by the Collateral Agreements, and to perform its obligations
                hereunder
                and under the Collateral Agreements.  Upon the approval of this
                Agreement by the Board of Directors of Buyer, the execution and delivery
                of this Agreement and the Collateral Agreements and the performance
                of the
                transactions contemplated hereby and thereby have been duly and validly
                authorized and approved by all company action necessary on behalf
                of
                Buyer.  Subject to such Board approval, this Agreement and each
                Collateral Agreement to which Buyer is a party constitutes, or upon
                execution and delivery will constitute, the legal, valid and binding
                obligation of Buyer, enforceable in accordance with its terms, except
                as
                such enforcement may be limited by general equitable principles or
                by
                applicable bankruptcy, insolvency, moratorium, or similar laws and
                judicial decisions from time to time in effect which affect creditors’
                rights generally. 

            

    

     

    
      	
               

            	
              (B)

            	
              No
                Default or Consents

            

    

     

    
      	
               

            	
              (1)

            	
              Neither
                the execution and delivery of this Agreement nor the carrying out
                of the
                transactions contemplated hereby
                will:

            

    

     

    
      	
               

            	
              (a)

            	
              violate
                or conflict with any of the terms, conditions or provisions of Buyer’s
                Certificate of Incorporation or
                by-laws;

            

    

     

    
      	
               

            	
              (b)

            	
              violate
                any Legal Requirements applicable to
                Buyer;

            

    

     

    
      	
               

            	
              (c)

            	
              violate,
                conflict with, result in a breach of, constitute a default under
                (whether
                with or without notice or the lapse of time or both), or accelerate
                or
                permit the acceleration of the performance required by, or give any
                other
                party the right to terminate, any contract or Permit applicable to
                Buyer;

            

    

     

    
      	
               

            	
              (d)

            	
              result
                in the creation of any lien, charge or other encumbrance on any property
                of Buyer; or

            

    

     

    
      	
               

            	
              (e)

            	
              require
                Buyer to obtain or make any waiver, consent, action, approval or
                authorization of, or registration, declaration, notice or filing
                with, any
                private non-governmental third party or any Governmental
                Authority.

            

    

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (c)

            	
              No
                Proceedings

            

    

     

    
      	
               

            	
              (A)

            	
              No
                suit, action or other proceeding is pending or, to Buyer’s knowledge,
                threatened before any Governmental Authority seeking to restrain
                Buyer or
                prohibit its entry into this Agreement or prohibit the Closing, or
                seeking
                Damages against Buyer or its properties as a result of the consummation
                of
                this Agreement.

            

    

     

    
      	
            	
              (d)

            	
              Each
                Party agrees and acknowledges that the only representations and warranties
                that the Buyer is making are those that are expressly set forth in
                this
                Agreement.

            

    

     

    
      	
              10.

            	
              OBLIGATIONS
                PRIOR TO CLOSING. From the date of this Agreement through the
                Closing:

            

    

     

    
      	
            	
              (a)

            	
              Buyer’s
                Access to Information and
                Properties

            

    

     

    
      	
               

            	
              (A)

            	
              The
                Sellers shall permit Buyer and its authorized employees, agents,
                accountants, legal counsel, financing sources and other representatives
                to
                have access to the books, records, employees, counsel, accountants,
                engineers and other representatives of the Company at all times reasonably
                requested by Buyer for the purpose of conducting an investigation
                of the
                Sellers’ financial condition, corporate status, operations, prospects,
                business and Properties.  Each Seller shall make available to
                Buyer for examination and reproduction all documents and data of
                every
                kind and character relating to such Seller in possession or control
                of, or
                subject to reasonable access by, such Seller and/or the Shareholders,
                including, without limitation, all files, records, data and information
                relating to the Properties (whether stored in paper, magnetic or
                other
                storage media) and all agreements, instruments, contracts, assignments,
                certificates, orders, and amendments thereto.  Also, each
                Seller  shall allow Buyer access to, and the right to inspect,
                its Properties, except to the extent that such Properties are operated
                by
                a third-party operator, in which case such Seller shall use its best
                efforts to cause the operator of such Properties to allow Buyer access
                to,
                and the right to inspect, such Properties. Buyer shall conduct any
                such
                investigation in such a manner as not to interfere unreasonably with
                the
                normal operations of Sellers.

            

    

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (b)

            	
              Company’s
                Conduct of Business and Operations

            

    

     

    
      	
               

            	
              (A)

            	
              Sellers
                and the Shareholders shall keep Buyer advised as to all material
                operations and proposed material operations relating to the
                Sellers.  Each Seller shall (a) conduct its business in the
                ordinary course (b) maintain present employees, (c) maintain and
                operate
                its Properties in a good and workmanlike manner, (d) pay or cause
                to be
                paid all costs and expenses (including but not limited to insurance
                premiums) incurred in connection therewith in a timely manner, (e)
                use
                reasonable efforts to keep all Contracts listed or required to be
                listed
                on Schedule 8(s) in full force and effect, (f) comply with all of
                the
                covenants contained in all such material Contracts, (g) maintain
                in force
                until the Closing Date insurance policies equivalent to those in
                effect on
                the date hereof, and (h) comply in all material respects with all
                applicable Legal Requirements, and (i) use their best efforts to
                preserve
                the present relationships of such Seller with all persons having
                significant business relations with such Seller.
                

            

    

     

    
      	
            	
              (c)

            	
              General
                Restrictions

            

    

     

    
      	
               

            	
              (A)

            	
              Except
                as otherwise expressly permitted in this Agreement, without the prior
                written consent of Buyer, which consent shall not be unreasonably
                withheld, each of the Sellers shall
                not:

            

    

     

    
      	
               

            	
              (1)

            	
              merge
                into or with or consolidate with, any other corporation or acquire
                the
                business or assets of any person;

            

    

     

    
      	
               

            	
              (2)

            	
              amend
                its articles of incorporation or
                bylaws;

            

    

     

    
      	
               

            	
              (3)

            	
              create,
                incur, assume, guarantee or otherwise become liable or obligated
                with
                respect to any indebtedness, or make any loan or advance to, or any
                investment in, any person, except in each case in the ordinary course
                of
                business;

            

    

     

    
      	
               

            	
              (4)

            	
              enter
                into, amend or terminate any material
                agreement;

            

    

     

    
      	
               

            	
              (5)

            	
              sell,
                transfer, lease, mortgage, encumber or otherwise dispose of, or agree
                to
                sell, transfer, lease, mortgage, encumber or otherwise dispose of,
                any
                Properties except (i) in the ordinary course of business, or (ii)
                pursuant
                to any agreement specified in Schedule
                8(s);

            

    

     

    
      	
               

            	
              (6)

            	
              settle
                any material claim or litigation, or file any material motions, orders,
                briefs or settlement agreements in any proceeding before any Governmental
                Authority or any arbitrator;

            

    

     

    
      	
               

            	
              (7)

            	
              incur
                or approve, or enter into any agreement or commitment to make, any
                capital
                expenditures in excess of $10,000 (other than those required pursuant
                to
                any agreement specified in Schedule
                8(s)));

            

    

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (8)

            	
              maintain
                its books of account other than in the usual, regular and ordinary
                manner
                in accordance with generally accepted accounting principles and on
                a basis
                consistent with prior periods or make any change in any of its accounting
                methods or practices;

            

    

     

    
      	
               

            	
              (9)

            	
              make
                any change, whether written or oral, to any agreement or understanding
                with any suppliers or customers;

            

    

     

    
      	
               

            	
              (10)

            	
              accelerate
                or delay collection of any notes or accounts receivable in advance
                of or
                beyond their regular due dates or the dates when they would have
                been
                collected in the ordinary course of business consistent with past
                practices;

            

    

     

    
      	
               

            	
              (11)

            	
              delay
                or accelerate payment of any accrued expense, trade payable or other
                liability beyond or in advance of its due date or the date when such
                liability would have been paid in the ordinary course of business
                consistent with past practices;

            

    

     

    
      	
               

            	
              (12)

            	
              allow
                its levels of inventory to vary in any material respect from the
                levels
                customarily maintained;

            

    

     

    
      	
               

            	
              (13)

            	
              adopt
                any Plan or Benefit Program or Agreement or increase the compensation
                payable to any employee (including, without limitation, any increase
                pursuant to any bonus, profit-sharing or other incentive plan or
                commitment);

            

    

     

    
      	
               

            	
              (14)

            	
              become
                a party to or bound by any of the arrangements described in this
                Agreement
                or any Schedule, whether written or
                oral;

            

    

     

    
      	
               

            	
              (15)

            	
              engage
                in any one or more activities or transactions outside the ordinary
                course
                of business;

            

    

     

    
      	
               

            	
              (16)

            	
              enter
                into any transaction or make any commitment which could result in
                any of
                the representations, warranties or covenants of the Company and/or
                the
                Shareholders contained in this Agreement not being true and correct
                after
                the occurrence of such transaction or event;
                or

            

    

     

    
      	
               

            	
              (17)

            	
              commit
                to do any of the foregoing.

            

    

     

    
      	
            	
              (d)

            	
              Notice
                Regarding Changes

            

    

     

    
      	
               

            	
              (A)

            	
              Sellers
                and the Shareholders shall promptly inform the Buyer in writing of
                any
                change in facts and circumstances that could render any of the
                representations and warranties made herein by the Sellers and the
                Shareholders inaccurate or misleading.  The Buyer shall promptly
                inform the Company in writing of any change in facts and circumstances
                that could render any of the representations and warranties made
                herein by
                it inaccurate or misleading. 

            

    

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

       

    

    
      	
            	
              (e)

            	
              Ensure
                Conditions Met

            

    

     

    
      	
               

            	
              (A)

            	
              Subject
                to the terms and conditions of this Agreement, each party hereto
                shall use
                all reasonable commercial efforts to take or cause to be taken all
                actions
                and do or cause to be done all things required under applicable Legal
                Requirements in order to consummate the transactions contemplated
                hereby,
                including, without limitation, (i) obtaining all Permits, authorizations,
                consents and approvals of any Governmental Authority or other person
                which
                are required for or in connection with Buyer’s conduct of the Business (as
                currently conducted by the Company) subsequent to (x) Closing or
                (y) the
                consummation of the transactions contemplated hereby and by the Collateral
                Agreements or (z) both, (ii) taking any and all reasonable actions
                necessary to satisfy all of the conditions to each party’s obligations
                hereunder as set forth in Section 12, and (iii) executing and delivering
                all agreements and documents required by the terms hereof to be executed
                and delivered by such party on or prior to the Closing.
                

            

    

     

    
      	
            	
              (f)

            	
              Casualty
                Loss

            

    

     

    
      	
            	
              (A)

            	
              If,
                between the date of this Agreement and the Closing, any of the Properties
                of the Sellers shall be destroyed or damaged in whole or in part
                by fire,
                earthquake, flood, other casualty or any other cause, then the Sellers
                shall, at Buyer’s election, (i) cause such Properties to be repaired or
                replaced prior to the Closing with Properties of substantially the
                same
                condition and function, (ii) assign the Sellers’ rights under applicable
                insurance policies provided that the same are sufficient to cause
                such
                Properties to be repaired or replaced prior to the Closing with Properties
                of substantially the same condition and function, or (iii) enter
                into
                contractual arrangements satisfactory to Buyer so that the Sellers
                will
                have at the Closing the same economic value as if such casualty had
                not
                occurred, provided that if there is substantial loss to any one of
                the
                Sellers’ Properties, Buyer may upon notice to the Company terminate this
                Agreement without liability to any party.

            

    

     

    
      	
            	
              (g)

            	
              Employee
                Matters

            

    

     

    
      	
               

            	
              (A)

            	
              The
                parties acknowledge that the transactions provided for in this Agreement
                may result in obligations on the part of the Sellers and one or more
                of
                the Plans that is a welfare benefit plan (within the meaning of Section
                3(1) of ERISA) to comply with the health care continuation requirements
                of
                Part 6 of Title 1 of ERISA and Code Section 4980B, as
                applicable.  The parties expressly agree that Buyer and Buyer’s
                benefit plans shall have no responsibility, and that Sellers shall
                have
                full responsibility, for compliance with such health care continuation
                requirements (i) for qualified beneficiaries who previously elected
                to
                receive continued coverage under the Sellers’ ERISA benefit plans or who
                between the date of this Agreement and the Closing Date elect to
                receive
                continued coverage, or (ii) with respect to those employees or former
                employees of the Sellers who may become eligible to receive such
                continued
                coverage as a result of the transactions provided for in this
                Agreement.

            

    

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

       

    

    
      	
               

            	
              (B)

            	
              Except
                as specifically set forth in this Agreement: (i) the Buyer shall
                not be
                obligated to assume, continue or maintain any of the Plans or Benefit
                Programs or Agreements; (ii) no assets or liabilities of the Plans
                shall
                be transferred to, or assumed by, the Buyer or the Buyer’s benefit plans;
                and (iii) the Sellers shall be solely responsible for funding and/or
                paying any benefits under any of the Plans or Benefit Programs or
                Agreements, including any termination benefits and other employee
                entitlements accrued under such plans by or attributable to employees
                of
                the Sellers prior to the Closing
                Date.

            

    

     

    
      	
               

            	
              (C)

            	
              Nothing
                in this Agreement, express or implied, shall confer upon any employee
                of
                the Sellers, or any representative of any such employee, any rights
                or
                remedies, including any right to employment or continued employment
                for
                any period, of any nature
                whatsoever.

            

    

     

    
      	
               

            	
              (D)

            	
              The
                Sellers shall, after the execution by the parties of this Agreement,
                permit Buyer to contact and make arrangements with the Sellers’ employees
                for the purpose of assuring their continued employment by the Buyer
                after
                the Closing and for the purpose of ensuring the continuity of the
                Sellers’
                business, and the Sellers agree not to discourage any such employees
                from
                consulting with Buyer.

            

    

     

    
      	
               

            	
              (E)

            	
              Each
                Seller shall use its best efforts to keep available the services
                of the
                Sellers’ present employees.

