Document:

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                                                                    EXHIBIT 10-E

                               TRUE VALUE COMPANY

                          DEFINED LUMP SUM PENSION PLAN

                  As Amended and Restated as of January 1, 2006
                         (except as otherwise provided)

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                                TABLE OF CONTENTS

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                                                                                                                      PAGE
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SECTION 1           INTRODUCTION..............................................................................          1

         1.1    History of Plan...............................................................................          1
         1.2    Preservation of Rights........................................................................          1
         1.3    Intent to Comply..............................................................................          1
         1.4    Application of Plan...........................................................................          2

SECTION 2           DEFINITIONS...............................................................................          3

         2.1    Definitions...................................................................................          3

SECTION 3           PARTICIPATION.............................................................................         13

         3.1    Date of Participation.........................................................................         13
         3.2    Events Affecting Participation................................................................         13
         3.3    Participation upon Reemployment...............................................................         14

SECTION 4           NORMAL PENSION............................................................................         15

         4.1    Formula.......................................................................................         15
         4.2    Eligibility and Commencement -- Normal Pension................................................         15
         4.3    Amount of Normal Pension......................................................................         15
         4.4    Uniformed Services Employment and Reemployment Rights.........................................         19

SECTION 5           IMMEDIATE, EARLY AND LATE PENSION.........................................................         20

         5.1    Immediate Pension.............................................................................         20
         5.2    Early Retirement Pension......................................................................         20
         5.3    SERVISTAR Plan................................................................................         20
         5.4    Late Retirement Pension.......................................................................         20

SECTION 6           NORMAL FORM OF PAYMENT....................................................................         22

         6.1    Normal Form of Payment -- Joint and Survivor..................................................         22
         6.2    Normal Form of Payment -- Single Life Annuity.................................................         22
         6.3    Optional Forms of Payment.....................................................................         22
         6.4    Election of Option............................................................................         22
         6.5    Notice to Participants........................................................................         22
         6.6    SERVISTAR Protected Payment Forms.............................................................         23
         6.7    Payment of Pension to the Participant.........................................................         23
         6.8    Payment Options...............................................................................         24
         6.9    Minimum Distribution Requirements.............................................................         24
         6.10   Restoration of Retired Participant or Other Former Associate to Service.......................         29
         6.11   Direct Rollover of Certain Distributions......................................................         29

SECTION 7           SURVIVING SPOUSE BENEFIT..................................................................         31

         7.1    Eligibility...................................................................................         31
         7.2    Amount........................................................................................         31
         7.3    Payments......................................................................................         31
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                              TABLE OF CONTENTS
                                 (CONTINUED)

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         7.4    Death Benefits for Non-Spouse Beneficiaries...................................................         32

SECTION 8           TRUST FUND AND TRUSTEE....................................................................         34

         8.1    Trust Fund....................................................................................         34
         8.2    Trust Fund Applicable Only to Payment of Benefits and Expenses................................         34
         8.3    Trustee Capacity..............................................................................         34
         8.4    Resignation and Removal of Trustee............................................................         34
         8.5    Taxes, Expenses and Compensation of Trustee...................................................         34
         8.6    Funding Policy and Investment Managers........................................................         35

SECTION 9           FUNDING OF BENEFITS.......................................................................         36

         9.1    Contributions to the Fund.....................................................................         36
         9.2    Fund for Exclusive Benefit of Participants....................................................         36
         9.3    Disposition of Credits and Forfeitures........................................................         36

SECTION 10          PLAN ADMINISTRATOR........................................................................         37

         10.1   Plan Administrator/Appointment of Committee...................................................         37
         10.2   Duties and Authority..........................................................................         37
         10.3   Removal of Committee Members..................................................................         38
         10.4   Appointment of Successor Committee Member.....................................................         38
         10.5   Plan Administration -- Miscellaneous..........................................................         38

SECTION 11          AMENDMENT AND TERMINATION OF PLAN.........................................................         44

         11.1   Amendment -- General..........................................................................         44
         11.2   Amendment -- Merger or Consolidation of Plan..................................................         44
         11.3   Termination of Plan...........................................................................         44

SECTION 12          RESTRICTION OF BENEFITS UPON EARLY TERMINATION OF THE PLAN................................         45

         12.1   Limitation Concerning Highly Compensated Employees or Highly Compensated Former Employees.....         45

SECTION 13          SPECIAL PENSION BENEFITS PROVISIONS.......................................................         46

         13.1   Statutory Maximum Pension Benefits............................................................         46
         13.2   Top-Heavy Provisions..........................................................................         51

SUPPLEMENT A..................................................................................................        A-1

SUPPLEMENT B..................................................................................................        B-1

SUPPLEMENT C..................................................................................................        E-1
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                                    SECTION 1

                                  INTRODUCTION

      1.1 History of Plan

      As of January 1, 1958, Cotter & Company established a program for
providing retirement income and other benefits for certain of its Associates and
their beneficiaries. This program was set forth in a document entitled the
Cotter & Company Pension Plan. Since the Cotter & Company Pension Plan was
initially established, it has been amended and restated and its name changed to
the Cotter & Company Defined Lump Sum Pension Plan.

      On July 1, 1997, Cotter & Company and SERVISTAR COAST TO COAST Corporation
merged to form TruServ Corporation. In conjunction with the merger, the Cotter &
Company Defined Lump Sum Pension Plan changed its name to be known as the
TruServ Corporation Defined Lump Sum Pension Plan effective as of January 1,
1998. On January 2, 1998, the TruServ Corporation Defined Lump Sum Pension Plan
and the SERVISTAR COAST TO COAST Corporation Retirement Income Plan were
combined. Between July 1, 1997 and January 1, 1998, all Associates of the
TruServ Corporation who were participants in the SERVISTAR Plan on June 30, 1997
remained participants in the SERVISTAR Plan. All benefit accruals under the
SERVISTAR COAST TO COAST Corporation Retirement Income Plan ceased as of
December 31, 1997. On January 2, 1998, all participants under the SERVISTAR Plan
became Participants under the TruServ Corporation Defined Lump Sum Pension Plan
and are entitled to the retirement benefits described in this Plan, including
current accruals beginning on January 1, 1998.

      Effective January 1, 2005 TruServ Corporation changed it name to True
Value Company and the name of this Plan to the True Value Company Defined Lump
Sum Pension Plan. The Plan has been further amended and restated effective
January 1, 2006 to reflect the name change and to make certain other changes.

      1.2 Preservation of Rights

      No provisions, other than those required to maintain this Plan as one
qualified under Section 401(a) of the Code, of any previous amendment, this
amendment and restatement of the Plan, or any future amendment shall operate to
diminish or otherwise adversely affect the amount or terms of retirement income
accrued in respect to a Participant's coverage under the Plan prior to the
effective date of any such amendment or restatement.

      1.3 Intent to Comply

      It is the intent of the Employer that the Plan shall be established and
maintained (1) as a retirement program which is in full compliance with ERISA,
and (2) as a qualified plan under the terms of Section 401(a) of the Internal
Revenue Code of 1986 as amended from time to time.

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      1.4 Application of Plan

      This Plan superseded the Cotter & Company Defined Lump Sum Pension Plan
and the SERVISTAR COAST TO COAST Corporation Retirement Income Plan, both as in
effect on December 31, 1997. With respect to all persons who retired on or prior
to December 31, 1997, retirement benefits will be made in accordance with such
plan in effect on the date of retirement or separation from service. With
respect to all persons who retire or otherwise separate from service on or after
January 1, 1998, the retirement benefits will be made in accordance with the
terms of the Plan. Notwithstanding the preceding effective dates, the provisions
of this amended and restated Plan described in Supplement E shall have effective
dates which are prior to January 1, 1998 and are applicable to the Prior Plan,
and the SERVISTAR Plan as each plan existed at that time.

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                                    SECTION 2

                                   DEFINITIONS

      2.1 Definitions

      The terms, as capitalized and defined in this Section, shall for all
purposes of this Plan have the meaning described in this Section unless the
context clearly requires otherwise or as otherwise expressly provided.

            (A) Accrued Benefit -- The yearly Pension commencing on the
Participant's Normal Retirement Date, or if later, the date of determination,
determined in accordance with Section 4, as if the Participant's termination of
employment occurred on the date of determination and he had a Vesting Percentage
of 100%.

            (B) Actuarial Equivalent or Actuarially Equivalent -- The amount of
equal value when computed on the basis of the actuarial assumptions set forth in
Supplement A of the Plan. Application of such assumptions to the computation of
benefits under the Plan shall be made uniformly and consistently with respect to
all Participants in similar circumstances.

            (C) Adjustment Factor -- The appropriate adjustment factor(s) which
may be applicable to a Participant's Pension in accordance with the further
terms of the Plan.

            (D) Affiliated Employer -- Any company not participating in the Plan
which is a member of a controlled group of corporations (as defined in Section
414(b) of the Code) which also includes as a member the Employer; any trade or
business under common control (as defined in Section 414(c) of the Code) with
the Employer; any organization (whether or not incorporated) which is a member
of an affiliated service group (as defined in Section 414(m) of the Code) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing sentence, for purposes of Section 13.1, the
definitions in Sections 414(b) and (c) of the Code shall be modified as provided
in Section 415(h) of the Code.

            (E) Annuity Starting Date -- The first day of the first period for
which an amount is payable as an annuity or in the case of a lump sum payment
the first date on which all events have occurred which entitle a Participant to
such benefit.

            (F) Associate -- Any person in the employ of the Employer, but
excluding any person who is:

                  (1) a Leased Employee;

                  (2) in a unit of Associates covered by a collective bargaining
      agreement which does not provide for participation in the Plan;

                  (3) a participant, or eligible to become a participant, in any
      other retirement or pension plan (except the True Value Company Savings
      and Compensation

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      Deferral Plan) intended to qualify under Section 401(a) of the Code and
      which is established by the Employer or to which the Employer makes any
      contribution; or

                  (4) any person who is treated as being other than a common law
      employee on the payroll records of the Employer, including any person
      classified as an independent contractor or consultant by the Employer
      during the period such person is so classified by the Employer regardless
      of such person's reclassification for such period by the Internal Revenue
      Service or other controlling authority for tax withholding purposes.

            The term "Leased Employee" as used in the Plan means any person
(other than a person in the employ of the Employer) who pursuant to an agreement
between the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and related persons
determined in accordance with Section 414(n)(2)(B) of the Code), on a
substantially full time basis for a period of at least one year, and such
services are performed under primary direction or control by the recipient.
Contributions or benefits provided a leased employee by the leasing organization
which are attributable to services performed for the recipient employer shall be
treated as provided by the recipient employer.

            A Leased Employee shall not be considered an employee of the
recipient if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Section 415(c) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Section 125, Section 402(e)(3), Section
402(h)(1)(B) or Section 403(b) of the Code; (2) immediate participation; and (3)
full and immediate vesting; and (ii) leased employees do not constitute more
than 20 percent of the recipient's non highly compensated work force.

            (G) Average Compensation -- Prior to January 1, 2002, the annual
average of the Compensation of an Associate during the three consecutive
calendar years within the ten calendar years up to and including the calendar
year of such Associate's termination of employment which yield the highest
average. Effective January 1, 2002, the annual average of the Compensation of an
Associate during three calendar years within the ten calendar years up to and
including the calendar year of such Associate's termination of employment which
yield the highest average. Effective July 1, 2005, the annual average of the
Compensation of an Associate during the three consecutive calendar years within
the ten calendar years up to and including the calendar year of such Associate's
termination of employment which yield the highest average.

            (H) Beneficiary -- The person or persons named by a Participant by
written designation filed with the Employer to receive the Participant's
contributions to the SERVISTAR Plan plus credited interest after the
Participant's death as provided in Section 7.4. Effective January 1, 2003, the
person named by an unmarried Participant by written designation filed with the
Plan Administrator to receive the death benefit under Section 7.4 of the Plan.

            (I) Code -- The Internal Revenue Code of 1986, as amended from time
to time.

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            (J) Committee -- The committee appointed by the Employer to act as
Plan Administrator as described in Section 10.1.

            (K) Compensation -- For any calendar year is the total cash
compensation (including commissions, bonuses [other than sign-on bonuses],
overtime pay, sick pay, vacation pay and holiday pay) paid to him by the
Employer during that calendar year for personal services rendered to an Employer
as an Associate, plus elective deferrals under Sections 125 and 401(k) of the
Code (and for Plan Years beginning after December 31, 1997, Section 132(f) of
the Code) for that calendar year, but excluding severance pay, moving or
relocation allowances or bonuses, tuition reimbursements, auto or travel expense
allowances or bonuses, or any other extraordinary remuneration. During the
period of any Leave of Absence, an Associate shall be deemed to receive
Compensation at the annual rate of Compensation actually received by him during
such period, or, if no compensation is paid, the annual rate of Compensation
immediately prior to the commencement of such Leave of Absence.

            However, effective on and after the first day of the Plan Year
beginning in 1989 and before the first day of the Plan Year beginning in 1994,
Compensation taken into account for any purpose under the Plan, including the
determination of Average Compensation, shall not exceed $200,000 per year.
Except as provided below, as of January 1 of each calendar year on and after
January 1, 1990 and before January 1, 1994, the applicable limitation as
determined by the Commissioner of Internal Revenue for that calendar year shall
become effective as the maximum Compensation to be taken into account for Plan
purposes for 12-month compensation computation periods beginning within that
calendar year only in lieu of the $200,000 limitation set forth above.
Commencing with the Plan Year beginning in 1994, Compensation taken into account
for any purpose under the Plan, including the determination of Average
Compensation, shall not exceed $150,000 (as adjusted from time to time by the
Secretary of the Treasury in accordance with Section 401(a)(17)(B) of the Code).
Effective January 1, 1997, the compensation limit shall be applied without
regard to the family aggregation provisions of the now repealed Section
414(q)(6) of the Code in determining benefit accruals for Plan Years beginning
on and after January 1, 1997, and, to the extent permissible under the Internal
Revenue Service rules or regulations, for any earlier Plan Year. Commencing with
the Plan Year beginning in 2002, Compensation taken into account for any purpose
under the Plan, including the determination of Average Compensation, shall not
exceed $200,000 per year (as adjusted for cost-of-living increases in accordance
with Section 401(a)(17)(B) of the Code). Prior to January 1, 2002, the
cost-of-living adjustment in effect for a calendar year applies to Compensation
for the Plan Year that begins with or within such calendar year. For purposes of
determining Accrued Benefits in a Plan Year beginning after December 31, 2001,
Compensation for prior Plan Years shall be limited to $160,000 for any Plan Year
beginning in 1997, 1998, or 1999; and $170,000 for any Plan Year beginning in
2000 or 2001.

            Solely for purposes of this subsection 2.1(K), for those individuals
who were employed by SERVISTAR Corporation or SERVISTAR COAST TO COAST
Corporation and who were participants in the SERVISTAR Corporation Retirement
Income Plan or the SERVISTAR COAST TO COAST Corporation Retirement Income Plan,
Compensation for periods beginning before January 1, 1998 shall include
"Earnings" as defined in the SERVISTAR Plan as restated in Supplement C hereto
subject to the above statutory limits and for the purposes of this Plan recasted
on a calendar year basis assuming level "Earnings."

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Compensation shall not include any "Earnings" received by an individual while an
Associate of Coast to Coast Stores, Inc.

            (L) Defined Lump Sum -- The amount determined under Section 4.3(B).

            (M) Disability Insurance Plan -- Any plan from time to time in force
which provides for the payment of income benefits to Associates of an Employer
by reason of disability resulting from accident or sickness.

            (N) Effective Date -- January 1, 2006, unless otherwise noted.

            (O) Employer -- On and after January 1, 2005, Employer shall mean
True Value Company or any successor by merger, purchase or otherwise, with
respect to its Associates. Before January 1, 2005, Employer shall mean TruServ
Corporation. Before July 1, 1997, Employer shall mean Cotter & Company, a
Delaware corporation, and any Affiliated Employer which adopted the Plan by
resolution of its board of directors and with the consent of Cotter & Company.

            (P) Employment Continuity -- The period commencing with the date on
which an Associate first performs an Hour of Service for an Employer or an
Affiliated Employer and ending on the first day of the 12-month period in which
the Associate incurs a One-Year Break in Service; provided, however, that if an
Associate leaves the employ of the Employer or an Affiliated Employer other than
pursuant to an authorized Leave of Absence and does not return until after a
One-Year Break in Service, his Employment Continuity upon return to employment
by the Employer or an Affiliated Employer shall be determined on the basis of
the date on which the Associate first performs an Hour of Service subsequent to
his return to the employ of the Employer or an Affiliated Employer. A former
Associate who terminates employment and is reemployed by the Employer or an
Affiliated Employer before incurring a One-Year Break in Service will not be
deemed to have terminated employment with the Employer or an Affiliated
Employer. Solely for purposes of determining Employment Continuity with respect
to all persons who were active participants in the SERVISTAR Plan on December
31, 1997, for periods on or before June 30, 1997, Employer means SERVISTAR COAST
TO COAST Corporation and its predecessors.

            (Q) ERISA -- The Employee Retirement Income Security Act of 1974, as
it may be amended from time to time, and any regulations issued pursuant
thereto.

            (R) Fund -- The fund or funds established by separate written
agreement between the Employer and an insurance company and/or trustee or
trustees for the purpose of accumulating contributions made in accordance with
the Funding of Benefits Section and paying the benefits and expenses described
in certain other Sections of this Plan.

            (S) Highly Compensated Employee -- With respect to a Plan Year
commencing on or after January 1, 1997, any Associate of the Employer or an
Affiliated Employer (whether or not eligible for the Plan) who

                  (i) was a 5% owner of the Employer (as defined in Code Section
      416(i)(1)) for such Plan Year or the prior Plan Year, or

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                  (ii) for the preceding Plan Year received "statutory
      compensation" in excess of $80,000. The $80,000 amount is adjusted at the
      same time and in the same manner as under Section 415(d), except that the
      base period is the calendar quarter ending September 30, 1996.

            For purposes of the foregoing, the applicable year of the Plan for
which a determination is being made is called a determination year and the
preceding 12-month period is called a look-back year. A highly compensated
former employee is based on the rules applicable to determining highly
compensated employee status as in effect for that determination year, in
accordance with Section 1.414(q)-1T, A-4 of the Temporary Treasury Regulations
and Internal Revenue Service Notice 97-45.

            Notwithstanding the foregoing, Associates who are nonresident aliens
and who receive no earned income from the Employer or an Affiliated Employer
which constitutes income from sources within the United States shall be
disregarded for all purposes of this Section.

            The provisions of this definition shall be further subject to such
additional requirements as shall be described in Section 414(q) of the Code and
its applicable regulations, which shall override any aspects of this Section
inconsistent therewith.

            (T) Hour of Service -- With respect to the applicable computation
period:

                  (1) each hour for which the Associate is either directly or
      indirectly paid by the Employer or Affiliated Employer or entitled to
      payment for the performance of duties for the Employer or an Affiliated
      Employer; and

                  (2) up to a maximum of 501 hours for reasons other than the
      performance of duties (such as but not limited to paid sick leave, paid
      vacation time), irrespective of whether the employment relationship has
      terminated, which hours shall be credited to the Associate during the
      computation period in which payment is made or amounts payable to the
      Associate become due, and

                  (3) each hour for which back pay is either awarded or agreed
      to by the Employer or an Affiliated Employer, irrespective of mitigation
      of damages, which hour shall be credited to the Associate for the
      computation period to which the award, agreement or payment pertains,
      rather than the period in which the award, agreement or payment was made.

                  The same hours of service shall not be credited under more
      than one paragraph of this definition. In no event will Hours of Service
      be allowed and computed in a manner less liberal than the manner described
      in the Department of labor Regulation 2530.200b-2.

            Solely for purposes of this subsection 2.1(T), the term Associate
shall be deemed to include any person who is in the common law employ of the
Employer or an Affiliated Employer so that Associates may be credited under the
Plan with Hours of Service for

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participation purposes for period of employment during which they are not
Associates as such term is defined in subsection 2.1(F).

            (U) Leave of Absence -- A temporary absence from active service with
the Employer or an Affiliated Employer that, in the discretion of the Employer
or an Affiliated Employer, may be granted to an Associate because of temporary
incapacity or other good cause. If an Associate on a Leave of Absence does not
return to employment with the Employer or an Affiliated Employer within the
period authorized by the Employer or an Affiliated Employer, the Associate's
employment shall be deemed to have terminated as of the first day following the
period of the Leave of Absence. A Participant shall automatically be entitled to
a Leave of Absence during any period of time for which he is eligible to receive
a benefit under a Disability Insurance Plan.

            (I.E.) Manchester Employee - Any person:

                  (1) who is or was covered by the collective bargaining
      agreement between the Employer and Chauffeurs, Teamsters and Helpers Local
      Union #633 of New Hampshire ratified on March 1, 2003;

                  (2) who was an Associate on March 1, 2003; and

                  (3) who was a Participant with a Vesting Percentage of 100% as
      of January 1, 2002.

            (V) Named Fiduciary -- For purposes of ERISA, is the Committee
appointed in Section 10.

            (W) Normal Retirement Date - For benefit eligibility and vesting
purposes, the day on which the Participant attains his 65th birthday. For all
other purposes, the first day of the month coinciding with or next following the
Participant's 65th birthday.

            (X) One-Year Break in Service -- For an Associate, a 12-month period
commencing on the date of an Associate's termination of employment and on each
anniversary thereof during which such Associate is not employed (i.e., does not
complete an Hour of Service) with an Employer or an Affiliated Employer. In the
case of a maternity or paternity Leave of Absence, the 12-month period beginning
on the first day of such absence shall not constitute a One-Year Break in
Service. For purposes of this subsection 2.1(X), maternity or paternity Leave of
Absence means an absence from work by reason of the Associate's pregnancy, birth
of the Associate's child, or placement of a child with the Associate in
connection with the adoption of such child, or an absence for the purpose of
caring for such child for a period immediately following such birth or
placement.

            (Y) Participant -- Any Associate who becomes covered under this
Plan. A former Associate who is entitled to a vested Pension under the Plan
shall continue to be a Participant until he has received his vested Pension.

            (Z) Pension -- Yearly payments (and lump sum payment, if elected)
under the Plan in the amount provided in Section 4.1 and the forms provided in
Section 7 payable to the

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Participant or his Beneficiary under the Plan as a consequence of the
termination of employment of the Participant.

            (AA) Plan -- The True Value Company Defined Lump Sum Pension Plan as
set forth in this document, as amended from time to time thereafter.

            (BB) Plan Administrator -- The committee designated by the Employer
to administer and supervise the Plan as provided in Section 10.

            (CC) Plan Year -- The 12-month period commencing on a January 1 and
ending on the following December 31.

            (DD) Prior Plan -- The Cotter & Company Pension Plan in effect on
December 31, 1995.

            (EE) Protected Benefits -- As of any date of determination, the
Accrued Benefit of a Participant and

                  (1) any right of the Participant under the terms of the Plan
      as of such date to have such Accrued Benefit, and the Prior Plan benefit,
      commence on a date other than the Normal Retirement Date;

                  (2) any right of the Participant under the terms of the Plan
      as of such date to have such Accrued Benefit, and the Prior Plan benefit,
      payable in an optional form of payment; and

                  (3) the methodology under the terms of the Plan as of such
      date for determining the amount of benefit payable as a result of the
      exercise of any right of the Participant expressed in paragraph (1) or (2)
      above.

            For the sole purposes of paragraph (3) above, any provision of the
Plan that requires payment of a Participant's Pension in a form other than that
described in Section 6.2 shall be considered to be the exercise of a right by
the Participant therefor.

            See Sections 2.1(OO), 4.1(B), 5.3, 6.6 and 7.4 for any Protected
Benefits rights with respect to the SERVISTAR Plan.

            (FF) Qualified Joint and Survivor Annuity --

                  (1) in the case of a 50% Qualified Joint and Survivor Annuity,
      an annuity for the life of the Participant with a survivor annuity for the
      life of his Spouse which is one-half of the amount of the annuity payable
      during the joint lives of the Participant and his Spouse, and which is the
      Actuarial Equivalent of a single annuity for the life of the Participant
      in the amount specified by the relevant provision of Section 4; and

                  (2) in the case of a 100% Qualified Joint and Survivor
      Annuity, an annuity for the life of the Participant with an survivor
      annuity for the life of his Spouse

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<PAGE>

      which is equal to the amount of the annuity payable during the joint lives
      of the Participant and his Spouse, and which is the Actuarial Equivalent
      of a single annuity for the life of the Participant in the amount
      specified by the relevant provision of Section 4.

                  (3) in the case of an unmarried Participant, a Qualified Joint
      and Survivor Annuity is a single life annuity.

            (GG) Retirement Date -- The date on which the payment of a
Participant's Pension is to commence as a result of his termination of
employment, as determined in accordance with the further terms of the Plan.

            (HH) SERVISTAR -- Is SERVISTAR COAST TO COAST Corporation, which
merged with Cotter & Company to form the TruServ Corporation on July 1, 1997.

            (II) SERVISTAR Plan -- Is the SERVISTAR COAST TO COAST Corporation
Retirement Income Plan in effect on December 31, 1997. Certain provisions of the
SERVISTAR Plan are contained in Supplement C to this Plan to assist the
Committee's administration of this Plan's provisions where they relate to the
SERVISTAR Plan provisions.

            (JJ) Spousal Consent -- The Spouse's consent to the Participant's
election of a form of payment other than Qualified Joint and Survivor Annuity
must be in writing, must acknowledge the effect of the election, and the
Spouse's signature must be witnessed by a Plan representative or notary public.
Additionally, the Spouse's consent must specifically acknowledge any nonspouse
Beneficiary designated by the Participant in conjunction with his election of an
optional form of payment. The Participant may not subsequently designate another
nonspouse Beneficiary without the further written consent of the Spouse.
Notwithstanding this consent requirement, if the Participant establishes to the
satisfaction of a Plan representative that such written consent cannot be
obtained because there is no Spouse; the Spouse cannot be located; of other
circumstances as the Secretary of the Treasury may by regulations prescribe, the
Participant's election to waive coverage will be considered valid. Any consent
necessary under this provision will be valid only with respect to the Spouse who
signs the consent. A Participant is allowed to revoke his election without the
consent of his Spouse. The number of his revocations is not limited.

            (KK) Spouse -- The lawful wife of a male Participant, or the lawful
husband of a female Participant, on the Participant's Retirement Date, date of
death, or other event date as the context requires, if earlier.

            (LL) Trust -- The trust established with the Trustee to hold the
assets which fund the benefits payable by the Plan.

            (MM) Trustee - The Trustee of the Fund appointed by the Employer,
which may be a bank, trust company or other corporation possessing trust powers
under applicable state and Federal law, or one or more individuals or any
combination thereof.

            (NN) Vesting Percentage -- The percentage which may be applied to a
Participant's Accrued Benefit in accordance with the further terms of the Plan
as determined below:

                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                VESTING
                                                              PERCENTAGE
                                                              ----------
<S>                                                           <C>
If he has 5 Years of Service                                     100%
On his Normal Retirement Date                                    100%
In all other cases                                                 0%
</TABLE>

                  Notwithstanding the above, a Participant shall have a 100%
      Vesting Percentage in his Accrued Benefit if he:

                  (i) attained age 50, regardless of his Years of Service, and

                  (ii) became a participant in the SERVISTAR Plan before July 1,
      1996.

            (OO) Wage Base - The amount of wages from which Social Security
taxes are required to be withheld in accordance with the Federal Insurance
Contributions Act, or any successor act, which is in effect at the beginning of
the Plan Year.

            (PP) Year of Service -- Shall be credited to each Participant based
on the number of days during a Participant's period of Employment Continuity
divided by 365.25 rounded to the nearest 1/10 of a year, subject to the
following:

                  (1) a Prior Plan participant shall be credited with his Years
      of Service earned through December 31, 1995 in accordance with provisions
      of the Prior Plan;

                  (2) a Participant in the SERVISTAR Plan as of December 31,
      1997 shall be credited with a minimum number of Years of Service which
      shall be equal to his Years of Service as of June 30, 1997 under the
      SERVISTAR Plan;

                  (3) in addition, if an individual was a participant in the
      SERVISTAR Plan on July 1, 1997 and earned at least 500 hours of service
      (as defined in the SERVISTAR Plan and included in Supplement C hereto in
      which the Employer and Affiliated Employer referred to therein has the
      same meaning as defined in this Plan) during the period July 1, 1997
      through December 31, 1997, he shall be credited with an additional
      one-half Year of Service under this Plan and thereafter shall be credited
      with a Year of Service (and fractions thereof) as generally provided in
      this subsection (OO);

                  (4) if a former Participant with no Vesting Percentage in the
      Plan again becomes a Participant in this Plan, his Years of Service prior
      to any One-Year Break in Service shall be taken into account only if the
      number of consecutive One-Year Breaks in Service is less than five;

                  (5) no more than one Year of Service shall be granted to any
      individual for any 12-month period; and

                  (6) notwithstanding any Plan provision to the contrary, for
      purposes of Section 4.3, no Year of Service shall be credited to any
      Participant for any of the

                                       11

<PAGE>

      following periods: (a) periods of employment with Coast to Coast Stores,
      Inc. occurring prior to July 1, 1996, (b) periods of employment with
      Advocate Services, Inc. occurring prior to January 1, 1998, (c) periods of
      employment while such person is in an employment classification, including
      but not limited to a unit of Associates covered by a collective bargaining
      agreement which does not provide for participation in this Plan, (d)
      periods of employment during which an employee was a participant (or
      eligible to be a participant) in any retirement plan which is intended to
      be qualified under the Code (except the True Value Company Savings and
      Compensation Deferral Plan and the SERVISTAR Plan) sponsored by the
      Employer or an Affiliated Employer, (e) periods of employment as a Leased
      Employee as defined in Section 414(n) of the Code, (f) periods of
      employment for which an employee has received or is receiving benefits
      under this Plan.

                                       12

<PAGE>

                                    SECTION 3

                                  PARTICIPATION

      3.1 Date of Participation

            (A) Each Associate who:

                  (1) was a Participant in the Cotter & Company Defined Lump Sum
      Pension Plan on January 1, 1998; or

                  (2) was a Participant in the SERVISTAR Plan on January 1, 1998

automatically became a Participant in the Plan on January 2, 1998 provided that
his Employment Continuity did not end on January 1, 1998.

            (B) Each other Associate who is not a Participant as of January 1,
2005 will become a Participant under the Plan on the date the Associate has
completed "one year of employment."

            (C) Notwithstanding any Plan provision to the contrary, each
individual, who on January 1, 1998 was employed by Advocate Services, Inc. and
who became an Associate of the Employer on January 2, 1998, commenced
participation in the Plan on January 2, 1998.

            (D) For the purposes of this Section, an Associate shall be credited
with "one year of employment" when he completes a 12-month period of employment
during his period of Employment Continuity.

            (E) Notwithstanding any Plan provision to the contrary, for purposes
of this Section, each individual who is hired as a temporary employee shall be
credited with "one year of employment" for the 12-month computation period
beginning on the date he first completes an Hour of Service if he completes at
least 1,000 Hours of Service by the end of that period, and he shall become a
Participant as provided in (B) above. If a temporary employee terminates
employment prior to becoming a Participant, but after having worked 1,000 Hours
of Service in the 12-month period during which he was employed, and is
subsequently rehired, he shall become a Participant as of the first January 1 or
July 1 which coincides with or immediately follows his reemployment. If he
terminates employment, is subsequently rehired as a temporary employee, and had
not worked 1,000 Hours of Service in the 12-month period commencing with his
initial date of hire, his prior service shall be disregarded and he shall begin
a new computation period and his Hours of Service shall be counted from his date
of rehire.

      3.2 Events Affecting Participation

      A person's participation in the Plan shall end when he is no longer
employed by the Employer, if he is not entitled to either an immediate or a
deferred Pension under the Plan. Participation shall continue while on a Leave
of Absence or during a period while he is not an Associate but is in the employ
of the Employer or an Affiliated Employer, but no Years of Service for the
purpose of determining the Accrued Benefit shall be counted for that period,

                                       13

<PAGE>

except as specifically provided otherwise in this Plan, and such person's
Accrued Benefit shall be determined in accordance with the provisions of the
Plan in effect on the date he ceased to be an Associate.

      3.3 Participation upon Reemployment

            (A) If an Associate's participation in the Plan ends and he again
becomes an Associate, he shall again become a Participant as of his date of
restoration to service as an Associate if his Vesting Percentage was 100% or he
had not incurred five One-Year Breaks in Service. In any other case, he will
participate in the Plan when he again meets the requirements of Section 3.1.

            (B) However, if an Associate's employment is terminated before he
participates in the Plan and:

                  (i) he is later reemployed before he incurred a One-Year Break
      in Service, his employment after reemployment shall be aggregated with his
      previous period of employment and the period between his date of
      termination and his date of reemployment shall be included in his
      requirement of one year of employment; or

                  (ii) he incurred at least a One-Year Break in Service and the
      length of his break in service exceeded his Service prior to his Break,
      his employment before reemployment shall not be aggregated with his period
      of employment after his absence,

            in which case he will participate in the Plan when he meets the
requirements of Section 3.1.

                                       14

<PAGE>

                                    SECTION 4

                                 NORMAL PENSION

      4.1 Formula

      With respect to a Participant who retires or terminates on or after
January 2, 1998, the Pension payable under the Plan is the greatest of (A), (B)
or (C):

            (A) The Vesting Percentage of the Participant's Accrued Benefit
determined in Section 4.3; or

            (B) The Vesting Percentage of the Participant's accrued benefit
payable under the SERVISTAR Plan as of January 1, 1998, as modified by Section
2.1(OO); or

            (C) The Vesting Percentage of the Participant's accrued benefit
under the Prior Plan as of December 31, 1995.

      4.2 Eligibility and Commencement -- Normal Pension

      Each Participant who retires from the employ of the Employer on his Normal
Retirement Date will receive a normal Pension commencing as of such date.

      4.3 Amount of Normal Pension

      The yearly Pension payable to such Participant will be equal to the amount
described in subsections (A), (B), (C) and (D) below (subject, however, to
Section 13.1 of this Plan, if applicable, and the election of the Participant to
take the Accrued Benefit in a lump sum or other optional form under Section
6.9):

            (A) The Participant's Accrued Benefit shall equal his Defined Lump
Sum converted into an Actuarially Equivalent single life annuity payable at the
Participant's Normal Retirement Date or, if the Participant retires after his
Normal Retirement Date, the age he retires after his Normal Retirement Date.

            (B) The Participant's Defined Lump Sum Benefit shall be determined
as follows:

                  (1) With respect to Participants other than Participants who
      are Manchester Employees, the amount determined by multiplying the
      Participant's Average Compensation by the sum of (a) plus (b) below and
      adding the result to the amount calculated in (c) below:

                        (a) The sum of (I) plus (II) below:

                        (I) The sum of the annual pension credit percentages in
                  the table below that were earned by the Participant under the
                  Plan as of December 31, 2001:

                                       15

<PAGE>

<TABLE>
<CAPTION>
YEARS OF SERVICE            ANNUAL PENSION             AGE DURING             ANNUAL PENSION
    WHILE AGE             CREDIT PERCENTAGE         YEARS OF SERVICE        CREDIT PERCENTAGE
----------------          -----------------         ----------------        -----------------
<S>                       <C>                       <C>                     <C>
  Less than 26                   2.0%                      46                      7.0%
      26-28                      2.5%                      47                      7.5%
      29-31                      3.0%                      48                      8.0%
      32-33                      3.5%                      49                      8.5%
      34-35                      4.0%                      50                      9.0%
      36-37                      4.5%                      51                      9.5%
      38-39                      5.0%                      52                     10.0%
      40-41                      5.5%                      53                     10.5%
      42-43                      6.0%                      54                     11.0%
      44-45                      6.5%                    55-60                    11.5%
                                                       61 or more                 12.0%
</TABLE>

                        (II) For a Participant in the Plan who:

                                        i. was a participant in the ServiStar
                             Plan, had attained age 50 and completed 15 years of
                             service as of January 1, 1998; or

                                        ii. was a participant in the Prior Plan,
                             had attained age 50 and completed 15 years of
                             service as of January 1, 1996;

            an additional 25% credit will be added to the Participant's total
            annual pension credit percentages.

                        (b) the sum of the annual pension credit percentages in
            the table below that are earned by the Participant for each Year of
            Service (and fraction thereof) beginning January 1, 2002;

<TABLE>
<CAPTION>
YEARS OF SERVICE            ANNUAL PENSION          YEARS OF SERVICE          ANNUAL PENSION
    WHILE AGE             CREDIT PERCENTAGE            WHILE AGE            CREDIT PERCENTAGE
----------------          -----------------         ----------------        -----------------
<S>                       <C>                       <C>                     <C>
  Less than 26                   1.0%                      50                      6.0%
      26-28                      1.5%                      51                      6.5%
      29-31                      2.0%                      52                      7.0%
      32-34                      2.5%                      53                      7.5%
      35-37                      3.0%                      54                      8.0%
      38-40                      3.5%                      55                      8.5%
      41-43                      4.0%                  56 or More                  9.0%
      44-45                      4.5%
      46-47                      5.0%
      48-49                      5.5%
</TABLE>

                                       16

<PAGE>

                        (c) For a Participant whose Average Compensation is
                  greater than 2/3 of the Wage Base, an additional amount equal
                  to the excess of the Participant's Average Compensation over
                  2/3 of the Wage Base multiplied by 1/2 of the Participant's
                  annual pension credit percentages as of December 31, 2001 as
                  defined in section 4.3(B)(1)(a) above.