            

    

     

    
      	
            	
              (h)

            	
              Name
                Change

            

    

     

    
      	
               

            	
              (A)

            	
              Each
                Seller hereby represents, warrants and covenants to the Buyer that
                the
                corporate name of each and every Seller is as set forth on the signature
                page hereof and further agrees and acknowledges that such name is
                included
                with the Assets and that the exclusive right to use such name will
                be
                transferred to the Buyer on the Closing Date.  Each Seller and
                the Shareholders shall, at the Closing, cause the filing of an appropriate
                amendment to such Seller’s Certificate of Incorporation changing its name
                to a name which is in no way similar to the corporate name set forth
                on
                the signature page hereof and shall furnish such written consents
                and
                assignments as the Buyer shall hereafter reasonably request in connection
                with such name change.

            

    

     

    
      	
              11.

            	
              The
                Sellers and the Buyer shall have entered into the Owned Real Estate
                Leases  and Landlord’s Agreements and shall have caused the
                landlord under the Real Estate Lease to consent to the Buyer’s occupancy
                of the premises in the same manner as held by
                Sellers.

            

    

     

    
      	
              12.

            	
              CONDITIONS
                TO SELLERS’ AND BUYER’S OBLIGATIONS

            

    

     

    
      	
            	
              (a)

            	
              Conditions
                to Obligations of the Sellers.  The obligations of the Sellers
                to carry out the transactions contemplated by this Agreement are
                subject,
                at the option of the Sellers to the commercially reasonable satisfaction,
                or waiver by the Sellers, of the following
                conditions:

            

    

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (A)

            	
              Buyer
                shall have furnished the Sellers with a certified copy of all necessary
                company action on its behalf to approve its execution, delivery and
                performance of this Agreement.

            

    

     

    
      	
               

            	
              (B)

            	
              All
                representations and warranties of Buyer contained in this Agreement
                shall
                be true and correct in all material respects at and as of the Closing,
                and
                Buyer shall have performed and satisfied in all material respects
                all
                covenants and agreements required by this Agreement to be performed
                and
                satisfied by Buyer at or prior to the
                Closing.

            

    

     

    
      	
               

            	
              (C)

            	
              As
                of the Closing Date, no suit, action or other proceeding (excluding
                any
                such matter initiated by or on behalf of the Sellers or any Shareholder)
                shall be pending or threatened before any Governmental Authority
                seeking
                prohibit the Closing as a result of the consummation of this Agreement.
                

            

    

     

    
      	
               

            	
              (D)

            	
              Buyer
                shall have executed an employment agreement with Adam in the same
                form as
                set forth in
                Schedule  7(c)(A).

            

    

     

    
      	
               

            	
              (E)

            	
              Buyer
                shall have executed an employment agreement with Brian in the same
                form as
                set forth in Schedule 7(c)(B).

            

    

     

    
      	
               

            	
              (F)

            	
              Buyer
                shall have executed a consulting agreement with Nancy in the same
                form as
                set forth in Schedule 7(c)(D).

            

    

     

    
      	
            	
              (b)

            	
              Conditions
                to Obligations of Buyer.  The obligations of Buyer to carry out
                the transactions contemplated by this Agreement are subject, at the
                option
                of Buyer, to the commercially reasonable satisfaction, or waiver
                by Buyer,
                of the following conditions:

            

    

     

    
      	
               

            	
              (A)

            	
              All
                representations and warranties of the Sellers and the Shareholders
                contained in this Agreement shall be true and correct in all material
                respects at and as of the Closing, and the Sellers and the Shareholders
                shall have performed and satisfied in all material respects all agreements
                and covenants required by this Agreement to be performed and satisfied
                by
                them at or prior to the Closing.

            

    

     

    
      	
               

            	
              (B)

            	
              As
                of the Closing Date, no suit, action or other proceeding (excluding
                any
                such matter initiated by or on behalf of Buyer) shall be pending
                or
                threatened before any court or governmental agency seeking to prohibit
                the
                Closing as a result of the consummation of this
                Agreement.

            

    

     

    
      	
               

            	
              (C)

            	
              Except
                for matters disclosed in Schedule 8(n)(A) or 8(n)(B), since the Balance
                Sheet Date and up to and including the Closing, there shall not have
                been
                any event, circumstance, change or effect that, individually or in
                the
                aggregate, had or might have a material adverse effect on the Sellers’
                business, operations, prospects, Properties or financial
                condition.

            

    

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (D)

            	
              The
                Buyer shall have received the opinion of Martinelli Discenza P.C.,
                counsel
                to the Sellers (“Company Counsel”), dated as of the Closing Date,
                addressed to the Buyer and in form and substance reasonably satisfactory
                to the Buyer, to the effect set forth on Exhibit 12(b)(D)
                hereto.

            

    

     

    
      	
               

            	
              (E)

            	
              The
                Sellers shall have furnished Buyer with a certified copy of all necessary
                corporate action on its behalf approving the Sellers’ execution, delivery
                and performance of this Agreement.

            

    

     

    
      	
               

            	
              (F)

            	
              Buyer
                shall have received written evidence, in form and substance satisfactory
                to Buyer, of the consent to the transactions contemplated by this
                Agreement of all governmental, quasi-governmental and private third
                parties (including, without limitation, persons or other entities
                leasing
                real or personal property to the Company) where the absence of any
                such
                consent would result in a violation of law or a breach or default
                under
                any agreement to which the Company is
                subject.

            

    

     

    
      	
               

            	
              (G)

            	
              No
                proceeding in which any of the Shareholders or the Sellers shall
                be a
                debtor, defendant or party seeking an order for its own relief or
                reorganization shall have been brought or be pending by or against
                such
                person under any United States, state or foreign bankruptcy or insolvency
                law.

            

    

     

    
      	
               

            	
              (H)

            	
              Satisfactory
                completion of business, legal and accounting due diligence by each
                of the
                Buyer and Buyer’s lender providing financing in connection with the
                transactions contemplated hereby, within thirty (30) days of the
                signing
                of this Agreement.

            

    

     

    
      	
               

            	
              (I)

            	
              [Intentionally
                Deleted].

            

    

     

     

    
      	
               

            	
              (J)

            	
              Brian
                and Adam shall have executed and delivered their respective Employment
                Agreements.

            

    

     

     

    
      	
               

            	
              (K)

            	
              Sellers
                shall have executed an appropriate notice of sale and request of
                continuance of the Kohler distribution agreement to Kohler in
                substantially the same form attached as Exhibit
                12(b)(K).

            

    

     

    
      	
               

            	
              (L)

            	
              Sellers
                shall have filed a request for the Waiver of Tax Lien and shall deliver
                such Waiver of Tax Lien promptly to the Buyer upon
                receipt.

            

    

     

    
      	
               

            	
              (M)

            	
              Sellers
                shall have filed on the date of the signing of this Agreement a request
                for a certificate from the Massachusetts Department of Revenue as
                to the
                good standing of, and the payment of taxes by, each of the Sellers
                as of
                the date of the signing of the Agreement and shall promptly deliver
                such
                certificate to the Buyer upon
                receipt.

            

    

     

    
      	
               

            	
              (N)

            	
              The
                Sellers shall have simultaneously with the Closing of this Agreement
                executed the Owned Real Estate Leases and Landlord’s
                Agreements.

            

      
        
          
          

        

        
          -42-

          
            

          

        

        
          
          

        

      

    

     

    
      	
              13.

            	
              POST-CLOSING
                OBLIGATIONS. Further Assurances

            

    

     

     

    
      	
            	
              (a)

            	
              Following
                the Closing, the Sellers, the Shareholders and the Buyer shall execute
                and
                deliver such documents, and take such other action, as shall be reasonably
                requested by any other party hereto to carry out the transactions
                contemplated by this Agreement. 

            

    

     

     

    
      	
            	
              (b)

            	
              Sellers
                shall give proper notice to all vendors that Sellers agreed to sell
                the
                Business to the Buyer in accordance with the terms and conditions
                of this
                Agreement. . 

            

    

     

     

    
      	
            	
              (c)

            	
              Post-Closing
                Indemnity 

            

    

     

     

    
      	
            	
              (A)

            	
              The
                Sellers and the Majority Shareholders shall jointly and severally
                indemnify and hold harmless Buyer from and against any and all damages
                arising out of, resulting from or in any way related to (i) a breach
                of or
                the failure to perform or satisfy any of the representations, warranties,
                covenants and agreements made by each Seller and each Shareholder
                in this
                Agreement or in any document or certificate delivered by the Sellers
                at
                the Closing pursuant hereto, (ii) the occurrence of any event on
                or prior
                to the date of Closing that is (or would be, but for any deductible
                thereunder) covered by individual policies of insurance, blanket
                insurance
                policies or self insurance programs maintained by the Sellers, (iii)
                the
                Excluded Assets, (iv) the existence of any liabilities or obligations
                of
                the Sellers (whether accrued, absolute, contingent, known or unknown,
                or
                otherwise, and whether or not of a nature appropriate for inclusion
                in a
                balance sheet in accordance with GAAP) other than the Assumed Obligations
                or (v) any and all actions, suits, proceedings, claims, demands,
                assessments, judgments, costs, and expenses, including, without
                limitation, legal fees and expenses, incident to any of the foregoing
                or
                incurred in investigating or attempting to avoid the same or to oppose
                the
                imposition thereof, or in enforcing this
                indemnity.  Notwithstanding the above, the Buyer shall be
                entitled to indemnification only in the event that the aggregate
                amount
                for which the Buyer is entitled to indemnification (excluding the
                limitation of this sentence) exceeds $ 25,000. It is expressly understood
                that in the event the aggregate amount of indemnification exceeds
                $25,000,
                Buyer shall be entitled to receive the total amount of indemnification
                amount from the first dollar.

            

    

     

    
      	
               

            	
              (B)

            	
              In
                the event that Buyer is entitled to indemnification hereunder in
                any
                amount and any amounts are then held in escrow by the Escrow Agent
                under
                the Escrow Agreement, Brian (on behalf of the Sellers) shall forthwith
                join with Buyer in a written direction to the Escrow Agent to release
                such
                amount to Buyer. To the extent that the amount of the required
                indemnification exceeds the amounts then available for release from
                escrow
                by the Escrow Agent, Sellers and the Majority Shareholders shall
                jointly
                and severally pay the excess to Buyer
                forthwith.

            

    

     

    
      	
            	
              (C)

            	
              On
                the first anniversary of the Closing, Brian (on behalf of the Sellers)
                shall join with Buyer in a written direction to the Escrow Agent
                to
                release to the Company (on behalf of the Sellers) all amounts then
                held in
                escrow (together with any earnings thereon) which Escrow Agent is
                not then
                required to release to Buyer and which are not then subject to any
                dispute
                under this Agreement.

            

      
        
          
          

        

        
          -43-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (D)

            	
              In
                the event that there is any dispute on whether any party is required
                to
                sign any direction to the Escrow Agent hereunder, such dispute shall
                be
                resolved exclusively by arbitration by the American Arbitration
                Association in Great Barrington, Massachusetts. In the event that
                the
                parties agree that a direction to the Escrow Agent is required to
                a given
                extent but dispute whether such direction is required for any excess
                amount, then the parties shall execute such direction for to the
                given
                amount as to which there is no dispute, and the dispute on the excess
                amount shall be submitted to arbitration as
                aforesaid.

            

    

     

    
      	
               

            	
              (E)

            	
              Buyer
                shall indemnify and hold harmless Sellers from and against any and
                all
                damages arising out of, resulting from or in any way related to Buyer’s
                failure to make payments under the Assumed
                Obligations.

            

    

     

    
      	
               

            	
              (F)

            	
              If
                any claim or demand for which an Indemnifying Party would be liable
                to an
                Indemnified Party is asserted against or sought to be collected from
                the
                Indemnified Party by a third party, Indemnified Party shall with
                reasonable promptness notify in writing the Indemnifying Party of
                such
                claim or demand stating with reasonable specificity the circumstances
                of
                the Indemnified Party’s claim for indemnification; provided, however, that
                any failure to give such notice will not waive any rights of the
                Indemnified Party except to the extent the rights of the Indemnifying
                Party are actually prejudiced.  After receipt by the
                Indemnifying Party of such notice, then upon reasonable notice from
                the
                Indemnifying Party to the Indemnified Party, or upon the request
                of the
                Indemnified Party, the Indemnifying Party shall defend, manage and
                conduct
                any proceedings, negotiations or communications involving any claimant
                whose claim is the subject of the Indemnified Party’s notice to the
                Indemnifying Party as set forth above, and shall take all actions
                necessary, including, but not limited to, the posting of such bond
                or
                other security as may be required by any Governmental Authority,
                so as to
                enable the claim to be defended against or resolved without expense
                or
                other action by the Indemnified Party.  Upon request of the
                Indemnifying Party, the Indemnified Party shall, to the extent it
                may
                legally do so and to the extent that it is compensated in advance
                by the
                Indemnifying Party for any costs and expenses thereby
                incurred,

            

    

     

    
      	
               

            	
              (1)

            	
              take
                such action as the Indemnifying Party may reasonably request in connection
                with such action,

            

    

     

    
      	
               

            	
              (2)

            	
              allow
                the Indemnifying Party to dispute such action in the name of the
                Indemnified Party and to conduct a defense to such action on behalf
                of the
                Indemnified Party, and

            

    

     

    
      	
               

            	
              (3)

            	
              render
                to the Indemnifying Party all such assistance as the Indemnifying
                Party
                may reasonably request in connection with such dispute and
                defense.

            

      
        
          
          

        

        
          -44-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (G)

            	
              In
                any action or proceeding, the Indemnified Party shall have the right
                to
                retain its own counsel, but, in the event the Sellers are the Indemnified
                Party, Sellers shall have the right to retain only one counsel on
                behalf
                of all the Sellers; but the fees and expenses of such counsel shall
                be at
                its own expense unless (i) the Indemnifying Party and the Indemnified
                Party shall have mutually agreed to the retention of such counsel
                or (ii)
                the named parties to any suit, action or proceeding (including any
                impleaded parties) include both the Indemnifying Party and the Indemnified
                Party and representation of all parties by the same counsel would
                be
                inappropriate due to actual or potential conflict of interests between
                them.

            

    

     

    
      	
               

            	
              (H)

            	
              An
                Indemnifying Party shall not be liable under this Agreement for any
                settlement effected without its consent of any claim, litigation
                or
                proceeding in respect of which indemnity may be sought
                hereunder.

            

    

     

    
      	
               

            	
              (I)

            	
              The
                Indemnifying Party may settle any claim without the consent of the
                Indemnified Party, but only if the sole relief awarded is monetary
                damages
                that are paid in full by the Indemnifying Party. The Indemnified
                Party
                shall, subject to its reasonable business needs, use reasonable efforts
                to
                minimize the indemnification sought from the Indemnifying Party under
                this
                Agreement.

            

    

     

    
      	
            	
              (d)

            	
              Non-Competition,
                Non-Solicitation and Non-Disclosure

            

    

     

    
      	
               

            	
              (A)

            	
              General.  In
                consideration of the payment of the Purchase Price, and in order
                to induce
                the Buyer to enter into this Agreement and to consummate the transactions
                contemplated hereby, each Seller and each Shareholder (other than
                for
                Brian and Adam, who shall each be subject to the terms and conditions
                of
                the Non-Compete, Non-Solicitation and Non-Disclosure set forth in
                their
                individual employment agreements) hereby covenants and agrees as
                follows:

            

    

     

    
      	
               

            	
              (1)

            	
              Without
                the prior written consent of the Buyer, neither any  Seller (nor
                any Affiliate of Seller) nor any Shareholder (nor any Affiliate of
                any
                Shareholder) shall for a period of three (3) years from and after
                the
                Closing Date (A) directly or indirectly acquire or own in any manner
                any
                interest (whether through a debt or equity instrument) in any person
                ,
                firm, partnership, corporation, association or other entity (including
                the
                Company) which engages or plans to engage in any facet of the Business
                or
                which competes or plans to compete in any way with the Buyer or any
                of its
                subsidiaries or Affiliates anywhere within a 50 mile radius of any
                of the
                Owned Premises, Owned Real Estate, Real Property and/or Leased Premises
                (the “Territory”), (B) be employed by or serve as an employee, agent,
                officer, director of, or as a consultant to, any person, firm,
                partnership, corporation, association or other entity which engages
                or
                plans to engage in any facet of the Business  or which competes
                or plans to compete in any way with the Buyer or any of its subsidiaries
                or Affiliates within the Territory, or (C) utilize its or his special
                knowledge of the business of each Seller and his or its relationships
                with
                customers, suppliers and others to compete with Buyer and/or its
                Affiliates in any business which engages or plans to engage in any
                facet
                of the Business; provided, however, that nothing herein shall be
                deemed to
                prevent either Seller or either Shareholder from (x) acquiring through
                market purchases and owning, solely as a passive investment, less
                than one
                percent in the aggregate of the equity securities of any class of
                any
                issuer whose shares are registered under §12(b) or 12(g) of the Securities
                Exchange Act of 1934, as amended, and are listed or admitted for
                trading
                on any United States national securities exchange or are quoted on
                the
                National Association of Securities Dealers Automated Quotation System,
                or
                any similar system of automated dissemination of quotations of securities
                prices in common use, so long as such Seller or such Shareholder
                is not a
                member of any “control group” (within the meaning of the rules and
                regulations of the United States Securities and Exchange Commission)
                of
                any such issuer.  Each Seller and each Shareholder acknowledges
                and agrees that the covenants provided for in this Section are reasonable
                and necessary in terms of time, area and line of business to protect
                the
                Sellers’ Trade Secrets.  Each Seller and each Shareholder
                further acknowledges and agrees that such covenants are reasonable
                and
                necessary in terms of time, area and line of business to protect
                the
                Buyer’s legitimate business interests, which include its interests in
                protecting the Buyer’s (i) valuable confidential business information,
                (ii) substantial relationships with customers, and (iii) customer
                goodwill
                associated with the ongoing Business.  Each Seller and each
                Shareholder hereby expressly authorizes the enforcement of the covenants
                provided for in this Section by (A) the Buyer and its subsidiaries,
                (B)
                the Buyer’s permitted assigns, and (C) any successors to the Buyer’s
                business.  To the extent that the covenants provided for in this
                Section may later be deemed by a court to be too broad to be enforced
                with
                respect to its duration or with respect to any particular activity
                or
                geographic area, the court making such determination shall have the
                power
                to reduce the duration or scope of the provision, and to add or delete
                specific words or phrases to or from the provision.  The
                provision as modified shall then be
                enforced.

            

      
        
          
          

        

        
          -45-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (2)

            	
              Without
                the prior consent of Buyer, neither any Seller (nor any Affiliate
                of any
                Seller) nor any Shareholder (nor any Affiliate of any Shareholder),
                shall
                for a period of three (3) years from the Closing Date, directly or
                indirectly, for itself or himself or for any other person, firm,
                corporation, partnership, association or other entity (including
                the
                Company), (A) solicit any of the Sellers’ employees employed in the
                Business, (B) call on or solicit any of the actual customers or clients
                of
                the Business, nor shall any  Seller (or any Affiliate of Seller)
                or any Shareholder (or any Affiliate of any Shareholder), make known
                the
                names and addresses of such customers or any information relating
                in any
                manner to the Sellers’ trade or business relationships with such
                customers, (C) in any manner, directly or indirectly, attempt to
                seek to
                cause any entity to refrain from dealing or doing business with the
                Buyer
                or assist any entity in doing so or attempting to do so or (D) employ
                any
                employees of Buyer.

            

      
        
          
          

        

        
          -46-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (3)

            	
              Neither
                any  Seller (nor any Affiliate of any Seller) nor any
                Shareholder (nor any Affiliate of any Shareholder), shall  at
                any time divulge, communicate, use to the detriment of the Buyer
                or for
                the benefit of any other person or persons, or misuse in any way,
                any
                Confidential Information pertaining to the Business.  Any
                confidential information or data now known or hereafter acquired
                by the
                either any  Seller or any Shareholder, with respect to the
                Business shall be deemed a valuable, special and unique asset of
                the Buyer
                that is received by the either any  Seller or any Shareholder,
                in confidence and as a fiduciary, and each Seller and each Shareholder,
                shall remain a fiduciary to the Buyer with respect to all of such
                information.

            

    

     

    
      	
               

            	
              (4)

            	
              Injunction.  It
                is recognized and hereby acknowledged by the parties hereto that
                a breach
                or violation by either any  Seller or any Shareholder of any or
                all of the covenants and agreements contained in this Section may
                cause
                irreparable harm and damage to Buyer in a monetary amount which may
                be
                virtually impossible to ascertain.  As a result, each Seller and
                each Shareholder recognizes and hereby acknowledges that Buyer shall
                be
                entitled (without the requirement of posting a bond) to an injunction
                from
                any court of competent jurisdiction enjoining and restraining any
                breach
                or violation of any or all of the covenants and agreements contained
                in
                this Section by the each of the Sellers and each of the Shareholders,
                and/or its associates, Affiliates, partners or agents, either directly
                or
                indirectly, and that such right to injunction shall be cumulative
                and in
                addition to whatever other rights or remedies the Buyer may possess
                hereunder, at law or in equity.  Nothing contained in this
                Section shall be construed to prevent Buyer from seeking and recovering
                from the either any Seller or any Shareholder, or both, jointly and
                severally, damages sustained by it as a result of any breach or violation
                by either any  Seller or any Shareholder, or both, of any of the
                covenants or agreements contained
                herein.

            

    

     

    
      	
            	
              (e)

            	
              Delivery
                of Property Received by the Company After
                Closing

            

    

     

    
      	
               

            	
              (A)

            	
              From
                and after the Closing, Buyer shall have the right and authority to
                collect, for the account of Buyer, all receivables and other items
                which
                shall be transferred or are intended to be transferred to Buyer as
                part of
                the Assets as provided in this Agreement, and to endorse with the
                name of
                the Sellers any checks or drafts received on account of any such
                receivables or other Assets.  Each Seller agrees that it will
                transfer or deliver to Buyer, promptly after the receipt thereof,
                any cash
                or other property which such Seller receives after the Closing Date
                in
                respect of any claims, contracts, licenses, leases, commitments,
                sales
                orders, purchase orders, receivables of any character or any other
                items
                transferred or intended to be transferred to Buyer as part of the
                Assets
                under this Agreement. 

            

      
        
          
          

        

        
          -47-

          
            

          

        

        
          
          

        

      

    

     

    
      	
            	
              (f)

            	
              Assignment
                of Contracts

            

    

     

    
      	
               

            	
              (A)

            	
              At
                the option of Buyer, and notwithstanding anything in this Agreement
                to the
                contrary, this Agreement shall not constitute an assignment of any
                claim,
                contract, license, franchise, lease, commitment, sales order, sales
                contract, supply contract, service agreement, purchase order or purchase
                commitment if an attempted assignment thereof without the consent
                of a
                third party thereto would constitute a breach thereof or in any way
                adversely affect the rights of Buyer thereunder.  If such
                consent is not obtained, or if any attempt at an assignment thereof
                would
                be ineffective or would affect the rights of the Sellers thereunder
                so
                that Buyer would not in fact receive all such rights, the Sellers
                shall
                cooperate at its own expense with Buyer to the extent necessary to
                provide
                for Buyer the benefits under such claim, contract, license, franchise,
                lease, commitment, sales order, sales contract, supply contract,
                service
                agreement, purchase order or purchase commitment, including enforcement
                for the benefit of Buyer of any and all rights of the Sellers against
                a
                third party thereto arising out of the breach or cancellation by
                such
                third party or otherwise. 

            

    

     

    
      	
            	
              (g)

            	
              Corporate
                Existence.  Each Seller shall maintain its corporate existence
                unchanged and in full force and effect for at least six  months
                following the Closing Date.

            

    

     

    MISCELLANEOUS

     

    
      	
              14.

            	
              Limitation
                on Liability.

            

    

     

    
      	
            	
              (a)

            	
              Representations
                and Warranties.  Each of the representations and warranties of
                each of the parties to this Agreement shall be deemed to have been
                made,
                and the certificates delivered pursuant to Section 7(a)(B) and Section
                7(b)(D) by a party are agreed to and shall be deemed to constitute
                the
                making of such representations and warranties, again at and as of
                the
                Closing by and on behalf of the party on behalf of whom such certificates
                are delivered.

            

    

     

    
      	
            	
              (b)

            	
              Survival.

            

    

     

    
      	
               

            	
              (A)

            	
              The
                representations and warranties of each party shall survive the execution
                and delivery of this Agreement and the Closing hereunder and shall
                thereafter continue in full force for 12 full calendar months after
                the
                Closing Date. However, the representations and warranties contained
                in
                Section 8(d) (Taxes) and Section 10(g)(i) (health care continuation
                requirements under ERISA and section 4980B of the Code) shall continue
                until 30 days after all liability relating thereto is barred by all
                applicable statutes of limitation; and the representations and warranties
                contained in Sections 8(q)(A) (Asbestos) and Section 8(w)(B) and
                8(w)
                (Environmental) shall survive forever. If any claim for indemnification
                hereunder that has been previously asserted by a party to this Agreement
                in accordance with this Agreement‎
                is still pending at the expiration of the applicable survival period,
                such
                claim shall continue to be subject to the indemnification provisions
                of
                this Agreement until resolved.

            

      
        
          
          

        

        
          -48-

          
            

          

        

        
          
          

        

      

    

     

    
      	
               

            	
              (B)

            	
              The
                covenants, agreements and indemnification and other obligations of
                the
                parties shall survive the execution and delivery of this Agreement
                and the
                Closing hereunder and shall thereafter continue in full
                force.

            

    

     

    
      	
              15.

            	
              Confidentiality.

            

    

     

    
      	
            	
              (a)

            	
              The
                existing Non-Disclosure Agreement by Buyer or its affiliates in favor
                of
                the Company shall continue in full force and effect until the
                Closing.

            

    

     

    
      	
            	
              (b)

            	
                The
                Sellers and Shareholders shall, and shall cause their respective
                Affiliates, employees, agents, accountants, legal counsel and other
                representatives and advisers to, hold in strict confidence all, and
                not
                divulge or disclose any, information of any kind concerning the
                transactions contemplated by this Agreement, the Sellers, Buyer or
                their
                respective businesses; provided, however, that the foregoing obligation
                of
                confidence shall not apply to (i) information that is or becomes
                generally
                available to the public other than as a result of a disclosure by
                the
                Sellers or Shareholders, or any of its Affiliates, employees, agents,
                accountants, legal counsel or other representatives or advisers,
                (ii)
                information that is or becomes available to the Sellers or Shareholders
                or
                any of Sellers and Shareholders Affiliates, employees, agents,
                accountants, legal counsel or other representatives or advisers after
                the
                Closing on a nonconfidential basis prior to its disclosure by the
                Sellers
                or Shareholders, or any Affiliates of the Sellers or the Shareholders,
                employees, agents, accountants, legal counsel or other representatives
                or
                advisers and (iii) information that is required to be disclosed by
                the
                Sellers or any of its Affiliates, or the Shareholders and their
                Affiliates, employees, agents, accountants, legal counsel or other
                representatives or advisers as a result of any applicable law, rule
                or
                regulation of any Governmental Authority; and provided further that
                the
                Sellers and Shareholders shall promptly shall notify Buyer of any
                disclosure pursuant to clause (ii) of this
                Section.