                  (2) With respect to Participants who are Manchester Employees,
      the amount determined by multiplying the Participant's Average
      Compensation by the sum of (a) plus (b) below and adding the result to the
      amount calculated in (c) below:

                        (a) The sum of the annual pension credit percentages in
            the table in Section 4.3(B)(i)(a) earned by the Participant under
            the Plan as of October 31, 2002, based on the provisions of the Plan
            in effect on December 31, 2001 and assuming such provisions had
            continued in effect until October 31, 2002.

                        (b) The sum of the annual pension credit percentages in
            the table set forth in Section 4.3(B)(1)(b) above that are earned by
            the Participant for each Year of Service (and fraction thereof)
            beginning November 1, 2002.

                        (c) For a Participant whose Average Compensation is
            greater than 2/3 of the Wage Base, an additional amount equal to the
            excess of the Participant's Average Compensation over 2/3 of the
            Wage Base multiplied by 1/2 of the Participant's annual pension
            credit percentages as of October 31, 2002 as defined in section
            4.3(B)(2)(a) above.

                  (3) In no event will the Participant's Defined Lump Sum
      Benefit by less than 10% of the Participant's Average Compensation.

            (C) (1) With respect to any Participant who is an officer of the
      Employer, such Participant's Defined Lump Sum shall not be less than an
      amount which is equal to the sum of (a) the benefits determined under (B)
      above, considering only Years of Service prior to becoming an officer,
      plus (b) 33% of the Participant's Average Compensation for each Year of
      Service, considering only the Years of Service beginning with the date the
      Participant became an officer, subject to Section 4.3(C)(2) below. In no
      event will a Participant's total accumulated pension credit percentages
      under this paragraph exceed 660%. In no event will the benefit described
      in this subsection be greater than the maximum benefit payable under Code
      section 415(b).

                  (2) Effective July 1, 2005, the benefit under this section
      4.3(C) will be calculated as the greater of (a) and (b), as described
      below:

                        (a) the sum of:

                                        i. the benefit described in section
                              4.3(C)(1) based on the Participant's Average
                              Compensation and Years of Service as of December
                              31, 2004, and

                                       17

<PAGE>

                                        ii. 20% of the Participant's Average
                              Compensation for each Year of Service prior to age
                              50 and 25% of the Participant's Average
                              Compensation for each Year of Service after age
                              50, considering only Years of Service beginning
                              with the date the Participant became an Officer on
                              or after January 1, 2005.

                            (b) The benefit described in section 4.3(C)(1),
            based on the Participant's Average Compensation and Years of Service
            as of June 30, 2005.

            (D) Minimum Benefit Protection

                  (1) With respect to a Participant in the Prior Plan, the lump
      sum benefit payable under this Plan shall be no less than the Actuarial
      Equivalent of the Participant's Accrued Benefit under the Prior Plan.
      Further, for a Participant eligible for an immediate benefit under the
      Prior Plan, the lump sum shall be no less than the Actuarial Equivalent of
      the immediate Prior Plan benefit payable to the Participant.

                  (2) With respect to a Participant in the Prior Plan who
      attains age 62 or completes 30 Years of Service while an active Associate,
      the lump sum shall be no less than the lump sum calculated in (1) above,
      assuming the Participant commenced receipt of the lump sum at the later of
      (a) January 1, 1996, and (b) the first day of the month coincident with or
      next following the earlier of (i) the date the Associate attains age 62,
      and (ii) the date the Associate completes 30 Years of Service.

                  (3) With respect to a Participant in the SERVISTAR Plan, the
      lump sum benefit payable under this Plan will not be less than the
      Actuarial Equivalent of the Participant's Accrued Benefit under the
      SERVISTAR Plan.

                  (4) With respect to a Participant in the SERVISTAR Plan who
      attains age 60 while an active Associate, the lump sum shall be no less
      than the lump sum calculated in (3) above, assuming the Participant
      commenced receipt of the lump sum at the later of (a) January 1, 1998, and
      (b) the first day of the month coincident with or next following the date
      the Associate attains age 60.

      4.4 Uniformed Services Employment and Reemployment Rights

      Notwithstanding any Plan provision to the contrary, for re-employments
initiated on or after December 12, 1994, benefits and service credit with
respect to qualified military service will be provided in accordance with
Section 414(u) of the Code.

                                       18

<PAGE>

                                    SECTION 5

                        IMMEDIATE, EARLY AND LATE PENSION

      5.1 Immediate Pension

      A Participant, whose employment with the Employer and all Affiliated
Employers terminates with a 100% Vesting Percentage, may upon such termination
of employment prior to his Normal Retirement Date be entitled to receive an
immediate Pension. An immediate Pension is the Participant's Accrued Benefit
converted into an Actuarially Equivalent single life annuity. With the consent
of the Participant and Spousal Consent, if applicable, such immediate Pension
shall commence on the first day of the month coinciding with or immediately
following the Participant's termination of employment and shall be payable in
any form of benefit as described in Section 6. Such Immediate Pension election
must be made within 60 days from the date the Pension information and forms are
provided to the Participant which will be as soon as administratively practical
after the earlier of the submission of the Participant's written notice of
termination or the Participant's actual termination from employment.

      5.2 Early Retirement Pension

      A Participant who does not timely elect an immediate Pension under Section
5.1 upon his termination of employment may next elect to receive his Pension as
an early retirement Pension under the Plan on the first day of any month
thereafter, provided that the Participant gives the Committee at least 15 days
advance notice, but not later than his Normal Retirement Date. The early
retirement Pension shall equal his Accrued Benefit reduced by 2/3 of 1% for each
of the first 60 months and by 1/3 of 1% for each of the next 60 months by which
payment of his early retirement Pension precedes his Normal Retirement Date (see
SERVISTAR Plan application in Section 5.3 below). If the Participant is younger
than age 55, the early retirement Pension shall be Actuarially Equivalent to the
Participant's Accrued Benefit. In no event, however, shall a Participant's early
retirement Pension be less than his immediate Pension. With the consent of the
Participant and Spousal Consent, if applicable, the early retirement Pension
shall be payable in any form of benefit described in Section 6.

      5.3 SERVISTAR Plan

      For any Participant whose Pension is determined under Section 4.1(B), the
calculation of any immediate or early retirement reduction factors will be based
upon an age 60 Normal Retirement Date in accordance with the terms of the
SERVISTAR Plan in effect at the earlier of his termination, retirement or
January 1, 1998, as restated in Supplement C hereto.

      5.4 Late Retirement Pension

      (A) If a Participant's employment with the Employer or any Affiliated
Employer continues after his Normal Retirement Date, such Participant will
receive a late retirement Pension commencing on the first day of the month
immediately following the calendar month in which his employment ceases by
reason other than death. The Participant's late retirement Pension is the
Participant's Accrued Benefit.

                                       19

<PAGE>

            In the event a Participant's Pension is required to begin under
Section 6.8 while the Participant is in active service, such required beginning
date shall be the Participant's Annuity Starting Date for purposes of Section 6
and the Participant shall receive a late retirement Pension commencing on or
before such required beginning date in an amount determined as if he had retired
on the last day of the preceding Plan Year. Subsequently, as of the end of each
prior Plan Year before the Participant's actual late retirement date (and as of
his actual late retirement date), the Participant's Pension shall be recomputed
to reflect additional accruals. The Participant's recomputed Pension shall then
be paid as of the following January 1.

                  (1) If the Participant's Pension is being paid on an annuity
      form, the Participant's recomputed Pension shall then be reduced by the
      Actuarial Equivalent of the total payments of his late retirement Pension
      which were paid prior to each such recomputation to arrive at the
      Participant's late retirement Pension; provided that no such reduction
      shall reduce the Participant's late retirement Pension below the amount of
      late retirement Pension payable to the Participant prior to the
      recomputation of such Pension.

                  (2) If the Participant's Pension was paid in a lump sum
      payment, the additional accrual for a subsequent Plan Year will be based
      on that Year of Service only and not be reduced by any prior payments.
      Such additional Accrued Benefit shall be paid in a lump sum as soon as
      practicable following the end of the Plan Year.

            (B) If a Participant terminates employment with the Employer and all
Affiliated Employers prior to age 65, but does not elect to commence his or her
Pension until after age 65, the amount of such Pension shall be adjusted to the
Actuarial Equivalent of the Pension payable at age 65.

                                       20

<PAGE>

                                    SECTION 6

                             NORMAL FORM OF PAYMENT

      6.1 Normal Form of Payment -- Joint and Survivor

      If the Participant has a Spouse, to whom he was married at least one year
prior to his Annuity Starting Date, the normal form of payment is the 50%
Qualified Joint and Survivor Annuity form. A Participant who was married within
one year of his Annuity Starting Date shall be deemed to have been married for
at least one year if he and his spouse remain married for at least one year.

      As an alternative to the 50% Qualified Joint and Survivor Annuity
described above, a Participant may elect that his benefit be payable to him in
the 100% Qualified Joint and Survivor Annuity form. Such election will not
require Spousal Consent as provided in Section 6.4.

      6.2 Normal Form of Payment -- Single Life Annuity

      If the Participant does not have a Spouse on his Annuity Starting Date,
the normal form of payment is the single life annuity form. This form provides
that payments will be made to the Participant during his lifetime with no
payments made after death.

      6.3 Optional Forms of Payment

      In lieu of receiving his Pension in the normal form applicable to his
coverage, a Participant may elect to receive an Actuarially Equivalent benefit
based on one of the optional forms of payment provided in accordance with the
further terms of the Plan, including Sections 6.6 and 6.8.

      6.4 Election of Option

      The Participant may elect or revoke an option during the 90-day period
before his Annuity Starting Date by filing a written election, including the
Spousal Consent, with the Employer. However, a Participant may not elect more
than one option to be effective at the same time. No such election or revocation
can be made after the Participant's Retirement Date.

      In addition a Participant may elect or revoke an optional form of payment,
to become effective upon his death, at any time on or after his Normal
Retirement Date and before his late Retirement Date. To elect an option the
Participant must waive surviving Spouse benefit coverage and elect an optional
form of payment. His election must include the Spousal Consent to both the
waiver and election.

      6.5 Notice to Participants

      The Committee shall furnish to each Participant, no less than 30 days and
no more than 90 days, before his Annuity Starting Date a written explanation in
nontechnical language of the terms and conditions of the Pension payable to the
Participant in the normal and optional forms described in Sections 6.1, 6.2,
6.3, 6.6 and 6.8. Such explanation shall include a general

                                       21

<PAGE>

description of the eligibility conditions for, and the material features and
relative values of, the optional forms of payment under the Plan, any rights the
Participant may have to defer commencement of his Pension, the requirement for
Spousal Consent, and the right of the Participant to make, and to revoke,
elections under Section 6.4. A Participant's Annuity Starting Date may not occur
less than 30 days after receipt of the notice. An election under Section 6.4
shall be made on a form provided by the Plan Administrator and may be made
during the 90-day period ending on the Participant's Annuity Starting Date, but
not prior to the date the Participant receives the written explanation described
in this Section. Notwithstanding any provision to the contrary, the Participant
may, after having received the notice, affirmatively elect (with any applicable
Spousal Consent) to waive any requirement that the written explanation be
provided at least 30 days before his Annuity Starting Date if:

            (A) the Committee clearly informs the Participant that he has a
period of at least 30 days after receiving the notice to decide when to have his
benefits begin and, if applicable, to choose a particular optional form of
payment;

            (B) the Participant affirmatively elects a date for his benefit to
begin and, if applicable, an optional form of payment, after receiving the
notice;

            (C) the Participant is permitted to revoke his election until the
later of his Annuity Starting Date or seven days following the day he received
the notice; and

            (D) the distribution of his Pension commences more than 7 days after
such explanation is provided to the Participant.

      6.6 SERVISTAR Protected Payment Forms

      Each Participant who was a participant in the SERVISTAR Plan on January 1,
1998 shall have, in addition to the optional forms of payment available under
this Plan, all of the normal and optional forms of payment available under the
SERVISTAR Plan, except for the 66 2/3 Joint and Survivor Annuity form, with
respect to the payment of his Pension under this Plan. The Participant's Pension
payable under said SERVISTAR Plan optional payment forms shall be the Actuarial
Equivalent of the single life annuity form of payment for the life of the
Participant and all calculations of these forms are based on the provisions
contained in the SERVISTAR Plan on December 31, 1997 and restated in Supplement
C hereto.

      6.7 Payment of Pension to the Participant

      A Participant's Pension will be payable monthly with each payment
equivalent to 1/12 of the yearly amount. The first of such monthly payments will
be made at the Participant's Normal Retirement Date, late retirement date or
early retirement date, if appropriate, with subsequent monthly payments being
made at the first of each month thereafter until the Participant's death occurs,
or in the case of a survivor annuity, until the surviving Beneficiary's death
occurs.

      Except as otherwise provided in Sections 4, 5 or 7, unless the Participant
elects otherwise, the payment of a Pension shall commence not later than the
60th day after the latest of the close of the Plan Year in which:

                                       22

<PAGE>

            (A) the Participant attains the earlier of age 65 or his Normal
Retirement Date, or

            (B) the fifth anniversary of the year in which the Participant
commenced participation in the Plan occurs, or

            (C) the Participant terminates his Service with the Employer.

      Notwithstanding the preceding paragraph, in the case of a Participant in
active service of the Employer or an Affiliated Employer, the Participant's
Pension shall begin not later than the April 1 following the calendar year in
which he attains age 70 1/2. In this situation, the provisions of Section 5.4
shall apply to him. However, a Participant who attained age 70 1/2 prior to
January 1, 1988 and who is not a 5% owner (as defined in Section 416(i) of the
Code) of the Employer as described above shall not receive payment while in
active service under the provisions of this Section 6.7.

      6.8 Payment Options

      If not made in a lump-sum under the small benefits provisions of Section
10.5(G), payment may be made in one of the following forms upon the
Participant's election and with Spousal Consent, if applicable:

            (A) A monthly pension payable in equal installments for the life of
the Participant; provided however, that in the event the Participant dies within
the 10-year period following his Annuity Starting Date, monthly payments equal
to those payable during the life of the Participant shall be made to the
Beneficiary or Spouse of the deceased Participant designated to receive such
payments for the remainder of said 10-year period.

            (B) A lump sum payment equal to the Participant's Defined Lump Sum,
as determined under Section 4.3(B) but in no event less than the lump sum amount
determined under Section 4.3(D), which payment shall be made as of the first day
of the month following the date an election to receive such lump sum payment is
made pursuant to this Section.

            (C) A monthly pension payable in equal installments for the life of
a Participant.

      The Participant must elect the optional forms of payment described in this
Section 6.9, subject to the provisions of Section 5.1 and as provided in Section
6.4. Each of the optional forms of payment in this Section 6.9 (except as
modified by Section 6.9(D)) shall be the Actuarial Equivalent of the single life
annuity form of payment for the life of the Participant.

      6.9 Minimum Distribution Requirements

            (A) General Rules

                  (1) Effective Date. The provisions of this Section 6.10 will
      apply for purposes of determining required minimum distributions for
      calendar years beginning with the 2003 calendar year.

                                       23

<PAGE>

                  (2) Precedence. The requirements of this Section will take
      precedence over any inconsistent provisions of the Plan.

                  (3) Requirements of Treasury Regulations Incorporated. All
      distributions required under this Section will be determined and made in
      accordance with the Treasury regulations under Section 401(a)(9) of the
      Internal Revenue Code.

            (B) Time and Manner of Distribution

                  (1) Required Beginning Date. The Participant's entire interest
      will be distributed, or begin to be distributed, to the Participant no
      later than the Participant's Required Beginning Date, as defined in
      subsection (F)(4) below.

                  (2) Death of Participant Before Distributions Begin. If the
      Participant dies before distributions begin, the Participant's entire
      interest will be distributed, or begin to be distributed, no later than as
      follows:

                        (a) If the Participant's surviving spouse is the
            Participant's sole designated beneficiary, then, except as provided
            in subsection (G), distributions to the surviving spouse will begin
            by December 31 of the calendar year immediately following the
            calendar year in which the Participant died, or by December 31 of
            the calendar year in which the Participant would have attained age
            70 1/2, if later.

                        (b) If the Participant's surviving spouse is not the
            Participant's sole designated beneficiary, then, except as provided
            in subsection (G), distributions to the designated beneficiary will
            begin by December 31 of the calendar year immediately following the
            calendar year in which the Participant died.

                        (c) If there is no designated beneficiary as of
            September 30 of the year following the year of the Participant's
            death, the Participant's entire interest will be distributed by
            December 31 of the calendar year containing the fifth anniversary of
            the Participant's death.

                        (d) If the Participant's surviving spouse is the
            Participant's sole designated beneficiary and the surviving spouse
            dies after the Participant but before distributions to the surviving
            spouse begin, this subsection (B)(2), other than subsection
            (B)(2)(a), will apply as if the surviving spouse were the
            Participant.

                  For purposes of this subsection (B)(2) and subsection (E),
      distributions are considered to begin on the Participant's Required
      Beginning Date (or, if subsection (B)(2)(d) applies, the date
      distributions are required to begin to the surviving spouse under
      subsection (B)(2)(a)). If annuity payments irrevocably commence to the
      Participant before the Participant's Required Beginning Date (or to the
      Participant's surviving spouse before the date distributions are required
      to begin to the surviving spouse under subsection (B)(2)(a)), the date
      distributions are considered to begin is the date distributions actually
      commence.

                                       24

<PAGE>

                  (3) Form of Distribution. Unless the Participant's interest is
      distributed in the form of an annuity purchased from an insurance company
      or in a single sum on or before the Required Beginning Date, as of the
      first distribution calendar year distributions will be made in accordance
      with subsections (C), (D) and (E) of this Section 6.10. If the
      Participant's interest is distributed in the form of an annuity purchased
      from an insurance company, distributions thereunder will be made in
      accordance with the requirements of Section 401(a)(9) of the Code and the
      Treasury regulations. Any part of the Participant's interest which is in
      the form of an individual account described in Section 414(k) of the Code
      will be distributed in a manner satisfying the requirements of Section
      401(a)(9) of the Code and the Treasury regulations that apply to
      individual accounts.

            (C) Determination of Amount to be Distributed Each Year

                  (1) General Annuity Requirements. If the Participant's
      interest is paid in the form of annuity distributions under the Plan,
      payments under the annuity will satisfy the following requirements:

                        (a) the annuity distributions will be paid in periodic
            payments made at intervals not longer than one year;

                        (b) the distribution period will be over a life (or
            lives) or over a period certain not longer than the period described
            in subsection (D) or (E);

                        (c) once payments have begun over a period certain, the
            period certain will not be changed even if the period certain is
            shorter than the maximum permitted;

                        (d) payments will either be non-increasing or increase
            only as follows:

                                        i. by an annual percentage increase that
                              does not exceed the annual percentage increase in
                              a cost-of-living index that is based on prices of
                              all items and issued by the Bureau of Labor
                              Statistics;

                                        ii. to the extent of the reduction in
                              the amount of the Participant's payments to
                              provide for a survivor benefit upon death, but
                              only if the beneficiary whose life was being used
                              to determine the distribution period described in
                              subsection (D) dies or is no longer the
                              Participant's beneficiary pursuant to a qualified
                              domestic relations order within the meaning of
                              Section 414(p) of the Code;

                                        iii. to provide cash refunds of employee
                              contributions upon the Participant's death; or

                                       25

<PAGE>

                                        iv. to pay increased benefits that
                              result from a Plan amendment.

                  (2) Amount Required to be Distributed by Required Beginning
      Date. The amount that must be distributed on or before the Participant's
      Required Beginning Date (or, if the Participant dies before distributions
      begin, the date distributions are required to begin under subsection
      (B)(2)(a) or (b)) is the payment that is required for one payment
      interval. The second payment need not be made until the end of the next
      payment interval even if that payment interval ends in the next calendar
      year. Payment intervals are the periods for which payments are received,
      e.g., bi-monthly, monthly, semi-annually, or annually. All of the
      Participant's benefit accruals as of the last day of the first
      distribution calendar year will be included in the calculation of the
      amount of the annuity payments for payment intervals ending on or after
      the Participant's Required Beginning Date.

                  (3) Additional Accruals After First Distribution Calendar
      Year. Any additional benefits accruing to the Participant in a calendar
      year after the first distribution calendar year will be distributed
      beginning with the first payment interval ending in the calendar year
      immediately following the calendar year in which such amount accrues.

            (D) Requirements For Annuity Distributions that Commence During
Participant's Lifetime

                  (1) Joint Life Annuities Where the Beneficiary Is Not the
      Participant's Spouse. If the Participant's interest is being distributed
      in the form of a joint and survivor annuity for the joint lives of the
      Participant and a non-spouse beneficiary, annuity payments to be made on
      or after the Participant's Required Beginning Date to the designated
      beneficiary after the Participant's death must not at any time exceed the
      applicable percentage of the annuity payment for such period that would
      have been payable to the Participant using the table set forth in Q&A-2 of
      Section 1.401(a)(9)-6T of the Treasury regulations. If the form of
      distribution combines a joint and survivor annuity for the joint lives of
      the Participant and a non-spouse beneficiary and a period certain annuity,
      the requirement in the preceding sentence will apply to annuity payments
      to be made to the designated beneficiary after the expiration of the
      period certain.

                  (2) Period Certain Annuities. Unless the Participant's spouse
      is the sole designated beneficiary and the form of distribution is a
      period certain and no life annuity, the period certain for an annuity
      distribution commencing during the Participant's lifetime may not exceed
      the applicable distribution period for the Participant under the Uniform
      Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury
      regulations for the calendar year that contains the annuity starting date.
      If the annuity starting date precedes the year in which the Participant
      reaches age 70, the applicable distribution period for the Participant is
      the distribution period for age 70 under the Uniform Lifetime Table set
      forth in Section 1.401(a)(9)-9 of the Treasury regulations plus the excess
      of 70 over the age of the Participant as of the Participant's birthday in
      the year that contains the annuity starting date. If the Participant's
      spouse is the Participant's sole designated beneficiary and the form of
      distribution is a period certain and no life

                                       26

<PAGE>

      annuity, the period certain may not exceed the longer of the Participant's
      applicable distribution period, as determined under this subsection
      (D)(2), or the joint life and last survivor expectancy of the Participant
      and the Participant's spouse as determined under the Joint and Last
      Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury
      regulations, using the Participant's and spouse's attained ages as of the
      Participant's and spouse's birthdays in the calendar year that contains
      the annuity starting date.

            (E) Requirements for Minimum Distributions Where Participant Dies
Before Date Distributions Begin

                  (1) Participant Survived by Designated Beneficiary. Except as
      provided in subsection (G) below, if the Participant dies before the date
      distribution of his or her interest begins and there is a designated
      beneficiary, the Participant's entire interest will be distributed,
      beginning no later than the time described in subsection (B)(2)(a) or (b),
      over the life of the designated beneficiary or over a period certain not
      exceeding:

                        (a) unless the annuity starting date is before the first
            distribution calendar year, the life expectancy of the designated
            beneficiary determined using the beneficiary's age as of the
            beneficiary's birthday in the calendar year immediately following
            the calendar year of the Participant's death; or

                        (b) if the annuity starting date is before the first
            distribution calendar year, the life expectancy of the designated
            beneficiary determined using the beneficiary's age as of the
            beneficiary's birthday in the calendar year that contains the
            annuity starting date.

                  (2) No Designated Beneficiary. If the Participant dies before
      the date distributions begin and there is no designated beneficiary as of
      September 30 of the year following the year of the Participant's death,
      distribution of the Participant's entire interest will be completed by
      December 31 of the calendar year containing the fifth anniversary of the
      Participant's death.

                  (3) Death of Surviving Spouse Before Distributions to
      Surviving Spouse Begin. If the Participant dies before the date
      distribution of his or her interest begins, the Participant's surviving
      spouse is the Participant's sole designated beneficiary, and the surviving
      spouse dies before distributions to the surviving spouse begin, this
      subsection (E) will apply as if the surviving spouse were the Participant,
      except that the time by which distributions must begin will be determined
      without regard to subsection (B)(2)(a).

            (F) Definitions

                  (1) Designated Beneficiary. The individual who is designated
      as the beneficiary under the terms of this Supplement and is the
      designated beneficiary under Section 401(a)(9) of the Internal Revenue
      Code and Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

                                       27

<PAGE>

                  (2) Distribution Calendar Year. A calendar year for which a
      minimum distribution is required. For distributions beginning before the
      Participant's death, the first distribution calendar year is the calendar
      year immediately preceding the calendar year which contains the
      Participant's Required Beginning Date. For distributions beginning after
      the Participant's death, the first distribution calendar year is the
      calendar year in which distributions are required to begin pursuant to
      subsection (B)(2).

                  (3) Life Expectancy. Life expectancy as computed by use of the
      Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

                  (4) Required Beginning Date. The April 1 following the
      calendar year in which the Participant attains age 70 1/2.

            (G) Election to Apply 5-Year Rule to Distributions to Designated
Beneficiaries. If the Participant dies before distributions begin and there is a
designated beneficiary, distribution to the designated beneficiary is not
required to begin by the date specified in subsection (B)(2), but the
Participant's entire interest will be distributed to the designated beneficiary
by December 31 of the calendar year containing the fifth anniversary of the
Participant's death. If the Participant's surviving spouse is the Participant's
sole designated beneficiary and the surviving spouse dies after the Participant
but before distributions to either the Participant or the surviving spouse
begin, this election will apply as if the surviving spouse were the Participant.

      6.10 Restoration of Retired Participant or Other Former Associate to
Service

      If a Participant having received his Pension or in receipt of a Pension is
restored to service with the Employer or an Affiliated Employer, the following
shall apply:

            (A) Upon his restoration to service he shall not be required or
allowed to repay any benefit he has received and, if his Pension is payable in
an annuity form, his Pension shall not be suspended and any optional form of
payment shall remain in effect; if the Participant had commenced payment prior
to his Normal Retirement Date, however, any additional Pension he accrues after
his restoration to service shall be paid to his surviving Spouse in accordance
with the provisions of Section 7 if he should die in active service.

            (B) Any Years of Service to which he was entitled when he retired or
terminated service shall be restored to him, subject to the provisions of
Section 2.1(PP) ("Years of Service").

      6.11 Direct Rollover of Certain Distributions

            (A) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.

            (B) The following definitions apply to the terms used in this
Section:

                                       28

<PAGE>

                  (1) An "eligible rollover distribution" is any distribution of
      all or any portion of the balance to the credit of the distributee, except
      that an eligible rollover distribution does not include: any distribution
      that is one of a series of substantially equal periodic payments (not less
      frequently than annually) made for the life (or life expectancy) of the
      distributee or the joint lives (or joint life expectancies) of the
      distributee and the distributee's designated beneficiary, or for a
      specified period of ten years or more; any distribution to the extent such
      distribution is required under Section 401(a)(9) of the Code; and the
      portion of any distribution that is not includible in gross income;

                  (2) An "eligible retirement plan" is an individual retirement
      account described in Section 408(a) of the Code, an individual retirement
      annuity described in Section 408(b) of the Code, an annuity plan described
      in Section 403(a) of the Code, or a qualified trust described in Section
      401(a) of the Code, that accepts the distributee's eligible rollover
      distribution. An "eligible retirement plan" shall also mean an annuity
      contract described in Section 403(b) of the Code and an eligible deferred
      compensation plan under Section 457(b) of the Code which is maintained by
      a state, political subdivision of a state, or any agency or
      instrumentality of a state or political subdivision of a state and which
      agrees to separately account for amounts transferred into such plan from
      the Plan. The definition of eligible retirement plan shall also apply in
      the case of a distribution to a surviving Spouse, or to a Spouse or former
      Spouse who is the alternate payee under a qualified domestic relations
      order, as defined in Section 414(p) of the Code.

                  (3) A "distributee" includes an Associate or former Associate.
      In addition, the Associate's or former Associate's surviving Spouse and
      the Associate's or former Associate's Spouse or former Spouse who is the
      alternate payee under a qualified domestic relations order, as defined in
      Section 414(p) of the Code, are distributees with regard to the interest
      of the Spouse or former Spouse; and

                  (4) A "direct rollover" is a payment by the Plan to the
      eligible retirement plan specified by the distributee.

            (C) In the event that the provisions of this Section 6.11 or any
part thereof cease to be required by law as a result of subsequent legislation
or otherwise, this Section or any applicable part thereof shall be ineffective
without the necessity of further amendments to the Plan.

                                       29

<PAGE>

                                    SECTION 7

                            SURVIVING SPOUSE BENEFIT

      7.1 Eligibility

      Upon the death of a Participant before his Retirement Date, his Spouse
will receive a surviving Spouse benefit as described below in either 7.2(A) or
(B) as applicable, but in no event less than the amount determined under Section
7.2(C), if the following requirements were met when the Participant died:

            (A) The Participant had a Spouse to whom the Participant had been
married at least one full year prior to his death; and

            (B) The Participant's Vesting Percentage is 100%.

      7.2 Amount

            (A) If the Participant dies while actively employed by the Employer,
the surviving Spouse benefit shall be equal to 55% of the Participant's Defined
Lump Sum, but in no event less than 55% of the lump sum amount determined under
Section 4.3(D).

            (B) If the Participant dies after his employment with the Employer
is terminated, but prior to commencement of payments under the Plan, the
Surviving Spouse benefit shall be equal to 55% of the benefit the Participant
would have received if the Participant had survived to age 55 (or the age at his
date of death, if older) and elected a 50% Qualified Joint and Survivor Annuity,
and died.

            (C) Regardless of the amount determined under (A) or (B),

                  (1) if a married Participant dies before his Annuity Starting
      Date, and also before reaching his earliest retirement age, as defined in
      Section 5.2, then the benefit may not be less than the benefit that would
      be payable to the Spouse if the Participant had separated from service at
      the earlier of the actual separation or death, survived until the earliest
      retirement age, retired at that time with an immediate Qualified Joint and
      Survivor Annuity, and died on the day thereafter; or

                  (2) if a married Participant dies before his Annuity Starting
      Date, but after reaching his earliest retirement age, as defined in
      Sections 5.2, then the benefit may not be less than the benefit that would
      be payable to the Spouse if the Participant had retired with an immediate
      Qualified Joint and Survivor Annuity on the day before the Participant's
      death.

      7.3 Payments

            (A) Subject to the surviving Spouse's right to have the benefit paid
at what would have been the Participant's Normal Retirement Date, the surviving
Spouse benefit under Section 7.2(A) shall be paid commencing as of the first day
of the month coinciding with or

                                       30

<PAGE>

immediately following the Participant's death. In lieu of immediate monthly
payments for life, the surviving Spouse may elect to receive the benefit
immediately as a lump sum. Alternatively, the surviving Spouse may elect to
defer commencement of the surviving Spouse benefit until the first day of any
month coinciding with or immediately following the date the Participant would
have attained age 55 (or age at death, if older), but not later than the first
day of the month coinciding with or next following the date that would have been
the Participant's Normal Retirement Date (or age at death, if older).

            If a surviving Spouse elects to defer commencement of the surviving
Spouse benefit, the benefit shall be converted to an Actuarially Equivalent
monthly annuity for the life of the surviving Spouse commencing on the date that
would have been the Participant's Normal Retirement Date. This benefit will be
reduced by 2/3 of 1% for each of the first 60 months and 1/3 of 1% for each of
the next 60 months by which the benefit commencement date precedes the date that
would have been the Participant's Normal Retirement Date. In no event, however,
shall this benefit be less than the benefit the surviving Spouse could have
received as a monthly annuity for life commencing on the first of the month
coinciding with or immediately following the Participant's death.

            (B) Subject to the surviving Spouse's right to have the benefit paid
at what would have been the Participant's Normal Retirement Date, the surviving
Spouse benefit under Section 7.2(B) shall be paid commencing as of the first day
of the month coinciding with or immediately following the Participant's death.
In lieu of such immediate payment, the surviving Spouse may elect to defer
receipt of the surviving Spouse benefit to any date which is not later than the
Participant's Normal Retirement Date. If such an election is made, the surviving
Spouse benefit shall be equal to 55% of the benefit the Participant would have
received if the Participant had survived to the date at which the surviving
Spouse elects to commence the surviving Spouse benefit and had elected a 50%
Qualified Joint and Survivor Annuity.

            (C) An election by the Spouse to commence receiving payments prior
to what would have been the Participant's Normal Retirement Date shall be made
on a form provided by the Plan Administrator and may be made during the 90-day
period ending on the date the payments to the Spouse commence.

      7.4 Death Benefits for Non-Spouse Beneficiaries

      If a Participant dies prior to his or her Annuity Starting Date and does
not have a Spouse eligible for the surviving Spouse benefit, then the following
provisions shall apply:

            (A) If the Participant's Vesting Percentage at the time of death was
100%, then Participant's Beneficiary shall be entitled to a death benefit equal
to 55% of the Participant's Defined Lump Sum.

            (B) If the Participant was a former participant in the SERVISTAR
Plan, then the amount payable to a Beneficiary under paragraph (A) above shall
at least be equal to the Participant's available contributions together with
credited interest computed thereon to the date of the Participant's death.
Credited interest on a Participant's contributions means interest for the number
of full months from the January 1 following the date each such contribution was
paid

                                       31

<PAGE>

to the Plan to the date specified herein. Prior to January 1, 1960, the rate of
credited interest was 2-1/2% per annum, compounded annually. From January 1,
1960 to January 1, 1976, the rate of credited interest was 3% per annum,
compounded annually. From January 1, 1976 to July 1, 1983, the rate of credited
interest is 5% per annum. On and after July 1, 1983, the rate of credited
interest is 7% per annum, compounded on each July 1. Any change in the rate of
credited interest will apply to interest allowed for months occurring after the
effective date of change.

            (C) All death benefits payable under this Section 7.4 shall be paid
to the Beneficiary in a single, lump sum payment, as soon as practicable
following the Participant's death.

            The foregoing provisions of this Section 7.4 shall apply to
Participants who terminate employment with the Employer on or after December 15,
2002. The death benefits payable to the Beneficiary of a Participant who
terminated employment with the Employer prior to such date, if any, shall be
determined in accordance with the terms of the Plan as in effect on such
termination date.

                                       32

<PAGE>

                                    SECTION 8

                             TRUST FUND AND TRUSTEE

      8.1 Trust Fund

      The Employer has heretofore established the Fund which comprises all of
the assets of the Plan and into which future contributions to finance this Plan
shall be made. The Trust shall hold the Fund, which shall be used to pay
benefits or expenses as provided in this Plan pursuant to authorization by the
Committee; and such benefits shall be payable only from the Fund.

      8.2 Trust Fund Applicable Only to Payment of Benefits and Expenses

      The fund will be used and applied only in accordance with the provisions
of the Plan and the Trust Agreement entered into by the Employer and the Trustee
to provide the benefits thereof, and no part of the corpus or income of the
Trust fund will be used for, or diverted to, purposes other than for the
exclusive benefit of Participants under the Plan and other persons thereunder
entitled to benefits except to the extent provided in Sections 9.2 and 11.3 or
to pay any reasonable expenses in the administration of the Plan.

      8.3 Trustee Capacity

      When there are two or more Trustees, they are authorized to allocate
specific responsibilities, obligations or duties among themselves by their
written agreement. An executed copy of such written agreement is to be delivered
to and retained by the Committee. In the event of more than one Trustee, any
action shall be taken at the direction of a majority of such Trustees.

      8.4 Resignation and Removal of Trustee

      Any Trustee may resign at any time by delivering to the Board of Directors
of the Employer (the "Board of Directors") a written notice of resignation,
which notice may be waived by the Board of Directors, to take effect at a date
specified therein, which shall not be less than 30 days after the delivery
thereof. The Trustee may be removed by the Board of Directors with or without
cause, by tendering to the Trustee a written notice of removal to take effect at
a date specified therein. Upon such removal or resignation of a Trustee, the
Board of Directors shall either appoint a successor Trustee who shall have the
same powers and duties as those conferred upon the resigning or discharged
Trustee, or, if more than one Trustee is acting, determine that a successor
shall not be appointed and the number of Trustees shall be reduced by one.

      8.5 Taxes, Expenses and Compensation of Trustee

      The Trustee shall deduct from and charge against the Trust any taxes paid
by it which may be imposed upon the Trust, or the income thereof, or which the
Trustee is required to pay with respect to the interest of any Participant or
Beneficiary therein. The Employer may pay the Trustee's reasonable expenses in
administering the Plan and a reasonable compensation for its services as Trustee
hereunder, either directly or through the Fund, at a rate to be agreed upon

                                       33

<PAGE>

from time to time; provided, however, that no full-time Associate shall receive
any compensation for acting as Trustee hereunder.