            

    

     

    
      	
            	
              (c)

            	
              Notwithstanding
                anything herein to the contrary, any party to this agreement (and
                each
                employee, representative, or other agent of such party) may disclose
                to
                any and all persons, without limitation of any kind, the tax treatment
                and
                tax structure of any transaction contemplated by this Agreement and
                all
                materials of any kind (including opinions and other tax analyses)
                that are
                provided to the party relating to such tax treatment and tax
                structure.

            

    

     

    
      	
            	
              (d)

            	
              So
                long as this Agreement is in effect neither the Sellers nor either
                Shareholder shall entertain, negotiate or deal with, or provide any
                Confidential Information to, any person or entity who or which proposes
                to
                purchase all or any substantial part of the assets of any Seller
                other
                than in the ordinary course of business, or to purchase from any
                Seller or
                any Shareholder any equity interest in any
                Seller.

            

      
        
          
          

        

        
          -49-

          
            

          

        

        
          
          

        

      

    

     

    
      	
              16.

            	
              Brokers.
                Regardless of whether the Closing shall occur, (i) the Sellers and
                the
                Majority Shareholders shall jointly and severally indemnify and hold
                harmless Buyer from and against any and all liability for any brokers
                or
                finders’ fees arising with respect to brokers or finders retained or
                engaged by the Sellers or any of the Shareholders in respect of the
                transactions contemplated by this Agreement, and (ii) Buyer shall
                indemnify and hold harmless the Sellers from and against any and
                all
                liability for any brokers’ or finders’ fees arising with respect to
                brokers or finders retained or engaged by Buyer in respect of the
                transactions contemplated by this
                Agreement.

            

    

     

    
      	
              17.

            	
              Costs
                and Expenses.  Each of the parties to this Agreement shall bear
                his or its own expenses incurred in connection with the negotiation,
                preparation, execution and closing of this Agreement and the transactions
                contemplated hereby, except that Sellers shall pay all sales and
                excise
                and similar taxes, in connection with this
                transaction.

            

    

     

    
      	
              18.

            	
              Notices.

            

    

     

    Any
      notice, request, instruction, correspondence or other document to be given
      hereunder by any party hereto to another (herein collectively called “Notice”)
      shall be in writing and delivered personally or mailed by registered or
      certified mail, postage prepaid and return receipt requested,  as
      follows:

     

    
      	
              IF
                TO BUYER:

            	
              William
                Pagano

            

    

    c/o
      Universal Supply Group, Inc.

    275
      Wagaraw Road

    Hawthorne,
      New Jersey 07506

    

     

    With
      a
      copy to:

     

     

    Oscar
      D.
      Folger, Esq.

    521
      Fifth
      Avenue

    24th
      Floor

    New
      York,
      NY  10175

    Fax
      No.
      (212) 697-7833

    Tel
      No.
      (212) 697-6464

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    
      	
              IF
                TO THE COMPANY AND/OR THE

            	
              Brian
                Mead, President

            

    

    
      	
              Shareholder:

            	
              8
                Hillside Avenue

            

    

    
      	
               

            	
              Great
                Barrington, 01230

            

    

    

    

    
      	
               

            	
              With
                a copy to:

            

    

    

    
      	
               

            	
              Gary
                E. Martinelli

            

    

    Martinelli
      Discenza P.C.

    138
      Longmeadow Street

    Longmeadow,
      MA 01106

    

    Each
      of
      the above addresses for notice purposes may be changed by providing appropriate
      notice hereunder.  Notice given by personal delivery or registered
      mail shall be effective upon actual receipt.  Notice given by
      telecopier shall be effective upon actual receipt if received during the
      recipient’s normal business hours, or at the beginning of the recipient’s next
      normal business day after receipt if not received during the recipient’s normal
      business hours.  All Notices by telecopier shall be confirmed by the
      sender thereof promptly after transmission in writing by registered mail or
      personal delivery.  Anything to the contrary contained herein
      notwithstanding, notices to any party hereto shall not be deemed effective
      with
      respect to such party until such Notice would, but for this sentence, be
      effective both as to such party and as to all other persons to whom copies
      are
      provided above to be given.

     

    
      	
              19.

            	
              Governing
                Law.  The provisions of this agreement and the documents
                delivered pursuant hereto shall be governed by and construed in accordance
                with the laws of the State of Massachusetts (excluding any conflict
                of law
                rule or principle that would refer to the laws of another
                jurisdiction).

            

    

     

    
      	
              20.

            	
              Dispute
                Resolution.

            

    

     

    
      	
            	
              (a)

            	
              THE
                PARTIES AGREE THAT, EXCEPT AS OTHERWISE PROVIDED FOR IN THIS
                AGREEMENT,  THE FEDERAL COURTS IN SPRINGFIELD MASSACHUSETTS AND
                STATE COURTS IN BERKSHIRE COUNTY, MASSACHUSETTS SHALL HAVE EXCLUSIVE
                JURISDICTION ON ALL MATTERS ARISING OUT OF OR CONNECTED IN ANY WAY
                WITH
                THIS AGREEMENT, AND SELLERS AND BUYER FURTHER AGREE THAT THE SERVICE
                OF
                PROCESS OR OF ANY OTHER PAPERS UPON THEM OR ANY OF THEM IN THE MANNER
                PROVIDED FOR NOTICES HEREUNDER SHALL BE DEEMED GOOD, PROPER AND EFFECTIVE
                SERVICE UPON THEM.

            

    

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    
      	
            	
              (b)

            	
              EACH
                OF THE SELLERS, SHAREHOLDERS AND BUYER HEREBY WAIVES ITS RIGHT TO
                A JURY
                TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
                IN
                CONNECTION WITH THIS AGREEMENT, THE COLLATERAL AGREEMENTS OR ANY
                OF THE
                OTHER TRANSACTION DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER
                OR
                THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
                OBLIGATIONS.

            

    

    

    
      	
              21.

            	
              Entire
                Agreement; Amendments and Waivers.  This Agreement, together
                with all exhibits and schedules attached hereto, constitutes the
                entire
                agreement between and among the parties hereto pertaining to the
                subject
                matter hereof and supersedes all prior agreements, understandings,
                negotiations and discussions, whether oral or written, of the parties,
                and
                there are no warranties, representations or other agreements between
                the
                parties in connection with the subject matter hereof except as set
                forth
                specifically herein or contemplated hereby.  No supplement,
                modification or waiver of this Agreement shall be binding unless
                executed
                in writing by the party to be bound thereby.  No waiver of any
                of the provisions of this Agreement shall be deemed or shall constitute
                a
                waiver of any other provision hereof (regardless of whether similar),
                nor
                shall any such waiver constitute a continuing waiver unless otherwise
                expressly provided.

            

    

     

    
      	
              22.

            	
              Binding
                Effect and Assignment.  This Agreement shall be binding upon and
                inure to the benefit of the parties hereto and their respective permitted
                successors and assigns; but neither this Agreement nor any of the
                rights,
                benefits or obligations hereunder shall be assigned, by operation
                of law
                or otherwise, by any party hereto without the prior written consent
                of the
                other party, provided, however, that nothing herein shall prohibit
                the
                assignment of Buyer’s rights and obligations to any direct or indirect
                subsidiary or prohibit the assignment of Buyer’s rights (but not
                obligations) to any lender.  Nothing in this Agreement, express
                or implied, is intended to confer upon any person or entity other
                than the
                parties hereto and their respective permitted successors and assigns,
                any
                rights, benefits or obligations
                hereunder.

            

    

     

    
      	
              23.

            	
              Remedies.  The
                rights and remedies provided by this Agreement are cumulative, and
                the use
                of any one right or remedy by any party hereto shall not preclude
                or
                constitute a waiver of its right to use any or all other
                remedies.  Such rights and remedies are given in addition to any
                other rights and remedies a party may have by law, statute or
                otherwise.

            

    

     

    
      	
              24.

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

            

      
        
          
          

        

        
          -52-

          
            

          

        

        
          
          

        

      

    

     

    
      	
              25.

            	
              References
                and Construction.

            

    

     

    
      	
            	
              (a)

            	
              Whenever
                required by the context, and is used in this Agreement, the singular
                number shall include the plural and pronouns and any variations thereof
                shall be deemed to refer to the masculine, feminine, neuter, singular
                or
                plural, as the identification the person may require.  The
                provisions of this Agreement shall be construed according to their
                fair
                meaning and neither for nor against any party hereto irrespective
                of which
                party caused such provisions to be drafted.  Each of the parties
                acknowledge that it has been represented by an attorney in connection
                with
                the preparation and execution of this Agreement. References to monetary
                amounts, specific named statutes and generally accepted accounting
                principles are intended to be and shall be construed as references
                to
                United States dollars, statutes of the United States of the stated
                name
                and United States generally accepted accounting principles, respectively,
                unless the context otherwise
                requires.

            

    

     

    
      	
            	
              (b)

            	
              The
                provisions of this Agreement shall be construed according to their
                fair
                meaning and neither for nor against any party hereto irrespective
                of which
                party caused such provisions to be drafted.  Each of the parties
                acknowledge that it has been represented by an attorney in connection
                with
                the preparation and execution of this
                Agreement.

            

    

     

    
      	
              26.

            	
              Risk
                of Loss.  Prior to the Closing, the risk of loss of damage to,
                or destruction of, any and all of the Sellers’, including without
                limitation the Properties, shall remain with the Seller, and the
                legal
                doctrine known as the “Doctrine of Equitable Conversion” shall not be
                applicable to this Agreement or to any of the transactions contemplated
                hereby.

            

    

     

    
      	
              27.

            	
              Each
                party hereto shall cooperate, shall take such further action and
                shall
                execute and deliver and further document as may be reasonably requested
                by
                the other party in order to carry out the provisions and purposes
                of this
                Agreement.

            

    

     

    
      	
              28.

            	
              DEFINITIONS Capitalized
                terms used in this Agreement are used as defined in this Section
                or
                elsewhere in this Agreement.

            

    

     

    
      	
            	
              (a)

            	
              Affiliate.  The
                term “Affiliate” shall mean, with respect to any person, any other person
                controlling, controlled by or under common control with such
                person.  The term “Control” as used in the preceding sentence
                means, with respect to a corporation, the right to exercise, directly
                or
                indirectly, more than 50% of the voting rights attributable to the
                shares
                of the controlled corporation and, with respect to any person other
                than a
                corporation, the possession, directly or indirectly, of the power
                to
                direct or cause the direction of the management or policies of such
                person.

            

    

     

    
      	
            	
              (b)

            	
              Collateral
                Agreements.  The term “Collateral Agreements” shall mean the any
                or all of the exhibits to this Agreement and any and all other agreements,
                instruments or documents required or expressly provided under this
                Agreement to be executed and delivered in connection with the transactions
                contemplated by this Agreement. 

            

      
        
          
          

        

        
          -53-

          
            

          

        

        
          
          

        

      

    

     

    
      	
            	
              (c)

            	
              Confidential
                Information.  Any information not generally known in the
                relevant field or industry about the Sellers’ processes, activities,
                services or products, including software, patents, Inventions, know-how,
                trade secrets and information relating to research, development,
                purchase,
                accounting, marketing, merchandising, pricing, vendors, selling and
                customer lists.  “Inventions” shall mean and include
                discoveries, concepts and ideas, whether patentable or not, including
                but
                not limited to processes, methods, designs, formulas, and techniques,
                as
                well as improvements thereof or know-how related thereto, which have
                been
                reduced to written form in some
                manner.

            

    

     

    
      	
            	
              (d)

            	
              Contracts.  The
                term “Contracts,” when described as being those of or applicable to any
                Person, shall mean any and all contracts, agreements, franchises,
                understandings, arrangements, leases, licenses, registrations,
                authorizations, easements, servitudes, rights of way, mortgages,
                bonds,
                notes, guaranties, liens, indebtedness, approvals or other instruments
                or
                undertakings to which such person is a party or to which or by which
                such
                person or the property of such person is subject or bound, excluding
                any
                Permits.

            

    

     

    
      	
            	
              (e)

            	
              Damages.  The
                term “Damages” shall mean any and all damages, liabilities, obligations,
                penalties, fines, judgments, claims, deficiencies, losses, costs,
                expenses
                and assessments (including without limitation income and other taxes,
                interest, penalties and attorneys’ and accountants’ fees and
                disbursements).

            

    

     

    
      	
            	
              (f)

            	
              Financial
                Statements.  The term “Financial Statements” shall mean any or
                all of the financial statements, including balance sheets and related
                statements of income and cash flows and the accompanying notes thereto,
                of
                the Company prepared in accordance with generally accepted accounting
                principles consistently applied, except as may be otherwise provided
                herein.

            

    

     

    
      	
            	
              (g)

            	
              GAAP.  “GAAP”
                means U.S. generally accepted accounting principles, consistently
                applied
                with the Sellers’ past practices.

            

    

     

    
      	
            	
              (h)

            	
              Governmental
                Authorities.  The term “Governmental Authorities” shall mean any
                nation or country (including but not limited to the United States)
                and any
                commonwealth, territory or possession thereof and any political
                subdivision of any of the foregoing, including but not limited to
                courts,
                departments, commissions, boards, bureaus, agencies, ministries or
                other
                instrumentalities.

            

      
        
          
          

        

        
          -54-

          
            

          

        

        
          
          

        

      

    

     

    
      	
            	
              (i)

            	
              Hazardous
                Material.  The term “Hazardous Material” shall mean all or any
                of the following: (a) substances that are defined or listed in, or
                otherwise classified pursuant to, any applicable laws or regulations
                as
                “hazardous substances,” “hazardous materials,” “Hazardous wastes,” “toxic
                substances” or any other formulation intended to define, list or classify
                substances by reason of deleterious properties such as ignitability,
                corrosivity, reactivity, carcinogenicity, reproductive toxicity or
“EP
                toxicity”; (b) oil, petroleum or petroleum derived substances, natural
                gas, natural gas liquids or synthetic gas and drilling fluids, produced
                waters and other wastes associated with the exploration, development
                or
                production of crude oil, natural gas or geothermal resources; (c)
                any
                flammable substances or explosives or any radioactive materials;
                and (d)
                asbestos in any form or electrical equipment which contains any oil
                or
                dielectric fluid containing levels of polychlorinated biphenyls in
                excess
                of fifty parts per million.

            

    

     

    
      	
            	
              (j)

            	
              Inventory.  The
                term “Inventory” shall mean all goods, merchandise and other personal
                property owned and held for sale, and all raw materials, works-in-process,
                materials and supplies of every nature which contribute to the finished
                products of the Sellers in the ordinary course of its business,
                specifically excluding, however, damaged, defective or otherwise
                unsaleable items.

            

    

     

    
      	
            	
              (k)

            	
              Legal
                Requirements.  The term “Legal Requirements,” when described as
                being applicable to any person, shall mean any and all laws (statutory,
                judicial or otherwise), ordinances, regulations, judgments, orders,
                directives, injunctions, writs, decrees or awards of, and any Contracts
                with, any Governmental Authority, in each case as and to the extent
                applicable to such person or such person’s business, operations or
                properties.

            

    

     

    
      	
            	
              (l)

            	
              Liens:
                The term “Liens” shall mean any and all liens, encumbrances, mortgages,
                security interests, pledges, claims, equities, charges and other
                restrictions or limitations of any kind or nature
                whatsoever.  

            

    

     

    
      	
            	
              (m)

            	
              Permits.  The
                term “Permits” shall mean any and all permits, rights, approvals,
                licenses, authorizations, legal status, orders or Contracts under
                any
                Legal Requirement or otherwise granted by any Governmental
                Authority.

            

    

     

    
      	
            	
              (n)

            	
              Person.  The
                term “Person” shall mean any individual, partnership, joint venture, firm,
                corporation, association, limited liability company, limited liability
                partnership, trust or other enterprise or any governmental or political
                subdivision or any agency, department or instrumentality
                thereof.

            

    

     

    
      	
            	
              (o)

            	
              Product.  The
                term “Product” shall mean each product under development, developed,
                manufactured, licensed, distributed or sold by the Sellers and any
                other
                products in which the Sellers have any proprietary rights or beneficial
                interest.  

            

    

     

    
      	
            	
              (p)

            	
              Properties.  The
                term “Properties” shall mean any and all properties and assets (real,
                personal or mixed, tangible or intangible) owned or Used by the Sellers,
                including all Assets to be conveyed to Buyer pursuant to this
                Agreement.

            

      
        
          
          

        

        
          -55-

          
            

          

        

        
          
          

        

      

    

     

    
      	
            	
              (q)

            	
              Real
                Property.  The term “Real Property” shall mean the real property
                Used by the Company in the conduct of its
                business.

            

    

     

    
      	
            	
              (r)

            	
              Subsidiary.  The
                term “Subsidiary” shall mean any Person of which a majority of the
                outstanding voting securities or other voting equity interests are
                owned,
                directly or indirectly, by any
                Seller.

            

    

     

    
      	
            	
              (s)

            	
              Trade
                Secrets.  The term “Trade Secrets” shall mean information of the
                Sellers including, but not limited to, technical or nontechnical
                data,
                formulas, patterns, compilations, programs, financial data, financial
                plans, product or service plans or lists of actual or potential customers
                or suppliers which (i) derives economic value, actual or potential,
                from
                not being generally known to, and not being readily ascertainable
                by
                proper means by, other persons who can obtain economic value from
                its
                disclosure or use, and (ii) is the subject of efforts that are reasonable
                under the circumstances to maintain its
                secrecy.  

            

    

     

    
      	
            	
              (t)

            	
              Used.  The
                term “Used” shall mean, with respect to the Properties, Contracts or
                Permits of the Sellers, those owned, leased, licensed or otherwise
                held by
                the Sellers which were acquired for use or held for use by the Sellers
                in
                connection with the Sellers’ business and operations, whether or not
                reflected on the Sellers’ books of
                account.

            

    

     

    [Signature
      Page Follows]

     

    
      
        
          
          

        

        
          -56-

          
            

          

        

        
          
          

        

      

    

    

    EXECUTED
      as of the date first written above.

     

    
      	
              S&A
                Purchasing Corp.:

            	 	
              Colonial
                Commercial Corp., with regard to Section 2(e) only

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	
              /s/
                William Pagano

            	 	
              By:

            	
              /s/
                William Pagano

            
	
              Name:

            	
              William
                Pagano

            	 	
              Name:

            	
              William
                Pagano

            
	
              Title:

            	
              President

            	 	
              Title:

            	
              Chief
                Executive Officer

            

    

    

     

    SELLERS:

     

    
      	
              S&A
                Supply, Inc.

            	 	
              S&A
                Realty, Inc.

            	 	
              S&A
                Management, Inc.

            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
              By:

            	
              /s/
                Brian Mead

            	 	
              By:

            	
              /s/
                Brian Mead

            	 	
              By:

            	
              /s/
                Brian Mead

            
	
              Name:

            	
              Brian
                Mead

            	 	
              Name:

            	
              Brian
                Mead

            	 	
              Name:

            	
              Brian
                Mead

            
	
              Title:

            	
              President

            	 	
              Title:

            	
              President

            	 	
              Title:

            	
              President

            

    

    

    SHAREHOLDERS:

    

    
      	
              /s/
                Nancy Mead

            	 	
              The
                Discretionary Trust under The Rodney P. Mead Revocable Trust,
                dated

            	 	
              /s/
                Adam Mead

            
	
              Nancy
                Mead

            	 	
              January
                12, 1999

            	 	
              Adam
                Mead

            
	 	 	 	 	 
	 	 	
              By:

            	
              /s/
                Nancy A. Mead

            	 	 
	 	 	 	
              Nancy
                A. Mead, Trustee

            	 	 
	 	 	 	 	 	 
	 	 	
              By:

            	
              /s/
                Thomas H. Mead

            	 	 
	 	 	 	
              Thomas
                H. Mead, Trustee

            	 	 

    

    

    
      	 	 	 	 	Escrow
              Agent
	
              /s/
                Sarah Mead

            	 	
              /s/
                Brian Mead

            	 	 
	
              Sarah
                Mead

            	 	
              Brian
                Mead

            	 	Martinelli
              Discenza P.C. 
	 	 	 	 	 	 
	 	 	 	 	
              By:

            	
              /s/
                Gary E. Martinelli

            
	 	 	 	 	 	
              Gary
                E. Martinelli

            

    

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    SCHEDULES

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      1(a)(D)

    Prepaid
      Expenses, other assets, and excess rebates

     

    
      
        	
                James
                  E. Kimball, Jr., Inc.

              	
                Gt.
                  Barrington Warehouse

              	
                $2,587.20

              
	
                John
                  B. Hull Inc.

              	
                Gt.
                  Barr. Counter & Office

              	
                $5,565.00

              
	
                Oil
                  Estimate of possible 990 gallons at 5/8 600 gallons

              	
                Pittsfield
                  Warehouse

              	
                $1,532.84

              
	 	
                Total

              	
                $9,685.04

              

      

      

      Health
        Insurance

      
        	
                Insurance

              	
                Total
                  September Premium

              	
                2/3
                  USG Portion

              
	
                BlueCross
                  Health

              	
                $20,952.35

              	
                $13,968.23

              
	
                Guardian
                  Life, Dental, Disability

              	
                $
                  3,230.06

              	
                $
                  2,153.38

              
	
                Prepaid
                  Insurance

              	
                Total
                  annual $17,234.00

              	
                $
                  2,393.61 (1.66/12)

              
	 	
                Total

              	
                $18,515.22

              

      

      

      Data
        Processing

      
        	
                Company

              	
                Total
                  September Premium

              	
                2/3
                  USG Portion

              
	
                Prophet
                  21/Activant

              	
                $2,178.18

              	
                $1,452.09

              
	
                BSI
                  (printers)

              	
                $410.97

              	
                $   273.98

              
	 	
                Total

              	
                $1,726.07

              

      

       

      Other

      
        	
                Service
                  / company

              	
                Total
                  Amount

              	
                USG
                  Portion

              
	
                Yellow
                  Pages

              	
                $4,290.00  paid
                  through

                April
                  2008

              	
                7
                  2/3 months

                $2740.83

              
	
                Vendor
                  Rebates (detail attached)

              	
                $94,138.60

              	
                $94,
                  138.60

              
	
                Prepaid
                  Vehicle Excise Tax

              	
                $5178.25

              	
                $3,020.65
                  Sept 07 – March 08 (7/12)

              
	 	 	 
	 	
                Total

              	
                $99,900.08

              

      

    

     

    TOTAL
      PREPAID $129,826.41

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      Schedule
        1(a)(D) attachment

    

    
      	
                   2007
                Vender Rebate Estimates      

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Plumbing
                & Heating

            	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Vender

            	 	
              2006
                total Sales

            	 	 	
              2006
                Rebate

            	 	 	
              2007
                YTD Purchases

            	 	 	
              2007
                YTD Anticipated Rebate

            	 
	
              Robert
                Manf

            	 	$	
              12,594.99

            	 	 	$	
              305.98

            	 	 	$	
              13,745.20

            	 	 	$	
              333.92

            	 
	
              Ridgid

            	 	$	
              88,549.36

            	 	 	$	
              1,758.29

            	 	 	$	
              37,959.07

            	 	 	$	
              753.74

            	 
	
              A.O.
                Smith

            	 	$	
              188,987.69

            	 	 	$	
              5,653.47

            	 	 	$	
              157,768.85

            	 	 	$	
              4,719.57

            	 
	
              Unico

            	 	$	
              158,466.15

            	 	 	$	
              7,303.68

            	 	 	$	
              59,551.27

            	 	 	$	
              2,744.71

            	 
	
              Charlotte

            	 	$	
              165,124.42

            	 	 	$	
              15,698.11

            	 	 	$	
              56,907.90

            	 	 	$	
              5,410.14

            	 
	
              Burnham

            	 	$	
              851,515.26

            	 	 	$	
              9,201.23

            	 	 	$	
              365,093.38

            	 	 	$	
              3,945.09

            	 
	
              Symmons

            	 	$	
              48,653.77

            	 	 	$	
              1,226.40

            	 	 	$	
              55,152.29

            	 	 	$	
              1,390.21

            	 
	
              Watts

            	 	$	
              81,649.86

            	 	 	$	
              2,116.00

            	 	 	$	
              85,756.73

            	 	 	$	
              2,572.68

            	 
	
              Grohe

            	 	$	
              68,540.91

            	 	 	$	
              1,778.00

            	 	 	$	
              55,266.19

            	 	 	$	
              1,657.98

            	 
	
              American
                Saw

            	 	$	
              35,060.33

            	 	 	$	
              1,020.32

            	 	 	$	
              26,586.08

            	 	 	$	
              797.58

            	 
	
              Kohler

            	 	 	 	 	 	 	 	 	 	 	 	 	 	$	
              17,742.00

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Totals

            	 	 	 	 	 	$	
              46,061.48

            	 	 	 	 	 	 	$	
              42,067.63

            	 

    

    

    
      	
              Electrical

            	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Vender

            	 	
              2006
                total Sales

            	 	 	
              2006
                Rebate

            	 	 	
              2007
                YTD Purchases

            	 	 	
              2007
                YTD Anticipated Rebate

            	 
	
              Wiremold

            	 	$	
              21,777.78

            	 	 	$	
              1,543.87

            	 	 	$	
              24,916.55

            	 	 	$	
              1,766.38

            	 
	
              Genisis
                Cable

            	 	$	
              22,942.73

            	 	 	$	
              688.28

            	 	 	$	
              16,878.93

            	 	 	$	
              506.37

            	 
	
              Leviton

            	 	$	
              170,559.59

            	 	 	$	
              337.16

            	 	 	$	
              110,907.37

            	 	 	$	
              219.24

            	 
	
              United
                Cop

            	 	$	
              367,687.58

            	 	 	$	
              10,500.00

            	 	 	$	
              252,433.15

            	 	 	$	
              10,500.00

            	 
	
              Dimplex

            	 	$	
              31,929.17

            	 	 	$	
              207.52

            	 	 	$	
              27,420.00

            	 	 	$	
              178.21

            	 
	
              Highland

            	 	$	
              73,847.96

            	 	 	$	
              3,146.79

            	 	 	$	
              78,040.49

            	 	 	$	
              5,462.00

            	 
	
              Siemens

            	 	$	
              212,688.29

            	 	 	$	
              2,364.08

            	 	 	$	
              152,379.36

            	 	 	$	
              1,523.00

            	 
	
              Equity

            	 	$	
              0.00

            	 	 	$	
              41,312.90

            	 	 	$	
              0.00

            	 	 	$	
              31,915.77

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Totals

            	 	 	 	 	 	 	 	 	 	 	 	 	 	$	
              52,070.97

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Grand
                Total

            	 	 	 	 	 	 	 	 	 	 	 	 	 	$	
              94,138.60

            	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      1(a)(F)

    

    

    Real
      Estate Leases

     

    S&A
      Supply, Inc. Occupies premises at 992 Massachusetts Avenue, North Adams, MA
      under a verbal month-to-month occupancy agreement with Peter Swift, the owner.
      Mr. Swift has agreed (per the attached letter) to continue the relationship
      with
      the Buyer.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

            

    

    Schedule
      1(a)(F) Attachment

    

    

    
      	 	
              September
                6, 2007

            

    

     

    To
      Whom
      It May Concern:

    

    Please
      consider this letter as my
      acceptance of allowing S & A Purchasing Group to continue leasing property
      from me at 992 Massachusetts Avenue in North Adams under the same terms and
      conditions as S & A Supply, Inc currently does.