      8.6 Funding Policy and Investment Managers

      The Employer or its delegate shall be responsible for establishing and
carrying out a funding policy and method consistent with the objectives of this
Plan and the requirements of ERISA and shall determine the investment policy for
the Plan. However, the Employer or its delegate may appoint one or more
investment managers to manage the assets of the Plan (including the power to
acquire and dispose of all or part of such assets) as the Employer shall
designate. In that event, the authority over and responsibility for the
management of the assets so designated shall be the sole responsibility of that
investment manager.

      For purposes of this Article, the term "investment manager" means an
individual who:

            (A) Has the power to manage, acquire or dispose of any asset of the
Plan;

            (B) Is (i) registered as an investment advisor under the Investment
Advisors Act of 1940, (ii) is a bank, as defined in that Act, or (iii) is an
insurance company qualified to perform services described in paragraph (A)
above; and

            (C) Has acknowledged in writing that he is a fiduciary with respect
to the Plan.

                                       34

<PAGE>

                                    SECTION 9

                               FUNDING OF BENEFITS

      9.1 Contributions to the Fund

      From time to time, the Employer shall make such contributions to the Fund
as the Employer determines are required to maintain the Plan on a sound
actuarial basis. In determining the amounts and incidence of such contributions,
the Employer will take into account such actuarial recommendations as may be
provided by an enrolled actuary as defined by ERISA. Contributions by
Participants are neither required nor permitted.

      9.2 Fund for Exclusive Benefit of Participants

      The Fund is for the exclusive benefit of Participants and other persons
who may become entitled to benefits hereunder, and may also be used to pay any
reasonable expenses arising from the administration of the Plan not assumed and
then paid directly by the Employer. Prior to the satisfaction of all liabilities
for benefits provided hereunder, no contribution made to the Fund will be
refunded to the Employer except in the following circumstances:

            (A) The Employer's contributions to the Plan are conditioned upon
their deductibility under Section 404 of the Code. If all or part of the
Employer's deductions for contributions to the Plan are disallowed by the
Internal Revenue Service, the portion of the contributions to which that
disallowance applies shall be returned to the Employer without interest, but
reduced by any investment loss attributable to those contributions. The return
shall be made within one year after the date of the disallowance of deduction.

            (B) The Employer may recover without interest the amount of its
contributions to the Plan made on account of a mistake in fact, reduced by any
investment loss attributable to those contributions, if recovery is made within
one year after the date of those contributions.

      9.3 Disposition of Credits and Forfeitures

      No credit or forfeitures arising from the operation of the Plan may be
used to increase the benefit of any Participant or group of Participants but
will instead be taken into account in determining contributions to be made by
the Employer.

                                       35

<PAGE>

                                   SECTION 10

                               PLAN ADMINISTRATOR

      10.1 Plan Administrator/Appointment of Committee

      To the extent provided in this Section, the general administration of the
Plan and the responsibility for carrying out the provisions of the Plan shall be
placed in a committee of not less than 3 persons appointed from time-to-time by
the Board of Directors (the "Committee") to serve at the pleasure of the Board
of Directors. Any person who is appointed a member of the Committee shall
signify his acceptance by filing written acceptance with the Board of Directors
and the Secretary of the Committee. Any member of the Committee may resign by
delivering his written resignation to the Board of Directors and the Secretary
of the Committee. If the Employer does not appoint a Committee, the Employer
shall perform the duties of the Committee.

      10.2 Duties and Authority

      The Plan Administrator shall administer the Plan on behalf of the Employer
in a nondiscriminatory manner for the exclusive benefit of Participants and
their Beneficiaries.

      The Plan Administrator shall have the exclusive discretionary power to,
and perform all such duties as are necessary to, operate, administer and manage
the Plan in accordance with the terms thereof, including but not limited to the
following:

            (A) To determine, in its sole discretion, all questions relating to
a Participant's coverage under the Plan,

            (B) To maintain all necessary records for the administration of the
Plan,

            (C) To compute and authorize the payment of a Pension and other
benefit payments to eligible Participants and Beneficiaries,

            (D) To adopt and amend rules for the administration of the Plan and
the transaction of its business subject to the limitations of the Plan. The Plan
Administrator shall have the sole and unilateral discretionary authority to
interpret the Plan and to make factual determinations (including but not limited
to, determination of an individual's eligibility for Plan participation, the
right, amount and form of any benefit payable under the Plan and the date on
which any individual ceases to be a Participant and to remedy ambiguities,
inconsistencies and/or omissions). The determinations, acts and decisions of the
Plan Administrator shall be final, conclusive and binding on all parties and,
subject to the claim procedures in Section 10.7(B), shall not be overturned
unless determined to be arbitrary and capricious by a court of competent
jurisdiction.

            (E) To advise or assist Participants regarding any rights, benefits
or elections available under the Plan.

                                       36

<PAGE>

      The Plan Administrator shall take such actions as are necessary to
establish and maintain the Plan as a retirement program which is at all times in
full and timely compliance with any law or regulation having pertinence to this
Plan.

      The Plan Administrator shall have all reasonable discretionary powers
necessary or appropriate to accomplish its duties as Plan Administrator. The
Plan Administrator shall use that degree of care, skill, prudence and diligence
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of a similar situation.

      10.3 Removal of Committee Members

      Any member of the Committee may be removed with or without cause by the
Board of Directors through delivery to him of written notice of removal, to take
effect at a date specified therein.

      10.4 Appointment of Successor Committee Member

      In the event the Committee has fewer than three members, the Board of
Directors shall promptly designate one or more successor Committee members who
must signify acceptance of this position in writing. In the event no Committee
is appointed, the Employer shall function as the Plan Administrator until a new
Plan Administrator has been appointed and has accepted such appointment.

      10.5 Plan Administration -- Miscellaneous

            (A) Filing a claim for Benefits. A Participant or Beneficiary shall
notify the Plan Administrator of a claim for benefits under the Plan. Such
request may be in any form adequate to give reasonable notice to the Plan
Administrator and shall set forth the basis of such claim. The claim shall also
authorize the Plan Administrator to conduct such examinations as may be
necessary to determine the validity of the claim and to take such steps as may
be necessary to facilitate the payment of any benefits to which the Participant
or Beneficiary may be entitled under the Plan.

            (B) Claims Procedures.

                  (1) The Plan Administrator will endeavor to administer the
      Plan fairly and consistently and to pay all benefits to which Participants
      or Beneficiaries are properly entitled. However, failure to execute any
      forms required or to furnish information requested by the Plan
      Administrator within a reasonable period of time may result in delayed
      benefit payments. All claims for unpaid benefits should be made in writing
      to the Plan Administrator. The Plan Administrator may request additional
      information necessary to consider the claim further. If a claim is wholly
      or partially denied, the Plan Administrator will notify the claimant of
      the adverse decision within a reasonable period of time, but not later
      than 90 days after receiving the claim, unless the Plan Administrator
      determines that special circumstances require an extension. In such case,
      a written extension notice shall be furnished before the end of the
      initial 90-day period. The extension cannot exceed 90 days. The extension
      notice shall indicate the special circumstances requiring an extension of
      time and the date by which the Plan

                                       37

<PAGE>

      Administrator expects to render the decision. The claim determination time
      frames begin when a claim is filed, without regard to whether all the
      information necessary to make a claim determination accompanies the
      filing. Any notice of denial shall include:

                  (i) The specific reason or reasons for denial with reference
      to those specific Plan provisions on which the denial is based;

                  (ii) A description of any additional material or information
      necessary to perfect the claim and an explanation of why that material or
      information is necessary; and

                  (iii) A description of the Plan's appeal procedures and time
      frames, including a statement of the claimant's right to bring a civil
      action under ERISA following an adverse decision on appeal.

                  (2) A claimant, or a claimant's authorized representative, may
      appeal a denied claim within 60 days after receiving the Plan
      Administrator's notice of denial. A claimant has the right to:

                  (i) Submit to the Plan Administrator, for review, written
      comments, documents, records and other information relating to the claim;

                  (ii) Request, free of charge, reasonable access to, and copies
      of, all documents, records and other information relevant to the
      claimant's claim; and

                  (iii) A review on appeal that takes into account all comments,
      documents, records, and other information submitted by the claimant,
      without regard to whether such information was submitted or considered in
      the initial claim decision.

                  (3) The Plan Administrator will make a full and fair review of
      the appeal and may require additional documents as it deems necessary in
      making such a review. A final decision on review shall be made within a
      reasonable period of time, but not later than 60 days following receipt of
      the written request for review, unless the Plan Administrator determines
      that special circumstances require an extension. In such case, a written
      extension notice will be sent to the claimant before the end of the
      initial 60-day period. The extension notice shall indicate that the
      special circumstances and the date by which the Plan Administrator expects
      to render the appeal decision. The extension cannot exceed a period of 60
      days. The appeal time frames begin when an appeal is filed, without regard
      to whether all the information necessary to make an appeal decision
      accompanies the filing. If an extension necessary because the claimant
      failed to submit necessary information, the days from the date the Plan
      Administrator sends the extension notice until the claimant responds to
      the request for additional information are not counted as part of the
      appeal determination period. The Plan Administrator's notice of denial on
      appeal shall include:

                  (i) The specific reason or reasons for denial with reference
      to those Plan provisions on which the denial is based; and

                                       38

<PAGE>

                  (ii) A statement that the claimant is entitled to receive,
      upon request and free of charge, reasonable access to, and copies of all
      documents, records, and other information relevant to the claimant's
      claim.

            (C) Governing Law. To the extent not preempted by ERISA, the Plan
shall be construed, regulated and administered under the laws of the State of
Illinois.

            (D) Masculine and Feminine, Singular and Plural. In construing the
text of this Plan, the masculine shall include the feminine and the singular
shall include the plural, and the plural the singular wherever the context shall
plainly so require.

            (E) Reference to Laws. Any reference herein to any section of the
federal Internal Revenue Code, ERISA or any other statute or law shall be deemed
to include any successor statute or law of similar import.

            (F) Non-Assignment. Except as required by any applicable law, no
benefit under the Plan shall in any manner be anticipated, assigned, alienated,
subject to garnishment, levy, execution or other legal or equitable process, or
otherwise subject to the claims of creditors, and any attempt to do so shall be
void. However, payment shall be made in accordance with the provisions of any
judgment, decree, or order which:

                  (1) creates for, or assigns to, a spouse, former spouse, child
      or other dependent of a Participant the right to receive all or a portion
      of the Participant's benefits under the Plan for the purpose of providing
      child support, alimony payments or marital property rights to that spouse,
      child or dependent,

                  (2) is made pursuant to a State domestic relations law,

                  (3) does not require the Plan to provide any type of benefit,
      or any option, not otherwise provided under the Plan, and

                  (4) otherwise meets the requirements of Section 206(d) of
      ERISA, as amended, as a "qualified domestic relations order," as
      determined by the Plan Administrator.

            The amount payable to an alternate payee under a qualified domestic
relations order shall be paid to the alternate payee in a single lump sum as
soon as practicable after the order has been determined to be qualified by the
Plan Administrator unless the qualified domestic relations order specifically
provides otherwise.

            (G) Small Benefits. If the Actuarial Equivalent of the Vesting
Percentage of the Participant's Pension under the Plan is $1,000 or less, such
Pension shall be distributed without the Participant's consent (or his
Spouse's/Beneficiary's consent, if applicable) in the form of a lump sum cash
distribution. For purposes of determining such Actuarial Equivalent amount, it
shall be assumed that the benefit commencement date is the Participant's Normal
Retirement Date.

                                       39

<PAGE>

            The lump sum payment shall be made as soon as administratively
practicable following the Participant's termination of employment or death, but
in any event prior to the date his Pension payments would have otherwise
commenced. In the event a Participant is not entitled to any Pension upon his
termination of employment, he shall be deemed cashed-out under the provisions of
this paragraph (G) as of the date he terminated service. However, if a
Participant described in the preceding sentence is subsequently restored to
service, the provisions of Section 6.10 shall apply to him without regard to
such sentence.

            (H) Conditions of Employment Not Affected by Plan. The establishment
of the Plan shall not confer any legal rights upon any Associate or other person
for a continuation of employment, nor shall it interfere with the rights of the
Employer or an Affiliated Employer to discharge any Associate and to treat him
without regard to the effect which that treatment might have upon him as a
Participant or potential Participant of the Plan. Participation in the Plan
shall not grant any Participant the right to be retained in the service of the
Employer or an Affiliated Employer or any other rights other than those to which
he is entitled under relevant law or regulations.

            (I) Clerical Error. If any fact pertaining to eligibility for or
amount of benefits payable under the Plan to a Participant or other payee has
been misstated, or in the event of clerical error, the benefits will be adjusted
by the Plan Administrator on the basis of the correct facts in a manner
precluding individual selection.

            (J) Divestment of Benefits for Cause Precluded. In no event may a
Participant be divested for cause of Pension or other benefits which he is
eligible to receive.

            (K) Advisors and Counsel. The Employer, or the Committee acting
through the Employer, may employ one or more persons to render advice with
respect to any duty or responsibility it may have including, but not limited to,
consultants, actuaries, financial advisors, accountants and attorneys.

            (L) Incompetency. If the Committee receives evidence satisfactory to
it that a Participant or his Beneficiary to whom an amount is distributable
under this Plan is legally incompetent to receive such amount and give valid
receipt therefore, the Committee may cause payment of such amount to be made to
the guardian or other legal representative of such Participant or his
Beneficiary, or in the absence of a legal guardian or other legal
representative, to such other person or institution who is then maintaining and
has custody of such Participant or his Beneficiary. Any payments made shall be a
complete discharge of liabilities of the Plan for that benefit.

            (M) Erroneous Payments. In the event that a Participant (or his
Beneficiary) receives a distribution under this Plan in excess of the amount, if
any, to which he is entitled, by reason of a calculation error or otherwise, the
Plan Administrator, in its sole and absolute discretion, may adjust future
benefit payments to the Participant (or his Beneficiary) to the extent necessary
to recoup the amount which the Participant (or his Beneficiary) received which
was in excess of the amount to which he was entitled under the term of the Plan.
If the Plan Administrator determines, in its sole and absolute discretion, that
it is not feasible or desirable to adjust future benefit payments to the
Participant, the Plan Administrator may require the

                                       40

<PAGE>

Participant (or his Beneficiary) to repay to the Plan the amount which is in
excess of the amount to which the Participant (or his Beneficiary) is entitled
under the terms of the Plan. All amounts received by the Participant (or his
Beneficiary) under the Plan shall be deemed to be paid subject to these
conditions. The determination of the Plan Administrator made pursuant to this
Section 10.7(M) shall be final, conclusive and binding on all parties, subject
to the claims procedures under Section 10.7(B), and shall not be overturned
unless such determinations are arbitrary and capricious.

            (N) Headings. The headings of the Plan have been inserted for
convenience of reference only and are to be ignored in the construction of the
Plan.

            (O) Information. Before any benefit shall be payable by the Plan,
each Participant, Spouse, Beneficiary or other person entitled to a benefit
shall file with the Committee all the information that the Committee shall
require to establish such persons rights and benefits under the Plan.

            (P) Written Elections. Any elections, notifications or designations
made by a Participant or any other individual pursuant to the provisions of the
Plan shall be made in writing and filed with the Committee in a time and manner
determined by the Committee under rules uniformly applicable to all persons
similarly situated. The Committee reserves the right to change from time to time
the time and manner for making notifications, elections or designations by such
persons under the Plan if it determines after due deliberation that such action
is justified in that it improves the administration of the Plan. In the event of
a conflict between the provisions for making an election, notification or
designation set forth in the Plan and such new administrative procedures, those
new administrative procedures shall prevail.

            (Q) Vested Rights. No person shall have any vested rights under the
Plan and Trust except to the extent that such rights may accrue to him as
provided under the Plan. Furthermore, any person with vested rights under the
Plan and Trust shall look solely to the Plan and Trust and the assets thereunder
for satisfaction of such vested rights.

            (R) Plan Provisions Controlling. In the event of any conflict
between the provisions of the Plan and the provisions of a summary or other
description of the Plan or the terms of any agreement or instrument related to
the Plan, the provisions of the Plan shall control.

            (S) Interpretation of the Plan. It is the intent of the Employer
that the Plan and Trust qualify under Sections 401(a) and 501(a) of the Code,
respectively, and meet all applicable requirements of ERISA. Accordingly, the
Plan and Trust shall be construed and interpreted in such manner as to give
effect to this intent.

            (T) Limitation of Liability. The Employer, the Board of Directors of
the Employer or any Affiliated Employer, the members of the Committee, and any
of their officers, Associates, representatives, consultants, counsel, or agents
shall not incur any liability individually or on behalf of any other individuals
or on behalf of the Employer for any act or failure to act, made in good faith
in relation to the Plan or the Funds of the Plan. However, this limitation shall
not act to relieve any such individual or the Employer from a responsibility or
liability for any fiduciary responsibility, obligation or duty under Part 4,
Title I of ERISA.

                                       41

<PAGE>

            (U) Indemnification. The Employer, members of the Committee, the
Board of Directors of the Employer or any Affiliated Employer, and their
officers, Associates, representatives, consultants, counsel, and agents shall be
indemnified against any and all liabilities arising by reason of any act, or
failure to act, in relation to the Plan or the Fund of the Plan, including,
without limitation, expenses reasonably incurred in the defense of any claim
relating to the Plan or the Fund of the Plan, and amounts paid in any compromise
or settlement relating to the Plan or the Fund of the Plan, except for such
liability, losses or costs which result from:

                  (1) their actions or failures to act made in bad faith;

                  (2) their own gross negligence or willful conduct;

                  (3) any settlement, without the Employer's prior approval, of
      an action, suit, or proceeding; or

                  (4) suits or actions at law or in equity advanced by the
      Employer against such party.

            (V) Authority to Act. The Employer and the Committee may authorize
one or more of its members, Associates, representatives, consultants, counsel,
or agents to execute on its behalf instructions or directions to any interested
party, and any such interested party may rely thereupon and the information
contained therein.

                                       42

<PAGE>

                                   SECTION 11

                        AMENDMENT AND TERMINATION OF PLAN

      11.1 Amendment -- General

      The Employer, by action of its Board of Directors, or the Committee, in
either case, at a meeting held either in person or by telephone or other
electronic means, or by unanimous written consent in lieu of a meeting, reserves
the right at any time and from time to time, and retroactively if deemed
necessary or appropriate, to amend in whole or in part any or all of the
provisions of the Plan. However, no amendment shall make it possible for any
part of the Fund of the Plan to be used for, or diverted to, purposes other than
for the exclusive benefit of persons entitled to benefits under the Plan, before
the satisfaction of all liabilities with respect to them. No amendment shall be
made which has the effect of decreasing the Protected Benefit of any Participant
or of reducing the nonforfeitable percentage of the Accrued Benefit of a
Participant below the nonforfeitable percentage computed under the Plan as in
effect on the date on which the amendment is adopted or, if later, the date on
which the amendment becomes effective.

      11.2 Amendment -- Merger or Consolidation of Plan

      This Plan may be amended to provide for the merger or consolidation of the
Plan with another retirement plan, or for the transfer of assets and liabilities
hereunder to another retirement plan. Such an event, however, may not occur
unless each Participant would receive a retirement benefit under such other
retirement plan after the merger, consolidation, or transfer (assuming that plan
had then terminated) which is at least as great as the benefit he would have
received under this Plan immediately prior to the merger, consolidation, or
transfer (assuming this Plan had then terminated).

      11.3 Termination of Plan

      The Employer, by action of its Board of Directors, taken at a meeting held
either in person or by telephone or other electronic means, or by unanimous
written consent in lieu of a meeting, may terminate the Plan for any reason at
any time. In case of termination of the Plan, the rights of Participants to
their Protected Benefits as of the date of the termination, to the extent then
funded or protected by law, if greater, shall be nonforfeitable. The Funds of
the Plan shall be used for the exclusive benefit of persons entitled to benefits
under the Plan as of the date of termination, except as provided in Section 9.2.
However, any funds not required to satisfy all liabilities of the Plan for
benefits because of erroneous actuarial computation shall be returned to the
Employer. The Plan Administrator shall determine on the basis of actuarial
valuation the share of the Fund of the Plan allocable to each person entitled to
benefits under the Plan in accordance with Section 4044 of ERISA, or
corresponding provision of any applicable law in effect at the time. In the
event of a partial termination of the Plan, the provisions of this Section shall
be applicable to the Participants affected by that partial termination.

                                       43

<PAGE>

                                   SECTION 12

           RESTRICTION OF BENEFITS UPON EARLY TERMINATION OF THE PLAN

      12.1 Limitation Concerning Highly Compensated Employees or Highly
Compensated Former Employees

            (A) The provisions of this Section shall apply (i) in the event the
Plan is terminated, to any Participant who is a Highly Compensated Employee or
Former Highly Compensated Employee of the Employer or an Affiliated Employer and
(ii) in any other event, to any Participant who is one of the 25 Highly
Compensated Employees of former Highly Compensated Employees of the Employer or
Affiliated Employer with the greatest compensation in any Plan Year. The amount
of the annual payments to any one of the Participants to whom this Section
applies shall not be greater than an amount equal to the annual payments that
would be made on behalf of the Participant during the year under a single life
annuity that is Actuarially Equivalent to the sum of the Participant's Accrued
Benefit and the Participant's other benefits under the Plan.

            (B) If, (i) after payment of Pension or other benefits to any one of
the Participants to whom this Section applies, the value of Plan assets equals
or exceeds 110% of the value of current liabilities (as that term is defined in
Section 412(l)(7) of the Code) of the Plan, (ii) the value of the Accrued
Benefit and other benefits of any one of the Participants to whom this Section
applies is less than 1% of the value of current liabilities of the Plan, or
(iii) the value of the benefits payable to a Participant to whom this Section
applies does not exceed the amount described in Section 411(a)(11)(A) of the
Code, the provisions of paragraph (A) above will not be applicable to the
payment of benefits to such Participant.

            (C) If any Participant to whom this Section applies elects to
receive a lump sum payment in lieu of his Pension and the provisions of
paragraph (B) above are not met with respect to such Participant, the
Participant shall be entitled to receive his benefit in full provided he shall
agree to repay to the Plan any portion of the lump sum payment which would be
restricted by operation of the provisions of paragraph (A), and shall provide
adequate security to guarantee that repayment.

            (D) Notwithstanding paragraph (A) of this Section, in the event the
Plan is terminated, the restriction of this Section shall not be applicable if
the benefit payable to any Highly Compensated Employee and any former Highly
Compensated Employee is limited to a benefit that is nondiscriminatory under
Section 401(a)(4) of the Code.

            (E) If it should subsequently be determined by statute, court
decision acquiesced in by the Commissioner of Internal Revenue, or ruling by the
Commissioner of Internal Revenue, that the provisions of this Section are no
longer necessary to qualify the Plan under the Code, this Section shall be
ineffective without the necessity of further amendment to the Plan.

                                       44

<PAGE>

                                   SECTION 13

                       SPECIAL PENSION BENEFITS PROVISIONS

      13.1 Statutory Maximum Pension Benefits

      The statutory maximum amount of yearly Pension payable during any Plan
Year, which shall be the limitation year for the purpose attributable to the
Employer Accrued Benefit shall be determined in accordance with the further
provisions of this Section 13.1.

            (A) Basic Limitation

            Regardless of any other provisions of this Plan, other than
paragraphs (B)(4), (C) and (D) below, the amount of yearly Pension payable
hereunder for any Limitation Year shall not exceed the lesser of (1) the Defined
Benefit Dollar Limitation or (2) 100% of the Participant's average annual
remuneration determined with reference to the three consecutive limitation years
of Service which he received the highest aggregate remuneration from the
Employer and all Affiliated Employers (referred to hereinafter in this Section
13.1 as "highest average compensation").

            The "Defined Benefit Dollar Limitation" is $160,000, as adjusted,
effective January 1 of each year, under Section 415(d) of the Code in such
manner as the Secretary of the Treasury shall prescribe, and payable in the form
of a straight life annuity. A limitation as adjusted under Section 415(d) of the
Code will apply to limitation years ending with or within the calendar year for
which the adjustment applies.

            (B) Secondary Limitations

            The basic limitation in paragraph (A) shall be reduced or increased,
as applicable, for the following situations if they are applicable:

                  (1) Form of Pension other than a life annuity.

                  If the Pension is payable in a form other than a single life
      annuity, or a Qualified Joint and Survivor Annuity, the basic limitation
      in paragraph (A) shall be adjusted to its actuarial equivalent based upon
      the age at which such Pension commences and an interest rate assumption of
      the greater of the rate of interest specified in Supplement A - Section
      A.1.(a) or 5%.

                  (2) Less Than 10 Years of Service

                  If the Participant has less than 10 full years of Service, the
      basic limitations in paragraph (A)(2) shall be reduced by multiplying such
      limitation by a fraction, the numerator of which is the Participant's
      years of Service (computed to the nearest full month) and the denominator
      of which is 10. In addition, if the Participant has not been a Participant
      of the Plan for at least 10 years, the maximum annual Pension in paragraph
      (A)(1) above shall be multiplied by the ratio which the number of years of
      his participation in the Plan bears to 10. In both cases, these limits
      under this

                                       45

<PAGE>

      Section 13.1(B)(2) shall not be reduced to an amount less than 1/10 of the
      applicable limitation in Section 13.1(A).

                  (3) Commencement of Pension

                  If the Pension of a Participant begins prior to age 62, the
      Defined Benefit Dollar Limitation applicable to the Participant at such
      earlier age is an annual benefit payable in the form of a straight life
      annuity beginning at the earlier age that is the actuarial equivalent of
      the Defined Benefit Dollar Limitation applicable to the Participant at age
      62 (adjusted under Section 13.1(B)(2), if required). The Defined Benefit
      Dollar Limitation applicable at an age prior to age 62 is determined as
      the lesser of (i) the actuarial equivalent (at such age) of the Defined
      Benefit Dollar Limitation computed using the interest rate and Group
      Annuity Mortality Table specified in Supplement A - Section A.1. and (ii)
      the actuarial equivalent (at such age) of the Defined Benefit Dollar
      Limitation computed using a 5 percent interest rate and the Group Annuity
      Mortality Table as specified in Supplement A - Section A.1.(b).

                  (4) Commencement of Pension After Social Security Retirement
      Age

                  If the Pension benefit of a Participant begins after the
      Participant attains age 65, the Defined Benefit Dollar Limitation
      applicable to the Participant at the later age is the annual benefit
      payable in the form of a straight life annuity beginning at the later age
      that is actuarially equivalent to the Defined Benefit Dollar Limitation
      applicable to the Participant at age 65 (adjusted under Section
      13.1(B)(2), if required). The actuarial equivalent of the Defined Benefit
      Dollar Limitation applicable at an age after age 65 is determined as (i)
      the lesser of the actuarial equivalent (at such age) of the Defined
      Benefit Dollar Limitation computed using the interest rate and Group
      Annuity Mortality Table specified in Supplement A - Section A.1. and (ii)
      the actuarial equivalent (at such age) of the Defined Benefit Dollar
      Limitation computed using a 5 percent interest rate assumption and the
      applicable Group Annuity Mortality Table specified in Supplement A -
      Section A.1.(b).

                  (5) Special Provisions Effective under the Small Business Job
      Protection Act of 1996.

                        (I) This Section 13.1(B)(5) is effective on January 1,
            2000. As provided in the Small Business Job Protection Act of 1996,
            for purposes of this Section 13.1, a Participant's annual benefit
            provided under this Plan, and compliance with the benefit
            limitations under Section 415 of the Code, shall be determined in
            accordance with Revenue Ruling 98-1, 1998-1 C.B. 249, and
            specifically Q&A-7 and Q&A-8 thereof. The annual benefit for a
            Participant who is married shall include the benefit payable as a
            Qualified Joint and Survivor Annuity under Section 6.1.

                        (II) For purposes of applying Section 415(b) of the Code
            to an optional form of benefit under Sections 6.3, 6.7, and 6.9 of
            the Plan that is not subject to Section 417(e)(3) of the Code, the
            determination as to whether such a

                                       46

<PAGE>

            benefit satisfies the limitations under Section 415(b) of the Code
            is made by comparing the equivalent annual benefit determined in
            Step 1 below with the lesser of the age-adjusted dollar limit
            determined in Step 2 below and the limitations under Section 415(b)
            of the Code described in Step 3 below:

                        Step 1: Under Section 415(b)(2)(B) of the Code,
            determine the annual benefit in the form of a straight life annuity
            commencing at the same age that is actuarially equivalent to the
            retirement benefit. In general, Sections 415(b)(2)(E)(i) and (v) of
            the Code require that the equivalent annual benefit be the greater
            of the equivalent annual benefit computed using the interest rate
            and mortality table, specified in Supplement A - Section A.1 of the
            Plan for actuarial equivalence for the particular form of benefit
            payable (Plan rate and Plan mortality table, or Plan tabular factor,
            respectively) and the equivalent annual benefit computed using a 5
            percent interest rate assumption and the applicable mortality table.
            This step does not apply to a benefit that is not required to be
            converted to a straight life annuity pursuant to Section
            415(b)(2)(B) of the Code (for example, a qualified joint and
            survivor annuity).

                        Step 2: Under Section 415(b)(2)(C) or (D) of the Code,
            determine the dollar limitation under Section 415(b) of the Code
            that applies at the age the benefit is payable (age-adjusted dollar
            limit). The age-adjusted dollar limit is the annual benefit that is
            actuarially equivalent to an annual benefit equal to dollar
            limitation under Section 415(b) of the Code payable at the
            Participant's social security retirement age (as such term is
            defined in Section 13.1(B)(3)).

                        If the age at which the benefit is payable is 62 or
            greater, and less than the Participant's social security retirement
            age, the age-adjusted dollar limit is determined by reducing the
            dollar limitation under Section 415(b) of the Code at the
            Participant's social security retirement age using adjustment
            factors that are consistent with the factors used to reduce old-age
            insurance benefits under the Social Security Act. Pursuant to Q&A-5
            of Notice 87-21, 1987-1 C.B. 458, the dollar limitation under
            Section 415(b) of the Code at the Participant's Social Security
            Retirement Age is reduced by 5/9 of 1 percent for each of the first
            36 months by which benefits commence before the month in which the
            Participant's social security retirement age is attained and by 5/12
            of 1 percent for each additional month.

                        If the age at which the benefit is payable is less than
            62, the age-adjusted dollar limit is determined by reducing the
            age-adjusted dollar limit at age 62 on an actuarially equivalent
            basis. In general, Sections 415(b)(2)(E)(i) and (v) of the Code
            require that the reduced age-adjusted dollar limit be the lesser of
            the equivalent amount computed using the plan rate and plan
            mortality table (or plan tabular factor) used for actuarial
            equivalence for early retirement benefits under Supplement A -
            Section A.1 and the amount computed using 5 percent interest and the
            applicable mortality table under Revenue Ruling 95-6, 1995-1, C.B.
            80, (used to the extent described in Q&A-6 of Revenue Ruling 98-1,
            1998-1 C.B. 249, which provides that for purposes of adjusting any
            limitation under

                                       47

<PAGE>

            Sections 415(b)(2)(C) or (D) of the Code that, to the extent a
            forfeiture does not occur upon death, the mortality decrement may be
            ignored prior to age 62 and must be ignored after social security
            retirement age).

                        If the age at which the benefit is payable is greater
            than the Participant's social security retirement age, the
            age-adjusted dollar limit is determined by increasing the dollar
            limitation under Section 415(b) of the Code at the Participant's
            social security retirement age on an actuarially equivalent basis.
            In general, Sections 415(b)(2)(E)(i) and (v) of the Code require
            that the increased age-adjusted dollar limit be the lesser of the
            equivalent amount computed using the Plan rate and the Plan
            mortality table (or Plan tabular factor) used for actuarial
            equivalence for late retirement benefits under Supplement A -
            Section A.1 and the equivalent amount computed using 5 percent
            interest and the applicable mortality table (used to the extent
            described in Q&A-6 of Revenue Ruling 98-1, 1998-1 C.B. 249, as
            described in the prior paragraph).

                        Step 3: Determine the Participant's compensation
            limitation under Section 415(b) of the Code. This limitation is
            equal to the Participant's compensation averaged over the
            consecutive three-year period producing the highest average, as
            provided in Section 415(b)(3) of the Code.

                        The Plan does not satisfy the limitations under Section
            415(b) of the Code unless the equivalent annual benefit determined
            in Step 1 above is not greater than the lesser of the age-adjusted
            dollar limit determined in Step 2 above and the compensation
            limitation under Section 415(b) of the Code determined in Step 3
            above.

                        (III) For purposes of applying Section 415(b)(2)(B) of
            the Code to a benefit that is payable in a form subject to Section
            417(e)(3) of the Code, the determination of the equivalent annual
            benefit is the same as in Step 1 of subsection (2) above, except
            that, under Section 415(b)(2)(E)(ii) of the Code, the applicable
            interest rate under Q&A-4 of Revenue Ruling 98-1, 1998-1 C.B. 249,
            (i.e., "GATT interest rates") is substituted for the 5 percent
            interest rate under Section 415(b)(2)(E)(i) of the Code. Thus, the
            equivalent annual benefit must be the greater of the equivalent
            annual benefit computed using the Plan rate and Plan mortality table
            (or Plan tabular factor) under Supplement A - Section A.1 and the
            equivalent annual benefit computed using the applicable interest
            rate and the applicable mortality table").

                        (IV) Notwithstanding any other Plan provisions to the
            contrary, any reference to the mortality table under Revenue Ruling
            95-6, 1995-1 C.B. 80, shall be construed as a reference to the
            mortality table prescribed in Revenue Ruling 2001-62, 2001-2 C.B.
            632, for all purposes under the Plan. For any distribution with an
            Annuity Starting Date on or after the effective date of this
            subsection and before the adoption date of this subsection, if
            application of this subsection as of the Annuity Starting Date would
            have caused a reduction in the amount of any distribution, such
            reduction is not reflected in any payment made

                                       48

<PAGE>

            before the adoption date of this subsection. However, the amount of
            any such reduction that is required under Code Section 415(b)(2)(B)
            must be reflected actuarially over any remaining payments to the
            Participant.

                  (6) Notwithstanding the above, for limitation years beginning
      before January 1, 2002, the maximum permissible benefit will not exceed
      the Defined Benefit Dollar Limitation. In the case of a Participant who
      has fewer than 10 years of Service with the Employer, the Defined Benefit
      Dollar Limitation shall be multiplied by a fraction, (i) the numerator of
      which is the number of years (or part thereof) of Service and (ii) the
      denominator of which is 10.

            (C) Minimum Pension

            If the Participant's yearly Pension is not more than $10,000, as
adjusted in accordance with paragraph (B)(2) above, the Participant may receive
such $10,000 without regard to the other secondary limitations, provided the
Participant did not at any time participate in a defined contribution plan
maintained by the Employer.

            (D) Cost-of-Living Limitation Adjustment

            Each January 1, the $90,000 limitation of paragraph (A) above will
be automatically adjusted to the new dollar limitation determined by the
Commissioner of Internal Revenue for that calendar year. The new limitation will
apply to limitation years in which the dollar limitation is changed.

            (E) Participation in More Than One Defined Benefit Plan

            If the Participant participated in more than one defined benefit
plan maintained by the Employer or an Affiliated Employer regardless of whether
any such plans are terminated, the statutory maximum retirement benefit shall be
determined as if there were just one defined benefit plan, but the retirement
income so determined will apply on a pro rata basis between, or among, such
plans.

            (F) Remuneration

            For purposes of this Section 13.1 and the following Section 13.2, a
Participant's remuneration means his earned income, wages, salaries, and fees
for professional services, and other amounts received for personal services
actually rendered in the course of employment with the employer maintaining the
plan determined for purposes of Section 13.1, including, but not limited to,
commissions paid to salesmen, compensation for services on the basis of a
percentage of profits, commissions paid on insurance premiums, tips and bonuses
(except as excluded below) and also including, in accordance with Section
415(c)(3) of the Code, any elective deferrals (as defined in Section 402(g)(3)
of the Code) and any amount which is contributed by the employer at the election
of the employee and which is not includible in the gross income of the employee
by reason of Sections 125, 132(f)(4), or 457 of the Code. However, remuneration
shall exclude the following:

                                       49

<PAGE>

                  (1) Employer contributions under a simplified Associate
      pension plan to the extent such contributions are deductible by the
      Associate, or any distributions from a plan of deferred compensation;

                  (2) Amounts realized from the exercise of a nonqualified stock
      option, or when restricted stock (or property) held by the Associate
      either becomes freely transferable or is no longer subject to a
      substantial risk of forfeiture;

                  (3) Amounts realized from the sale, exchange, or other
      disposition of stock acquired under a qualified stock option;

                  (4) Or other contributions made by the employer (whether or
      not under a salary reduction agreement) towards the purchase of an annuity
      described in Section 403(b) of the Code (whether or not the amounts are
      actually excludable from the gross income of the Associate).

                  Remuneration for any limitation year is the remuneration
      actually paid or includible in gross income during such year.

            (G) Discrepancy With Code

            The limitations set forth in this Section 13.1 are intended to
comply with the provisions of Section 415 of the Code and any regulations issued
pursuant thereto, so that the maximum Pension shall be exactly equal to the
maximum amount allowed under said Section 415, and any regulations issued
pursuant thereto. Should there be any discrepancy between the provisions of this
Section 13.1 and those of said Section 415 and any regulations issued pursuant
thereto, such discrepancy shall be resolved by giving full effect to the
provisions of said Section 415 and any regulations issued pursuant thereto.

      13.2 Top-Heavy Provisions

            (A) Top-heavy Plan Status. This Plan will be a Top-Heavy Plan as of
a Determination Date if:

                  (1) this Plan is not a Plan that is required to be aggregated
      and the ratio of the Present Value of Accrued Benefits of Participants who
      are Key Employees to the Present Value of the Accrued Benefits of all
      Participants in the Plan exceeds 6/10; or

                  (2) this Plan is part of a Required Aggregation Group and the
      ratio of the Present Value of Accrued Benefits of Participants who are Key
      Employees to the Present Value of Accrued Benefits of all Participants in
      the Required Aggregation Group exceeds 6/10.

            Notwithstanding anything in (A)(2) to the contrary, the
determination of whether this Plan is a Top-Heavy Plan of a Determination Date
shall be made after aggregating all Plans in the Required Aggregation Group, and
after aggregating any other Plans which are in the Permissive Aggregation Group,
if such permissive aggregation thereby eliminates the Top-

                                       50

<PAGE>

Heavy status of the Required Aggregation Group. Regardless of the results of any
aggregation, a Plan that was not part of the Required Aggregation Group will not
be top-heavy.

            (B) Key Employee. The term Key Employee means any Associate or
former Associate in this Plan who, at any time during the Plan Year ending on
the Determination Date, was:

                  (1) An officer of the Employer having annual remuneration
      greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for
      Plan Years beginning after December 31, 2002),

                  (2) A "5-percent owner" (as defined in Section 416(i) of the
      Code) of the Employer, or

                  (3) A "1-percent owner" of the Employer having an annual
      remuneration of more than $150,000.

                  The term shall also include beneficiaries of Key Employees.
      For purposes of this definition, ownership percentages shall be determined
      without regard to aggregation of entities under common control within the
      meaning of Sections 414(b), (c) and (m) of the Code. However, in
      determining an individual's remuneration, remuneration from the Employer
      and each Affiliated Employer shall be taken into account. The
      determination of who is a Key Employee will be made in accordance with
      Section 416(i)(1) of the Code and the applicable regulations and other
      guidance of general applicability issued thereunder.

            (C) Non-Key Employee. A Non-Key Employee means any Associate who is
not a Key Employee. Any Associate who previously was a Key Employee and is now a
Non-Key Employee will be excluded entirely from the calculation done to
determine Top-heavy Status.

            (D) Employer. For purposes of Section 13.2 the Employer is the
Employer who adopts this Plan, and any Affiliated Employer.

            (E) Accrued Benefit. The Accrued Benefit is the yearly Pension
commencing on the Participant's Normal Retirement Date determined in accordance
with Section 4 as if the Participant's Termination of Employment had occurred as
of the most recent valuation date prior to the Determination Date. For purposes
of Section 13.2 the Accrued Benefit will not include the accrued benefit
attributable to any Associate who has not performed an Hour of Service during
the five-year period ending on the Determination Date, but will include any
distribution made to a Key Employee or Non-Key Employee during the five-year
period ending on the Determination Date.

            (F) Present Value. Present Value shall be based on the actuarial
assumptions specified in Supplement A - Section A.1. If this Plan is part of a
Required or Permissive Aggregation Group, the mortality and interest assumptions
shall be the same for all plans within the Group. In determining Present Value,
proportional subsidies shall not be taken into account, but nonproportional
subsidies shall be taken into account. The Present Value will be determined

                                       51

<PAGE>

as of the valuation date occurring during the twelve-month period ending on the
Determination Date. The valuation date is the date used in computing Plan costs
for minimum funding.

            (G) Required Aggregation Group. The term Required Aggregation Group
means all of the plans of the Employer which cover a Key Employee during the
five-year period ending on the relevant Determination Date, or those plans which
during said five-year period were aggregated, so that a plan which covers a Key
Employee would satisfy the requirements of Sections 401(a)(4) or 410 of the
Code.

            (H) Permissive Aggregation Group. The term Permissive Aggregation
Group means all of the plans of the Employer which are included in the Required
Aggregation Group plus any plans of the Employer which provide comparable
benefits to the benefits provided by plans in the Required Aggregation Group and
are not included in the Required Aggregation Group, but which satisfy the
requirements of Sections 401(a)(4) and 410 of the Code when considered together
with the Required Aggregation Group.

            (I) Determination Date. The term Determination Date means, with
respect to a Plan Year, the last day of the preceding Plan Year, or, in the case
of the first Plan Year of a plan, the last day of the first Plan Year.

            (J) Minimum Pension Benefit. The yearly amount of Pension as
described in Section 4.1 for a Participant who is a Non-Key Employee, shall not
be less than the Participant's average yearly remuneration, during the
Participant's five highest-paid consecutive calendar years, multiplied by the
lesser of (1) 2%, multiplied by the number of the Participant's years of Service
after December 31, 1983 in which this Plan is a Top-Heavy Plan, or (2) 20%. This
minimum amount is assumed to be payable on a single life annuity basis,
commencing on his Normal Retirement Date.

            If a Participant who is a Non-Key Employee is covered under this
Plan and a defined contribution plan maintained by the Employer, the yearly
amount of Pension, for such Participant, determined in the preceding paragraph
shall not be applicable to such Participant if the minimum contribution under
such defined contribution plan is equal to 5% of the Participant's remuneration.

            If the minimum Pension payable on a basis other than a single life
annuity or on a date other than Normal Retirement Date, it shall be adjusted to
be the actuarial equivalent of the single life annuity form payable at Normal
Retirement Date.

            In determining Years of Service with the Employer for purposes of
determining a Participant's minimum Pension benefit under this Section 13.2(J),
any Service with the Employer shall be disregarded to the extent that such
Service occurs during a Plan Year when the Plan benefits (within the meaning of
Section 410(b) of the Code) no Key Employee.

            (K) Minimum Vesting Percentage. Notwithstanding any other Vesting
Percentage provision of this Plan to the contrary unless it would produce a
greater Vesting Percentage, the Vesting Percentage that is applied to the
Participant's Accrued Benefit, on and after this Plan becomes a Top-Heavy Plan,
shall, in accordance with the further terms of this Plan, be as determined
below:

                                       52

<PAGE>

<TABLE>
<CAPTION>
      YEARS OF SERVICE                      PERCENTAGE
---------------------------                 ----------
<S>                                         <C>
If he has less than 2 years                     0%
If he has 2 years                              20%
If he has 3 years                              40%
If he has 4 years                              60%
If he has 5 years                             100%
</TABLE>

            (L) Determination of Present Values and Amounts. Notwithstanding any
other provisions of the Plan to the contrary, this Section 13.2(L) shall apply
for purposes of determining the Present Values of Accrued Benefits and the
amounts of account balances of Participants as of the Determination Date.

                  (1) The Present Values of Accrued Benefits and the amounts of
      account balances of a Participant as of the Determination Date shall be
      increased by the distributions made with respect to the Participant under
      the Plan and any plan aggregated with the Plan under Section 416(g)(2) of
      the Code during the 1-year period ending on the Determination Date. The
      preceding sentence shall also apply to distributions under a terminated
      plan which, had it not been terminated, would have been aggregated with
      the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a
      distribution made for a reason other than separation from service, death,
      or disability, this provision shall be applied by substituting "5-year
      period" for "1-year period."

                  (2) The Accrued Benefits and accounts of any individual who
      has not performed Service for the Employer during the 1-year period ending
      on the Determination Date shall not be taken into account.

      The Employer herewith causes this amended and restated Plan to be executed
by its duly authorized officers on this __________ day of ______________, 2005.

                                                 TRUE VALUE COMPANY

                                                 _______________________________

                                       53

<PAGE>

                                  SUPPLEMENT A

                              ACTUARIAL ASSUMPTIONS

A.1   Lump Sum Distributions

      For purposes of determining "Actuarially Equivalent" or "Actuarial
      Equivalent" lump sum distributions under the Plan, and for purposes of
      converting a Participant's Defined Lump Sum into a single life annuity
      pursuant to Section 4.3(A), the following actuarial assumptions are used:

      (a)   Rate of Interest: The rate in use during a Plan Year shall be the
            annual rate of interest on 30-year Treasury securities for the month
            of November immediately preceding such Plan Year as specified by the
            Commissioner for such month in the Internal Revenue Bulletin but not
            greater than 8.0%.

      (b)   Mortality: The mortality table prescribed by the Secretary of the
            Treasury in revenue rulings, notices, or other guidance pursuant to
            Section 807(d)(5)(A) of the Code that has been published in the
            Internal Revenue Bulletin as of the date such lump sum distribution
            is being determined. Notwithstanding any other Plan provisions to
            the contrary (with exception of Section 13.1(B)(5)(iv)), the
            applicable mortality table used for purposes of adjusting any
            benefit or limitation under Section 415(b)(2)(B), (C), or (D) of the
            Code and satisfying the requirements of Section 417(e) of the Code
            is the table prescribed in Revenue Ruling 2001-62, 2001-2 C.B. 632.
            For any distribution with an Annuity Starting Date on or after the
            effective date of this subsection and before the adoption date of
            this subsection, if application of this paragraph as of the Annuity
            Starting Date would have caused a reduction in the amount of any
            distribution, such reduction is not reflected in any payment made
            before the adoption date of this subsection. However, the amount of
            any such reduction that is required under Code Section 415(b)(2)(B)
            must be reflected actuarially over any remaining payments to the
            Participant.

A.2   Type of Annuity

      For purposes of determining "Actuarially Equivalent" or "Actuarial
      Equivalent" benefits under the Plan, the following factors shall be used
      in determining benefits that are actuarially equivalent to the normal
      single annuity for the life of the Participant form of benefit provided
      under the Plan (in no event will a factor exceed one):

      (a)   50% Qualified Joint and Survivor Annuity: 90%, plus (or minus) 0.4
            of 1% for each full year that the Participant is younger (or older)
            than the Participant's spouse; except that, if the Participant's age
            at the Annuity Starting Date is less than 55 years, "94%" shall be
            substituted for "90%." In no event will this factor exceed 100%.

      (b)   100% Qualified Joint and Survivor Annuity: 81%, plus (or minus) 0.7
            of 1% for each full year that the Participant is younger (or older)
            than the Participant's

                                      A-1

<PAGE>

            spouse; except that, if the Participant's age at the Annuity
            Starting Date is less than 55 years, "89%" shall be substituted for
            "81%." In no event will this factor exceed 100%.

      (c)   Life and 10-Year Certain Annuity: 94%; except that, if the
            Participant's age at the Annuity Starting Date is less than 55
            years, "98%" shall be substituted for "94%."

                                      A-2

<PAGE>

                                  SUPPLEMENT B

                    MERGER OF NORTHERN WHOLESALE HARDWARE CO.
                    RETIREMENT PLAN WITH AND INTO PRIOR PLAN

B.1   Merger

      Effective as of January 1, 1990, the Northern Wholesale Hardware Co.
      Retirement Plan ("Northern Plan") was amended, continued and merged with
      the Cotter & Company Pension Plan ("Prior Plan").

B.2   Participation

      On January 1, 1990, each former participant in the Northern Plan
      ("Northern Participant") became a Participant in the Prior Plan and will
      have benefits determined and paid in accordance with this Plan.

B.3   Preservation of Accrued Benefit

      Notwithstanding any provisions of the Plan to the contrary, in no event
      shall a Northern Participant's accrued benefit under the Prior Plan as in
      effect on January 1, 1990 be less than the accrued earned by such Northern
      Participant under the Northern Plan as at December 31, 1989.

B.4   Years of Service

      Each Northern Participant will be credited with the Years of Service
      before January 1, 1990 that such Northern Participant had earned under the
      Northern Plan as in effect on December 31, 1989 for participation, vesting
      and accrued benefit purposes.

B.5   Records

      The Committee shall maintain such records as it deems necessary and
      desirable to demonstrate the amount of each Northern Participant's
      benefits and Years of Service under Paragraphs B.3 and B.4 above pursuant
      to applicable Internal Revenue Service regulations.

B.6   Effective Date

      The effective date of this Supplement B is January 1, 1990.

                                      B-1

<PAGE>

                                  SUPPLEMENT C

                      SERVISTAR COAST TO COAST CORPORATION
                        RETIREMENT INCOME PLAN PROVISIONS

The following provisions from the SERVISTAR Plan are included herein (with
slight modification if appropriate) to assist the administration of this Plan as
it requires inclusion of the SERVISTAR Plan provisions or the calculation of the
Participant's Accrued Benefit under the SERVISTAR Plan:

Certain defined terms from the SERVISTAR Plan are referred to in this Supplement
C, but are not reproduced in the interest of conciseness. The terms - Accrued
Benefit, Code, Contingent Pensioner, Credited Interest, Employee, Employer,
Excess Benefit Plan, Long-Term Disability, Normal Retirement Date, Participant
Pension, Retirement Date, Termination of Employment - should not need further
defining and are intended to continue their meaning from the SERVISTAR Plan. The
term "Plan" was used in the SERVISTAR Plan to refer to itself, but will be used
herein to refer to this Plan. Any reference to "Plan" from the SERVISTAR Plan
document is changed herein to "SERVISTAR Plan" where appropriate. Any use of the
term "Plan Year" in Supplement C will refer to the SERVISTAR Plan Year (July 1
to June 30) unless otherwise indicated. The method used to recast SERVISTAR Plan
"Earnings" for this Plan is described in Plan Section 2.1(K). Vesting Percentage
as used herein is now defined in Section 2.1(NN) of the Plan.

SERVISTAR PLAN SECTION REFERENCES HAVE BEEN CHANGED TO SUPPLEMENT C SECTIONS IF
INCLUDED IN THIS SUPPLEMENT C, OTHERWISE SERVISTAR PLAN REFERENCES HAVE BEEN
MAINTAINED.

All SERVISTAR Plan service, credited service, earnings and cash balance credits
shall cease on January 2, 1998.

In the event of a conflict in the terms of the SERVISTAR Plan as included in
Supplement C and the SERVISTAR Plan itself, the terms of the SERVISTAR Plan
shall control.

C.1   Earnings

      Includes basic salary or wages paid to an Employee for services rendered
      to the Employer, determined prior to any pre-tax contributions under a
      "qualified cash or deferred arrangement" (as defined under Section 401(k)
      of the Code and its applicable regulations) under a "cafeteria plan" (as
      defined under Section 125 of the Code and its applicable regulations), or
      that are a "qualified transportation" fringe benefit (as defined under
      Section 132(f) of the Code), including executive bonuses, pay for which no
      duties are performed due to vacation pay, holiday pay, sick pay, and any
      other authorized policy pay, safe driver awards and perfect attendance
      awards (effective July 1, 1994), gain sharing (effective July 1, 1995) and
      overtime payments received from the Employer during each Plan Year,
      excluding Employer contributions to Social Security, contributions to this
      or through any other profit sharing or retirement plan or program, capital
      income compensation or the value of any other fringe benefits (including
      any

                                      E-1

<PAGE>

      long-term disability payments) provided at the expense of the Employer
      which are not specifically included herein.

      If, in a Plan Year, a Participant has lower Earnings than he had the
      preceding Plan Year because he was paid either Worker's Compensation or
      Long-Term Disability, or both, Earnings will be considered to be his
      Earnings received in the preceding Plan Year. These higher Earnings
      calculations will continue for the period of time that benefits are paid
      under either Worker's Compensation or Long-Term Disability, or both.
      Notwithstanding the immediately preceding two sentences, for Plan Years
      beginning on or after July 1, 1996, if a Participant is disabled in any
      Plan Year, only the Participant's Earnings in such Plan Year shall be
      taken into account for any purpose under the SERVISTAR Plan.

      Notwithstanding any SERVISTAR Plan provision to the contrary, Earnings for
      any Participant, who transferred employment from Coast to Coast
      Corporation to SERVISTAR Corporation prior to July 1, 1996, shall only
      include such remuneration paid by SERVISTAR Corporation.

C.2   Hour of Service

      (1)   each hour for which the Employee is either directly or indirectly
            paid by the Employer or Affiliated Employer or entitled to payment,

            (a)   for duties performed during the applicable computation period,
                  and

            (b)   for reasons other than the performance of duties (such as but
                  not limited to paid sick leave, paid vacation time),
                  irrespective of whether the employment relationship has
                  terminated, and

      (2)   any additional hours as normally would have been credited to the
            Employee had he worked on a no overtime basis during the following
            periods for the Employer or an Affiliated Employer:

            (a)   temporary layoff,

            (b)   leave of absence of up to two years, as authorized by the
                  Employer pursuant to the Employer's established leave policy,
                  and

            (c)   military leave while the Employee's reemployment rights are
                  protected by law, provided that any such periods qualify as
                  Service in accordance with the terms of the Service
                  definition, and

      (3)   each hour for which back pay is either awarded or agreed to by the
            Employer or an Affiliated Employer, irrespective of mitigation of
            damages.

      Hours of Service shall be credited to the Employee for the computation
      period(s): (1) in which the duties are performed or payments are due, (2)
      in which payments would have been due during a covered unpaid leave of
      absence or layoff, or (3) to which the back pay

                                      E-2

<PAGE>

      award or agreement pertains. The same Hours of Service shall not be
      credited under more than one paragraph of this definition.

      In no event will Hours of Service be allowed and computed in a manner less
      liberal than the manner described in the Department of Labor Regulation
      2530.200b-2.

C.3   SERVISTAR Plan Prior Formula

      With respect to each Participant who retires or terminates on or after
      July 1, 1996, the yearly amount of basic Pension payable under the Plan is
      equal to the greater of (A) or (B) plus (C):

      (A)   Is (i) less (ii) where:

            (i)   is 2% of a Participant's Final Earnings multiplied by the
                  years and fraction of Credited Service, up to a maximum of 25,
                  1/2 of 1% of a Participant's Final Earnings multiplied by the
                  years and fraction of Credited Service over 25 years, and

            (ii)  is 3/4 of 1% of the Participant's Offset Earnings multiplied
                  by the years and fraction of Credited Service, up to a maximum
                  of 25, plus 1/4 of 1% of (a) the Participant's Offset
                  Earnings, or (b) effective July 1, 1994 the Participant's
                  Final Earnings (if smaller), multiplied by the years and
                  fractions of Credited Service over 25 years, provided that
                  this offset will not be applied until the first of the month
                  following or coincident with the Participant's attainment of
                  Social Security Retirement Age.

            Notwithstanding any Plan provision to the contrary, for purposes of
            calculating the benefit under Supplement C Section C.3(A)(i) and
            (ii), Credited Service shall not include any period after June 30,
            1996.

      (B)   Is the amount the Participant would have received under the terms of
            Section 4.1(B) of the SERVISTAR Plan (referring to the SERVISTAR
            Plan as in effect on June 30, 1983) assuming level Earnings from
            that time forward, using Credited Service through June 30, 1994
            only.

      (C)   With respect to each Participant who contributed to the SERVISTAR
            Plan in accordance with its terms prior to July 1, 1974, the
            Employee Accrued Benefit, unless:

            (1)   if a cash refund of the Participant's Contributions with
                  Credited Interest is elected on or after July 1, 1994, the
                  Employee Accrued Benefit is not payable under this paragraph
                  (C);

            (2)   if a refund of the Participant's contributions with Credited
                  Interest is elected prior to January 1, 1994, the benefit
                  calculated under this paragraph (C) is equal to the excess, if
                  any, of the amount determined in paragraph (a) over paragraph
                  (b), where:

                                      E-3

<PAGE>

                  (a)   is a yearly amount beginning on the Participant's Normal
                        Retirement Date determined on an equivalent Value (using
                        the monthly interest rate in effect when the refund is
                        paid instead of the yearly rate) to the cash refund of
                        the Participant's contributions; and

                  (b)   is the Employee Accrued Benefit;

      provided, however, that the yearly benefit under Supplement C Section C.3
      of a Participant who is affected by the imposition of the $150,000
      limitation on Earnings shall be equal to the greater of (a) the
      Participant's benefit calculated under the provisions of Supplement C
      Section C.3 as determined with regard to such imposition, or (b) the
      benefit equal to the Participant's Accrued Benefit determined as of the
      last day of the Plan Year beginning in 1993, plus the Participant's
      Accrued Benefit based solely on Credited Service after such date under the
      provisions of Supplement C Section C.3 as determined with regard to such
      imposition. For purposes of the SERVISTAR Plan, the Accrued Benefit
      determined as of the last day of the Plan Year beginning in 1993 shall be
      equal to the greater of (c) the Participant's Accrued Benefit determined
      as of the last day of the Plan Year beginning in 1993 as determined with
      regard to the $200,000 limitation on Earnings, or (d) the Participant's
      Accrued Benefit determined as of the last day of the Plan Year beginning
      in 1988, plus the Participant's Accrued Benefit based solely on Credited
      Service after such date under the provisions of the SERVISTAR Plan as
      determined with regard to such limitation.

      In no event will the Pension determined for a Participant on his
      Retirement Date to be less than the highest amount of Pension the
      Participant would have received in the same form of payment had his
      Credited Service ceased at any time prior to his Retirement Date when he
      was eligible to receive an immediate Pension.

      In no event will any amendment to the SERVISTAR Plan reduce the Accrued
      Benefit to the effective date of such amendment including, but not limited
      to, any Pension payable as a result of the delayed application of the
      offset in Supplement C Section C.3.(A)(ii).

      In addition, effective July 1, 1988, in no event will the annuities
      purchased for Participants in the Employer's Excess Benefit Plan plus
      retirement income payable under the Plan (as limited by the maximums
      outlined in Section 13.1 of the Plan) exceed the total retirement income
      as calculated in this Supplement C Section C.3 and the Cash Balance
      Formula under Section 4.4 of the SERVISTAR Plan (assuming the maximums in
      Section 13.1 of the Plan had not been in effect). Any excess will be
      subtracted from the yearly amount of retirement income payable under the
      Plan after reduction to comply with the maximums as outlined in Section
      13.1 of the Plan. This provision will not reduce the amount of retirement
      income accrued under the SERVISTAR Plan as of July 1, 1988.

                                      E-4

<PAGE>

C.4   Final Earnings

      The highest average Earnings received in any five consecutive Plan Years
      ending on or before June 30, 1996, excluding any Plan Year in which the
      Credited Service is not granted under Supplement C Section C.5.
      Notwithstanding the foregoing, for the purposes of determining a
      Participant's Final Earnings, all Earnings received during the Plan Year
      starting January 1, 1976 and ending July 1, 1976 shall be annualized and
      counted as a full Plan Year's Earnings.

C.5   Credited Service

      That portion of a Participant's Service which is included for purposes of
      determining the amount of his accrued Pension attributable to the Prior
      Formula. With respect to any employment period, a Participant's Credited
      Service shall include employment with the Employer corresponding with
      Service allowed except:

      (1)   Any Plan Year in which the Participant has less than 1,000 Hours of
            Service, except for the Plan Year commencing on January 1, 1976, as
            determined in Supplement C Section C.6.

      (2)   Service prior to a break-in-service if the Participant received a
            lump sum payment equal to the equivalent Value of his vested accrued
            Pension at the time of his latest termination.

      A Participant's Credited Service shall be counted in whole years and full
      months. In no event will a Participant receive Credited Service for a
      period that is considered a "break-in-service," as determined in the
      Service definition.

      Notwithstanding any Plan provision to the contrary, Credited Service shall
      not include any Service for periods after June 30, 1996.

C.6   Service

      Shall be the aggregate number of years of employment with the Employer
      excluding any period or portion of any period as determined in accordance
      with the following rules. Service is used to determine an Employee's
      participation and vesting status, and effective for Plan Years beginning
      on or after July 1, 1996, Service also is used to determine the
      Participant's Plan Year Cash Balance Formula benefit credit under Section
      4.4 of the SERVISTAR Plan.

      (1)   With respect to any employment periods prior to January 1, 1976, an
            Employee's last period of continuous employment immediately prior to
            such date will be counted as Service.

      (2)   With respect to any employment periods on and after January 1, 1976
            and before January 2, 1998:

                                      E-5

<PAGE>

            (a)   If in any Plan Year an Employee has at least 1000 hours of
                  Service, he will be credited with one year of Service.

            (b)   If in any Plan Year an Employee has less than 1000 Hours of
                  Service, no Service will be credited for such Plan Year but a
                  break-in service" will not be deemed to have occurred.

            (c)   If in any Plan Year an Employee has 500 or less Hours of
                  Service, no Service will be credited for such Plan Year, and a
                  "break-in-service" will be deemed to have occurred.

            Solely for purposes of determining whether a one year
            break-in-service has occurred in a Plan Year, an Employee who is
            absent from work for maternity or paternity reasons shall receive
            credit for up to 501 Hours of Service which would otherwise have
            been credited to such Employer but for such absence, or in any case
            in which such hours cannot be determined 8 Hours of Service per day
            of such absence. For purposes of this paragraph, an absence from
            work for maternity or paternity reasons means an absence:

            (a)   by reason of the pregnancy of the Employee,

            (b)   by reason of a birth of a child of the Employee,

            (c)   by reason of the placement of a child with the Employee in
                  connection with the adoption of such child by such Employee,
                  or

            (d)   for purposes of caring for such child for a period beginning
                  immediately following such birth or placement.

            The Hours of Service credited under this paragraph shall be credited
            (a) in the Plan Year in which the absence begins if the crediting is
            necessary to prevent a break-in-service in that period, or (b) in
            all other cases, in the following Plan Year.

      (3)   Service prior to a break-in-service which occurs before July 1, 1985
            will be determined in accordance with the terms of the SERVISTAR
            Plan as of the date the break-in-service occurred.

      (4)   If an Employee who has a break-in-service which occurs after July 1,
            1985 is later reemployed by the Employer, the following special rule
            shall apply:

            Service prior to his most recent break-in-service shall be counted
            along with any Service earned on or after the Employee's
            reemployment date if:

            (a)   he was entitled to any vested Pension attributable to Employer
                  contributions in accordance with Section 6 of the SERVISTAR
                  Plan prior to his most recent break-in-service, or

                                      E-6

<PAGE>

            (b)   he was not entitled to any vested Pension attributable to
                  Employer contributions and the length of his latest
                  break-in-service did not equal or exceed the greater of:

                  (i)   the Employee's aggregate number of years of prebreak
                        Service; or

                  (ii)  5 years.

            If a reemployed Employee fails to meet any of the tests described in
            (a) or (b) above, any Service earned prior to his most recent
            break-in-service shall be disregarded.

      (5)   Absence from employment shall be counted as Service if the following
            circumstances apply:

            (a)   temporary layoff,

            (b)   subject to Section 2.1(L) of the SERVISTAR Plan, a leave of
                  absence of up to two years, as authorized by the Employer
                  pursuant to the Employer's established leave policy,

            (c)   military leave while the Employee's re-employment rights are
                  protected by law,

            provided that the Employee returns to active employment with the
            Employer when recalled (if temporary layoff), within 2 years (if
            leave of absence), or within 90 days after he becomes eligible for
            release from active duty (if military leave). Except as required by
            law for military leaves, if the Employee does not return to active
            employment with the Employer, his Service will be deemed to have
            ceased on the date his absence commenced, and he will receive credit
            for 501 Hours of Service for each year of continuous absence.

            The Employer's leave policy shall be applied in a uniform and
            nondiscriminatory manner to all Employees under similar
            circumstances.

      (6)   Employment with a predecessor company shall be counted as Service to
            the extent required by ERISA.

      (7)   Transfers and Service with an Affiliated Employer or as a Leased
            Employee

            (a)   If an Employee (i) becomes employed by the Employer in any
                  capacity other than as an Employee, or (ii) becomes employed
                  by an Affiliated Employer, or (iii) becomes a Leased Employee,
                  he shall retain any Credited Service he has under the
                  SERVISTAR Plan. Upon his later retirement or termination of
                  employment with the Employer or Affiliated Employer (or upon
                  benefit commencement in the case of a Leased Employee), any
                  benefits to which the Employee is entitled under the SERVISTAR
                  Plan shall be determined under the SERVISTAR Plan

                                      E-7

<PAGE>

                  provisions in effect on the date he ceases to be an Employee,
                  and only on the basis of his Credited Service accrued while he
                  was an Employee.

            (b)   Subject to the break-in-service provisions of this Supplement
                  C Section C.6, in the case of a person who (i) was originally
                  employed by the Employer in any capacity other than as an
                  Employee, or (ii) was originally employed by an Affiliated
                  Employer, or (iii) was originally providing services to the
                  Employer as a Leased Employee, and thereafter becomes an
                  Employee, upon his later retirement or termination of
                  employment, the benefits payable under the SERVISTAR Plan
                  shall be computed under the SERVISTAR Plan provisions in
                  effect at that time, and only on the basis of the Credited
                  Service accrued while he is an Employee.

            (c)   Any Participant who was formerly employed with Coast to Coast
                  Stores, Inc. (as it was formerly known) shall receive credit
                  for service with Coast to Coast Stores, Inc. prior to May 29,
                  1990 (as defined at that time by Coast to Coast Stores, Inc.)
                  for purposes of calculating his Service for the Vested
                  Percentage.

            (d)   For any Participant who is an Employee of the Employer on July
                  1, 1996, Service, with respect to Plan Years beginning on or
                  after July 1, 1996, shall include all service recognized under
                  the Coast Profit Sharing and Savings Plan for purposes of
                  vesting thereunder and credited to the Participant as of June
                  30, 1996.

C.7   Offset Earnings

      The average of the Employee's Earnings for the three consecutive Plan
      Years preceding the Plan Year in which the Employee's employment ceases or
      June 30, 1996, if earlier. In determining the Offset Earnings, any
      Earnings for a Plan Year in excess of the taxable wage base in effect
      under Section 230 of the Social Security Act shall be disregarded. Prior
      to June 30, 1994, Offset Earnings shall not include any Plan Year excluded
      from Credited Service under Supplement C Section C.5 and shall be the
      average of the Employee's Earnings for the three highest consecutive Plan
      Years ending with the Plan Year that the Employee's employment ceases.
      Notwithstanding the foregoing, Offset Earnings shall not exceed Covered
      Compensation for the Plan Year in which the Employee's employment ceases.

C.8   Covered Compensation

      For any Participant, the average of the taxable wage bases in effect under
      Section 230 of the Social Security Act for each year in the 35-year period
      ending with the year in which the Participant attains his Social Security
      Retirement Age rounded to the nearest $600 or such other similar amount
      designated by the Internal Revenue Service. In determining a Participant's
      Covered Compensation for any Plan Year, the taxable wage base for the
      current Plan Year and any subsequent Plan Year shall be assumed to be the
      same as the

                                      E-8

<PAGE>

      taxable wage base in effect as of the beginning of the Plan Year for which
      the determination is made.

C.9   Social Security Retirement Age

      Age 65 with respect to a Participant who was born before January 1, 1938;
      age 66 with respect to a Participant who was born after December 31, 1937
      and before January 1, 1955; and age 67 with respect to a Participant who
      was born after December 31, 1954. For employees who terminate prior to
      July 1, 1994, Social Security Retirement Age means the age (in years and
      months) at which he or she qualifies for unreduced old age Social Security
      benefits.

C.10  Normal Retirement Date

      For benefit eligibility and vesting purposes, the day on which the
      Participant attains his 60th birthday. For all other purposes, the first
      day of the month coinciding with or next following the Participant's 60th
      birthday.

C.11  Value

      With respect to the refund of a Participant's contribution under
      Supplement C Section C.20 or the calculation of the monthly benefit
      derived from the Participant's contributions under Supplement C Section
      C.3(C)(2)(a), Value means the present value of a Participant's Pension
      based upon the Pension Benefit Guaranty Corporation's male annuity rates,
      factors, tables, assumptions and procedures for lump sum payments in
      effect for the month in which the refund is distributed. For all other
      Pensions based on the provisions of the SERVISTAR Plan: (i) for
      terminations occurring on or after July 1, 1996, Value shall mean the
      equivalent actuarial value of the Ten-Year Certain and Life form of
      payment as described in Supplement C Section C.17 computed on the basis of
      the Participant's age at distribution (or the Beneficiary's age, if the
      benefit is payable due to the Participant's death prior to commencement of
      benefits), the 1983 Group Annuity Mortality Table as set forth in Revenue
      Ruling 95-28 or such other mortality table as may be required by the
      Internal Revenue Service in any ruling superseding Revenue Ruling 95-28,
      with interest at the annual rate of interest on 30-Year Treasury
      securities. The rate of interest shall be fixed for each Plan Year and
      shall be determined by the rate of interest on 30-year Treasury securities
      set in April and published by the Board of Governors of the Federal
      Reserve System in May of the preceding Plan Year; and (ii) for
      terminations occurring before July 1, 1996, Value shall mean the
      equivalent actuarial value calculated as above but based on the Pension
      Benefit Guaranty Corporation's male annuity rates, factors, tables,
      assumptions and procedures for lump sum payments in effect at the
      beginning of the Plan Year in which the distribution is made.

C.12  Adjustment Factor

      The appropriate adjustment factor(s) which may be applicable to a
      Participant's Pension under the SERVISTAR Plan in accordance with the
      further terms of the SERVISTAR Plan.

                                      E-9

<PAGE>

      With respect to each Participant whose Retirement Date occurs after August
      1, 1983, the appropriate Adjustment Factors are the applicable
      gender-neutral Adjustment Factors based on the 1971 GAM, 6% interest and
      the gender mix as shown in the Tables attached hereto and, with respect to
      Participants who are retiring after the Normal Retirement Date, the late
      retirement Adjustment Factors. Table A shall apply to Accrued Benefit as
      of June 30, 1994 in accordance with the procedures in Section 5.4 of the
      SERVISTAR Plan.

C.13  Cash Balance Account

      Is the bookkeeping account established for eligible Participants who
      accrue Service under the SERVISTAR Plan after June 30, 1996 and who are
      entitled to a Cash Balance Benefit.

C.14  Cash Balance Benefit

      The benefit described in Cash Balance Formula under Section 4.4 of the
      SERVISTAR Plan derived from a Participant's Cash Balance Account which, if
      not distributed in a lump sum, will be the annual benefit which has a
      Value equal to the Participant's Cash Balance Account, adjusted as
      necessary to reflect the form of payment elected by the Participant by
      applying the Adjustment Factor.

C.15  Amount of Early Pension Reduction

      During the period commencing July 1, 1994 and ending June 30, 1996, the
      yearly amount of early Pension payable to the Participant will be equal to
      the amount determined in Supplement C Section C.3, based on Credited
      Service to the date the Participant's employment ceases or June 30, 1996,
      if earlier, and then reduced by 1/4 of 1%, for each month (3% per year)
      by which the early retirement date precedes the Normal Retirement Date up
      to 60 months early (5 years) and then 2/5 of 1% for each month (4.8% per
      year) thereafter.

C.16  Normal Form of Payment - Joint and Survivor

      If the Participant has a Spouse on his Retirement Date, the normal form of
      payment is the Joint and Survivor form. This form provides that, upon the
      Participant's death on or after his Retirement Date, 50% of the Pension
      payable to the Participant, will be paid to such Spouse, if surviving the
      Participant, for the balance of the Spouse's life. However, if the
      Participant dies within the ten-year period commencing on his Retirement
      Date, a Pension in the same amount as the Participant would have received
      will be paid until the end of such ten-year period.

      As an alternative to the 50% continuation described above, a Participant
      may elect that 66 2/3% or 100% of the benefit payable to him, be continued
      to his Spouse upon his death. Such election will not require Spousal
      Consent as provided in the Plan.

                                      E-10

<PAGE>

C.17  Normal Form of Payment - Ten-Years Certain

      If the Participant does not have a Spouse on his Retirement Date or if his
      Termination of Employment occurred prior to January 1, 1976, the normal
      form of payment is the Ten Years Certain form. This form provides that
      payments will be made to the Participant in an amount determined in
      accordance with Supplement C Section C.3 and the Cash Balance Formula
      under Section 4.4 of the SERVISTAR Plan during his lifetime and that, if
      his death occurs within the 10-year period commencing upon his Retirement
      Date, a Pension in the same amount as the Participant would have received
      will be paid to the Beneficiary designated by the Participant for the
      balance of the 10-year period.

C.18  Contingent Pension Option

      Subject to the right to elect the lump sum payment of the Cash Balance
      Benefit, the Participant who elects this option will receive a reduced
      Pension amount during his lifetime so that, after his death, a Pension in
      the same amount or 66 2/3% or 50% thereof (as specified in the election)
      will be paid for the life of the Contingent Pensioner designated by the
      Participant if surviving the Participant. However, if the Participant dies
      within the ten-year period commencing on his Retirement Date, payments
      will not be reduced to the elected percentage until the tenth anniversary
      of his Retirement Date.

      If the option is in effect on the Participant's Retirement Date, the
      amount of Pension payable to the Participant will be determined using the
      same procedures specified in Section 4.3(A) of the Plan except that the
      Contingent Pensioner Adjustment Factor will be applied instead of the
      Joint and Survivor Adjustment Factor.