    

    

    
      	 	
              /s/
                Peter Swift

            	 	
              9/6/2007

            
	 	
              Peter
                Swift

            	 	
              Date

            

    

    

    

    20
      Maple
      Ave, Great Barrington, MA 01230 (413) 528-3470

    1311
      East
      Street, Pittsfield, MA 01201 (413) 443-9681

    992
      Massachusetts Ave, North Adams, MA 01247 (413) 664-4454

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      1(f)(D)

    

    Certificates
      of Occupancy

    

     

      
        	
              	
                a)

              	
                20
                  Maple Avenue, Great Barrington, MA

              

      

      -Town
        Building Inspector is looking for
        the C/O in Town archives

      

      
        	
              	
                b)

              	
                40
                  Maple Avenue, Great Barrington, MA

              

      

      -S&A
        Supply, Inc. Must complete Handicapped Entrance to comply with Americans
        with Disabilities Act before Town issues C/O on new construction. S&A
        Realty, Inc. undertakes to complete this.

      

      
        	
              	
                c)

              	
                1311
                  East Street, Pittsfield, MA

              

      

      -C/O
        attached

      

      
        	
              	
                d)

              	
                992
                  Massachusetts avenue, North Adams,
                  MA

              

      

      –
        Landlord has been requested to supply a copy

    

     

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      S&A
        SUPPLY, INC.

    

    
      VEHICLE
        LOANS PAYABLE (Per 7/31/07 TB)

    

    
      7/31/07

    

    
      

    

    
      

    

    
      	
              G/L

            	 	
              Bank

            	 	
              Vehicle

            	 	
              CI

            	 	 	
              LT

            	 	 	
              T

            	 	 	
              
                Proj.

              

              
                Bal.

              

              9/10/07

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              242003

              260603

            	 	
              Legacy

            	 	
              Ford
                F-650 Box Truck

            	 	 	
              9,934

            	 	 	 	
              21,841

            	 	 	 	
              31,775

            	 	 	 	
              30,823

            	 
	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              242901

              260901

            	 	
              Greylock

            	 	
              '05
                Toyota Tundra

            	 	 	
              3,862

            	 	 	 	
              5,492

            	 	 	 	
              9,354

            	 	 	 	
              8,974

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              243001

              267501

            	 	
              GMAC

            	 	
              '04
                GMC Rack Body

            	 	 	
              6,470

            	 	 	 	
              4,461

            	 	 	 	
              10,931

            	 	 	 	
              10,391

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              243201

              269001

            	 	
              GMAC

            	 	
              '04
                Chevy Colorado

            	 	 	
              4,975

            	 	 	 	
              3,732

            	 	 	 	
              8,707

            	 	 	 	
              7,878

            	 
	 	 	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              243203

              267503

            	 	
              Greylock

            	 	
              '07
                Toyota Tundra

            	 	 	
              7,111

            	 	 	 	
              17,182

            	 	 	 	
              24,293

            	 	 	 	
              23,817

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              243401

              261501

            	 	
              GMAC

            	 	
              '04
                Chev. PU/w/plow (Silverado)

            	 	 	
              6,754

            	 	 	 	
              2,030

            	 	 	 	
              8,784

            	 	 	 	
              8,216

            	 
	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              244501

              267801

            	 	
              Greylock

            	 	
              '05
                Chev. 3/4
                ton
                (Silverado)

            	 	 	
              5,583

            	 	 	 	
              4,713

            	 	 	 	
              10,296

            	 	 	 	
              9,293

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              245005

              267905

            	 	
              Greylock

            	 	
              '06
                Ford F350 Rack

            	 	 	
              2,973

            	 	 	 	
              18,134

            	 	 	 	
              21,107

            	 	 	 	
              20,509

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              248603

            	 	
              Berkshire

            	 	
              '03
                Chev.

            	 	 	
              493

            	 	 	 	 	 	 	 	
              493

            	 	 	 	
              -0-

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              248703

              262003

            	 	
              Greylock

            	 	
              '05
                Chev. 1/2 ton (Silverado)

            	 	 	
              5,401

            	 	 	 	
              4,543

            	 	 	 	
              9,944

            	 	 	 	
              8,954

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              249003

              270003

            	 	
              Greylock

            	 	
              '06
                Ford F250 WH/RE

            	 	 	
              3,538

            	 	 	 	
              11,552

            	 	 	 	
              15,090

            	 	 	 	
              14,421

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              249203

            	 	
              Ford
                Credit

            	 	
              '03
                Ford WH Van (E-150)

            	 	 	
              3,799

            	 	 	 	(1,891	)	 	 	
              1,908

            	 	 	 	
              772

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              250103

              267303

            	 	
              Berkshire

            	 	
              ’06
                GMC ExCab (K-25)

            	 	 	
              4,794

            	 	 	 	
              11,414

            	 	 	 	
              16,208

            	 	 	 	
              15,022

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              251001

              268101

            	 	
              Ford
                Credit

            	 	
              ’03
                Ford F-250

            	 	 	
              -

            	 	 	 	(753	)	 	 	(753	)	 	 	
              -0-

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              ######

              260503

            	 	
              Berkshire

            	 	
              ’07
                GMC 3500 Rack

            	 	 	
              -

            	 	 	 	
              24,442

            	 	 	 	
              24,442

            	 	 	 	
              25,119

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              ######

              267403

            	 	
              Berkshire

            	 	
              ’07
                GMC 2500 P/UP

            	 	 	
              -

            	 	 	 	
              23,563

            	 	 	 	
              23,563

            	 	 	 	
              24,003

            	 
	 	 	 	
               

            	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	
              Total

            	 	 	 	 	 	 	 	 	 	 	
              247,917

            	 	 	 	
              239,015

            	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      1(g)(B)  page 2 of 2

    

    Auto
      & Truck Leases

    

    
      	
              Vehicle,
                make, model, year

            	
              Lessor

            	
              Pay
                Off Date

            	
              Monthly
                Amount

            	
              Mnths

              Remng

            	
              Total
                amount left on loan

            	
              Primary
                Driver

            	
              Branch

            	
              Use

            
	 	 	 	
               

            	 	 	 	 	 
	
              Toyota
                7FGU25 forklift

            	
              Thompson
                & Johnson

            	
              7/31/09

            	
              489.00

            	
              23

            	
              N/A

            	 	
              Great
                Barrington

            	
              Yard

            
	 	 	 	 	 	 	 	 	 

    

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1(g)(C)

    

    ASSUMED
      OBLIGATIONS

    

    
      	
              ·  Expense
                Accounts Payable

            	 	
              None

            	 
	
              ·  Customer
                Deposits

            	 	$	
              10,699

            	 
	
              ·  Unreconciled
                Stock Receipts

            	 	 	 	 
	
              (Amount
                to be provided at conclusion of physical inventory)

            	 	$	
              -

            	 
	
              ·  Unused
                Vacation and Sick Pay

            	 	$	
              58,313

            	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      2(b)

    

    
      	
              RESTATED
                08/20/2007

            	
              S
                & A  SUPPLY, INC

            	
              PAGE  1

            
	
              AUTOS/SHOWROOM
                ENTRIES

            	
              BALANCE
                SHEET

            	 
	 	
              JUNE
                2007

            	 

    

    

    

    
      	    	 	
              2007

            	 	 	
              2006

            	 	 	
              CHANGE

            	 	 	
              CHANGE

            	 
	
              ASSETS   

            	 	 	 	 	 	 	 	 	 	 	 	 
	
              CURRENT
                ASSETS  

            	 	 	 	 	 	 	 	 	 	 	 	 
	
              CASH
                IN BANK  

            	 	 	
              675

            	 	 	 	
              675

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              CASH
                IN BANK OPERATING 

            	 	 	(441,990	)	 	 	(609,038	)	 	 	
              167,048

            	 	 	 	-27.4	%
	
              PAYROLL
                CHECKING 

            	 	 	
              785

            	 	 	 	
              716

            	 	 	 	
              69

            	 	 	 	9.6	%
	
              CASH
                IN BANK OPERATING 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              ACCOUNTS
                RECEIVABLE-TRADE

            	 	 	
              1,831,197

            	 	 	 	
              1,973,736

            	 	 	 	(142,539	)	 	 	-7.2	%
	
              ACCOUNTS
                RECEIVABLE- OTHER

            	 	 	(6,213	)	 	 	
              0

            	 	 	 	(6,213	)	 	
              #DIV/0!

            	 
	
              RESERVE
                FOR BAD DEBTS 

            	 	 	(119,600	)	 	 	(144,600	)	 	 	
              25,000

            	 	 	 	-17.3	%
	
              LOAN
                REC - S & A MANAGEMENT

            	 	 	
              365,232

            	 	 	 	
              315,534

            	 	 	 	
              49,698

            	 	 	 	15.8	%
	
              NOTES
                RECEIVABLE 

            	 	 	
              314

            	 	 	 	
              314

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              INVENTORIES  

            	 	 	
              4,219,960

            	 	 	 	
              4,435,643

            	 	 	 	(215,683	)	 	 	-4.9	%
	
              UNEXPIRED
                INSURANCE 

            	 	 	
              20,234

            	 	 	 	
              23,943

            	 	 	 	(3,709	)	 	 	-15.5	%
	
              LOAN
                RECEIVABLE J CURE 

            	 	 	
              0

            	 	 	 	
              72

            	 	 	 	(72	)	 	 	-100.0	%
	
              PREPAID
                EXPENSES 

            	 	 	
              31,559

            	 	 	 	
              22,453

            	 	 	 	
              9,106

            	 	 	 	40.6	%
	
              NOTE
                RECEIVABLE RPM 

            	 	 	
              315,803

            	 	 	 	
              326,978

            	 	 	 	(11,175	)	 	 	-3.4	%
	
              LOAN
                RECEIVABLE R.J. ALOISIRJA
                & ERIC DRYS

            	 	 	
              7,804

            	 	 	 	
              2,543

            	 	 	 	
              5,261

            	 	 	 	206.9	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                CURRENT ASSETS 

            	 	 	
              6,225,760

            	 	 	 	
              6,348,969

            	 	 	 	(123,209	)	 	 	-1.9	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              PROPERTY.
                PLANT AND EQUIPMENT

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LAND   

            	 	 	
              23,132

            	 	 	 	
              23,132

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              LAND
                IMPROVEMENTS 

            	 	 	
              41,076

            	 	 	 	
              39,418

            	 	 	 	
              1658

            	 	 	 	4.2	%
	
              BUILDING
                & INPROVEMENTS 

            	 	 	
              480,506

            	 	 	 	
              480,506

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              IMPROVEMENTS-ELECTRICAL
                DEPT.

            	 	 	
              78,059

            	 	 	 	
              78,059

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              FURNITURE
                AND FIXTURES 

            	 	 	
              200,569

            	 	 	 	
              200,569

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              MACHINERY
                AND EQUIPMENT

            	 	 	
              172,894

            	 	 	 	
              163,120

            	 	 	 	
              9774

            	 	 	 	6.0	%
	
              DATA
                PROCESSING EQUIPMENT

            	 	 	
              448,854

            	 	 	 	
              442,885

            	 	 	 	
              5969

            	 	 	 	1.3	%
	
              AUTOMOTIVE
                EQUIPMENT 

            	 	 	
              585,613

            	 	 	 	
              610,480

            	 	 	 	(24,867	)	 	 	-4.1	%
	
              SHOWROOM
                DISPLAY 

            	 	 	
              119,950

            	 	 	 	
              79,348

            	 	 	 	
              40,602

            	 	 	 	51.2	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                PROP, PLANT & EQUIPMENT

            	 	 	
              2,150,653

            	 	 	 	
              2,117,517

            	 	 	 	
              33,136

            	 	 	 	1.6	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LESS
                ACCUMULATED DEPRECIATION

            	 	 	(1,564,304	)	 	 	(1,597,227	)	 	 	(32,923	)	 	 	2.1	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                PROP, PLANT & EQUIPMENT

            	 	 	
              586,349

            	 	 	 	
              520,290

            	 	 	 	
              66,059

            	 	 	 	12.7	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              OTHER
                ASSETS  

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              UNAMORTIZED
                MORTGAGE EXP

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              DEPOSITS  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              EXCHANGE  

            	 	 	(2,710	)	 	 	
              1,304

            	 	 	 	(4,014	)	 	 	-307.8	%
	
              CASH
                SURR. VALUE OF LIFE INS

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                OTHER ASSETS 

            	 	 	(2,710	)	 	 	
              1,304

            	 	 	 	(4,014	)	 	 	-307.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                ASSETS  

            	 	 	
              6,809,399

            	 	 	 	
              6,870,563

            	 	 	 	(61,164	)	 	 	-0.9	%

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              S
                & A  SUPPLY, INC

            	
              PAGE  2

            
	 	
              BALANCE
                SHEET

            	 
	 	
              JUNE
                2007

            	 

    

    

    
      	    	 	 	 	 	 	 	 	
               $

            	 	 	 	
              %

            	 
	    	 	
              2007

            	 	 	
              2006

            	 	 	
              CHANGE

            	 	 	
              CHANGE

            	 
	
              LIABILITIES
                AND STOCKHOLDERS EQUITY

            	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              CURRENT
                LIABILITIES 

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              ACCOUNT
                PAYABLE-TRADE 

            	 	 	
              613,853

            	 	 	 	
              716,086

            	 	 	 	(102,233	)	 	 	-14.3	%
	
              LIABILITY
                TO PENSION FUND 

            	 	 	
              1,954

            	 	 	 	
              1,450

            	 	 	 	
              504

            	 	 	 	34.8	%
	
              LIFE
                INSURANCE EMPLOYEES

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              L/T
                DISABILITY EMPLOYEES 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              FEDERAL
                & FICA TAXES PAYABLE

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              SWT
                PAYABLE  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              FED
                UC PAYABLE  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              DEPOSIT
                CLEARING 

            	 	 	(6,625	)	 	 	(366	)	 	 	(6,259	)	 	 	1710.1	%
	
              PAYROLL
                CLEARING 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              PAYMENT
                CLEARING 

            	 	 	(1,687	)	 	 	
              16,365

            	 	 	 	(18,052	)	 	 	-110.3	%
	
              SALES/USE
                TAX PAYABLE 

            	 	 	
              36,801

            	 	 	 	
              37,239

            	 	 	 	(438	)	 	 	-1.2	%
	
              ACCRUED
                EXPENSES 

            	 	 	
              122,880

            	 	 	 	
              152,908

            	 	 	 	(30,028	)	 	 	-19.6	%
	
              CORP
                TAX PAYABLE 

            	 	 	(33,996	)	 	 	
              49

            	 	 	 	(34,045	)	 	 	-69479.6	%
	
              N/P
                LEE BK LOC  

            	 	 	
              2,703,454

            	 	 	 	
              2,671,999

            	 	 	 	
              31,455

            	 	 	 	1.2	%
	
              N/P
                S & A REALTY  

            	 	 	
              7,200

            	 	 	 	
              0

            	 	 	 	
              7,200

            	 	 	
              #DIV/0!