      This option will be inoperative if the Contingent Pensioner dies before
      the Participant's Retirement Date or the Participant dies before his
      Retirement Date and the terms of the next paragraph are not applicable.

      If a Participant who has elected this option dies on or after his Normal
      Retirement Date, but before his Pension is due to commence, his Contingent
      Pensioner will receive Pension payments beginning on the first day of the
      month next following the Participant's death and continuing for the
      balance of his life. Prior to the tenth anniversary of such first day of
      the month, these Pension payments will be equal to the amount of Pension
      which would have been payable to the Participant had he retired hereunder
      on such first day of the month with the option in effect; any such
      payments payable thereafter will be adjusted by the continuation
      percentage (100%, 66 2/3%, or 50%) elected by the Participant.

C.19  Cash Balance Benefit Payment Option

      Notwithstanding any Plan provision to the contrary, the entire Vesting
      Percentage of the Cash Balance Benefit portion of the Participant's
      Pension may be distributed in a cash lump sum form of payment if elected
      by the Participant, or his Beneficiary if applicable. Such distribution
      may commence as soon as practicable after the earliest to occur of the
      following: the Participant's death, disability, or retirement, or
      termination of service and

                                      E-11

<PAGE>

      in no event later than the dates described in Section 8.9 of the Plan. The
      spousal consent rules described in Section 8.4 of the Plan shall apply to
      such distribution.

C.20  Refund of Participant's Contributions to Participant

      If a Participant's Service ceases by reason other than death prior to his
      Normal Retirement Date, he may elect prior to or on his Retirement Date to
      receive a refund of his Participant's contributions made prior to July 1,
      1974, together with Credited Interest computed thereon to the date the
      election is made.

      Effective July 1, 1994, the cash refund of the Participant's contributions
      shall be no less than the equivalent Value of the yearly amount of Pension
      that can be provided by the Participant's contributions with Credited
      Interest computed to the date such amount is applied to purchase this
      Pension in accordance with the rates in Table C. Such benefit shall be on
      a Full Cash Refund - Ten-Year Certain Form of payment.

      Credited Interest on a Participant's Contributions means interest for the
      number of full months from the January 1 following the date each such
      contribution was paid to the Fund to the date specified herein.

      Prior to January 1, 1960, the rate of Credited Interest was 2 1/2% per
      annum, compounded annually. From January 1, 1960 to January 1, 1976, the
      rate of Credited Interest was 3% per annum, compounded annually. From
      January 1, 1976 to July 1, 1983, the rate of Credited Interest is 5% per
      annum. On and after July 1, 1983, the rate of Credited Interest is 7% per
      annum, compounded on each July 1. Any change in the rate of Credited
      Interest will apply to interest allowed for months occurring after the
      effective date of change.

                                      E-12

<PAGE>

                                     TABLE A

                        LATE RETIREMENT ADJUSTMENT FACTOR

<TABLE>
<CAPTION>
          NUMBER OF YEARS AND MONTHS FROM NORMAL RETIREMENT DATE TO LATE RETIREMENT DATE
------------------------------------------------------------------------------------------------------
MONTHS:  YEARS:    0       1       2       3       4       5       6       7      8        9       10
-------  ------  -----   -----   -----   -----   -----   -----   -----   -----   -----   -----   -----
<S>      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
  0                      107.2%  114.4%  122.8%  131.2%  140.8%  150.4%  161.2%  172.0%  182.8%  193.6%
  1              100.6%  107.8   115.1   123.5   132.0   141.6   151.3   162.1   172.9   183.7
  2              101.2   108.4   115.8   124.2   132.8   142.4   152.2   163.0   173.8   184.6
  3              101.8   109.0   116.5   124.9   133.6   143.2   153.1   163.9   174.7   185.5
  4              102.4   109.6   117.2   125.6   134.4   144.0   154.0   164.8   175.6   186.4
  5              103.0   110.2   117.9   126.3   135.2   144.8   154.9   165.7   176.5   187.3
  6              103.6   110.8   118.6   127.0   136.0   145.6   155.8   166.6   177.4   188.2
  7              104.2   111.4   119.3   127.7   136.8   146.4   156.7   167.5   178.3   189.1
  8              104.8   112.0   120.0   128.4   137.6   147.2   157.6   168.4   179.2   190.0
  9              105.4   112.6   120.7   129.1   138.4   148.0   158.5   169.3   180.1   190.9
 10              106.0   113.2   121.4   129.8   139.2   148.8   159.4   170.2   181.0   191.8
 11              106.6   113.8   122.1   130.5   140.0   149.6   160.3   171.1   181.9   192.7
</TABLE>

Factors for other years and months will be determined in a manner consistent
with the manner used in determining these factors.

                                      E-13

<PAGE>

                                     TABLE B

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                      JOINT AND SURVIVOR ADJUSTMENT FACTORS
                                50% CONTINUATION

<TABLE>
<CAPTION>
                                            PARTICIPANT
-------------------------------------------------------------------------------------------------------
         AGE*          55          56           57           58           59          60            61
         ----         ----        ----         ----         ----         ----        ----          ----
<S>      <C>          <C>         <C>          <C>          <C>          <C>         <C>           <C>
C         41          89.1        88.4         87.7         86.9         86.2        85.4          84.6
O         42          89.3        88.7         88.0         87.2         86.4        85.7          84.9
N         43          89.6        89.0         88.2         87.5         86.7        86.0          85.2
T         44          89.9        89.3         88.5         87.8         87.0        86.3          85.5
I         45          90.1        89.5         88.8         88.1         87.3        86.6          85.8
N         46          90.4        89.8         89.1         88.4         87.7        86.9          86.2
G         47          90.7        90.2         89.4         88.7         88.0        87.3          86.6
E         48          91.0        90.5         89.8         89.0         88.3        87.6          86.9
N         49          91.3        90.8         90.1         89.4         88.7        88.0          87.3
T         50          91.6        91.1         90.4         89.7         89.0        89.3          87.6
          51          91.9        91.4         90.7         90.1         89.4        88.7          88.0
          52          92.3        91.7         91.1         90.4         89.8        89.1          88.4
          53          92.6        92.1         91.4         90.8         90.1        89.5          88.8
          54          92.9        92.4         91.8         91.1         90.5        89.9          89.2
          55          93.2        92.7         92.1         91.5         90.9        90.3          89.6
P         56          93.5        93.1         92.5         91.9         91.3        90.7          90.1
E         57          93.8        93.4         92.8         92.2         91.7        91.1          90.5
N         58          94.2        93.7         93.2         92.6         92.1        91.5          90.9
S         59          94.5        94.1         93.5         93.0         92.4        91.9          91.4
I         60          94.8        94.4         93.9         93.4         92.8        92.3          91.8
O         61          95.1        94.7         94.2         93.7         93.2        92.7          92.2
N         62          95.4        95.0         94.6         94.1         93.6        93.1          92.6
E         63          95.7        95.4         94.9         94.4         94.0        93.5          93.1
R         64          96.0        95.7         95.2         94.8         94.4        93.9          93.5
          65          96.3        96.0         95.6         95.2         94.8        94.3          93.9
          66          96.5        96.3         95.9         95.5         95.1        94.7          94.7
          67          96.8        96.5         96.2         95.8         95.5        95.1          94.7
          68          97.1        96.8         96.5         96.1         95.8        95.5          95.1
          69          97.3        97.1         96.8         96.5         96.1        95.8          95.5
          70          97.6        97.4         97.1         96.8         96.5        96.2          95.9
          71          97.8        97.6         97.3         97.0         96.8        96.5          96.2
          72          98.0        97.8         97.5         97.3         97.0        96.8          96.5
          73          98.2        98.0         97.8         97.6         97.3        97.1          96.9
          74          98.4        98.2         98.0         97.8         97.6        97.4          97.2
          75          98.6        98.4         98.3         98.1         97.9        97.7          97.5
</TABLE>

*     Age nearest birthday on Retirement Date, or on date Contingent Pensioner
      option becomes effective, if later.

      Factors for other age combinations will be determined in a manner
      consistent with the manner used in determining these factors.

                                      E-14

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                              66 2/3% CONTINUATION

<TABLE>
<CAPTION>
                                            PARTICIPANT
-------------------------------------------------------------------------------------------------------
         AGE*          55          56           57           58           59          60            61
         ----         ----        ----         ----         ----         ----        ----          ----
<S>      <C>          <C>         <C>          <C>          <C>          <C>         <C>           <C>
C         41          85.9        85.2         84.2         83.3         82.4        81.4          80.5
O         42          86.3        85.5         84.6         83.6         82.7        81.8          80.9
N         43          86.6        85.8         84.9         84.0         83.1        82.2          81.2
T         44          86.9        86.2         85.3         84.3         83.4        82.5          81.6
I         45          87.3        86.5         85.6         84.7         83.8        82.9          82.0
N         46          87.6        86.9         86.0         85.1         84.2        83.3          82.4
G         47          88.0        87.3         86.4         85.5         84.6        83.7          82.9
E         48          88.4        87.7         86.8         85.9         85.0        84.2          83.3
N         49          88.8        88.1         87.2         86.3         85.5        84.6          83.7
T         50          89.1        88.4         87.6         86.7         85.9        85.0          84.2
          51          89.5        88.9         88.0         87.2         86.3        85.5          84.7
          52          89.9        89.3         88.5         87.6         86.8        86.0          85.2
          53          90.3        89.7         88.9         88.1         87.3        86.5          85.7
          54          90.7        90.1         89.3         88.5         87.7        87.0          86.2
          55          91.1        90.5         89.8         89.0         88.2        87.4          86.7
P         56          91.5        91.0         90.2         89.5         88.7        87.9          87.2
E         57          91.9        91.4         90.7         89.9         89.2        88.5          87.7
N         58          92.4        91.8         91.1         90.4         89.7        89.0          88.3
S         59          92.8        92.2         91.6         90.9         90.2        89.5          88.8
I         60          93.2        92.7         92.0         91.3         90.7        90.0          89.3
O         61          93.6        93.1         92.4         91.8         91.2        90.5          89.9
N         62          93.9        93.5         92.9         92.3         91.7        91.0          90.4
E         63          94.3        93.9         93.3         92.7         92.2        91.6          91.0
R         64          94.7        94.3         93.8         93.2         92.6        92.1          91.5
          65          95.1        94.7         94.2         93.7         93.1        92.6          92.1
          66          95.4        95.1         94.6         94.1         93.6        93.1          92.6
          67          95.8        95.4         95.0         94.5         94.0        93.6          93.1
          68          96.1        95.8         95.4         94.9         94.5        94.0          93.6
          69          96.4        96.2         95.8         95.3         94.9        94.5          94.1
          70          96.8        96.5         96.1         95.8         95.4        95.0          94.6
          71          97.0        96.8         96.5         96.1         95.7        95.4          95.1
          72          97.3        97.1         96.8         96.4         96.1        95.8          95.5
          73          97.6        97.4         97.1         96.8         96.5        96.2          95.9
          74          97.8        97.7         97.4         97.1         96.8        96.6          96.3
          75          98.1        97.9         97.7         97.4         97.2        97.0          96.7
</TABLE>

*     Age nearest birthday on Retirement Date, or on date Contingent Pensioner
      option becomes effective, if later.

      Factors for other age combinations will be determined in a manner
      consistent with the manner used in determining these factors.

                                      E-15

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                              66 2/3% CONTINUATION

<TABLE>
<CAPTION>
                                            PARTICIPANT
------------------------------------------------------------------------------------------------------
         AGE*          62          63           64           65           66          67           68
         ----         ----        ----         ----         ----         ----        ----         ----
<S>      <C>          <C>         <C>          <C>          <C>          <C>         <C>          <C>
C         41          79.5        78.5         77.5         76.5         75.5        74.5         73.5
O         42          79.9        78.9         77.9         76.9         75.9        74.9         73.9
N         43          80.2        79.2         78.2         77.2         76.2        75.3         74.3
T         44          80.6        79.6         78.6         77.6         76.6        75.7         74.7
I         45          81.0        80.0         79.0         78.0         77.0        76.1         75.1
N         46          81.4        80.4         79.5         78.5         77.5        76.5         75.6
G         47          81.9        80.9         79.9         78.9         78.0        77.0         76.1
E         48          82.3        81.4         80.4         79.4         78.4        77.5         76.5
N         49          82.8        81.8         80.8         79.9         78.9        78.0         77.0
T         50          83.2        82.3         81.3         80.3         79.4        78.4         77.5
          51          83.7        82.8         81.8         80.9         79.9        79.0         78.1
          52          84.2        83.3         82.4         81.4         80.5        79.6         78.6
          53          84.7        83.8         82.9         82.0         81.1        80.1         79.2
          54          85.3        84.3         83.4         82.5         81.6        80.7         79.8
          55          85.8        84.9         84.0         83.1         82.2        81.3         80.4
P         56          86.3        85.4         84.6         83.7         82.8        81.9         81.0
E         57          86.9        86.0         85.2         84.3         83.4        82.6         81.7
N         58          87.4        86.6         85.8         84.9         84.1        83.2         82.3
S         59          88.0        87.2         86.3         85.5         84.7        83.8         83.0
I         60          88.5        87.7         86.9         86.1         85.3        84.5         83.7
O         61          89.1        88.3         87.6         86.8         86.0        85.2         84.4
N         62          89.7        88.9         88.2         87.4         86.7        85.9         85.1
E         63          90.3        89.5         88.8         88.1         87.4        86.6         85.8
R         64          90.8        90.1         89.4         88.8         88.1        87.3         86.6
          65          91.4        90.7         90.1         89.4         88.7        88.0         87.3
          66          91.9        91.3         90.7         90.0         89.4        88.7         88.0
          67          92.5        91.9         91.3         90.7         90.1        89.4         88.7
          68          93.0        92.5         91.9         91.3         90.7        90.1         89.5
          69          93.6        93.0         92.5         92.0         91.4        90.8         90.2
          70          94.1        93.6         93.1         92.6         92.1        91.5         90.9
          71          94.6        94.1         93.6         93.1         92.7        92.1         91.6
          72          95.0        94.6         94.1         93.7         93.3        92.7         92.2
          73          95.5        95.1         94.7         94.2         93.8        93.4         92.9
          74          95.9        95.5         95.2         94.8         94.4        94.0         93.5
          75          96.4        96.0         95.7         95.4         95.0        94.6         94.2
</TABLE>

*     Age nearest birthday on Retirement Date, or on date Contingent Pensioner
      option becomes effective, if later.

      Factors for other age combinations will be determined in a manner
      consistent with the manner used in determining these factors.

                                      E-16

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                                100% CONTINUATION

<TABLE>
<CAPTION>
                                            PARTICIPANT
------------------------------------------------------------------------------------------------------
         AGE*          55          56           57           58           59          60           61
         ----         ----        ----         ----         ----         ----        ----         ----
<S>      <C>          <C>         <C>          <C>          <C>          <C>         <C>          <C>
C         41          80.3        79.3         78.1         76.9         75.7        74.5         73.4
O         42          80.8        79.7         78.5         77.4         76.2        75.0         73.8
N         43          81.2        80.2         79.0         77.8         76.6        75.5         74.3
T         44          81.6        80.6         79.4         78.3         77.1        75.9         74.7
I         45          82.1        81.0         79.9         78.7         77.5        76.4         75.2
N         46          82.6        81.6         80.4         79.2         78.1        76.9         75.8
G         47          83.1        82.1         80.9         79.8         78.6        77.5         76.3
E         48          83.6        82.6         81.4         80.3         79.2        78.0         76.9
N         49          84.1        83.1         82.0         80.8         79.7        78.6         77.4
T         50          84.6        83.6         82.5         81.4         80.2        79.1         78.0
          51          85.1        84.2         83.1         82.0         80.9        79.8         78.6
          52          85.6        84.7         83.7         82.6         81.5        80.4         79.3
          53          86.2        85.3         84.2         83.2         82.1        81.0         79.9
          54          86.7        85.9         84.8         83.8         82.7        81.7         80.6
          55          87.3        86.4         85.4         84.4         83.3        82.3         81.2
P         56          87.8        87.0         86.0         85.0         84.0        83.0         82.0
E         57          88.4        87.6         86.6         85.6         84.7        83.7         82.7
N         58          89.0        88.2         87.3         86.3         85.3        84.4         83.4
S         59          89.5        88.8         87.9         86.9         86.0        85.0         84.1
I         60          90.1        89.4         88.5         87.6         86.7        85.7         84.8
O         61          90.6        90.0         89.1         88.2         87.3        86.5         85.6
N         62          91.2        90.6         89.7         88.9         88.0        87.2         86.3
E         63          91.7        91.1         90.3         89.5         88.7        87.9         87.1
R         64          92.3        91.7         90.9         90.2         89.4        88.6         87.8
          65          92.8        92.3         91.5         90.8         90.1        89.3         88.6
          66          93.3        92.8         92.1         91.4         90.7        90.0         89.7
          67          93.8        93.3         92.7         92.0         91.3        90.7         90.0
          68          94.3        93.8         93.2         92.6         92.0        91.3         90.7
          69          94.8        94.4         93.8         93.2         92.6        92.0         91.4
          70          95.3        94.9         94.3         93.8         93.2        92.7         92.1
          71          95.6        95.3         94.8         94.3         93.8        93.2         92.7
          72          96.0        95.7         95.2         94.8         94.3        93.8         93.3
          73          96.4        96.1         95.7         95.2         94.8        94.4         93.9
          74          96.8        96.5         96.1         95.7         95.3        94.9         94.5
          75          97.2        96.9         96.6         96.2         95.9        95.5         95.1
</TABLE>

*     Age nearest birthday on Retirement Date, or on date Contingent Pensioner
      option becomes effective, if later.

      Factors for other age combinations will be determined in a manner
      consistent with the manner used in determining these factors.

                                      E-17

<PAGE>

                               TABLE B (CONTINUED)

                     CONTINGENT PENSIONER ADJUSTMENT FACTORS
                                100% CONTINUATION

<TABLE>
<CAPTION>
                                            PARTICIPANT
------------------------------------------------------------------------------------------------------
         AGE*          62          63           64           65           66          67           68
         ----         ----        ----         ----         ----         ----        ----         ----
<S>      <C>          <C>         <C>          <C>          <C>          <C>         <C>          <C>
C         41          72.1        70.9         69.7         68.5         67.2        66.1         65.0
O         42          72.6        71.4         70.1         68.9         67.7        66.6         65.4
N         43          73.1        71.8         70.6         69.4         68.2        67.0         65.9
T         44          73.5        72.3         71.1         69.8         68.6        67.5         66.3
I         45          74.0        72.8         71.5         70.3         69.1        67.9         66.8
N         46          74.5        73.3         72.1         70.9         69.7        68.5         67.4
G         47          75.1        73.9         72.7         71.5         70.2        69.1         68.0
E         48          75.7        74.5         73.2         72.0         70.8        69.7         68.5
N         49          76.2        75.0         73.8         72.6         71.4        70.3         69.1
T         50          76.8        75.6         74.4         73.2         72.0        70.8         69.7
          51          77.5        76.3         75.1         73.9         72.7        71.5         70.4
          52          78.1        76.9         75.7         74.6         73.4        72.2         71.1
          53          78.8        77.6         76.4         75.2         74.1        72.9         71.8
          54          79.4        78.3         77.1         75.9         74.8        73.6         72.5
          55          80.1        78.9         77.8         76.6         75.5        74.3         73.2
P         56          80.8        79.7         78.5         77.4         76.3        75.2         74.0
E         57          81.6        80.4         79.3         78.2         77.1        76.0         74.9
N         58          82.3        81.2         80.1         79.0         77.9        76.8         75.7
S         59          83.0        81.9         80.9         79.8         78.7        77.6         76.5
I         60          83.8        82.7         81.6         80.6         79.5        78.4         77.4
O         61          84.5        83.5         82.5         81.4         80.4        79.4         78.3
N         62          85.3        84.3         83.3         82.3         81.3        80.3         79.2
E         63          86.1        85.1         84.2         83.2         82.2        81.2         80.2
R         64          86.9        85.9         85.0         84.0         83.1        82.1         81.1
          65          87.7        86.7         85.8         84.9         84.0        83.0         82.1
          66          88.4        87.5         86.7         85.8         84.9        84.0         83.1
          67          89.2        88.3         87.5         86.7         85.8        84.9         84.0
          68          89.9        89.1         88.3         87.5         86.8        85.9         85.0
          69          90.7        89.9         89.2         88.4         87.7        86.8         86.0
          70          91.4        90.7         90.0         89.3         88.6        87.8         87.0
          71          92.1        91.4         90.7         90.1         89.4        88.7         87.9
          72          92.7        92.1         91.5         90.9         90.2        89.5         88.8
          73          93.4        92.8         92.2         91.6         91.1        90.4         89.7
          74          94.0        93.5         92.9         92.4         91.9        91.3         90.6
          75          94.7        94.2         93.7         93.2         92.7        92.1         91.5
</TABLE>

*     Age nearest birthday on Retirement Date, or on date Contingent Pensioner
      option becomes effective, if later.

      Factors for other age combinations will be determined in a manner
      consistent with the manner used in determining these factors.

                                      E-18

<PAGE>

                                     TABLE C

                                IMMEDIATE ANNUITY
                             10-YEAR CERTAIN ANNUITY
                             MONTHLY INCOME PER 1000

<TABLE>
<CAPTION>
AGE*                            MONTHLY INCOME
----                            --------------
<S>                             <C>
 45                                  7.72
 46                                  7.81
 47                                  7.89
 48                                  7.98
 49                                  8.07
 50                                  8.16
 51                                  8.26
 52                                  8.36
 53                                  8.46
 54                                  8.57
 55                                  8.68
 56                                  8.80
 57                                  8.93
 58                                  9.05
 59                                  9.19
 60                                  9.33
 61                                  9.47
 62                                  9.62
 63                                  9.77
 64                                  9.93
 65                                 10.10
 66                                 10.26
</TABLE>

*     Age, nearest birthday, or annuity commencement date.

      Purchase of retirement annuity with employee contributions plus Credited
      Interest.

                                      E-19

<PAGE>

                                      E-20exv10w1

 

Exhibit 10.1

STOCK PURCHASE AGREEMENT

BY AND AMONG

WABASH NATIONAL CORPORATION,

TRANSCRAFT CORPORATION,

AND

TRANSCRAFT INVESTMENT PARTNERS, L.P.

Dated as of March 3, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	ARTICLE I DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	Certain Definitions	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II SALE AND PURCHASE OF SHARES	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Sale and Purchase of Shares	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III CONSIDERATION	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Consideration	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.2	 	Payment of Closing Purchase Price	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.3	 	Purchase Price Adjustment	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.4	 	Indemnification Escrow Agreement	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.5	 	Earnout	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV CLOSING AND TERMINATION	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Closing Date	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.2	 	Termination of Agreement	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.3	 	Procedure Upon Termination	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.4	 	Effect of Termination	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	Organization and Good Standing	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.2	 	Authorization of Agreement	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.3	 	Conflicts; Consents of Third Parties	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.4	 	Capitalization	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.5	 	Subsidiaries	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.6	 	Financial Statements	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.7	 	No Undisclosed Liabilities	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.8	 	Absence of Certain Developments	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.9	 	Taxes	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.10	 	Real Property	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.11	 	Tangible Personal Property; Title to Assets	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.12	 	Intellectual Property	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.13	 	Material Contracts	 	 	27	 

i

 

	 	 	 	 	 	 	 	 	 
	 
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	 	 	 	(continued)	 	 	 	 
	 
	 	 	 	 	 	 	Page	 
	 
	 
	 	5.14	 	Employee Benefits Plans	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.15	 	Labor	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.16	 	Litigation	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.17	 	Compliance with Laws; Permits	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.18	 	Environmental Matters	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.19	 	Financial Advisors	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.20	 	Accounts Receivable; Bank Accounts	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.21	 	Inventory	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.22	 	Insurance	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.23	 	Books and Records	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.24	 	Transactions With Related Parties	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.25	 	Off Balance Sheet Transactions	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.26	 	Suppliers; Customers; Dealers	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.27	 	Warranties; Recalls; Product Liability	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.28	 	Certain Payments; International Trade Laws	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Organization and Good Standing	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.2	 	Authorization of Agreement	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.3	 	Conflicts; Consents of Third Parties	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.4	 	Ownership and Transfer of Shares	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.5	 	Litigation	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.6	 	Amounts Owed to Selling Stockholder	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.7	 	Financial Advisors	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	Organization and Good Standing	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.2	 	Authorization of Agreement	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.3	 	Conflicts; Consents of Third Parties	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.4	 	Litigation	 	 	41	 

ii

 

	 	 	 	 	 	 	 	 	 
	 
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	 	 	 	(continued)	 	 	 	 
	 
	 	 	 	 	 	 	Page	 
	 
	 
	 	7.5	 	Investment Intention	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.6	 	Financing	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.7	 	No Financial Advisers	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII COVENANTS	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Access to Information	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.2	 	Conduct of the Business Pending the Closing	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.3	 	Consents	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.4	 	Regulatory Approvals	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.5	 	Further Assurances	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.6	 	Confidentiality	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.7	 	Preservation of Records	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.8	 	Publicity	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.9	 	Exclusivity	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.10	 	Tax Matters	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.11	 	Noncompetition; Nonsolicitation	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.12	 	Notice; Supplementation and Amendment of Schedules	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.13	 	Indemnity Obligations	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.14	 	Montgomery County Facility	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX CONDITIONS TO CLOSING	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Conditions Precedent to Obligations of Purchaser	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.2	 	Conditions Precedent to Obligations of the Selling Stockholder	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE X INDEMNIFICATION	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.1	 	Survival	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.2	 	Indemnification by Selling Stockholder	 	 	54	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.3	 	Indemnification by Purchaser	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.4	 	Indemnification Procedures	 	 	55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.5	 	Limitations on Indemnification
for Breaches of Representations and Warranties	 	 	57	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.6	 	Tax Treatment of Indemnity Payments	 	 	59	 

iii

 

	 	 	 	 	 	 	 	 	 
	 
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	 	 	 	(continued)	 	 	 	 
	 
	 	 	 	 	 	 	Page	 
	 
	 
	 	10.7	 	No Consequential Damages	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.8	 	Exclusive Remedy	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.1	 	Payment of Sales, Use or Similar Taxes	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.2	 	Expenses	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.3	 	Submission to Jurisdiction; Consent to Service of Process	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.4	 	Entire Agreement; Amendments and Waivers	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.5	 	Governing Law	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.6	 	Notices	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.7	 	Severability	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.8	 	Binding Effect; No Third-Party Beneficiaries; Assignment	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.9	 	Counterparts	 	 	62	 

iv

 

STOCK PURCHASE AGREEMENT

          THIS STOCK PURCHASE AGREEMENT, dated as of March 3, 2006 (the “Agreement”), is made by
and among Wabash National Corporation, a Delaware corporation (“Purchaser”), Transcraft
Corporation., a Delaware corporation (the “Company”), and Transcraft Investment Partners,
L.P., a Delaware limited partnership (the “Selling Stockholder”),

W I T N E S S E T H:

          WHEREAS, (i) Selling Stockholder owns an aggregate of 915 shares (the “Shares”) of the
Company’s common stock, par value $.01 per share (the “Common Stock”), and (ii)
Lincolnshire Equity Fund II, L.P., a Delaware limited partnership (“Lincolnshire”), owns an
aggregate of 10,430 shares (the “Preferred Shares”) of the Company’s preferred stock, par
value $.01 per share (the “Preferred Stock”);

          WHEREAS, Monumental Life Insurance Company, a Maryland corporation (“Monumental”), is
the holder of a warrant (the “Warrant”) as evidenced by that certain Warrant to Purchase
Shares of Common Stock of the Company dated January 1, 2004, to purchase six percent (6%) of the
fully diluted Common Stock at a price of $1.00 per share, which constitutes the only outstanding
right of any kind to acquire capital stock of the Company;

          WHEREAS, the Shares, Preferred Shares and the Warrant constitute all of the issued and
outstanding equity interests of the Company;

          WHEREAS, concurrently with, and as a condition to the closing of the transactions contemplated
under this Agreement, the Warrant shall be cancelled and of no further force and effect and the
Preferred Shares shall be redeemed in full and cancelled;

          WHEREAS, the Selling Stockholder desires to sell to Purchaser, and Purchaser desires to
purchase from the Selling Stockholder, all of the Shares for the Purchase Price (as hereinafter
defined) and upon the terms and subject to the conditions hereinafter set forth;

          WHEREAS,
certain terms used in this Agreement are defined in Section 1.1;

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

1

 

ARTICLE I

DEFINITIONS

          1.1 Certain Definitions.

          (a) For purposes of this Agreement, the following terms shall have the meanings specified in
this Section 1.1:

          “Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, such Person, and the term “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.

          “Indemnity Side Letter” means that certain letter agreement, dated the date hereof,
between the Purchaser and Lincolnshire.

          “Business Day” means any day of the year on which national banking institutions in New
York are open to the public for conducting business and are not required or authorized to close.

          “Closing Date Payments” means, as of the Closing Date, the sum of the aggregate amount
required to (i) pay and satisfy in full the Company’s Indebtedness for money borrowed as more
specifically set forth on Schedule 3.2(b), (ii) cancel the Warrant, and (iii) redeem and
cancel in full the Preferred Shares.

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

          “Contract” means any written or oral agreement, contract, indenture, note, mortgage,
guarantee, bond, lease, commitment, easement, right of way, arrangement or understanding.

          “Defect” means a defect of any kind, whether in design, manufacture, processing, or
otherwise, including, any dangerous propensity associated with any reasonable foreseeable use of a
Product, or the failure to warn of the existence of any defect, impurity or dangerous propensity.

          “EBITDA” means the Company’s Net Income plus, to the extent charged or
otherwise allocated against, or otherwise included in the determination of, such Net Income (a) (i)
income Tax expense and (ii) gross receipts and franchise Tax expense to the extent that such Tax
expense has been reflected in “income taxes” in the audited statement of income included in the
Financial Statements, (b) interest, prepayment penalties deferred financing charges, and other
expenses incurred in connection with Indebtedness for money borrowed including, without limitation,
interest expense in
connection with floor plan costs paid by the Company on behalf of its dealers, (c)
amortization and depreciation (d) fees and any other amounts paid or allocated pursuant

2

 

to the
management agreement between the Company and Lincolnshire Management, Inc. and corporate overhead
charges allocated by the Purchaser, (e) expenses incurred in connection with the negotiation and
execution of this Agreement and closing of the transactions contemplated hereby, (f) compensation
and employee benefits in respect of positions not typically employed by the Company prior to the
Closing, (g) audit related expenses incurred above $60,000 (including, without limitation, any
incremental expenses associated with complying with Sarbanes Oxley and other United States public
company reporting requirements), (i) expenses incurred in the integration of the Company’s business
with the Purchaser, all as determined in accordance with GAAP applied on a basis consistent with
that employed by the Company in the preparation of the Financial Statements and with such
calculation to be consistent with the exemplar set forth on Exhibit C. “Net
Income” means for any period the net income (or loss) of the Company for such period determined
in accordance with GAAP applied on a basis consistent with that employed by the Company in the
preparation of the Financial Statements; provided that in determining Net Income, the following
items shall be excluded: (i) gains and losses from the sale or disposition of assets outside the
Ordinary Course of Business; (ii) income and losses attributable to any business acquired by the
Company after the Closing Date, and all expenses and other items included in the calculation
thereof in accordance with GAAP, and all transaction expenses, including legal, accounting, due
diligence and brokers’ fees, incurred in connection with any such acquisition; (ii) any gain or
loss from currency or other hedging or other financial risk mitigation transactions; (iii) any
reserves or adjustments to reserves which are not consistent with past practices of the Company;
and (iv) any accounting policies or accounting procedures adopted by the Purchaser that are
inconsistent with the policies and procedures utilized by the Company prior to the Closing.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

          “Environmental Law” means any foreign, federal, state or local statute, regulation,
ordinance, rule of common law or other legal requirement in effect on or prior to the Closing Date
relating to the protection of human health and safety, the environment or natural resources,
including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§
9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et
seq.), the Clean Water Act (33 U.S.C. §§ 1251 et seq.), the Clean Air Act
(42 U.S.C. §§ 7401 et seq.) the Toxic Substances Control Act (15 U.S.C. §§ 2601
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136
et seq.), and the Occupational Safety and Health Act (29 U.S.C. §§ 651 et
seq.), as each has been or may be amended and the regulations promulgated pursuant thereto.

          “Environmental Permits” means all Permits required under applicable Environmental
Laws.

          “Expenses” means any and all notices, actions, suits, proceedings, claims, demands,
assessments, judgments, costs, penalties and expenses, including reasonable attorneys’ and other
professionals’ fees and disbursements.

3

 

          “GAAP” means generally accepted accounting principles in the United States of America
in effect from time to time.

          “Governmental Body” means any government or governmental or regulatory body thereof,
or political subdivision thereof, whether federal, state, local or foreign, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).

          “Hazardous Material” means any substance, radiation, material or waste that is
regulated, classified, or otherwise characterized under or pursuant to any Environmental Law and
includes, without limitation, hazardous substances, solid wastes, petroleum and its by-products,
asbestos, polychlorinated biphenyls, radon, mold, MTBE, and urea formaldehyde insulation.

          “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

          “Indebtedness” of any Person means, without duplication, (i) the principal of and
premium (if any) in respect of (A) indebtedness of such Person or its Subsidiaries for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person or its Subsidiaries is responsible or liable; (ii) all
obligations of such Person or its Subsidiaries issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person and all obligations of such Person under
any title retention agreement (but excluding trade accounts payable and other accrued current
liabilities arising in the Ordinary Course of Business); (iii) all obligations of such Person or
its Subsidiaries under leases required to be capitalized in accordance with GAAP as then in effect;
(iv) all obligations of such Person or its Subsidiaries for the reimbursement of any obligor on any
letter of credit, banker’s acceptance or similar credit transaction; (v) all obligations of the
type referred to in clauses (i) through (iv) of other Persons for the payment of which such Person
or its Subsidiaries is responsible or liable, directly or indirectly, as obligor, guarantor, surety
or otherwise, including guarantees of such obligations; and (vi) all obligations of the type
referred to in clauses (i) through (v) of other Persons secured by any Lien on any property or
asset of such Person or its Subsidiaries (whether or not such obligation is assumed by such Person
or its Subsidiaries).

          “Indemnification Claim” means any claim in respect of which payment may be sought
under Article X of this Agreement.

          “Intellectual Property” means all intellectual property rights arising from or in
respect of the following: (i) all patents and applications therefor, including
continuations, divisionals, continuations-in-part, or reissues of patent applications and
patents issuing thereon (collectively, “Patents”), (ii) all trademarks, service marks,
trade names, service names, brand names, trade dress rights, logos, Internet domain names and
corporate names, together with the goodwill associated with any of the foregoing, and all
applications, registrations and renewals thereof, (collectively, “Marks”), (iii) copyrights

4

 

and registrations and applications therefor, works of authorship and mask work rights
(collectively, “Copyrights”) and (iv) all know-how, Software and Technology.

          “IRS” means the Internal Revenue Service.

          “Knowledge” of the Company or Selling Stockholder means (i) the actual knowledge of
any of those Persons identified on 
Schedule 1.1(a) and (ii) the knowledge that any such
Person referenced in (i) above, acting as a prudent business person, would have obtained in the
conduct of his or her business.

          “Law” means all foreign, federal, state and local laws, statutes, codes, ordinances,
rules, regulations, resolutions and Orders.

          “Legal Proceeding” means any judicial, administrative or arbitral actions, suits or
proceedings (public or private) by or before a Governmental Body or arbiter.

          “Liability” means any debt, liability or obligation (whether direct or indirect,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due)
and including all costs and expenses relating thereto.

          “Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement, servitude, transfer
restriction, encroachment, reservation, municipal bond, or other restriction of any kind.

          “Material Adverse Effect” means a material adverse effect on (i) the business, assets,
properties, results of operations, condition (financial or otherwise) or performance of the Company
and its Subsidiaries (taken as a whole) or (ii) the ability of the Company to consummate the
transactions contemplated by this Agreement, other than (with respect to clause (i) or (ii)) an
effect resulting from an Excluded Matter. “Excluded Matter” means any one or more of the
following: (i) any change in the United States or foreign economies or securities or financial
markets in general; (ii) any change that generally affects any industry in which the Company or its
Subsidiaries operates, but only if such change does not have a disproportionate effect (relative to
other industry participants) on the Company and its Subsidiaries (taken as a whole); (iii) any
change arising in connection with hostilities, acts of war, sabotage or terrorism or military
actions or any escalation or material worsening of any such hostilities, acts of war or terrorism
or military actions existing or underway as of the date hereof; or (iv) any action taken by
Purchaser or its Affiliates with respect to the transactions contemplated hereby or with respect to
the Company or its Subsidiaries.

          “Net Working Capital” means (i) the sum of accounts receivable, inventory, and prepaid
expenses, reduced by (ii) the sum of accounts payable, accrued expenses and customer deposits,
excluding accrued interest and warranty, in each case as determined in accordance with GAAP applied
on a basis consistent with that employed by the Company in the preparation of the Financial
Statements.

5

 

          “Order” means any order, injunction, judgment, decree, determination, ruling, writ,
assessment or arbitration or other award of a Governmental Body.

          “Ordinary Course of Business” means the ordinary and usual course of business of the
Company and its Subsidiaries consistent with past practices and applicable law.

          “Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.

          “Permitted Exceptions” means (i) all defects, exceptions, restrictions, easements,
rights of way and encumbrances disclosed in the policies of title insurance listed on Schedule
5.10, copies of which have been provided to Purchaser, (ii) statutory Liens for current Taxes,
assessments or other governmental charges not yet delinquent or the amount or validity of which is
being contested in good faith by appropriate proceedings, provided an appropriate reserve is
established therefor; (iii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising
or incurred in the Ordinary Course of Business with respect to amounts not yet due and payable or
being contested in good faith by appropriate proceedings, provided an appropriate reserve is
established therefor; (iv) zoning, entitlement and other land use and environmental regulations by
any Governmental Body that do not interfere with, in any material respect, the use of the Company
Property by the Company and its Subsidiaries or the Ordinary Course of Business thereon; (v) Liens
securing debt as disclosed in the Financial Statements to be released by Closing; (vi) Liens
securing rental payments under capital or operating lease arrangements; and (vii) such other
imperfections in title, charges, easements, restrictions and encumbrances that do not, individually
or in the aggregate, interfere with, in any material respect, the use of the Company Property by
the Company and its Subsidiaries or the Ordinary Course of Business thereon.

          “Person” means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization, Governmental Body or other
entity.

          “Product” means any product designed, manufactured, shipped, sold, marketed,
distributed and/ or otherwise introduced into the stream of commerce by or on behalf of the Company
or any Subsidiary.

          “Release” means the presence of or exposure to any Hazardous Materials and any
release, spill, emission, leaking, pumping, pouring, emptying, seepage, dumping,
injection, deposit, disposal, discharge, dispersal, migration, or leaching of any Hazardous
Material into or upon the indoor or outdoor environment, or into or out of any property.

          “Remediation” means any removal action, Remedial Action, restoration, repair, response
action, corrective action, monitoring, sampling and analysis, installation, reclamation, closure,
or post-closure in connection with the suspected, threatened or actual Release of Hazardous
Materials.

6

 

          “Remedial Action” means all actions to (i) clean up, remove, treat, investigate,
monitor, sample, analyze, abate or in any other way address any Hazardous Material, (ii) prevent
the Release of any Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment, (iii) perform studies and investigations, closure,
post-closure, or post-remedial monitoring and care and (iv) correct a condition of noncompliance
with Environmental Laws.

          “Schedules” means the disclosure schedules of the Company, the Selling Stockholder and
Purchaser, as applicable, accompanying this Agreement.

          “Software” means any and all (i) computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to
design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats,
firmware, development tools, templates, menus, buttons and icons, and (iv) all documentation
including user manuals and other training documentation related to any of the foregoing.

          “Subsidiary” means any Person of which a majority of the outstanding voting securities
or other voting equity interests are owned, directly or indirectly, by the Company.

          “Taxes” means (i) all federal, state, local or foreign taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social security, unemployment, excise, severance,
stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or additional amounts
imposed by any taxing authority in connection with any item described in clause (i) and (iii) any
transferee liability in respect of any items described in clauses (i) and/or (ii).

          “Tax Return” means all returns, declarations, reports, estimates, information returns
and statements required to be filed in respect of any Taxes.

          “Technology” means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, research and development, technical data, programs,
subroutines, tools, materials, specifications, processes, inventions (whether patentable or
unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of
authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses,
and other writings, and other tangible embodiments of the foregoing, in any form whether or not
specifically listed herein, and all related technology, that are used in, incorporated in, embodied
in, displayed by or relate to, or are used by the Company or any Subsidiary.

7

 

          (b) Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the
following terms have meanings set forth in the sections indicated:

	 	 	 
	Term	 	Section
	 
	Accounting Referee
	 	3.3(d)
	Agreement
	 	Recitals
	Balance Sheet
	 	5.6
	Balance Sheet Date
	 	5.6
	Closing
	 	4.1
	Closing Date
	 	4.1
	Closing Date Balance Sheet
	 	3.3(b)(ii)
	Closing Net Working Capital
	 	3.3(b)(ii)
	Closing Purchase Price
	 	3.1
	Closing Purchase Price Payment
	 	3.2(a)
	Closing Statement
	 	3.3(b)(ii)
	Common Stock
	 	Recitals
	Company
	 	Recitals
	Company Benefit Plan
	 	5.14(a)
	Company Documents
	 	5.2
	Company IP
	 	5.12
	Company Pension Plan
	 	5.14(b)
	Company Properties
	 	5.10
	Company Property
	 	5.10
	Confidentiality Agreement
	 	8.6
	Copyrights
	 	1.1 (in definition of Intellectual Property)
	County
	 	8.14
	Cunningham Parties
	 	10.2
	Dispute Period
	 	10.4(a)
	Earnout Escrow Amount
	 	3.5(f)
	Earnout Payment
	 	3.5(a)
	Earnout Period
	 	3.5(a)
	Earnout Review Period
	 	3.5(c)
	Earnout Statement
	 	3.5(b)
	EBITDA Components
	 	3.5(b)
	ERISA
	 	5.14(a)
	Escrow Agent
	 	3.4
	Estimated Closing Date Net Working Capital
	 	3.3(a)
	Estimated
Closing Date Net Working Capital Statement
	 	3.3(a)
	Excluded Matter
	 	1.1 (in definition of Material Adverse Effect)
	Financial Statements
	 	5.6
	Indemnification Escrow Agreement
	 	3.4
	Indemnification Escrow Amount
	 	3.4
	Indemnification Claim
	 	10.4(a)
	Indemnified Party
	 	10.4(a)

8

 

	 	 	 
	Term	 	Section
	 
	Indemnifying Party
	 	10.4(a)
	Lincolnshire
	 	Recitals
	Losses
	 	10.2(a)
	Marks
	 	1.1 (in definition of Intellectual Property)
	Material Contracts
	 	5.13(a)
	Montgomery Facility Deed
	 	8.14
	Montgomery Facility Lease
	 	8.14
	Montgomery Facility Release
	 	8.14
	Montgomery Property
	 	8.14
	Monumental
	 	Recitals
	Monumental Warrant
	 	5.4(a)
	Off-Balance Sheet Transaction
	 	5.25
	Owned Property
	 	5.10
	Patents
	 	1.1 (in definition of Intellectual Property)
	Personal Property Leases
	 	5.11
	Preferred Shares
	 	Recitals
	Preferred Stock
	 	Recitals
	Purchase Price
	 	3.1
	Purchaser
	 	Recitals
	Purchaser Documents
	 	7.2
	Purchaser Indemnified Parties
	 	10.2(a)
	Real Property Lease
	 	5.10
	Recalls
	 	5.27(c)
	Scheduled Agreement
	 	10.2(a)
	Scheduled Obligations
	 	10.2(a)
	Securities Act
	 	7.5
	Selling Stockholder
	 	Recitals
	Selling Stockholder Documents
	 	6.2
	Selling Stockholder Indemnified
	 	10.3(a)
	Parties
	 	 
	Settlement
	 	10.4(a)
	Shares
	 	Recitals
	Supply and Purchase Agreement
	 	3.5(g)(ii)
	Tail Policy
	 	8.13
	Target EBITDA
	 	3.5(a)
	Target Net Working Capital
	 	3.3(a)
	Target Tax Amount
	 	8.10(a)
	Selling Stockholder
	 	Recitals
	VEBA
	 	5.14(d)
	Warrant
	 	Recitals

          (c) Other Definitional and Interpretive Matters. Unless otherwise expressly provided,
for purposes of this Agreement, the following rules of interpretation shall apply:

9

 

          (i) Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken pursuant to this
Agreement, the date that is the reference date in calculating such period shall be
excluded. If the last day of such period is a non-Business Day, the period in question
shall end on the next succeeding Business Day.

          (ii) Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

          (iii) Exhibits/Schedules. The Exhibits and Schedules to this Agreement are
hereby incorporated and made a part hereof and are an integral part of this Agreement. All
Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein. Any capitalized terms used
in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth
in this Agreement. The specific disclosures set forth in the Schedules shall be organized
to correspond to a specific section reference in this Agreement to which the qualifying and
correspondingly numbered disclosure relates, together with appropriate cross references
when disclosure is applicable to other sections of this Agreement, and any disclosure set
forth in one section of the Schedules shall apply both (i) to the representations and
warranties contained in the Section of this Agreement to which it corresponds in number or
to which it is referred by cross reference and (ii) any other representation and warranty
of the Selling Stockholder, the Company or the Purchaser in this Agreement to the extent
that it is readily apparent from a reading of such disclosure item that it would also
qualify or apply to such other representation and warranty.

          (iv) Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include the plural
and vice versa.

          (v) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of headings are
for convenience of reference only and shall not affect or be utilized in construing or
interpreting this Agreement. All references in this Agreement to any “Section” are
to the corresponding Section of this Agreement unless otherwise specified.

          (vi) Herein. The words such as “herein,” “hereinafter,”
“hereof,” and “hereunder” refer to this Agreement as a whole and not merely
to a subdivision in which such words appear unless the context otherwise requires.

          (vii) Including. The word “including” or any variation thereof means
“including, without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters immediately following
it.

10

 

          (viii) Made Available. An item shall be considered “made available” to
Purchaser, to the extent such phrase appears in this Agreement, only if such item has been
provided in writing to Purchaser.

          (ix) Reflected On or Set Forth In. An item arising with respect to a specific
representation or warranty shall be deemed to be “reflected on” or “set forth
in” a balance sheet or financial statements, to the extent any such phrase appears in
such representation or warranty, if (a) there is a reserve, accrual or other similar item
underlying a number on such balance sheet or financial statements that relate to the
subject matter of such representation, (b) such item is otherwise specifically set forth on
the balance sheet or financial statements or (c) such item is reflected on the balance
sheet or financial statements and is specifically set forth in the notes thereto.

          (d) The parties hereto have participated jointly in the negotiation and drafting of this
Agreement and, in the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

ARTICLE II

SALE AND PURCHASE OF SHARES

     2.1 Sale and Purchase of Shares. Upon the terms and subject to the conditions contained herein, on the Closing Date, the
Selling Stockholder shall sell, transfer, assign and convey to Purchaser, and Purchaser shall
purchase and accept from the Selling Stockholder, the Shares (which shall constitute all of the
outstanding equity interests in the Company on a fully diluted basis as of the Closing Date), free
and clear of all Liens.

ARTICLE III

CONSIDERATION

          3.1 Consideration. The aggregate consideration for all of the Shares shall be an
amount in cash equal to Seventy One Million Dollars ($71,000,000) (the “Closing Purchase
Price”) as adjusted pursuant to Sections 3.2, 3.3 and 3.5 hereof (the
“Purchase Price”).

          3.2
Payment of Closing Purchase Price.

          (a) Closing Purchase Price Payment. On
the Closing Date, and upon the terms and
subject to the conditions contained herein, Purchaser shall (i) deposit Seven Million One Hundred
Thousand Dollars ($7,100,000) (the “Indemnification Escrow Amount”) with the Escrow Agent
subject to the terms and conditions of the Indemnification Escrow Agreement, and (ii) pay
Sixty-Three Million Nine Hundred Thousand Dollars ($63,900,000) less the Closing Date Payments (as
set forth in

11

 

Section 3.2(b) below) and plus or minus the amount by which the Closing
Purchase Price is adjusted pursuant to Section 3.3 hereof (collectively, the “Closing
Purchase Price Payment”), by wire transfer of immediately available United States funds into
such account or accounts designated by the Selling Stockholder in writing at least three (3)
Business Days prior to the date of the required payment. Subject to any adjustments pursuant to
Section 3.3, release of the Indemnification Escrow Amount in accordance with the terms and
conditions of the Indemnification Escrow Agreement, and the right to receive the Earnout Payment,
if any, pursuant to Section 3.5, the Company and the Selling Stockholder acknowledge and
agree that the payments to be made pursuant to this Section 3.2 constitute payment in full
of the Purchase Price and that the Selling Stockholder is entitled to no further payments in
respect of the Shares.

          (b) Payments Made on or Before the Closing Date.

          (i) At or prior to the close of business on the date immediately preceding the Closing
Date, the Selling Stockholder shall provide Purchaser with written notice setting forth the
amount required to pay and satisfy in full the Closing Date Payments together with the
identity of, and payment instructions for, each Person entitled to receive such Closing
Date Payments. Concurrently with, and as a condition precedent to the Closing, (i)
Purchaser shall pay or cause the Company to pay the Closing Date Payments from the Closing
Purchase Price
Payment in accordance with the written notice provided to Purchaser by the Selling
Stockholder setting forth the amount required to pay and satisfy in full the Closing Date
Payments, and (ii) the Selling Stockholder shall cause the Company to obtain from its
lenders with respect to all Liabilities set forth on Schedule 3.2(b), pay-off
letters and termination and release documents, acceptable to Purchaser, in each case
reflecting the total amount of such Indebtedness, including interest and finance charges,
as well as any other monetary obligations owing by the Company or its Subsidiaries to such
lenders to be repaid as of the Closing Date to satisfy in full such Liabilities for
Indebtedness of the Company or its Subsidiaries to such lenders and confirming that as of
the Closing Date the Company and its Subsidiaries and their assets shall be released from
any and all Liens in favor of such lenders.

          (ii) The Selling Stockholder shall also be responsible for and pay, from the Closing
Purchase Price, all fees, commissions and charges of any broker, finder or investment
banker (including, but not limited to, fees and expenses payable to BB&T Capital Markets)
in connection with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Company or the Selling Stockholder. The Company or the Selling
Stockholder, as the case may be, shall pay on or before the Closing Date, either directly
or from the Closing Purchase Price Payment, all amounts payable for legal, accounting and
other fees and expenses related to the transactions contemplated by this Agreement due by
or on behalf of the Company or the Selling Stockholder. The Company shall pay, on or
before the Closing, any severance or bonus payments required to be paid to employees who
cease their employment as of or prior to Closing (other than as a result of the Purchaser

12

 

affirmatively taking actions to specifically terminate the employment of such employees).

          3.3 Purchase Price Adjustment.

          (a) Estimated Closing Date Net Working Capital. Not later than five (5) business days
prior to the Closing Date (unless Purchaser shall otherwise agree), the Selling Stockholder shall
deliver to Purchaser a statement (the “Estimated Closing Date Net Working Capital
Statement”) setting forth the Selling Stockholder’s good faith estimate of the Closing Net
Working Capital (the “Estimated Closing Date Net Working Capital”) prepared in accordance
with GAAP applied on a basis consistent with that employed by the Company in the preparation of the
Financial Statements. The parties hereto agree that the components and calculations of Closing Net
Working Capital shall be based on the calculations of Estimated Closing Date Net Working Capital
set forth on Exhibit C, attached hereto (which has been provided for exemplary purposes only).

          (b) Closing Net Working Capital Adjustment.

          (i) Calculation of Adjustment. The Closing Purchase Price Payment, as
adjusted pursuant to Section 3.3(a) shall be (A) increased dollar-for-dollar by the
amount that the actual Closing Net Working Capital is greater than the Estimated Closing
Date Net Working Capital; or (B) decreased dollar-for-dollar by the amount that the actual
Closing Net Working Capital is less than the Estimated Closing Date Net Working Capital, in
each case as determined in accordance with the procedures set forth in this Section
3.3(b). The amount of any decrease to the Closing Purchase Price Payment pursuant to
this Section 3.3(b)(i) shall be paid by the Selling Stockholder. The amount of any
increase to the Closing Purchase Price Payment pursuant to this Section 3.3(b)(i)
shall be paid by Purchaser. The Selling Stockholder agrees to set aside an amount of the
Closing Purchase Price Payment received by it necessary to satisfy any adjustments pursuant
to this Section 3.3(b), including without limitation by refraining from
distributing such necessary amounts to any investors or equity holders in such Selling
Stockholder until any final adjustment to the Closing Purchase Price Payment pursuant to
this Section 3.3(b) shall have been completed.

          (ii) Preparation of Closing Date Balance Sheet. No earlier than sixty (60)
days after the Closing Date and no later than seventy (70) days after the Closing Date,
Purchaser shall cause to be prepared and delivered to the Selling Stockholder (A) a balance
sheet of the Company as of the Closing Date prepared in accordance with GAAP as in effect
as of the date of this Agreement applied on a basis consistent with that employed by the
Company in preparation of the Financial Statements (the “Closing Date Balance
Sheet”), (B) the Closing Statement and (C) a certificate of an executive officer of
Purchaser to the effect that the Closing Net Working Capital has been in all respects
prepared in accordance with this Section 3.3(b). The closing statement (the
“Closing Statement”) shall present the actual Net Working Capital of the Company as
of

13

 

the close of business on the Closing Date (“Closing Net Working Capital”) and
shall be prepared based on the Closing Date Balance Sheet.

          (iii) Exclusion of Certain Receivables. The Closing Statement shall not
include in Closing Net Working Capital any portion of any receivable (“Excluded
Receivables”) that (A) was included in the Estimated Closing Date Net Working Capital
and (B) was not paid in full by the date of delivery of the Closing Statement pursuant to
Section 3.3(b)(ii); provided, however, that if any Excluded Receivable is collected
by the Company after the date of delivery of the Closing Statement then the Company shall
promptly remit such amounts, less any reasonable costs directly attributable to collection,
including reasonable attorney’s fees, to the Selling Stockholder. Purchaser shall cause
the Company to use its commercially reasonable efforts after Closing to collect all
Excluded Receivables in accordance with past practice of the Company. Concurrently with
delivery of the Closing Statement, the Purchaser shall cause the Company to provide the
Selling Stockholder with information relating to any Excluded Receivable and the
Company’s collection efforts with respect to such receivable. After Closing until the
earlier of (x) collection of all Excluded Receivables or other disposition of such
receivables in a manner reasonably acceptable to Selling Stockholder and (y) six months
following the date of this Agreement, the Purchaser shall cause the Company to provide to
the Selling Stockholder, on a monthly basis, a report showing the status of the outstanding
aging of the Excluded Receivables and the Company’s collection efforts with respect to such
receivables.

          (iv) Walker Trailer Sales Receivable. The parties hereto acknowledge and
agree that (A) the account receivable of the Company with Walker Trailer Sales described in
the notes to the Estimated Closing Date Net Working Capital Statement (the “Walker
Trailer Receivable”) shall not be included in the Estimated Closing Date Net Working
Capital or the Closing Net Working Capital, (B) the Selling Stockholder shall cause the
Company to transfer, assign and delegate all rights to, interests in and obligations with
respect to the Walker Trailer Receivable to S&S Repurchase Solutions, LLC effective as of
immediately prior to the Closing, and (C) to the extent that the risk of loss has not
transferred to the customer, the risk of loss of any trailers underlying the Walker Trailer
Receivable shall be the sole responsibility of the Selling Stockholder (except to the
extent that any such loss occurs as a direct result of the gross negligence or willful
misconduct of the Purchaser) and the right of ownership with respect to such trailers shall
belong to S&S Repurchase Solutions, LLC.

          (c) The Selling Stockholder shall have twenty (20) days to review the Closing Statement and
Closing Date Balance Sheet (collectively, the “Closing Net Working Capital Documents”). If
the Selling Stockholder disagrees with Purchaser’s calculation of Closing Net Working Capital
delivered pursuant to Section 3.3(b)(ii), the Selling Stockholder may, within twenty (20)
days after receipt of the Closing Net Working Capital Documents, deliver a notice to Purchaser
disagreeing with such calculation and setting forth the Selling Stockholder’s calculation of such
amount. Any such notice of disagreement shall specify those items or amounts as to which the
Selling

14

 

Stockholder disagrees, and the Selling Stockholder shall be deemed to have agreed with all
other items and amounts contained in the Closing Statement and the calculation of Closing Net
Working Capital delivered pursuant to Section 3.3(b)(ii). If the Selling Stockholder fails
to deliver such notice in such twenty (20) day period, the Selling Stockholder shall have waived
its right to contest the Closing Statement and the calculation of Closing Net Working Capital set
forth therein shall be deemed to be final and binding upon Purchaser and the Selling Stockholder
and such amount shall be used for purposes of calculating the adjustment pursuant to Section
3.3(b)(i) above.

          (d) If a notice of disagreement shall be duly delivered pursuant to Section 3.3(c),
the Selling Stockholder and Purchaser shall, during the twenty (20) days following such delivery,
use their commercially reasonable efforts to reach agreement on the disputed items or amounts in
order to determine, as may be required, the amount of Closing Net Working Capital, which amount
shall not be less than the amount thereof
shown in Purchaser’s calculation delivered pursuant to Section 3.3(b)(ii) nor more
than the amount thereof shown in Selling Stockholder’s calculation delivered pursuant to
Section 3.3(c). If during such period, the Selling Stockholder and Purchaser are unable to
reach such agreement, then all amounts and issues remaining in dispute shall be submitted by the
Selling Stockholder and Purchaser to a mutually acceptable nationally recognized independent
accounting firm (the “Accounting Referee”) for a determination resolving such disputed
items or amounts for the purpose of calculating Closing Net Working Capital (it being understood
that in making such calculation, the Accounting Referee shall be functioning as an expert and not
as an arbitrator). If the parties are unable to agree on an appointment of an Accounting Referee,
within ten (10) days after not being able to reach agreement thereon, an Accounting Referee shall
be determined by mutual agreement of the regular auditor of the Company prior to the Closing Date
and the regular auditor of the Purchaser and, if such auditors are unable to reach agreement within
ten (10) days of being requested to do so, an Accounting Referee shall be determined by lot with
each of the Selling Stockholder and Purchaser submitting one candidate meeting the requirements of
an Accounting Referee set forth in the definition thereof. In making such calculation, the
Accounting Referee shall consider only those items or amounts in the Closing Statement and
Purchaser’s calculation of Net Working Capital as to which the Selling
Stockholder has disagreed.
The Accounting Referee shall deliver to the Selling Stockholder and Purchaser, as promptly as
practicable (but in any case no later than thirty (30) days from the date of engagement of the
Accounting Referee), a report setting forth its calculation of Closing Net Working Capital. Such
report shall be final and binding upon the Selling Stockholder and Purchaser and shall be used for
purposes of calculating the adjustment pursuant to Section 3.3(b)(i) above. The cost of
such review and report shall be borne equally by the Selling Stockholder, on the one hand, and
Purchaser, on the other hand.

          (e) The Selling Stockholder, Purchaser and the Company shall, and shall cause their respective
representatives to, cooperate and assist in the preparation of the Closing Statement and the
calculation of Closing Net Working Capital and in the conduct of the review referred to in this
Section 3.3, including, without limitation, the making available to the extent necessary of
books, records, work papers and personnel.

15

 

          (f) Form of Payments. Any payment pursuant to Section 3.3(b)(i) shall be made
at a mutually convenient time and place within five (5) Business Days after Closing Net Working
Capital is agreed to by Purchaser and the Selling Stockholder or is determined to be final and
binding either pursuant to Section 3.3(c) or Section 3.3(d) by wire transfer of
immediately available United States funds either by Purchaser into such account or accounts
designated by the Selling Stockholder, or by the Selling Stockholder into such account or accounts
designated by Purchaser, as the case may be.

          3.4 Indemnification Escrow Agreement. To secure the indemnification obligations of
the Selling Stockholder set forth in Section 10.2 hereof, Purchaser, Selling Stockholder
and Lasalle Bank National
Association, as escrow agent (the “Escrow Agent”), shall at the Closing execute an
Indemnification Escrow Agreement, a form of which is attached hereto as Exhibit D (the
“Indemnification Escrow Agreement”), which provides for Seven Million One Hundred Thousand
Dollars ($7,100,000) (the “Indemnification Escrow Amount”) of the Closing Purchase Price
Payment to be held in escrow following the Closing Date. The Indemnification Escrow Amount and any
interest thereon shall be dealt with in accordance with the terms and conditions set forth in the
Indemnification Escrow Agreement.

          3.5 Earnout.

          (a) Upon the terms and subject to the conditions contained herein, in the event that the
EBITDA of the Company and its Subsidiaries on a consolidated basis is at least Seventeen Million
Eight Hundred Thousand Dollars ($17,800,000) or greater (“Target EBITDA”) for the period
from January 1, 2006 through and including December 31, 2006 (the “Earnout Period”), an
additional amount of consideration in the amount of Four Million Five Hundred Thousand Dollars
($4,500,000) (the “Earnout Payment”) shall become payable to the Selling Stockholder and
shall be treated by the parties as an adjustment to the Purchase Price.

          (b) As promptly as practicable following, but no later than sixty (60) days following,
completion of the Purchaser’s consolidated financial statements for the Earnout Period, Purchaser
shall prepare and deliver to the Selling Stockholder (i) a statement setting forth in reasonable
detail the calculation of EBITDA of the Company and its Subsidiaries on a consolidated basis for
the Earnout Period (the “Earnout Statement”) and (ii) a certificate of an executive officer
of Purchaser to the effect that the Earnout Statement has been in all respects prepared in
accordance with this Section 3.5(b). The Earnout Statement and the components of EBITDA
(“EBITDA Components”) shall be derived from the consolidated audited financial statements
of the Purchaser for the year ending December 31, 2006, adjusted as necessary to comply with
Section 3.5(g).

          (c) The Selling Stockholder shall have twenty (20) days to review the Earnout Statement
(“Earnout Review Period”). If the Selling Stockholder disagrees with Purchaser’s
calculation of EBITDA or the Earnout Statement delivered pursuant to Section 3.5(b), the
Selling Stockholder may, within twenty (20) days after receipt of the Earnout Statement, deliver a
notice to Purchaser disagreeing with the Earnout Statement

16

 

and setting forth the Selling Stockholder’ calculation of EBITDA and EBITDA Components. Any such notice of disagreement shall
specify those items or amounts as to which the Selling Stockholder disagrees, and the Selling
Stockholder shall be deemed to have agreed with all other items and amounts contained in the
Earnout Statement delivered pursuant to Section 3.5(b). If the Stockholder Representative
fails to deliver such notice in such twenty (20) day period, the Selling Stockholder shall have
waived its right to contest the Earnout Statement and the calculation of EBITDA set forth therein
shall be deemed to be final and binding upon Purchaser and the Selling Stockholder and shall
be used for purposes of the adjustment pursuant to Section 3.5(a) above.

          (d) If a notice of disagreement shall be duly delivered pursuant to Section 3.5(c),
the Selling Stockholder and Purchaser shall, during the twenty (20) days following such delivery,
use their commercially reasonable efforts to reach agreement on the disputed items or amounts
contained within the Earnout Statement in order to determine, as may be required, EBITDA. If
during such period, the Selling Stockholder and Purchaser are unable to reach such agreement, then
all amounts and issues remaining in dispute shall be submitted by the Selling Stockholder and
Purchaser to an Accounting Referee for a determination resolving such disputed items or amounts for
the purpose of calculating EBITDA (it being understood that in making such calculation, the
Accounting Referee shall be functioning as an expert and not as an arbitrator). If the parties are
unable to agree on an appointment of an Accounting Referee, within ten (10) days after not being
able to reach agreement thereon, an Accounting Referee shall be determined by mutual agreement of
the regular auditor of the Company prior to the Closing Date and the regular auditor of the
Purchaser and, if such auditors are unable to reach agreement within ten (10) days of being
requested to do so, an Accounting Referee shall be determined by lot with each of the Selling
Stockholder and Purchaser submitting one candidate meeting the requirements of an Accounting
Referee set forth in the definition thereof. In making such calculation, the Accounting Referee
shall consider only those items or amounts in the Earnout Statement, the EBITDA Components and
Purchaser’s calculation of EBITDA as to which the Selling Stockholder has disagreed. The
Accounting Referee shall deliver to the Selling Stockholder and Purchaser, as promptly as
practicable (but in any case no later than thirty (30) days from the date of engagement of the
Accounting Referee), a report setting forth its calculation of EBITDA. Such report shall be final
and binding upon the Selling Stockholder and Purchaser and shall be used for purposes of
determining the adjustment pursuant to Section 3.5(a) above. The cost of such review and
report shall be borne equally by the Selling Stockholder, on the one hand, and Purchaser, on the
other hand.

          (e) The Selling Stockholder, Purchaser and the Company shall, and shall cause their respective
representatives to, cooperate and assist in the preparation of the Earnout Statement and the
calculation of EBITDA and in the conduct of the review referred to in this Section 3.5,
including, without limitation, the making available to the extent necessary of books, records, work
papers and personnel.

          (f) Any payment made pursuant to this Section 3.5, shall be made within five (5)
Business Days after EBITDA for the Earnout Period is agreed to by Purchaser and the Selling
Stockholder or is determined to be final and binding either

17

 

pursuant to Section 3.5(c) or
Section 3.5(d) by wire transfer of immediately available United States funds into such
account or accounts designated by the Selling Stockholder. Notwithstanding anything to the
contrary contained herein, to the extent that, at the time any Earnout Payment is to be made, there
exists any amounts owing from, or claims asserted against, the Selling Stockholder to Purchaser
pursuant to Section 3.3(f),
Section 8.10, Article X, or the Indemnity Side Letter, Purchaser shall be
entitled to set-off any such amounts against the Earnout Payment, and when and whether such amounts
are to be finally remitted to Seller or retained by Purchaser, as the case may be, shall be
determined in a manner consistent with the procedures for the determination of payment of an
Indemnification Claim under the Escrow Agreement; provided that (i) if the set-off relates to an
Indemnification Claim and the amount set off, when added to the amount then held under the
Indemnification Escrow Agreement, would exceed the sum of (A) the Indemnification Escrow Amount and
(B) $450,000 (such sum, the “Earnout Escrow Amount”), the Purchaser and Selling Stockholder
shall promptly execute a Joint Statement (as defined in the Indemnification Escrow Agreement)
directing the Escrow Agent to pay to the Selling Stockholder an amount equal to such excess and
(ii) if the set-off relates to a claim under the Indemnity Side Letter, the amount set-off shall
reduce dollar for dollar any cap on liability under the Indemnity Side Letter.

          (g) Operating Rules and Guidelines. Except as set forth on Schedule 3.5(g),
the following guidelines and rules shall be used in calculating EBITDA and the EBITDA
Components and shall be followed with respect to the Company and its Subsidiaries during the
Earnout Period:

          (i) EBITDA and the EBITDA Components and all other accounting terms used herein shall
be determined in accordance with GAAP as in effect at the date of this Agreement applied on
a basis consistent with that employed by the Company in the preparation of the Financial
Statements.

          (ii) During the Earnout Period, for purposes of the calculation of EBITDA, Purchaser
shall adhere to the pricing formula set forth in the Supply and Purchase Agreement dated as
of February 13, 2003, by and between Purchaser and the Company (“Supply and Purchase
Agreement”) with respect to sales to Purchaser of “Wabash” and “Transcraft” branded
trailers; provided, however, that with respect to Purchaser’s direct house
accounts (a current list of which is set forth on Exhibit A hereto), purchase price shall
be determined by reference to the lowest purchase price billed on comparable volume
purchases of the same products, as adjusted to give effect to seasonality, plant usage and
other matters that can affect the purchase price of the Company’s products; and
further, provided, however, in the event the Company is required to
move the production of “Transcraft” branded trailers to regular Company customers that are
already in the Company’s backlog at such time in order to satisfy orders placed by
customers who are in Purchaser’s customer base, the contribution to margin of the sales to
the Purchaser’s customers shall be determined based on the higher of the contribution to
margin of the moved sales and the contribution to margin of the sales to the Purchaser’s
customers.

18

 

          (iii) During the Earnout Period, the Purchaser shall not take or fail to take any
action with the intent and for the purpose of unfairly or prejudicially affecting the
Company’s ability to achieve the Target EBITDA.

ARTICLE IV

CLOSING AND TERMINATION

          4.1 Closing Date. Subject to the satisfaction of the conditions set forth in
Sections 9.1 and 9.2 hereof (or the waiver thereof by the party entitled to waive
that condition), the closing of the sale and purchase of the Shares provided for in Section
2.1 hereof (the “Closing”) shall take place at the offices of Pitney Hardin, LLP
located at 7 Times Square, New York, New York (or at such other place as the parties may designate
in writing) at 9:00 a.m. (New York City time) on the second Business Day after the satisfaction or
waiver of each condition to the Closing set forth in Article IX (other than conditions that
by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of
such conditions), unless another time or date, or both are agreed to in writing by the parties
hereto. The date on which the Closing shall be held is referred to in this Agreement as the
“Closing Date”.

          4.2 Termination of Agreement. This Agreement may be terminated prior to the Closing
as follows:

          (a) at the election of the Selling Stockholder or Purchaser on or after March 3, 2006, if the
Closing shall not have occurred by the close of business on such date, provided that the
terminating party (or, in the case of the Selling Stockholder, the Selling Stockholder or the
Company) is not in material default of any of its obligations hereunder;

          (b) by mutual written consent of the Selling Stockholder and Purchaser;

          (c) by the Selling Stockholder or Purchaser if there shall be in effect a final nonappealable
Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby; it being agreed that the
parties hereto shall promptly appeal any adverse determination that is not nonappealable (and
pursue such appeal with reasonable diligence);

          (d) by the Selling Stockholder, if Purchaser shall have breached any representation, warranty,
covenant or other agreement contained in this Agreement that would give rise to the failure of a
condition set forth in Section 9.2 hereof, which breach cannot be or has not been cured
within 10 days after the giving of written notice by the Selling Stockholder to Purchaser; or

          (e) by Purchaser, if the Company or the Selling Stockholder shall have breached any
representation, warranty, covenant or other agreement contained in this
Agreement that would give rise to the failure of a condition set forth in Section 9.1

19

 

hereof, which breach cannot be or has not been cured within 10 days after the giving of written
notice by Purchaser to the Selling Stockholder.

          4.3 Procedure Upon Termination. In the event of termination and abandonment by
Purchaser or the Selling Stockholder or both pursuant to Section 4.2 hereof, written notice
thereof shall forthwith be given to the other party or parties, and this Agreement shall terminate,
and the purchase of the Shares hereunder shall be abandoned, without further action by Purchaser or
the Selling Stockholder.

          4.4 Effect of Termination. If this Agreement is validly terminated pursuant to
Section 4.2 hereof, all further obligations of the parties under this Agreement shall
terminate, except that (a) the obligations under the Confidentiality Agreement and Article
XI hereof of this Agreement shall survive such termination and not be affected thereby, and (b)
each Party’s right to pursue all legal remedies for any breach of any provision of this Agreement
shall survive such termination. Each party’s rights of termination under Section 4.2
hereof are in addition to any other rights it may have under this Agreement or otherwise, and the
exercise of a right of termination shall not constitute an election of remedies.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The Company hereby represents and warrants to Purchaser that:

          5.1 Organization and Good Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to carry on its business
as currently being conducted. The Company is duly qualified or authorized to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction in which it owns,
leases or operates its properties and assets and each other jurisdiction in which the conduct of
its business or the ownership of its properties and assets requires such qualification or
authorization, except where the failure to be so qualified, authorized or in good standing would
not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse
Effect. The Company has made available to Purchaser a true and complete copy of the certificate or
articles of incorporation (or other organizational documents) of the Company and of each
Subsidiary, as currently in effect, certified as of a recent date by the Secretary of State (or
comparable governmental authority) of the respective jurisdictions of incorporation, and
a true and complete copy of the bylaws of the Company and of each Subsidiary, as currently in
effect, certified by their respective corporate secretaries and the corporate record books with
respect to actions taken by the shareholders and board of directors of the Company and each of the
Subsidiaries.

          5.2 Authorization of Agreement. The Company has all requisite power and authority to
execute and deliver this Agreement and each other agreement, document, or instrument or certificate
contemplated by this Agreement or to be executed

20

 

by the Company in connection with the consummation of the transactions
contemplated by this Agreement (the “Company Documents”), to perform its
obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby.  The execution and delivery of this Agreement and the Company
Documents and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part of the Company.
This Agreement has been, and each of the Company Documents has been or will be at or prior
to the Closing, duly and validly executed and delivered by the Company and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each of
the Company Documents, when so executed and delivered will
constitute, the legal, valid and binding obligations of the Company,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity).

          5.3 Conflicts; Consents of Third Parties.

          (a) Except as set forth on Schedule 5.3(a), none of the execution and delivery by the
Company of this Agreement or the Company Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by the Company with any of the provisions hereof or
thereof does or will conflict with, or result in any violation of or constitute a breach of or a
default (with or without notice or lapse of time, or both) under, or result in the loss of any
benefit under, or permit the acceleration of any obligation under, or give rise to a right of
termination, modification or cancellation under or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary under, any provision of (i) the
certificate of incorporation and bylaws or comparable organizational documents of the Company or
any Subsidiary; (ii) any Contract, or Permit to which the Company or any Subsidiary is a party or
by which any of the properties or assets of the Company or any Subsidiary are bound; (iii) any
Order of any Governmental Body applicable to the Company or any Subsidiary or by which any of the
properties or assets of the Company or any Subsidiary are bound; or (iv) any applicable Law, other
than, in the case of clauses (ii), (iii) and (iv), such conflicts, violations, breaches, loss of
benefits, accelerations, modifications, defaults, terminations, Liens, or cancellations, that would
not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse
Effect.