            	 
	
              N/P
                LEGACY A&B PLUS AUTOS

            	 	 	
              60,802

            	 	 	 	
              58,634

            	 	 	 	
              2,168

            	 	 	 	3.7	%
	
              NOTE
                PAYABLE AUTOS 

            	 	 	
              18,465

            	 	 	 	
              16,208

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              NOTE
                PAYABLE NAM 

            	 	 	(536	)	 	 	
              181

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              NOTE
                PAYABLE (1) FORD 650 

            	 	 	
              9,933

            	 	 	 	
              9,358

            	 	 	 	
              0

            	 	 	 	0.0	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                CURRENT LIABILITIES 

            	 	 	
              3,532,498

            	 	 	 	
              3,680,111

            	 	 	 	(147,613	)	 	 	-4.0	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LONG
                TERM LIABILITIES 

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              NOTES
                PAYABLE - OTHER 

            	 	 	
              537,441

            	 	 	 	
              520,230

            	 	 	 	
              17,211

            	 	 	 	3.3	%
	
              NOTES
                PAYABLE - OTHER 

            	 	 	
              37,111

            	 	 	 	
              58,686

            	 	 	 	(21,575	)	 	 	-36.8	%
	
              MORTGAGE
                PAYABLE 

            	 	 	
              101,355

            	 	 	 	
              104,779

            	 	 	 	(3,424	)	 	 	-3.3	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                LONG TERM LIABILITIES

            	 	 	
              675,907

            	 	 	 	
              683,695

            	 	 	 	(7,788	)	 	 	-1.1	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              STOCKHOLDERS
                EQUITY 

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              COMMON
                STOCK  

            	 	 	
              49,000

            	 	 	 	
              49,000

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              PAID
                IN SURPLUS  

            	 	 	
              40,403

            	 	 	 	
              40,403

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              UNDISTR.
                S CORP INCOME RVS

            	 	 	
              6,174

            	 	 	 	
              74,811

            	 	 	 	(68,637	)	 	 	-91.7	%
	
              RETAINED
                EARNINGS 

            	 	 	
              2,779,515

            	 	 	 	
              2,592,075

            	 	 	 	
              187,440

            	 	 	 	7.2	%
	
              CURRENT
                PERIOD NET INCOME/LOSS

            	 	 	(274,098	)	 	 	(249,532	)	 	 	(24,566	)	 	 	9.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                STOCKHOLDERS EQUITY

            	 	 	
              2,600,994

            	 	 	 	
              2,506,757

            	 	 	 	
              94,237

            	 	 	 	3.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
               

            	 	 	
              6,809,399

            	 	 	 	
              6,870,563

            	 	 	 	(61,164	)	 	 	-0.9	%

    

    

    
      	
              End
                of Schedule      

            

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      8(a)

    

    States
      in which authorized to do Business

    

    
      	
            	
              (1)

            	
              Massachusetts

            

    

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(k)(A)

    

    Employee
      Benefit Plan

    

    
      	
               

            	
              1.

            	
              The
                Sellers maintain the S&A Group of Companies Profit Sharing Plan and
                Trust. A copy of the plan document along with Form 5500s for the
                most
                recent three years has been previously e-mailed to the
                Buyer.

            

    

    

    
      	
               

            	
              2.

            	
              A
                copy of the Seller’s Employee Handbook (20 pages) is attached as Exhibit
                8(k)(A)(2).

            

    

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(k)(C)

    

    Exceptions
      to Section 8(k)(C)

    

    Attached
      is a Schedule listing accrued vacation and sick pay benefits for Seller’s
      employees.

    

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(k)(E)(i)

    

    Number
      of employees by position

    

    
      	
              Management
                / Administrative

            	
              5

            
	
              Office
                Sales / Purchasing

            	
              7

            
	
              Outside
                Sales

            	
              8

            
	
              Secretarial

            	
              6

            
	
              Counter
                / Warehouse

            	
              14

            
	
              Delivery

            	
              5

            
	
              Showroom
                Sales

            	
              4

            
	
              Consulting

            	
              1

            
	
              Cleaning
                (part time)

            	
              1

            
	 	
               

            
	
              Total

            	
              51

            

    

    

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(k)(E)(ii)

    

    Union
      employees

    

    None

    

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
                  Schedule
                8(l)(B)(a)   

            
	        
	
              RESTATED
                08/20/2007

            	
                          S
                & A  SUPPLY, INC 

            	
              PAGE  1

            
	
              AUTOS/SHOWROOM
                ENTRIES

            	
                            BALANCE
                SHEET 

            	 

    

    

    
      	    	 	
              JUNE
                2007

            	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	
              2007

            	 	 	
              2006

            	 	 	
              CHANGE

            	 	 	
              CHANGE

            	 
	
              ASSETS

            	 	 	 	 	 	 	 	 	 	 	 	 
	
              CURRENT
                ASSETS  

            	 	 	 	 	 	 	 	 	 	 	 	 
	
              CASH
                IN BANK  

            	 	 	
              675

            	 	 	 	
              675

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              CASH
                IN BANK OPERATING 

            	 	 	(441,990	)	 	 	(609,038	)	 	 	
              167,048

            	 	 	 	-27.4	%
	
              PAYROLL
                CHECKING 

            	 	 	
              785

            	 	 	 	
              716

            	 	 	 	
              69

            	 	 	 	9.6	%
	
              CASH
                IN BANK OPERATING 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              ACCOUNTS
                RECEIVABLE-TRADE

            	 	 	
              1,831,197

            	 	 	 	
              1,973,736

            	 	 	 	(142,539	)	 	 	-7.2	%
	
              ACCOUNTS
                RECEIVABLE- OTHER

            	 	 	(6,213	)	 	 	
              0

            	 	 	 	(6,213	)	 	
              #DIV/0!

            	 
	
              RESERVE
                FOR BAD DEBTS 

            	 	 	(119,600	)	 	 	(144,600	)	 	 	
              25,000

            	 	 	 	-17.3	%
	
              LOAN
                REC - S & A MANAGEMENT

            	 	 	
              365,232

            	 	 	 	
              315,534

            	 	 	 	
              49,698

            	 	 	 	15.8	%
	
              NOTES
                RECEIVABLE 

            	 	 	
              314

            	 	 	 	
              314

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              INVENTORIES  

            	 	 	
              4,219,960

            	 	 	 	
              4,435,643

            	 	 	 	(215,683	)	 	 	-4.9	%
	
              UNEXPIRED
                INSURANCE 

            	 	 	
              20,234

            	 	 	 	
              23,943

            	 	 	 	(3,709	)	 	 	-15.5	%
	
              LOAN
                RECEIVABLE J CURE 

            	 	 	
              0

            	 	 	 	
              72

            	 	 	 	(72	)	 	 	-100.0	%
	
              PREPAID
                EXPENSES 

            	 	 	
              31,559

            	 	 	 	
              22,453

            	 	 	 	
              9,106

            	 	 	 	40.6	%
	
              NOTE
                RECEIVABLE RPM 

            	 	 	
              315,803

            	 	 	 	
              326,978

            	 	 	 	(11,175	)	 	 	-3.4	%
	
              LOAN
                RECEIVABLE R.J. ALOISIRJA
                & ERIC DRYS

            	 	 	
              7,804

            	 	 	 	
              2,543

            	 	 	 	
              5,261

            	 	 	 	206.9	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                CURRENT ASSETS 

            	 	 	
              6,225,760

            	 	 	 	
              6,348,969

            	 	 	 	(123,209	)	 	 	-1.9	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              PROPERTY.
                PLANT AND EQUIPMENT

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LAND   

            	 	 	
              23,132

            	 	 	 	
              23,132

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              LAND
                IMPROVEMENTS 

            	 	 	
              41,076

            	 	 	 	
              39,418

            	 	 	 	
              1658

            	 	 	 	4.2	%
	
              BUILDING
                & INPROVEMENTS 

            	 	 	
              480,506

            	 	 	 	
              480,506

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              IMPROVEMENTS-ELECTRICAL
                DEPT.

            	 	 	
              78,059

            	 	 	 	
              78,059

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              FURNITURE
                AND FIXTURES 

            	 	 	
              200,569

            	 	 	 	
              200,569

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              MACHINERY
                AND EQUIPMENT

            	 	 	
              172,894

            	 	 	 	
              163,120

            	 	 	 	
              9774

            	 	 	 	6.0	%
	
              DATA
                PROCESSING EQUIPMENT

            	 	 	
              448,854

            	 	 	 	
              442,885

            	 	 	 	
              5969

            	 	 	 	1.3	%
	
              AUTOMOTIVE
                EQUIPMENT 

            	 	 	
              585,613

            	 	 	 	
              610,480

            	 	 	 	(24,867	)	 	 	-4.1	%
	
              SHOWROOM
                DISPLAY 

            	 	 	
              119,950

            	 	 	 	
              79,348

            	 	 	 	
              40,602

            	 	 	 	51.2	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                PROP, PLANT & EQUIPMENT

            	 	 	
              2,150,653

            	 	 	 	
              2,117,517

            	 	 	 	
              33,136

            	 	 	 	1.6	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LESS
                ACCUMULATED DEPRECIATION

            	 	 	(1,564,304	)	 	 	(1,597,227	)	 	 	(32,923	)	 	 	2.1	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                PROP, PLANT & EQUIPMENT

            	 	 	
              586,349

            	 	 	 	
              520,290

            	 	 	 	
              66,059

            	 	 	 	12.7	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              OTHER
                ASSETS  

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              UNAMORTIZED
                MORTGAGE EXP

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              DEPOSITS  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              EXCHANGE  

            	 	 	(2,710	)	 	 	
              1,304

            	 	 	 	(4,014	)	 	 	-307.8	%
	
              CASH
                SURR. VALUE OF LIFE INS

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                OTHER ASSETS 

            	 	 	(2,710	)	 	 	
              1,304

            	 	 	 	(4,014	)	 	 	-307.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                ASSETS  

            	 	 	
              6,809,399

            	 	 	 	
              6,870,563

            	 	 	 	(61,164	)	 	 	-0.9	%

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      	 	
              S
                & A  SUPPLY, INC

            	
              PAGE  2

            
	 	
              BALANCE
                SHEET

            	 
	 	
              JUNE
                2007

            	 

    

    

    
      	    	 	 	 	 	 	 	 	
               $

            	 	 	 	
              %

            	 
	    	 	
              2007

            	 	 	
              2006

            	 	 	
              CHANGE

            	 	 	
              CHANGE

            	 
	
              LIABILITIES
                AND STOCKHOLDERS EQUITY

            	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              CURRENT
                LIABILITIES 

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              ACCOUNT
                PAYABLE-TRADE 

            	 	 	
              613,853

            	 	 	 	
              716,086

            	 	 	 	(102,233	)	 	 	-14.3	%
	
              LIABILITY
                TO PENSION FUND 

            	 	 	
              1,954

            	 	 	 	
              1,450

            	 	 	 	
              504

            	 	 	 	34.8	%
	
              LIFE
                INSURANCE EMPLOYEES

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              L/T
                DISABILITY EMPLOYEES 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              FEDERAL
                & FICA TAXES PAYABLE

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              SWT
                PAYABLE  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              FED
                UC PAYABLE  

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              DEPOSIT
                CLEARING 

            	 	 	(6,625	)	 	 	(366	)	 	 	(6,259	)	 	 	1710.1	%
	
              PAYROLL
                CLEARING 

            	 	 	
              0

            	 	 	 	
              0

            	 	 	 	
              0

            	 	 	
              #DIV/0!

            	 
	
              PAYMENT
                CLEARING 

            	 	 	(1,687	)	 	 	
              16,365

            	 	 	 	(18,052	)	 	 	-110.3	%
	
              SALES/USE
                TAX PAYABLE 

            	 	 	
              36,801

            	 	 	 	
              37,239

            	 	 	 	(438	)	 	 	-1.2	%
	
              ACCRUED
                EXPENSES 

            	 	 	
              122,880

            	 	 	 	
              152,908

            	 	 	 	(30,028	)	 	 	-19.6	%
	
              CORP
                TAX PAYABLE 

            	 	 	(33,996	)	 	 	
              49

            	 	 	 	(34,045	)	 	 	-69479.6	%
	
              N/P
                LEE BK LOC  

            	 	 	
              2,703,454

            	 	 	 	
              2,671,999

            	 	 	 	
              31,455

            	 	 	 	1.2	%
	
              N/P
                S & A REALTY  

            	 	 	
              7,200

            	 	 	 	
              0

            	 	 	 	
              7,200

            	 	 	
              #DIV/0!