          (b) Except as set forth on Schedule 5.3(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Company or any Subsidiary in connection with the
execution, delivery or performance of this Agreement or the Company Documents or the compliance by
the Company with any of the provisions hereof or thereof, or the consummation of the transactions
contemplated hereby or thereby, except for (i) compliance with the applicable requirements of the
HSR Act and (ii) such consents, waivers, approvals, Orders, Permits or authorizations the

21

 

failure of which to obtain would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect.

          5.4 Capitalization.

          (a) The authorized capital stock of the Company consists solely of 3000 shares of Common Stock
and 17,000 shares of Preferred Stock. As of the date hereof, there are 915 shares of Common Stock
issued and outstanding, 10,430 shares of Preferred Stock issued and outstanding, and shares of
Common Stock issuable pursuant to the Warrant representing six percent (6%) of the fully diluted
Common Stock. All of the issued and outstanding shares of Common Stock are duly authorized for
issuance and are validly issued, fully paid and non-assessable. No shares of capital stock of the
Company or any Subsidiary have been reserved for any purpose or are held as treasury stock.

          (b) Except as set forth on Schedule 5.4(b), there is no existing option, warrant,
call, right (preemptive or otherwise), or Contract of any character to which the Company is a party
requiring, and there are no securities of the Company outstanding that upon conversion or exchange
would require, the issuance, of any shares of capital stock of the Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock of the Company. Except as set forth on Schedule 5.4(b), the Company is not a
party to any voting trust or other Contract with respect to the voting, redemption, sale, transfer,
issuance, purchase, repurchase or other disposition of the Common Stock of the Company, any other
securities of the Company, or any securities of any Subsidiary, except as contemplated hereunder.

          5.5 Subsidiaries.

          (a) Schedule 5.5(a) sets forth the name of each Subsidiary, and, with respect to each
Subsidiary, the jurisdiction in which it is incorporated or organized, the jurisdictions, if any,
in which it is qualified to do business, the number of shares of its authorized capital stock, the
number and class of shares thereof duly authorized, issued and outstanding, the names of all
stockholders or other equity owners and the number of shares of stock owned by each stockholder or
the amount of equity owned by each equity owner. Each Subsidiary is a duly organized and validly
existing corporation or other entity in good standing under the laws of the jurisdiction of its
incorporation or organization and is duly qualified or authorized to do business as a foreign
corporation or entity and is in good standing under the laws of each jurisdiction in which the
conduct of its business or the ownership of its properties and assets requires such qualification
or authorization, except where the failure to be so qualified, authorized or in good standing as a
foreign corporation would not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect. Each Subsidiary has all requisite corporate or entity power and
authority to own, lease and operate its properties and assets and carry on its business as
currently being conducted. Except as set forth on Schedule 5.5(a), neither the Company nor
any of its Subsidiaries owns, directly or indirectly, an equity interest in any other Person.

22

 

          (b) The outstanding shares of capital stock of each Subsidiary are duly authorized, validly
issued, fully paid and non-assessable, and all such shares or other equity interests represented as
being owned by the Company are owned by it free and clear of any and all Liens except as set forth
on Schedule 5.5(b). No shares of capital stock have been reserved for any purpose or are
held by any Subsidiary as treasury stock. There is no existing option, warrant, call, right
(preemptive or otherwise), or Contract of any character to which any Subsidiary is a party
requiring, and there are no convertible securities of any Subsidiary outstanding which upon
conversion or exchange would require, the issuance of any shares of capital stock or other equity
interests of any Subsidiary or other securities convertible into, exchangeable for or evidencing
the right to subscribe for or purchase shares of capital stock or other equity interests of any
Subsidiary.

          5.6 Financial Statements. The Company has made available to Purchaser copies of the
audited consolidated balance sheets of the Company and its Subsidiaries as at December 31, 2005,
December 31, 2004, December 31, 2003, and December 31, 2002 and the related audited statements of
income and of cash flows of the Company for the years then ended, each accompanied by the related
report of BDO Seidman, LLP, independent public accountants. The audited financial statements
referred to in Sections 5.6, including the related notes and schedules thereto, are
referred to herein as the “Financial Statements.” Except as set forth in the notes
thereto, each of the Financial Statements (i) has been prepared from, and are in accordance with,
books and records of the Company, (ii) has been prepared in accordance with GAAP consistently
applied and (iii) presents fairly in all material respects the consolidated financial position,
results of operations and cash flows of the Company as at the dates and for the periods indicated
therein.

          For the purposes hereof, the audited consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 2005 is referred to as the “Balance Sheet” and December 31,
2005 is referred to as the “Balance Sheet Date”.

          5.7 No Undisclosed Liabilities. To the Knowledge of the Company, neither the Company nor
any Subsidiary has any Liabilities of any kind or nature, other than Liabilities (i) set forth in
the Schedules to this Article V, (ii) set forth in the Financial Statements for the fiscal year
ended December 31, 2005 and (iii) incurred in the Ordinary Course of Business after December 31,
2005 that do not, individually or in the aggregate, involve amounts in excess of $100,000.

          5.8 Absence of Certain Developments. Except as contemplated by this Agreement or as
set forth on Schedule 5.8, since the Balance Sheet Date (i) the Company and its
Subsidiaries have conducted their respective businesses only in the Ordinary Course of Business,
(ii) there has not been any event, change, occurrence or circumstance that, individually or in the
aggregate has had, or would reasonably be expected to have a Material Adverse Effect, (iii) there
has not been any uninsured damage, destruction, loss or casualty to property or assets of the
Company or any Subsidiary and (iv) there has not been any action taken of the type described in
Section 8.2(b) that had such action

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occurred following the date hereof, without Purchaser’s prior approval, would be in violation
of Section 8.2(b).

          5.9 Taxes.

          (a) Each of the Company and its Subsidiaries has timely filed all federal, state, local and
foreign Tax Returns and reports required to be filed by it. All Taxes of the Company and its
Subsidiaries that have or may become due for all periods which end prior to or which end on the
date of the most recent Financial Statements (whether or not shown on any Tax Return) either have
been paid or are reflected in accordance with GAAP as a reserve for Taxes on the most recent
Financial Statement. All such returns and reports are correct and complete in all material
respects and were prepared in compliance with all applicable laws and regulations. Neither the
Company nor any of its Subsidiaries currently is the beneficiary of any extension of time within
which to file any Tax Return. All Taxes required to be withheld by the Company or any of its
Subsidiaries have been withheld and have been (or will be) duly and timely paid to the proper
Governmental Body. No deficiencies for any Taxes have been proposed, asserted or assessed in
writing against the Company or any of its Subsidiaries that are still pending. No requests for
waivers of the time to assess any such Taxes have been made that are still pending. The statute of
limitations for Federal income tax purposes with respect to the Company and its Subsidiaries is
closed for all years before 2002 and neither the Company nor its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time with respect to any
Tax assessment or deficiency. No income Tax Return of the Company or its Subsidiaries is under
current examination by the IRS or by any state or foreign tax authority. Neither the Company nor
any of its Subsidiaries has received from any foreign, federal, state or local taxing authority
(including jurisdictions where the Company or its Subsidiaries have not filed Tax Returns) any (i)
written notice or, to the Knowledge of the Company, any notice indicating an intent to open an
audit or other review, (ii) request for information related to Tax matters, or (iii) written notice
or, to the Knowledge of the Company, any notice of deficiency or proposed adjustment for any amount
of Tax proposed, asserted, or assessed by any taxing authority against the Company or any of its
Subsidiaries. No claim has ever been made by an authority in a jurisdiction where the Company or
any of its Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries is or
may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than
Permitted Exceptions) upon any of the assets of the Company or any of its Subsidiaries. Except
with respect to the consolidated group including the Company and its Subsidiaries, neither the
Company nor any of its Subsidiaries is otherwise liable for the Taxes of any other person as a
result of any indemnification provision or other contractual obligation. Schedule 5.9
lists all federal, state, local, and foreign income Tax Returns filed with respect to any of the
Company or its Subsidiaries for taxable periods ended on or after December 31, 2000. The Selling
Stockholder has made available to Purchaser correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies assessed against or agreed to by the
Company or any of its Subsidiaries filed or received since January 1, 2001.

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          (b) Neither the Company nor any Subsidiary will be required to include any item of income in,
or exclude any item of deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable
period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Code
Section 7121 (or any corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the Closing Date; (iii) intercompany transaction or excess loss account
described in Treasury Regulations under Code Section 1502 (or any corresponding or similar
provision of state, local or foreign income Tax law); (iv) installment sale or open transaction
disposition made on or prior to the Closing Date; or (v) prepaid amount received on or prior to the
Closing Date.

          (c) Neither the Company nor any Subsidiary nor any Person on their behalf has granted to any
Person any power of attorney that is currently in force with respect to any Tax matter.

          (d) Neither the Company nor any Subsidiary has distributed stock of another Person, or has had
its stock distributed by another Person, in a transaction that was purported or intended to be
governed in whole or in part by Code Section 355 or Code Section 361.

          (e) Neither the Company nor any Subsidiary has been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). All “reportable transactions” as described in Code Section 6011 and
the Treasury Regulations thereunder that involve the Company or any Subsidiary have been timely and
accurately reported as required by applicable Law. Neither the Company nor any Company Subsidiary
has made nor is obligated to make any payment, nor is a party to any agreement that could obligate
it to make any payment to reimburse any person or entity for excise taxes under Section 4999 of the
Code.

          5.10 Real Property.

          (a) Schedule 5.10 sets forth a true, correct and complete list of (i) all real
property and interests in real property owned in fee by the Company and its Subsidiaries
(individually, an “Owned Property” and collectively, the “Owned Properties”),
including the street address, city and state thereof and identity of the owner of each such parcel
of Owned Real Property, and (ii) all leases of real property to which the Company or any Subsidiary
is the lessee (individually, a “Real Property Lease” and collectively, the “Real
Property Leases” and, together with the Owned Properties, being referred to herein individually
as a “Company Property” and collectively as the “Company Properties”).

          (b) The Company and its Subsidiaries are the sole owners of good and valid, fee simple title
to the Owned Real Property respectively owned by them, including, without limitation, all
buildings, structures, fixtures and improvements thereon, free and

25

 

clear of all Liens of any nature whatsoever except (i) Liens set forth on Schedule
5.10 and (ii) Permitted Exceptions.

          (c) All buildings, structures, fixtures and other improvements on the Owned Real Property are
free of any material interior or exterior structural defects. The Company has not received notice
that any such buildings, structures, fixtures and improvements on the Owned Real Property are in
violation in any material respect of any Laws.

          (d) Other than the Permitted Exceptions, none of the Owned Real Property is subject to any
Contract or other restriction of any nature whatsoever (recorded or unrecorded) preventing or
limiting the Company’s or any Subsidiary’s right to convey or to use it.

          (e) The Company has not received written notice or, to the Knowledge of the Company, any
notice that any portion of the Owned Real Property or any building, structure, fixture or
improvement thereon is the subject of, or affected by, any condemnation, eminent domain or inverse
condemnation proceeding currently instituted or pending, and to the Knowledge of the Company none
of the foregoing are or have been threatened to be, the subject of, or affected by, any such
proceeding.

          (f) The Owned Real Property has access to electric, gas, water, sewer and telephone lines,
which access is adequate in all material respects for the uses to which the Owned Real Property is
currently devoted and intended to be devoted.

          (g) The Company or any Subsidiary, as the case may be, is the owner and holder of the
leasehold estate purported to be granted by the Real Property Leases. Each such Real Property
Lease is in full force and effect and constitutes a legal, valid and binding obligation of, and is
legally enforceable against, the Company and its Subsidiaries, as applicable, and, to the Knowledge
of the Company, the other parties thereto and grants the leasehold estate it purports to grant free
and clear of all Liens, except (i) Liens set forth on Schedule 5.11, (ii) Permitted
Exceptions, and (iii) as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting creditors’ rights generally and general
principles of equity (regardless of whether considered in a proceeding at law or in equity).
Neither the Company nor any Subsidiary has received any written notice or, to the Knowledge of the
Company, any notice of any threatened cancellations of any governmental approvals with respect
thereto or any outstanding disputes thereunder or failed to make any necessary material filings or
registration with respect thereto. The Company or a Subsidiary, as the case may be, has in all
material respects performed all obligations required to be performed by it to date pursuant to such
Real Property Lease. Neither the Company nor any Subsidiary has received any written notice of any
default or event that with notice or lapse of time, or both, would constitute a material default by
the Company or any Subsidiary under any of the Real Property Leases.

          5.11 Tangible Personal Property; Title to Assets. Schedule 5.11 sets forth
all leases of personal property by the Company or a Subsidiary (“Personal Property 

26

 

Leases”) involving annual payments in excess of $50,000. Neither the Company nor any
Subsidiary has received any written notice of any default or any event that with notice or lapse of
time, or both, would constitute a default, by the Company or any Subsidiary under any of the
Personal Property Leases. The Company and its Subsidiaries have good and valid title to all
material assets respectively owned by them, including, without limitation, all material assets
reflected in the Balance Sheet and all material assets purchased by the Company or by any
Subsidiary since the Balance Sheet Date (except for assets reflected in the Balance Sheet or
acquired since the Balance Sheet Date that have been sold or otherwise disposed of in the Ordinary
Course of Business), free and clear of all Liens, except (a) Liens set forth on Schedule
5.11 and (b) Permitted Exceptions. All material tangible personal property owned by the
Company and its Subsidiaries or subject to Personal Property Leases is in reasonable operating
condition and repair, ordinary wear and tear excepted, and is suitable and adequate for the uses
for which it is intended or is being used.

          5.12 Intellectual Property. Except as set forth on Schedule 5.12, the Company
and its Subsidiaries own or have valid licenses to use all Intellectual Property used by them in,
or necessary for use in, the Ordinary Course of Business, and the consummation of transactions
contemplated herein does not and will not conflict with, alter or impair any rights in such
Intellectual Property. Schedule 5.12 lists each patent application, issued patent,
registered Copyright or Copyright application, material unregistered Copyright or Software,
internet domain names, registered Mark, applications for a Mark, and material unregistered Marks
owned by the Company or any Subsidiary (“Company IP”). Except as set forth on Schedule
5.12, the Company or its Subsidiaries are the exclusive owner of the Company IP free and clear
of all Liens, except Liens set forth on Schedule 5.12. Except as set forth on Schedule
5.12, (i) the Intellectual Property used by the Company and its Subsidiaries are not the
subject of any challenge received by the Company or any of its Subsidiaries in writing (ii) neither
the Company nor any Subsidiary has received any written notice of any default or any event that
with notice or lapse of time, or both, would constitute a default under any Intellectual Property
license to which the Company or any Subsidiary is a party or by which it is bound, (iii) to the
Knowledge of the Company, the conduct of the Ordinary Course of Business does not and will not
infringe, misappropriate or violate the Intellectual Property of any third party or constitute
unfair competition or trade practices; (iv) to the Knowledge of the Company, no third party is
infringing, misappropriating or violating any Intellectual Property owned by the Company or its
Subsidiaries in any material respect nor are there any pending claims for such infringement,
misappropriation or violation; and (iv) to the Knowledge of the Company, all such Intellectual
Property is valid. The Company and each Subsidiary have taken commercially reasonable efforts to
protect their Technology, Software, and other confidential information.

          5.13 Material Contracts.

          (a) Schedule 5.13 sets forth a true correct and complete list of all of the following
Contracts to which the Company or any of its Subsidiaries is a party or by which it or any of its
assets or properties is bound (collectively, the “Material Contracts”):

27

 

          (i) Contracts with any Selling Stockholder or any current or former officer, director,
or employee of the Company or any of its Subsidiaries;

          (ii) Contracts with any labor union or association representing any employee of the
Company or any of its Subsidiaries;

          (iii) Contracts for the sale or lease of any of the assets of the Company or any of
its Subsidiaries other than in the Ordinary Course of Business, for consideration in excess
of $100,000;

          (iv) Contracts relating to the acquisition by the Company or any of its Subsidiaries
of any operating business or the capital stock of any other Person, in each case for
consideration in excess of $50,000;

          (v) Contracts for or relating to the incurrence or existence of Indebtedness, or the
making of any loans (and Schedule 5.13 also sets forth a true and correct list and
description of all outstanding Indebtedness);

          (vi) any other Contracts which involve the expenditure of more than $100,000 in the
aggregate or require performance by any party more than one year from the date hereof that,
in either case, are not terminable by the Company or a Subsidiary without penalty on notice
of one hundred and eighty (180) days’ or less;

          (vii) Contracts the performance of which is expected to involve payment or receipt by
the Company or a Subsidiary of consideration in excess of $100,000 in the twelve-month
period immediately following the Closing Date;

          (viii) Real Property Leases or other Contracts involving any properties or assets
(whether real, personal or mixed, tangible or intangible) involving an annual base rent of
more than $100,000;

          (ix) Contracts that limit or restrict the Company or any Subsidiary or any of their
respective officers or key employees from engaging in any business in any jurisdiction;

          (x) Contracts with any distributor, dealer, manufacturer’s representative, sales
agent, advertiser, property manager or broker that is not terminable without penalty on
thirty (30) days’ or less notice involving an annual commitment or payment of more than
$100,000;

          (xi) consulting agreements, residual agreements and Contracts relating to know-how,
engineering or work-for-hire, or pursuant to which royalties are paid or received;

          (xii) Contracts with any of the (A) ten (10) largest suppliers, (B) ten (10) largest
customers, and (C) ten (10) largest dealers of the Company

28

 

and its Subsidiaries, taken as a whole, for the twelve-month period ended December 31,
2005;

          (xiii) Contracts for the management, cleanup, remediation or abatement of any
Hazardous Materials or for the performance of any environmental audit or study;

          (xiv) Contracts regarding profit-sharing, bonus, incentive compensation, deferred
compensation, stock option, severance pay, stock purchase, employee benefit, insurance,
hospitalization, pension, retirement or other similar plan or agreement;

          (xv) Contracts that contain any provisions requiring the Company or any Subsidiary to
indemnify any other party thereto;

          (xvi) joint venture agreements;

          (xvii) all outstanding powers of attorney empowering any Person to act on behalf of
the Company or any Subsidiary other than powers of attorney granted in the Ordinary Course
of Business to employees employed outside the United States or to non-U.S. attorneys, in
each case solely for ministerial or other de minimis purposes;

          (xviii) all settlement agreements as to which the Company or a Subsidiary has
continuing obligations and which involve a payment in excess of $50,000 annually;

          (xix) Contracts, licenses and agreements to which the Company or any Subsidiary is a
party (i) with respect to Intellectual Property licensed to any third party or any
Affiliate of the Company (other than end-user licenses under which license and service fees
in the aggregate do not exceed $50,000) or (ii) pursuant to which a third party has
licensed or transferred any Intellectual Property to the Company or any Subsidiary (other
than Software that is generally available on nondiscriminatory pricing terms and has an
acquisition cost of $50,000 or less); and

          (xx) any other material Contract that by its terms does not terminate or is not
terminable by Company or by a Subsidiary within sixty (60) days or upon thirty (30) days’
(or less) notice.

          (b) (i) Each Material Contract is a valid, binding and enforceable obligation of the Company
or a Subsidiary, as the case may be, and, to the Knowledge of the Company, of the other party or
parties thereto, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting creditors’ rights generally and general
principles of equity (regardless of whether considered in a proceeding at law or in equity), and
(ii) to the Knowledge of the Company, each Material Contract is in full force and effect.

29

 

          (c) Except as set forth on Schedule 5.13, (i) neither the Company nor any Subsidiary,
nor to the Knowledge of the Company any other party thereto, is in breach of or default under any
term of any Material Contract or has repudiated any term of any Material Contract and (i) to the
Knowledge of the Company no event has occurred that with notice or lapse of time, or both, would
constitute a breach of or a default by the Company or its Subsidiaries under any Material Contract,
in each case under subsections (i) and (ii) herein, except for such breaches, defaults or
repudiations that would not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect.

          (d) Except as set forth on Schedule 5.13, neither the Company nor any Subsidiary has
received written notice of termination, cancellation or non-renewal that is currently in effect
with respect to any Material Contract and, to the Knowledge of the Company, no other party to a
Material Contract plans to terminate, cancel or not renew any such Material Contract.

          5.14 Employee Benefits Plans.

          (a) Schedule 5.14(a) lists each “employee benefit plan” (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and any other
material employee plan or agreement maintained, contributed to or required to be contributed to by
the Company or any of its Subsidiaries (each, a “Company Benefit Plan”). The Company has
made available to Purchaser correct and complete copies of (i) each Company Benefit Plan (or, in
the case of any such Company Benefit Plan that is unwritten, descriptions thereof), (ii) the most
recent annual reports on Form 5500 required to be filed with the IRS with respect to each Company
Benefit Plan (if any such report was required), (iii) the most recent summary plan description for
each Company Benefit Plan for which such summary plan description is required and, (iv) each trust
agreement and insurance or group annuity contract relating to any Company Benefit Plan. Each
Company Benefit Plan has been administered in all material respects in accordance with its terms.
The Company, its Subsidiaries and all the Company Benefit Plans are all in compliance with the
applicable provisions of ERISA, the Code and all other applicable Laws except for any noncompliance
that would not have a Material Adverse Effect.

          (b) All Company Benefit Plans that are “employee pension plans” (as defined in Section 3(3) of
ERISA) that are intended to be tax qualified under Section 401(a) of the Code (each, a “Company
Pension Plan”) is so qualified. The Company has made available to Purchaser a correct and
complete copy of the most recent determination letter received with respect to each Company Pension
Plan, as well as a correct and complete copy of each pending application for a determination
letter, if any. No event has occurred since the date of the most recent determination letter or
application therefor relating to any such Company Pension Plan that would adversely affect the
qualification of such Company Pension Plan.

          (c) All contributions, premiums and benefit payments under or in connection with the Company
Benefit Plans that are required to have been made as of the

30

 

date hereof in accordance with the terms of the Company Benefit Plans have been timely made or
have been reflected on the most recent Balance Sheet. No Company Pension Plan has an “accumulated
funding deficiency” (as such term is defined in Section 302 of ERISA or Section 412 of the Code),
whether or not waived. As of the Closing Date, the net fair market value of the assets of any
Company Benefit Plan that is subject to Title IV of ERISA equals or exceeds the actuarial accrued
liabilities of such Company Benefit Plan and no Company Benefit Plan that is a multi-employer plan
within the meaning of Section 3(37) of ERISA has any withdrawal liability.

          (d) No Company Benefit Plan is (i) an Employee Stock Ownership Plan within the meaning of
Section 4975(e)(7) of the Code, (ii) a Voluntary Employees’ Beneficiary Association
(“VEBA”) within the meaning of Section 501(c)(9) of the Code, or (iii) provides
post-retirement medical, life insurance or other benefits promised, provided or otherwise due now
or in the future to current, former or retired employees other than as required by Section 4980B(f)
of the Code.

          No amount required to be paid or payable to or with respect to any employee or other service
provider of the Company or any of its Subsidiaries in connection with the transactions contemplated
hereby (either solely as a result thereof or as a result of such transactions in conjunction with
any other event) will be an “excess parachute payment” within the meaning of Section 280G of the
Code.

          5.15 Labor.

          (a) Except as set forth on Schedule 5.15(a), neither the Company nor its Subsidiaries
is a party to any labor or collective bargaining agreement.

          (b) Except as set forth on Schedule 5.15(b), there are no (i) strikes, work stoppages,
work slowdowns, lockouts, picketing, concerted refusals to work overtime, or other similar labor
activities pending or, to the Knowledge of the Company, threatened against or involving the Company
or its Subsidiaries currently or within the last three (3) years, or (ii) unfair labor practice
charges, grievances or complaints pending or, to the Knowledge of the Company, threatened by or on
behalf of any employee or group of employees of the Company or any of its Subsidiaries, except in
each case as would not, individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.

          (c) (c) The Company has complied with all applicable Laws respecting employment practices,
terms and conditions of employment and wages and hours and has not engaged in any unfair labor
practice, except such non-compliance or practices that would not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect.

          5.16 Litigation. Except as set forth on Schedule 5.16, there are no Legal
Proceedings pending or, to the Knowledge of the Company, threatened against the Company or its
Subsidiaries, which, if adversely determined, would, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect.

31

 

          5.17 Compliance with Laws; Permits.

          (a) The Company and its Subsidiaries are in material compliance with all Laws (other than Laws
for which more specific representations are made in Sections 5.9, 5.10, 5.12, 5.14, 5.15,
and 5.18) applicable to their respective businesses or operations. No action, Legal Proceeding,
investigation, complaint, demand or notice has been filed or commenced, or to the Knowledge of the
Company, threatened, against the Company or a Subsidiary alleging any failure to so comply.
Neither the Company nor any Subsidiary has received any written notice of or been charged with the
violation, in any material respect, of any Laws.

          (b) Schedule 5.17 sets forth a true, correct and complete list of all material Permits
held by the Company and its Subsidiaries. Except as set forth on Schedule 5.17, the
Company and its Subsidiaries currently have all Permits that are required for the operation of
their respective businesses as presently conducted, except where the absence of which would not,
individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.
All Permits are valid, binding and in full force and effect except where failure to be valid,
binding or in full force and effect would not, individually or in the aggregate, have or reasonably
be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
in default or violation (and no event has occurred which, with notice or the lapse of time or both,
would constitute a default or violation) of any term, condition or provision of any Permit to which
it is a party, except where such default or violation would not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect.

          5.18 Environmental Matters.

          (a) Except as set forth on Schedule 5.18(a) hereto, the operations of the Company and
each of its Subsidiaries are in compliance with and have complied with all applicable Environmental
Laws and all Environmental Permits issued pursuant to Environmental Laws or otherwise.

          (b) Except as set forth on Schedule 5.18(b) hereto, neither the Company nor any of its
Subsidiary has any Liability under any Environmental Law, nor is Company or any Subsidiary
responsible for any such Liability of any other person under any Environmental Law, whether by
contract, by operation of law or otherwise.

          (c) (i) Except as set forth on Schedule 5.18(c)(i) hereto, the Company and each of its
Subsidiaries has obtained and filed timely applications for all material Environmental Permits
necessary to operate its business; (ii) all such Environmental Permits are listed on Schedule
5.18(c)(ii) and are in full force and effect; (iii) none of the Environmental Permits listed
on Schedule 5.18(c)(ii) require consent, notification, or other action to remain in full
force and effect following consummation of the transactions contemplated hereby; (iv) the Company
and its Subsidiaries have not received written notice that any Environmental Permit listed on
Schedule 5.18(c)(ii) will not be renewed upon expiration, or that any material additional
conditions will be imposed in order to receive any such renewal.

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          (d) Except as set forth on Schedule 5.18(d) hereto, neither the Company nor any of its
Subsidiaries is the subject of any outstanding Order or Contract with any Governmental Body
respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any Release or threatened Release
of a Hazardous Material.

          (e) Except as set forth on Schedule 5.18(e) hereto, neither the Company nor any of its
Subsidiaries has received any written information request from a Governmental Body or any written
communication alleging that the Company or any of its Subsidiaries may be in violation of any
Environmental Law or any Environmental Permit issued pursuant to Environmental Law, or may have any
liability under any Environmental Law.

          (f) Except as set forth on Schedule 5.18(f) hereto, to the Knowledge of the Company,
there are no investigations of the businesses of the Company or any of its Subsidiaries, or
currently or previously owned, operated or leased property of the Company or any of its
Subsidiaries pending or threatened that would reasonably be expected to result in the imposition of
any liability pursuant to any Environmental Law.

          (g) Except as set forth on Schedule 5.18(g) hereto, to the Knowledge of the Company,
there is not located at any of the properties owned, operated or leased by the Company or any of
its Subsidiaries any (i) underground storage tanks, (ii) asbestos-containing material, (iii)
equipment containing polychlorinated biphenyls, (iv) mold, or (v) wetlands delineated by a
Governmental Body.

          (h) Except as set forth on Schedule 5.18(h)(i), to the Knowledge of the Company there
are no facts, circumstances, or conditions existing, initiated or occurring prior to the Closing
Date, that have or will result in material liability to the Company or any of its Subsidiaries
under Environmental Law. Except as set forth on Schedule 5.18(h)(ii), there has been no
Release of Hazardous Materials at, on, under, or from any real property currently owned, operated
or leased by the Company or any of its Subsidiaries during the period of such ownership, operation,
or tenancy, in each case, nor was there such a Release at any real property formerly owned,
operated or leased by the Company or its Subsidiaries during the period of such ownership,
operation, or tenancy, in each case, such that the Company is or could be liable for Remedial
Action with respect to such Hazardous Materials.

          (i) Except as set forth on Schedule 5.18(i)(i), to the Knowledge of the Company no
property currently or formerly owned, operated or leased by the Company or its Subsidiaries, and no
property to which Hazardous Materials originating on or from such properties or the businesses or
assets of the Company or any Subsidiary has been sent for treatment or disposal, is listed or
proposed to be listed on the National Priorities List or CERCLIS or on any other governmental
database or list of properties that may or do require Remedial Action under Environmental Laws.
Except as set forth on Schedule 5.18(i)(ii), neither the Company nor any of its
Subsidiaries has arranged, by contract, agreement, or otherwise, for the transportation, disposal
or treatment of Hazardous Materials at any location such that it is or could reasonably be expected
to be liable for Remedial Action of such location pursuant to Environmental Laws.

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          (j) The Company and its Subsidiaries have furnished to Purchaser copies of all environmental
assessments, reports, audits and other documents in their possession or under their control that
relate to the environmental condition of any real property currently or formerly owned, operated or
leased by the Company or any of its Subsidiaries or the Company’s or any of its Subsidiaries’
compliance with Environmental Laws.

          5.19 Financial Advisors. Except as set forth on Schedule 5.19, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the Selling Stockholder
or the Company in connection with the transactions contemplated by this Agreement and no Person is
entitled to any fee or commission or like payment from Purchaser in respect thereof.

          5.20 Accounts Receivable; Bank Accounts.

          (a) The accounts receivable of the Company and its Subsidiaries shown on the balance sheets
provided by the Company pursuant to Section 5.6, or thereafter acquired by any of them,
have arisen or will arise from the sale of goods or services in bona fide transactions to Persons
not Affiliated with the Selling Stockholder or the Company.

          (b) Schedule 5.20 sets forth the names of all banks or other financial institutions
with which the Company or any Subsidiary has an account or safe deposit box and identifies each
such account and safe deposit box, together with the names of all Persons authorized to draw
therefrom or to have access thereto.

          5.21 Inventory. All of the Company’s and the Subsidiaries’ existing inventories,
whether reflected in the Interim Balance Sheet or otherwise:

          (a) consist of such quality and quantity as to be usable by the Company or any Subsidiary in
the Ordinary Course of Business and, with respect to finished goods, are in a condition such that
they can be sold in the Ordinary Course of Business, subject to reserves for unrealizable or
obsolete inventory reflected in the Financial Statements as adjusted for the passage of time
through the Closing Date (which adjustment has been disclosed in writing to Purchaser) in
accordance with the past custom and practice of the Company, free and clear of all Liens except A)
Liens set forth on Schedule 5.21 and (B) Permitted Exceptions;

          (b) have been properly recorded in the books and records of the Company in accordance with
GAAP applied consistent with past practice; and

          (c) to the Knowledge of the Company, are free of any material Defect (other than Defects
properly reserved for on the Balance Sheet).

Inventories now on hand that were purchased after the date of the Interim Balance Sheet were
purchased in the Ordinary Course of Business of the Company or its Subsidiaries. Except as set
forth on Schedule 5.21, neither the Company nor its Subsidiaries are in possession of any
inventory not owned by the Company or any Subsidiary, including

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goods already sold. The inventory levels maintained by the Company and its Subsidiaries: (i) are
not excessive in any material respect in light of the Company’s normal operating requirements; and
(ii) are adequate in all material respects for the conduct of the Company’s and the Subsidiaries’
operations in the Ordinary Course of Business. Neither the Company nor its Subsidiaries is under
any Liability with respect to accepting returns of items of inventory or merchandise in the
possession of their customers other than in the Ordinary Course of Business.

          5.22 Insurance. Schedule 5.22 lists all policies of title, asset, fire, hazard,
casualty, directors and officers liability and general liability, life, worker’s compensation and
other forms of insurance of any kind owned or held by the Company and its Subsidiaries. All such
policies: (a) are in full force and effect; (b) are sufficient for compliance by the Company and
its Subsidiaries with all requirements of Law and of all Contracts to which the Company or any
Subsidiary is a party; (c) to the Knowledge of the Company are valid and outstanding policies
enforceable against the insurer; and (d); have the policy expiration dates set forth in
Schedule 5.22.

          5.23 Books and Records.(a) The books of account, stock records, minute books and other
records of the Company and its Subsidiaries are true and complete and have been maintained in all
material respects in accordance with all requirements of Law. The Company and its Subsidiaries
maintain, in the reasonable judgment of the Company, a system of internal accounting controls
designed to provide reasonable assurance that (a) transactions are executed with management’s
general or specific authorization, (b) transactions are recorded as necessary to permit preparation
of financial statements of the Company and its Subsidiaries and to maintain accountability for
assets, and (c) access to assets of the Company and its Subsidiaries is permitted only in
accordance with management’s authorization.

          5.24 Transactions With Related Parties. Except as set forth on Schedule 5.24,
neither any present or former officer, director or stockholder of the Company or any Subsidiary,
nor any Affiliate of such officer, director or stockholder, is currently a party to any transaction
with the Company or any Subsidiary, including, without limitation, any Contract providing for the
employment of, furnishing of services by, rental of assets from or to, or otherwise requiring
payments to, any such officer, director, stockholder or Affiliate.

          5.25 Off-Balance Sheet Transactions. Except to the extent that the information
described below concerning transactions, arrangements and other relationships is otherwise
specifically identified on the Financial Statements, Schedule 5.25 sets forth a true,
complete and correct list and description of the following: (i) any repurchase obligation or
liability of the Company or any its Subsidiaries with respect to receivables sold by the Company or
any of its Subsidiaries, (ii) any liability of the Company or any of its Subsidiaries under any
sale and leaseback transaction which does not create a liability on the consolidated balance sheet
of the Company, (iii) any liability of the Company or any of its Subsidiaries under any financing
lease or so-called “synthetic lease” or “tax ownership operating lease” transaction, or (iv) any
obligations of the Company or any of its Subsidiaries arising with respect to any other transaction
which

35

 

is the functional equivalent of, or takes the place of, borrowing but which does not
constitute a liability on the consolidated balance sheet of the Company and its Subsidiaries.

          5.26 Suppliers; Customers; Dealers. Schedule 5.26 sets forth a list of each
of (a) the ten (10) largest suppliers, (b) the ten (10) largest customers, and (c) the ten (10)
largest dealers of the Company and its Subsidiaries, taken as a whole, for the twelve-month period
ended December 31, 2004 and the twelve-month period ended December 31, 2005, and sets forth
opposite the name of each such supplier, customer and dealer the approximate percentage and dollar
amount of net sales by the Company and its Subsidiaries attributable to such customer, supplier or
dealer for each such period. Since December 31, 2005, no customer, supplier or dealer listed on
Schedule 5.26 has cancelled, terminated or made any written threat, or, to the Knowledge of
the Company, the Company has not received any threat, to cancel or otherwise terminate its
contract, or to decrease in any material respect its usage of the Company’s or any Subsidiary’s
services or products. Neither the Company nor any Subsidiary has received any notice that any
customer or supplier listed on Schedule 5.26 intends to terminate or materially alter its
business relationship with the Company or any Subsidiary, either as a result of the transactions
contemplated by this Agreement or otherwise.

          5.27 Warranties; Recalls; Product Liability.

          (a) Except as provided in the terms and conditions of any Contract provided to Purchaser,
neither the Company nor any Subsidiary has given any warranties or indemnities relating to Products
or technology sold or licensed or services rendered by the Company or its Subsidiaries, other than
standard warranties and indemnities arising in the Ordinary Course of Business and imposed by Law.
The warranty claim expense incurred by the Company and its Subsidiaries for each of the four years
ended December 31, 2005 is set forth in Schedule 5.27(a).

          (b) To the Knowledge of the Company, except as set forth on Schedule 5.27(b), there
are currently no material Defects or any breach of express or implied warranties or representations
which involve any Product manufactured by the Company or any of its Subsidiaries (it being agreed
and understood that for purposes of the representation contained in the prior sentence, a “breach
of express or implied warranties” shall not be deemed to occur as a result of warranty claims made
in the Ordinary Course of Business under the Company’s express warranties for its Products, but
only to the extent that the nature and amount of such claims do not, individually or when
aggregated with other claims, result in an increase in any current or future reserve maintained on
the Company’s financial statements as determined in good faith by Purchaser (it being further
agreed and understood that, without limitation, claims made related to any Recall disclosed on any
Disclosure Schedule shall not be considered made in the Ordinary Course of Business)).