            	 
	
              N/P
                LEGACY A&B PLUS AUTOS

            	 	 	
              60,802

            	 	 	 	
              58,634

            	 	 	 	
              2,168

            	 	 	 	3.7	%
	
              NOTE
                PAYABLE AUTOS 

            	 	 	
              18,465

            	 	 	 	
              16,208

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              NOTE
                PAYABLE NAM 

            	 	 	(536	)	 	 	
              181

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              NOTE
                PAYABLE (1) FORD 650 

            	 	 	
              9,933

            	 	 	 	
              9,358

            	 	 	 	
              0

            	 	 	 	0.0	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                CURRENT LIABILITIES 

            	 	 	
              3,532,498

            	 	 	 	
              3,680,111

            	 	 	 	(147,613	)	 	 	-4.0	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              LONG
                TERM LIABILITIES 

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              NOTES
                PAYABLE - OTHER 

            	 	 	
              537,441

            	 	 	 	
              520,230

            	 	 	 	
              17,211

            	 	 	 	3.3	%
	
              NOTES
                PAYABLE - OTHER 

            	 	 	
              37,111

            	 	 	 	
              58,686

            	 	 	 	(21,575	)	 	 	-36.8	%
	
              MORTGAGE
                PAYABLE 

            	 	 	
              101,355

            	 	 	 	
              104,779

            	 	 	 	(3,424	)	 	 	-3.3	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                LONG TERM LIABILITIES

            	 	 	
              675,907

            	 	 	 	
              683,695

            	 	 	 	(7,788	)	 	 	-1.1	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              STOCKHOLDERS
                EQUITY 

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              COMMON
                STOCK  

            	 	 	
              49,000

            	 	 	 	
              49,000

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              PAID
                IN SURPLUS  

            	 	 	
              40,403

            	 	 	 	
              40,403

            	 	 	 	
              0

            	 	 	 	0.0	%
	
              UNDISTR.
                S CORP INCOME RVS

            	 	 	
              6,174

            	 	 	 	
              74,811

            	 	 	 	(68,637	)	 	 	-91.7	%
	
              RETAINED
                EARNINGS 

            	 	 	
              2,779,515

            	 	 	 	
              2,592,075

            	 	 	 	
              187,440

            	 	 	 	7.2	%
	
              CURRENT
                PERIOD NET INCOME/LOSS

            	 	 	(274,098	)	 	 	(249,532	)	 	 	(24,566	)	 	 	9.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                STOCKHOLDERS EQUITY

            	 	 	
              2,600,994

            	 	 	 	
              2,506,757

            	 	 	 	
              94,237

            	 	 	 	3.8	%
	    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TOTAL
                LIABILITIES & EQUITY 

            	 	 	
              6,809,399

            	 	 	 	
              6,870,563

            	 	 	 	(61,164	)	 	 	-0.9	%

    

    

    
      	
              End
                of Schedule  

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      8(n)(A)

    
 

    None

    

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(n)(B)

    

    

    None,
      except S&A Supply, Inc. has made monthly payments of rent in the amount of
      $7,500 to S&A Realty, Inc. and management fees of $49,200 to S&A
      Management, Inc. in the ordinary course of business and consistent with prior
      practices.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      8(n)(B)(3)

    

    

    None

    

    

    End
      of
      Schedule

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(n)(B)(6)

    

    

    None

    

    

    End
      of
      Schedule

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      8(o)

    

    

    None

    

    

    End
      of
      Schedule

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Schedule
      8(p)

    

    

    Dek
      Tillet Vs Brenden Reed & S & A Supply Inc. S &
A  Insurance Company Settled  Without further cost to S
& A

    

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(q)(2)

    

    Asbestos
      Insurance

    

    From
      the
      time of the Mead family’s first involvement with the Sellers in 1993 to date,
      none of the Sellers has carried asbestos-liability insurance. Current management
      of the Sellers is not aware of the Sellers ever having carried such
      insurance.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(r)(A)

    

    Real
      Estate Owned

    

    20
      Maple
      Ave Great Barrington, Massachusetts, 01230

    Warehouses
      and corporate offices of S & A Supply Inc, a plumbing, heating, and
      electrical wholesale distributor

    

    40
      Maple
      Ave Great Barrington, Massachusetts, 01230

    Showroom
      displaying fixtures sold by S & A Supply Inc, a plumbing, heating, and
      electrical wholesale distributor

    

    1311
      East
      Street Pittsfield, Massachusetts, 01201

    Warehouse
      and Showroom of S & A Supply Inc, a plumbing, heating, and electrical
      wholesale distributor

    

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(r)(B)

    

    Real
      Estate Leased

    

    992
      Massachusetts Ave North Adams, Massachusetts 01247

    Warehouse
      of S & A Supply Inc, a plumbing, heating, and electrical wholesale
      distributor

    

    Tenet
      at
      will

    Leased
      from Peter Swift (DBA Ashley Swift & Sons Plumbing &
Heating)

    

    End
      of
      Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(s)

    

    Commitments

    

    
      	
              Company

            	
              Service

            
	
              Verizon
                Wireless

            	
              Cell
                Phone Service

            
	
              Pitney
                Bowes

            	
              Postage
                Meter

            
	
              Berkshire
                Graphics

            	
              Gt.
                Barrington Copier

            
	
              Profit
                21

            	
              Computer
                Operating System

            
	
              BSI

            	
              Printer
                maintenance Service

            
	
              On
                Hold Marketing

            	
              Telephone
                Hold Advertising

            
	
              Unifirst

            	
              Uniform
                Service

            
	
              Ikon

            	
              Gt.
                Barrington Showroom Copier

            
	
              Lee
                Bank

            	
              Line
                of Credit

            
	
              Legacy
                Bank

            	
              Mortgages

            

    

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(t)

    

    Insurance

    

    See
      Attached Certificate of Insurance dated September 7, 2007 issued by BIG-Minkler
      Insurance Agency for information covering insurance coverage.

    

    Copies
      of
      policies of insurance carried by the Sellers are attached.

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(u)

    

    Intangible
      Rights

    

    None

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(v)

    

    FIXED
      ASSETS

    

    Detailed
      listing attached – 9 pages

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(w)(A)

    

    None

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(w)(B)

    

    Permits

    

    None

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(w)(C)

    

    Hazardous
      Substances

    

    Incorporated
      by reference herein are the Environmental Site Investigation-Remediation reports
      dated August 20, 2007 prepared by William L. Going Associates, Inc. with respect
      to:

    

    
      	
            	
              a)

            	
              20-40
                Maple Avenue, Great Barrington, MA;

            

    

    
      	
            	
              b)

            	
              1311
                East Street, Pittsfield, MA; and

            

    

    
      	
            	
              c)

            	
              992
                Massachusetts Avenue, North Adams,
                MA.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    William
      L. Going & Associates, Inc.

    ENVIRONMENTAL
      SITE INVESTIGATION-REMEDIATION

     

    
      
        

      

    

    38
      Chapel Court

    Pine
      Bush, New York 12566

    Tel.
      845-744-3705

    Fax.
      845-744-5464

    E-mail:
      budgoing@frontiernet.net

    August
      20, 2007

    

    Mr.
      William Pagano, President

    Universal
      Supply Group Inc.

    275
      Wagaraw Road

    Hawthorne,
      New Jersey 07506

    

    
      	
              RE:

            	
              Summary
                of Findings for Phase I Environmental Site
                Assessment

            

    

    Commercial
      Property At 1311 East Street, Pittsfield, Massachusetts

    

    Dear
      Mr.
      Pagano:

    

    At
      your
      request, William L. Going & Associates, Inc. is conducting a Phase I ESA of
      commercial property situated at 1311 East Street, Pittsfield, Massachusetts.
      We
      have determined that there are “recognized environmental conditions”
onsite and that there should be some additional investigation in
      order to
      determine whether or not these conditions have caused any significant
      impact to subject property.

    

    Specifically,
      historical sources indicate that subject may have been used as a trolley yard.
      In addition, documented historical use of subject property includes “paper
      manufacturing, research and development” and we have determined that two (2)
      aboveground storage tanks (ASTs) were utilized in the manufacturing process.
      The
      present owner cannot tell us and we have not yet been able to determine if
      these
      ASTs contain chemicals or chemical residual. We also find that a 10,000 gal.
      underground fuel oil storage tank (UST) was removed from subject property in
      1989 without any documentation of soil conditions before or after removal.
      Furthermore, there are currently three (3) 275 gal. fuel oil ASTs in service
      at
      the subject (without any means of secondary containment). Also, and finally,
      subject is surrounded to the north, south, and west by a hazardous waste site
      [“General Electric”] identified by both the Massachusetts Department of
      Environmental Protection and the U.S. Environmental Protection Agency, and
      considerable soil and groundwater contamination has been
      discovered.

    

    These
      “recognized environmental conditions” represent significant potential
      environmental liability until they have been thoroughly investigated. We
      recommend the installation of strategic test pits and soil borings and
      subsequent soil and groundwater analysis.

    

    We
      will
      issue the complete Phase I ESA (with attachments) in about two
      weeks.

    

    Meanwhile,
      if there are any technical questions for us, or if further elaboration is
      required, please do not hesitate to contact us at (845) 744-3705.

    

    Thanks
      for the opportunity to be of service.

    

    Sincerely,

    

    /s/
      William L. Going

     

    William
      L. Going, Principal

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    William
      L. Going & Associates, Inc.

    ENVIRONMENTAL
      SITE INVESTIGATION-REMEDIATION

     

    
      
        

      

    

    38
      Chapel Court

    Pine
      Bush, New York 12566

    Tel.
      845-744-3705

    Fax.
      845-744-5464

    E-mail:
      budgoing@frontiernet.net

    August
      20, 2007

    Mr.
      William Pagano, President

    Universal
      Supply Group Inc.

    275
      Wagaraw Road

    Hawthorne,
      New Jersey 07506

    

    
      	
              RE:

            	
              Summary
                of Findings for Phase I Environmental Site
                Assessment

            

    

    Commercial
      Property 20 and 40, Maple Avenue, Great Barrington, Massachusetts

    

    Dear
      Mr.
      Pagano:

    

    At
      your
      request, William L. Going & Associates, Inc. is conducting a Phase I ESA of
      commercial property situated at 20 and 40, Maple Avenue, Great Barrington,
      Massachusetts. We have determined that there are “recognized environmental
      conditions” onsite and that there should be some additional investigation
      in order to determine whether or not these conditions have caused any
      significant impact to subject property.

    

    Specifically,
      historical sources indicate that a 6,000 gal. underground fuel oil storage
      tank
      (UST) and a 2,000 gal. fuel oil UST were reportly closed in place in 1992
      without any documentation of soil conditions before or after UST removal. We
      also find one (1) 275 gal. aboveground fuel oil storage tank (AST) and one
      (1)
      330 gal. fuel oil AST in service at subject property (without any means of
      secondary containment).

    

    These
      “recognized environmental conditions” represent potential environmental
      liability until they have been thoroughly investigated. We recommend the
      installation of strategic test pits and/or soil borings and subsequent soil
      and/or groundwater analysis.

    

    We
      will
      issue the complete Phase I ESA (with attachments) in about two weeks. Meanwhile,
      if there are any technical questions for us, or if further elaboration is
      required, please do not hesitate to contact us at (845) 744-3705. Thanks for
      the
      opportunity to be of service.

    

    Sincerely,

    

    /s/
      William L. Going

     

    William
      L. Going, Principal

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    William
      L. Going & Associates, Inc.

    ENVIRONMENTAL
      SITE INVESTIGATION-REMEDIATION 

     

    
      
38
      Chapel Court

    Pine
      Bush, New York 12566

    Tel.
      845-744-3705

    Fax.
      845-744-5464

    E-mail:
      budgoing@frontiernet.net

    August
      20, 2007

    

    Mr.
      William Pagano, President

    Universal
      Supply Group Inc.

    275
      Wagaraw Road

    Hawthorne,
      New Jersey 07506

    E-mail:
      wpagano@usginc.com

    

    
      	
              RE:

            	
              Summary
                of Findings for Phase I Environmental Site
                Assessment

            

    

    Commercial
      Property At 992 Massachusetts Avenue, North Adams, Massachusetts

    

    Dear
      Mr.
      Pagano:

    

    At
      your
      request, William L. Going & Associates, Inc. is conducting a Phase I ESA of
      commercial property situated at 992 Massachusetts Avenue, North Adams,
      Massachusetts. We have not discovered any “recognized environmental
      conditions” or significant environmental issues associated with this
      commercial property.

    

    We
      will
      issue the complete Phase I ESA (with attachments) in about two
      weeks.

    

    Meanwhile,
      if there are any technical questions for us, or if further elaboration is
      required, please do not hesitate to contact us at (845) 744-3705.

    

    Thanks
      for the opportunity to be of service.

    

    Sincerely,

    

    /s/
      William L. Going

     

    William
      L. Going, Principal

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(w)(D)

    

    Tanks

    

    
      	
              -

            	
              20
                Maple Ave Great Barrington  (1) 2000 gallon Tank & (1) 6000
                gallon tank – Both have been de-commissioned and
                abandoned

            

    

    
      	
              -

            	
              1311
                East Street Pittsfield (1) 10,000 Gallon Tank removed September 19,
                1989

            

    

    

    Both
      above items are referred to in the Going Phase One reports attached to Schedule
      8(w)(C) hereto.

    

    Attached
      are:

    

    
      	
            	
              a)

            	
              Copy
                of permit dated September 1, 1989;

            

    

    
      	
            	
              b)

            	
              Copy
                of historic site assessment re: 1311 East Street, Pittsfield;
                and

            

    

    
      	
            	
              c)

            	
              Copy
                of Department of Public Safety Application dated July 8,
                1992

            

    

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(x)

    

    Customers/Vendors

    

    Attachment(s)
      on file at the Company’ s corporate office

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(y)

    

    

    None

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(z)(B)

    

    

    Recalled
      Products

    

    No
      record
      of, none in recent memory

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(z)(E)

    

    

    None

    

    

    End
      of Schedule

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(aa)

    

    Affiliate
      Transactions

    

    As
      set
      forth in Sellers’ annual financial statements

    

    
      	
               

            	
              1.

            	
              S
                & A Managements, Inc.

            

    

    
      	
               

            	
              2.

            	
              S
                & A Realty, Inc.

            

    

    

    See
      also
      Schedule 8(n)(B) with respect to rent and management fees paid since June 30,
      2007

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      8(bb)

    

    

    Sellers
      Credit Applications and Personal Guarantee

    

    The
      Sellers have not kept records of credit applications and guarantees to
      vendors.

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