          (c) Except as set forth on Schedule 5.27(c), (i) there is no demand, claim, action,
suit, hearing, proceeding, or notice of violation of a civil, criminal or administrative nature
pending against the Company, or, to the Knowledge of the

36

 

Company, threatened against the Company before any Governmental Body in which a Product is
alleged to have a Defect or from any alleged breach of express or implied warranties or
representations made by the Company or to the Company’s Knowledge, any investigation of any of the
foregoing, (ii) there has not been any recall, rework, retrofit or post-sale general consumer
warning (collectively, “Recalls”) of any Company product, or to the Company’s Knowledge,
any investigation or consideration of or decision made by any Person concerning whether to
undertake or not to undertake any such Recalls, and (iii) neither the Company nor any Subsidiary
has received any written notice or, to the Knowledge of the Company, any notice from any
Governmental Entity or any other Person in respect of the foregoing.

          (d) There is no suit, action, proceeding against the Company or, to the Knowledge of the
Company, any claim or investigation pending with respect to the Company or, to the Knowledge of the
Company, threatened against the Company or its Subsidiaries arising out of any injury to
individuals or property as a result of the ownership, possession, or use of any Product designed,
manufactured, assembled, repaired, maintained, delivered, sold or installed, or services rendered,
by or on behalf of the Company or any of the Subsidiaries.

          5.28 Certain Payments; International Trade Laws.

          (a) The operations of the Company have been and are in material compliance with all export
control Laws, and the Company has obtained all material licenses, authorizations or similar
approvals required under applicable export control Laws.

          (b) Neither the Company nor any Subsidiary has committed any act or made any omission
prohibited by the Foreign Corrupt Practices Act (15 U.S.C. 78dd-1,-1 during the past five (5)
years.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER

          The Selling Stockholder hereby represents to Purchaser that:

          6.1 Organization and Good Standing. The Selling Stockholder is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization and
has all requisite corporate, limited liability, partnership or limited partnership power and
authority to own, lease and operate its properties and assets and to carry on its business as now
conducted.

          6.2 Authorization of Agreement. The Selling Stockholder has all requisite power,
authority and legal capacity to execute and deliver this Agreement and each other agreement,
document, or instrument or certificate contemplated by this Agreement or to be executed by the
Selling Stockholder in connection with the consummation of the transactions contemplated by this
Agreement (together with this Agreement, the “Selling Stockholder Documents”), to perform
its obligations hereunder

37

 

and thereunder and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and each of the Selling Stockholder Documents
and the consummation of the transactions contemplated hereby and thereby have been duly authorized
by all required limited partnership action on the part of the Selling Stockholder. This Agreement
has been, and each of the Selling Stockholder Documents has been or will be at or prior to the
Closing, duly and validly executed and delivered by the Selling Stockholder, and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each Selling Stockholder Document, when so executed and delivered will constitute,
the legal, valid and binding obligation of the Selling Stockholder, enforceable against the Selling
Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

          6.3 Conflicts; Consents of Third Parties.

          (a) Except as set forth on Schedule 6.3(a), none of the execution and delivery by the
Selling Stockholder of this Agreement or the Selling Stockholder Documents, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Selling Stockholder with any of
the provisions hereof or thereof does or will conflict with, or result in any violation of or
constitute a breach of or a default (with or without notice or lapse of time, or both) under, or
result in the loss of any benefit under, or permit the acceleration of any obligation under, or
give rise to a right of termination, modification or cancellation under or result in the creation
of any Lien upon any of the properties or assets of the Selling Stockholder under, any provision of
(i) the certificate of incorporation and bylaws or comparable organizational documents of the
Selling Stockholder (if applicable); (ii) any Contract, or Permit to which the Selling Stockholder
is a party or by which any of the properties or assets of the Selling Stockholder are bound; (iii)
any Order of any Governmental Body applicable to the Selling Stockholder or by which any of the
properties or assets of the Selling Stockholder are bound; or (iv) any applicable Law, other than,
in the case of clauses (ii), (iii) and (iv), such conflicts, violations, defaults, breaches, loss
of benefits, accelerations, modifications, terminations, Liens or cancellations, that would not,
individually or in the aggregate, have or reasonably be expected to have a material adverse effect
on the Selling Stockholder’s ability to consummate the transactions contemplated hereby.

          (b) Except as set forth on Schedule 6.3(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Selling Stockholder in connection with the
execution, delivery or performance of this Agreement or the Selling Stockholder Documents or the
compliance by the Selling Stockholder with any of the provisions hereof or thereof, or the
consummation of the transactions contemplated hereby or thereby, except for (i) compliance with the
applicable requirements of the HSR Act and (ii) such consents, waivers, approvals, Orders, Permits
or authorizations the failure of which to obtain would not, individually or in the aggregate, have
or reasonably

38

 

be expected to have a material adverse effect on the Selling Stockholder’s ability to
consummate the transactions contemplated hereby.

          6.4 Ownership and Transfer of Shares.

          (a) The Selling Stockholder is the record and beneficial owner of the Shares, and the Shares
are (i) validly issued, fully paid and nonassessable, and (ii) free and clear of any and all Liens,
except such Liens as will be released concurrently with the Closing. The Selling Stockholder has
the limited partnership power and authority to sell, transfer, assign and deliver such Shares as
provided in this Agreement, and such delivery will convey to Purchaser good and valid title to such
Shares, free and clear of any and all Liens, except such Liens as may be created by the Purchaser.

          (b) Other than the Shares, there are no outstanding shares of capital stock of the Company or
any other equity security of the Company, or any option, warrant, right, call, commitment or right
of any kind outstanding to have any such equity security issued.

          6.5 Litigation. There are no Legal Proceedings pending or, to the knowledge of the
Selling Stockholder, threatened that are reasonably likely to prohibit or restrain the ability of
the Selling Stockholder to enter into this Agreement or the Selling Stockholder Documents or
consummate the transactions contemplated hereby or thereby or to perform its obligations hereunder
or thereunder.

          6.6 Amounts Owed to Selling Stockholder. Except as set forth on Schedule 6.6,
the Company does not owe and is not obligated to pay the Seller Stockholders or any of their
Affiliates any amount.

          6.7 Financial Advisors. Except as set forth on Schedule 6.7, no Person has
acted, directly or indirectly, as a broker, finder or financial advisor for the Selling Stockholder
in connection with the transactions contemplated by this Agreement and no Person is entitled to any
fee or commission or like payment in respect thereof.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF PURCHASER

          Purchaser hereby represents and warrants to the Selling Stockholder that:

          7.1 Organization and Good Standing. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and assets and carry on its
business.

          7.2 Authorization of Agreement. Purchaser has full corporate power and authority to
execute and deliver this Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by Purchaser in connection with the consummation
of the transactions contemplated hereby and

39

 

thereby (the “Purchaser Documents”), to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary corporate action on behalf of Purchaser. This Agreement has been, and
each Purchaser Document has been or will be at or prior to the Closing, duly executed and delivered
by Purchaser and (assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each Purchaser Document when so executed and
delivered will constitute, the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

          7.3 Conflicts; Consents of Third Parties.

          (a) Except as set forth on Schedule 7.3(a) hereto, none of the execution and delivery
by Purchaser of this Agreement or the Purchaser Documents, the consummation of the transactions
contemplated hereby or thereby, or compliance by Purchaser with any of the provisions hereof or
thereof does or will conflict with, or result in any violation of or constitute a breach of or a
default (with or without notice or lapse of time, or both) under, or give rise to a right of
termination, modification or cancellation under or result in the creation of any Lien upon any of
the properties or assets of Purchaser under, any provision of (i) the certificate of incorporation
and bylaws or comparable organizational documents of Purchaser; (ii) any Contract, or Permit to
which the Purchaser is a party or by which any of the properties or assets of Purchaser are bound;
(iii) any Order of any Governmental Body applicable to Purchaser or by which any of the properties
or assets of Purchaser are bound; or (iv) any applicable Law, other than, in the case of clauses
(ii), (iii) and (iv), such conflicts, violations, defaults, terminations, modifications, breaches,
Liens, or cancellations, that would not, individually or in the aggregate, have or reasonably be
expected to have a material adverse effect on Purchaser’s ability to consummate the transactions
contemplated hereby.

          (b) Except as set forth on Schedule 7.3(b), no consent, waiver, approval, Order,
Permit or authorization of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of Purchaser in connection with the execution, delivery
or performance of this Agreement or the Purchaser Documents or the compliance by Purchaser with any
of the provisions hereof or thereof, or the consummation of the transactions contemplated hereby or
thereby, except for (i) compliance with the applicable requirements of the HSR Act and (ii) such
consents, waivers, approvals, Orders, Permits or authorizations the failure of which to obtain
would not, individually or in the aggregate, have or reasonably be expected to have a material
adverse effect on Purchaser’s ability to consummate the transactions contemplated hereby.

40

 

          7.4 Litigation. There are no Legal Proceedings pending or, to the knowledge of
Purchaser, threatened that are reasonably likely to prohibit or restrain the ability of Purchaser
to enter into this Agreement or the Purchaser Documents or consummate the transactions contemplated
hereby or thereby or perform its obligations hereunder or thereunder.

          7.5 Investment Intention. Purchaser is acquiring the Shares for its own account, for
investment purposes only and not with a view to the distribution (as such term is used in Section
2(11) of the Securities Act of 1933, as amended (the “Securities Act”) thereof. Purchaser
understands that the Shares have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an exemption from such registration is
available.

          7.6 Financing. Purchaser: (a) has, and at the Closing will have, sufficient internal
funds, firm commitments for credit facilities and/or equity contributions (written evidence of
which, together with all amendments or additions thereto, have been provided to the Selling
Stockholder) available to pay the Purchase Price and any expenses incurred by Purchaser in
connection with the transactions contemplated by this Agreement; (b) has, and at the Closing will
have, the resources and capabilities (financial or otherwise) to perform its obligations hereunder;
and (c) has not incurred any obligation, commitment, restriction or Liability of any kind, that
would impair or adversely affect such resources and capabilities.

          7.7 No Financial Advisers. No person has acted, directly or indirectly, as a broker,
finder or financial advisor for the Purchaser in connection with the transactions contemplated by
this Agreement and no Person is entitled to any fee or commission or like payment.

ARTICLE VIII

COVENANTS

          8.1 Access to Information. Prior to the Closing Date, Purchaser shall be entitled,
through its officers, employees and representatives (including, without limitation, its legal
advisors and accountants), to make such investigation of the properties, businesses and operations
of the Company and its Subsidiaries and such examination of the books and records of the Company
and its Subsidiaries as it reasonably requests and to make extracts and copies of such books and
records. Any such investigation and examination shall be conducted during regular business hours
and under reasonable circumstances and shall be in
accordance with applicable Law. The Company shall cause the officers, employees, consultants,
agents, accountants, attorneys and other representatives of the Company and its Subsidiaries to
cooperate with Purchaser and Purchaser’s representatives in connection with such investigation and
examination, and Purchaser and its representatives shall cooperate with the Company and its
representatives and shall use their reasonable efforts to minimize any disruption to the Company’s
business. Notwithstanding anything to the contrary contained herein, prior to the Closing, (a)
Purchaser shall not contact any suppliers to, or customers of, the
 

41

 

Company in connection with the
transactions contemplated hereby and (b) Purchaser shall have no right to perform invasive or
subsurface investigations of the Company Property or facilities of the Company or any of its
Subsidiaries, in each case without prior notice to the Company.

          8.2 Conduct of the Business Pending the Closing.

          (a) Prior to the Closing, except (i) as set forth on Schedule 8.2, (ii) as required by
applicable Law, (iii) as otherwise contemplated by this Agreement or (iv) with the prior written
consent of Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned),
the Company shall, and shall cause its Subsidiaries to:

          (i) conduct the respective businesses of the Company and its Subsidiaries only in the
Ordinary Course of Business;

          (ii) use its commercially reasonable efforts to (A) preserve the present business
operations, organization and goodwill of the Company and its Subsidiaries, (B) keep its
current officers and employees available for future employment by Purchaser and (C)
preserve the present relationships with customers and suppliers of the Company and its
Subsidiaries;

          (iii) duly and timely file or cause to be filed all material reports and returns
required to be filed with any Governmental Body and promptly pay or cause to be paid when
due all material Taxes, assessments and governmental charges, including interest, fines and
penalties levied or assessed, unless diligently contested in good faith by appropriate
proceedings; and

          (iv) manage working capital and cash management practices in the Ordinary Course of
Business and use commercially reasonable efforts to continue to collect its accounts
receivable and pay its accounts payable in the Ordinary Course of Business.

          (b) Except (i) as set forth on Schedule 8.2, (ii) as required by applicable Law, (iii)
as otherwise contemplated by this Agreement or (iv) with the prior written consent of Purchaser
(which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not,
and shall not permit its Subsidiaries to:

          (i) declare, set aside, make or pay any dividend or other distribution in respect of
the capital stock of the Company or repurchase, redeem or otherwise
acquire any outstanding shares of the capital stock or rights or
obligations convertible into or exchangeable for shares of capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries;

          (ii) transfer, issue, sell or dispose of any shares of capital stock or rights or
obligations convertible into or exchangeable for shares of capital stock or other
securities of the Company or any of its Subsidiaries or grant options, warrants, calls or
other rights to purchase or otherwise acquire shares of the

42

 

capital stock or rights or
obligations convertible into or exchangeable for shares of capital stock or other
securities of the Company or any of its Subsidiaries;

          (iii) effect any recapitalization, reclassification or like change in the
capitalization of the Company or any of its Subsidiaries;

          (iv) amend the certificate of incorporation or bylaws or comparable organizational
documents of the Company or any of its Subsidiaries;

          (v) (A) increase the annual level of compensation of any director, executive officer
or employee of the Company or any of its Subsidiaries, (B) increase the annual level of
compensation payable or to become payable by the Company or any of its Subsidiaries to any
of their respective directors, executive officers or employees, (C) grant any unusual or
extraordinary bonus, benefit or other direct or indirect compensation to any director,
executive officer or employee, (D) increase the coverage or benefits available under any
(or create any new) severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan or arrangement made to,
for, or with any of the directors, executive officers or employees of the Company or any of
its Subsidiaries or otherwise modify or amend or terminate any such plan or arrangement or
(E) enter into any employment, deferred compensation, severance, consulting,
non-competition or similar agreement (or amend any such agreement) to which the Company or
any of its Subsidiaries is a party or involving a director, executive officer or employee
of the Company or any of its Subsidiaries, except, in each case, as required by applicable
Law from time to time in effect or by the terms of any Company Benefit Plans;

          (vi) (A) incur or assume any Indebtedness or mortgage or pledge any of its properties
or assets (whether tangible or intangible) of the Company and its Subsidiaries, or create
or suffer to exist any Lien thereupon, other than Permitted Exceptions, (B) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly or
indirectly, contingently or otherwise) for the obligations of any other Person, (C) make
any loans or advances to any other Person;

          (vii) acquire any material properties or assets or sell, assign, license, transfer,
convey, lease or otherwise dispose of any of the material properties or assets of the
Company and its Subsidiaries (except in the Ordinary
Course of Business or for the purpose of disposing of obsolete or worthless assets);

          (viii) cancel or compromise any material debt or claim or waive or release any
material right of the Company or any of its Subsidiaries;

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          (ix) enter into any commitment for capital expenditures of the Company and its
Subsidiaries in excess of $50,000 for any individual commitment and $250,000 for all
commitments in the aggregate;

          (x) enter into, modify or terminate any labor or collective bargaining agreement of
the Company or any of its Subsidiaries or, through negotiations or otherwise, make any
commitment or incur any liability to any labor organizations;

          (xi) create, dissolve or liquidate any Subsidiary or permit the Company or any of its
Subsidiaries to enter into or agree to enter into any merger or consolidation with any
corporation or other entity, or acquire the securities or equity interests of any other
Person;

          (xii) dispose of any asset outside the Ordinary Course of Business, or permit rights
attaching to any material Intellectual Property owned or used by the Company or its
Subsidiaries to lapse;

          (xiii) enter into, terminate or amend in any material respect any Material Contract;

          (xiv) other than in the Ordinary Course of Business, permit the Company or any of its
Subsidiaries to enter into or modify any Contract with the Selling Stockholder or any
Affiliate of the Selling Stockholder;

          (xv) make or rescind any election relating to Taxes, settle or compromise any claim,
action, suit, litigation, proceeding, arbitration, investigation, audit controversy
relating to Taxes, consent to any extension or waiver of the limitation period applicable
to any Tax claim or assessment relating to the Company or any of its Subsidiaries, change
any of its methods of accounting or methods of reporting income or deductions for Tax or
accounting practice or policy from those employed in the preparation of its most recent Tax
Return (except as required by applicable Law or GAAP), or take any other similar action
relating to the filing of any Tax Return or the payment of any Tax, if such action would
have the effect of increasing the Tax liability of the Company or any Subsidiary for any
period ending after the Closing Date, or decreasing any Tax attribute of the Company or any
Subsidiary existing on the Closing Date; or

          (xvi) agree to do anything prohibited by this Section 8.2.

          8.3 Consents.
Each of the Purchaser, Selling Stockholder and the Company shall use their commercially
reasonable efforts to obtain at the earliest practicable date all consents and approvals required
to consummate the transactions contemplated by this Agreement, including, without limitation, the
consents and approvals referred to in Sections 5.3(b), 6.3(b) and 7.3(b)
hereof, provided, however, that Purchaser shall be obligated to pay any
consideration to any third party from whom consent or approval is requested.

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          8.4 Regulatory Approvals. Each of Purchaser, the Company and the Selling Stockholder
(if necessary) shall (a) use its commercially reasonable efforts to make or cause to be made all
filings required of each of them or any of their respective Subsidiaries or Affiliates under the
HSR Act with respect to the transactions contemplated hereby prior to the date of this Agreement,
(b) comply at the earliest practicable date with any request under the HSR Act for additional
information, documents, or other materials received by each of them or any of their respective
Subsidiaries from any Governmental Body in respect of such filing, (c) coordinate and cooperate
with each other in connection with any such filing including exchanging such information and
providing such reasonable assistance as the other may require to comply with the HSR Act, (d) use
its commercially reasonable efforts to furnish to each other all information required for any
application or other filing to be made pursuant the HSR Act, and (e) use its commercially
reasonable efforts to respond as appropriate to such objections, if any, as may be asserted by any
Person in connection with all filings required under the HSR Act. In connection with the
foregoing, each party shall promptly notify the other parties of any communication received by that
party or its Affiliates from any other applicable Governmental Body and, subject to applicable Law,
provide the other parties with a copy of any such written communication (or summary of any oral
communication). No party hereto shall independently participate in any substantive meeting or
discussion with any Governmental Body in respect of any such filings, investigation, or other
inquiry concerning the transactions contemplated by this Agreement without giving the other parties
hereto prior notice of the meeting and, to the extent permitted by such Governmental Body, the
opportunity to attend and/or participate. Notwithstanding anything to the contrary in this
Agreement, neither Purchaser nor any of its Affiliates shall be required, in connection with the
matters covered by this Section 8.4, (i) to pay any amounts (other than the payment of
filing fees and expenses and fees of Purchaser’s or its Affiliates’ counsel), (ii) to commence or
defend any litigation, (iii) to hold separate (including by trust or otherwise) or divest any of
their respective businesses, product lines or assets, including the Company and its Subsidiaries,
(iv) to agree to any limitation on the operation or conduct of their or the Company’s or any of its
Subsidiaries’ respective businesses or (v) to waive any of the conditions set forth in Article
IX of this Agreement.

          8.5 Further Assurances. Except as otherwise provided in Section 8.4, each of
Purchaser and the Company shall use (and the Company shall cause each of its Subsidiaries to use)
its commercially reasonable efforts to (a) take or cause to be taken and do or cause to be done all
things necessary, appropriate or advisable under applicable Laws or otherwise to
consummate as promptly as practicable and make effective the transactions contemplated by this
Agreement, and (b) cause the fulfillment at the earliest practicable date of all of the conditions
to their respective obligations to consummate the transactions contemplated by this Agreement, in
accordance with the terms hereof, and (c) obtain any consent or notification, or take other action,
listed on Schedule 5.18(c)(iii).

          8.6 Confidentiality. Purchaser acknowledges that the information provided to it in
connection with this Agreement and the transactions contemplated hereby is subject to the terms of
the confidentiality agreement between Purchaser and the Company dated September 12, 2005 (the
“Confidentiality Agreement”), the terms of

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which are incorporated herein by reference.
Effective upon, and only upon, the Closing Date, the Confidentiality Agreement shall terminate.

          8.7 Preservation of Records. The Selling Stockholder and Purchaser agree that each of
them shall preserve and keep the records held by them relating to the respective businesses of the
Company and its Subsidiaries for a period of seven (7) years from the Closing Date and shall make
such records and personnel available to the other as may be reasonably required by such party in
connection with, among other things, any insurance claims by, Legal Proceedings or tax audits
against or governmental investigations of the Selling Stockholder or Purchaser or any of their
Affiliates or in order to enable the Selling Stockholder or Purchaser to comply with their
respective obligations under this Agreement and each other agreement, document or instrument
contemplated hereby or thereby. In the event the Selling Stockholder or Purchaser wishes to
destroy such records after that time, such party shall first give ninety (90) days prior written
notice to the other and such other party shall have the right at its option and expense, upon prior
written notice given to such party within that ninety (90) day period, to take possession of the
records within one hundred and eighty (180) days after the date of such notice.

          8.8 Publicity. None of the Selling Stockholder, the Company or Purchaser shall issue
any press release or public announcement concerning this Agreement or the transactions contemplated
hereby or make any other public disclosure containing the terms of this Agreement without obtaining
the prior written approval of the other party hereto, which approval will not be unreasonably
withheld or delayed, unless, in the judgment of the Selling Stockholder, the Company or Purchaser,
disclosure is otherwise required by applicable Law or by the applicable rules of any stock exchange
on which the Selling Stockholder, the Company or Purchaser lists securities, provided that, to the
extent required by applicable law, the party intending to make such release shall use its
commercially reasonable efforts consistent with applicable Law to consult with the other party with
respect to the text thereof.

          8.9 Exclusivity.
From the date of this Agreement until the Closing, neither the Selling Stockholder nor the
Company will (and the Company and the Selling Stockholder will cause their respective employees,
officers, directors, agents, representative and Affiliates not to) directly or indirectly: (a)
solicit, initiate, or encourage the submission of any proposal or offer from any Person relating
to, or enter into or consummate any transaction relating to, the acquisition of any equity
interests in the Company or its Subsidiaries or any merger, consolidation, business combination,
recapitalization, share exchange, sale of a material portion of the assets of the Company or its
Subsidiaries or any similar transaction or alternative to the transactions contemplated hereunder,
or (b) participate in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner, any effort or attempt by
any Person to do or seek any of the foregoing. The Company and the Selling Stockholder will
promptly notify Purchaser if any Person makes any proposal, offer, inquiry or contact with respect
to any of the foregoing (whether solicited or unsolicited) with the Company or the Selling
Stockholder.

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          8.10 Tax Matters.

          (a) Tax Returns

          (i) The Selling Stockholder shall prepare or shall cause to be prepared and timely
file or cause to be timely filed (at its expense) all Tax Returns for the Company and the
Subsidiaries for all periods ending on or prior to the Closing Date, that are filed after
the Closing Date (except to the extent that the operations of the Company and the
Subsidiaries on the Closing Date are required to be included in the consolidated, unitary
or combined income Tax Return of the Purchaser and its Affiliates). Such Tax Returns shall
be prepared in a manner consistent with the Tax Returns (including amended Tax Returns) of
the Company and Subsidiaries filed on or prior to the Closing Date for prior fiscal
periods, and are subject to the Purchaser’s right to review any such Tax Returns within not
less than 30 days (or such shorter period as may reasonably be required) prior to their
required filing date and to the Purchaser’s agreement with the relevant positions,
information and data set forth in such Tax Returns (which agreement shall not be
unreasonably withheld). The Selling Stockholder shall pay, or cause to be paid, all Taxes
shown as due (or required to be shown as due) on such Tax Returns to the extent that such
Taxes exceed the amount of Taxes taken into account in determining the Closing Net Working
Capital adjustment in Section 3.3 (the “Target Tax Amount”).

          (ii) Purchaser shall prepare or cause to be prepared and file or cause to be filed (at
its expense) any Tax Returns of the Company and Subsidiaries for Tax periods which begin
before the Closing Date and end after the Closing Date (and to the extent that the
operations of the Company and the Subsidiaries on the Closing Date are required to be
included in the consolidated, unitary or combined Tax Return of Purchaser and its
Affiliates, Purchaser will cause the operations of the Company and Subsidiaries to be so
included). Subject to the Selling Stockholder’s right to review any such Tax Returns
within not less
than 30 days (or such shorter period as may reasonably be required) prior to their
required filing date and to the Selling Stockholder’s agreement with the relevant
information and data set forth in such Tax Returns, which agreement shall not be
unreasonably withheld, the Selling Stockholder shall pay to Purchaser within fifteen days
after the date on which Taxes are paid with respect to such periods an amount equal to the
portion of such Taxes which relates to the portion of such Taxable period ending on the
Closing Date to the extent that such Taxes (together with the Taxes with respect to Tax
Returns described in Section 8.10(a)(i)) exceed the Target Tax Amount.

          (iii) Purchaser shall prepare or cause to be prepared and file or cause to be filed
(at its expense) any Tax Returns of the Company and Subsidiaries for Tax periods which
begin after the Closing Date.

          (b) Notwithstanding anything set forth in Section 10.5 (including, without limitation,
the Basket Amount and cap in Section 10.5(b)), the Selling

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Stockholder shall indemnify
Purchaser for any and all Taxes arising out of or attributable to (i) any Taxable period that ends
before or on the Closing Date, and (ii) any period that begins before the Closing Date and ends
after the Closing Date, to the extent such Taxes relate to the portion of such Taxable period
before and including the Closing Date; provided that such indemnity shall only apply to the extent
such Taxes in the aggregate exceed the Target Tax Amount.

          (c) Purchaser shall indemnify the Selling Stockholder for any Taxes arising out of or
attributable to (i) any Taxable period that begins after the Closing Date, and (ii) any period that
begins before the Closing Date and ends after the Closing Date, to the extent such Taxes relate to
the portion of such Taxable period after the Closing Date.

          (d) Purchaser may, and may cause the Company or its Subsidiaries to, carry back any item of
loss, deduction or credit which arises in any taxable period of the Company into any prior taxable
period, provided that such carryback, refund claim or related amended Tax Return does not have the
effect of increasing the liability of the Selling Stockholder for any Taxes, reducing any Tax
benefit of the Selling Stockholder or increasing any obligation of the Selling Stockholder to
Purchaser hereunder or increasing any amount Purchaser is entitled to recover from the Selling
Stockholder hereunder. The Selling Stockholder shall be entitled to any refund of Taxes attributed
to the operations of the Company and its Subsidiaries for periods ending on or before the Closing
Date, to the extent such refund exceeds deferred Tax assets taken into account in determining the
Closing Net Working Capital adjustment in Section 3.3, including any refund or reduction in
Taxes payable by the Purchaser or the Company attributable to a net operating loss or other Tax
attributes of the Company or any of its Subsidiaries arising in any period ending on or before the
Closing Date.

          (e) Following the Closing, Purchaser shall control all audits or administrative or judicial
proceedings relating to Taxes of the Company or any of its Subsidiaries, except as otherwise
provided in Section 8.10(f).

          (f) In the case of an audit or administrative or judicial proceeding that relates to periods
ending on or before the Closing Date or for which the Purchaser may seek indemnification from the
Selling Stockholder, the Selling Stockholder shall have the right, at its expense, to participate
with the Purchaser in the conduct of such audit or proceeding but only to the extent that such
audit or proceeding relates to a potential adjustment for which the Selling Stockholder has
acknowledged the Selling Stockholder’s liability. The Purchaser may not settle any audit or
administrative or judicial proceedings for which the Selling Stockholder has an indemnification
obligation under this Agreement without the Selling Stockholder’s written consent, which consent
shall not be unreasonably withheld.

          (g) Purchaser, the Selling Stockholder, the Company, and the Subsidiaries shall cooperate
fully, as and to the extent reasonably requested by the other parties, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon any other party’s
request) the provision of records and

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information that are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided hereunder. In addition to
the provisions in Section 8.7 relating to preservation of records, Purchaser, the Company,
and the Subsidiaries agree (i) upon reasonable request, to use their commercially reasonable
efforts to obtain any certificate or other document from any Governmental Authority or any other
Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated hereby) and (ii) upon
reasonable request, to provide the other parties with all information that any party may be
required to report pursuant to Code Section 6043 and all Treasury Regulations promulgated
thereunder.

          8.11 Noncompetition; Nonsolicitation.

          (a) The Selling Stockholder and its Affiliates shall not, for a period of three (3) years
following the Closing Date (computed by excluding from such computation any time during which the
Selling Stockholder or an Affiliate is found by a court of competent jurisdiction to have been in
violation of any provision of this Section 8.11(a)), for any reason whatsoever, directly or
indirectly, for themselves or on behalf of or in conjunction with any other Person, engage as a
shareholder, owner, partner, joint venturer, or in a managerial capacity, or as an independent
contractor, consultant, advisor or sales representative, in the design, manufacture, distribution
and sale of flatbed trailers, or use Intellectual Property of the Company (exclusive of know how),
anywhere in the United States. Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit the Selling Stockholder from acquiring as an investment not more than two (2%)
percent of the capital stock of a competing business whose stock is traded on a national securities
exchange or market, or over-the-counter.

          (b) The Selling Stockholder and its Affiliates shall not, for a period of three (3) years
following the Closing Date (computed by excluding from such computation any time during which the
Selling Stockholder or an Affiliate is found by a
court of competent jurisdiction to have been in violation of any provision of this Section
8.11(b)), for any reason whatsoever, directly or indirectly, solicit, hire (or assist or
encourage any other Person to solicit or hire) or otherwise interfere with the employment
relationship of any Person who is employed by the Company or its Subsidiaries as of the date of
this Agreement or employed by the Company or its Subsidiaries during the operation of this
provision. For the avoidance of doubt, an employee shall not be deemed to have been solicited or
as a result hired for employment solely as a result of (i) a general public advertisement or other
such general solicitation of employment, or (ii) the employee voluntarily and without any direct or
indirect solicitation from the Selling Stockholder or any representative or Affiliate thereof
(other than a general solicitation to the public described above) seeks employment with the Selling
Stockholder or Affiliate thereof.

          8.12 Notice; Supplementation and Amendment of Schedules. Each of the parties hereto
shall promptly notify the other parties hereto in writing of, and shall use commercially reasonable
efforts to cure before the Closing Date, any event, transaction or

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circumstance, that causes or
shall cause any covenant or agreement of such party to be breached in any material respect or that
renders or shall render untrue in any material respect any representation or warranty of such party
contained in this Agreement and, in that regard, from time to time prior to the Closing, the
Company shall have the right to, promptly after obtaining knowledge thereof, supplement or amend
the Schedules with respect to any matter hereafter arising or discovered after the delivery of the
Schedules pursuant to this Agreement (solely for purposes of notifying Purchaser of same);
provided, however, that no such notice, supplement or amendment shall (a) have any
effect on Purchaser’s ability to assert the failure of any conditions to Purchaser’s obligation to
close set forth in Article IX hereof or (b) relieve the Company or the Selling Stockholder
of liability or diminish any right or remedies of Purchaser with respect to any breach of
representation or warranty made prior to the date of such supplement or amendment, including
pursuant to Article X hereof.

          8.13 Indemnity Obligations. The Purchaser covenants and agrees that the Purchaser
shall take no action to terminate or adversely modify the tail to any existing director and officer
liability insurance policy of the Company and its Subsidiaries purchased by the Selling Stockholder
or the Company with respect to periods on and prior to the Closing Date (as it may be extended or
modified thereafter by the Selling Stockholder or its Affiliates, the “Tail Policy”).

          8.14 Montgomery County Facility. At least one (1) day prior to the Closing Date, the
Selling Stockholder shall, or shall cause, at the Selling Stockholder’s sole cost and expense, the
County of Montgomery, Kentucky (the “County”) to execute and deliver to the Selling
Stockholder (a) a release and termination for recording in the County’s record books (the
“Montgomery Facility Release”) of that certain Lease Agreement dated as of November 1,
1994, as amended, by and between the County and the Company (the “Montgomery Facility
Lease”), and (b) a Deed and Consideration Certificate made and entered into by and between the
County and the Company recordable in the County’s record books (the “Montgomery Facility
Deed”) for the sale of the property subject to the Montgomery Facility Lease (the
“Montgomery Property”). Immediately following the Closing Date but in no case later than
one (1) Business Day after the Closing Date, the Selling Stockholder shall, or shall cause, at its
sole cost and expense, the Montgomery Facility Release and the Montgomery Facility Deed to be
recorded in the County’s record books. The Selling Stockholder shall also take, at its sole cost
and expense, any and all actions such that immediately following the Closing Date, but in no case
later than one (1) Business Day after the Closing Date, the Company shall be fully released from
the Montgomery Facility Lease with not further obligations thereunder, such lease shall be
terminated in its entirety, and the Company will have good, valuable and marketable title to the
Montgomery Property without any further action being required by any other Person (including
without limitation any party hereto or their respective Affiliates). Any and all costs and
expenses incurred in connection with this Section 8.14 shall be borne by the Selling
Stockholder whether or not such cost is incurred before or after the Closing Date.

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ARTICLE IX

CONDITIONS TO CLOSING

          9.1 Conditions Precedent to Obligations of Purchaser. The obligation of Purchaser to
consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or all of which may be waived
by Purchaser in whole or in part to the extent permitted by applicable Law):

          (a) the representations and warranties of the Selling Stockholder and the Company set forth in
this Agreement qualified as to materiality shall be true and correct, and those not so qualified
shall be true and correct in all material respects, in each case when made and at and as of the
Closing Date as though made on the Closing Date, except to the extent such representations and
warranties relate to an earlier date (in which case such representations and warranties qualified
as to materiality shall be true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of such earlier date), and Purchaser shall have received a
certificate signed by an authorized officer of the Company, dated the Closing Date, to the
foregoing effect;

          (b) the Company and the Selling Stockholder shall have performed and complied in all material
respects with all covenants, obligations and agreements required by this Agreement to be performed
or complied with by them on or prior to the Closing Date, and Purchaser shall have received a
certificate signed by an authorized officer of the Company, dated the Closing Date, to the
foregoing effect;

          (c) no Legal Proceedings shall have been instituted or threatened against the Selling
Stockholder, the Company or its Subsidiaries, or Purchaser, seeking to restrain, delay or prohibit,
or to obtain substantial damages or other injunctive or other equitable relief with respect to, the
consummation of the transactions contemplated hereby, and there shall not be in effect any Order by
a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby or imposing any limitation on the operation or
conduct of the Company’s or its Subsidiaries’ respective businesses;

          (d) the parties shall have received any consents, Permits, approvals and waivers of any
Governmental Body required in order for the parties to consummate the transactions contemplated
hereby, including any necessary approval, or termination or expiration of any waiting period
applicable to the transactions contemplated by this Agreement under the HSR Act;

          (e) the Selling Stockholder shall have delivered to Purchaser an executed resignation from
each member of the board of directors (or comparable governing body) of the Company and each
Subsidiary and, at Purchaser’s request, any officers of the Company and Subsidiaries;

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          (f) the Company shall have paid in full the Closing Date Payments and shall have obtained and
delivered to Purchaser executed documentation (including pay-off letters) reasonably satisfactory
to Purchaser evidencing the payment of the Closing Date Payments and termination of all agreements
and Liens on the Shares and the assets of the Company and its Subsidiaries arising under or related
to the obligations satisfied by payment of the Closing Date Payments;

          (g) Purchaser shall have received opinions, dated the Closing Date, addressed to Purchaser,
from Pitney Hardin, LLP, counsel to the Company and the Selling Stockholder, in a form attached
hereto as Exhibit E;

          (h) all agreements, including the management agreement, between the Company and Lincolnshire
or any of its Affiliates shall have been terminated and the Company shall have been released from
all obligations thereunder, written evidence of which shall have been delivered to Purchaser;

          (i) the Selling Stockholder shall have delivered, or caused to be delivered, to Purchaser
stock certificates representing the Shares, duly endorsed in blank or accompanied by stock transfer
powers;

          (j) the Selling Stockholder and the Escrow Agent shall have executed and delivered
counterparts of the Indemnification Escrow Agreement;

          (k) the Company shall have delivered to Purchaser all minute books, share records and ledgers
and corporate seals of Company and its Subsidiaries;

          (l) there shall be no outstanding Preferred Shares and, to the extent not properly redeemed,
in full, the Company shall have redeemed each Preferred Share using the Company’s own funds;

          (m) the Company shall have obtained and delivered to Purchaser (i) all of the consents or
notifications listed on Schedule 5.3(b), 5.18(c)(iii) and 6.3(b) and (ii)
all other consents that may be required to be obtained in connection with the transactions the
failure of which to obtain would, individually or in the aggregate have or reasonably be expected
to have a Material Adverse Effect;

          (n) without limiting the generality of this Section 9.1, there shall not be or have
been any event, change, occurrence or circumstance that, individually or in the aggregate has had
or would reasonably be expected to have a Material Adverse Effect;

          (o) the Warrant shall have been cancelled and the Company shall have been released from all
obligations thereunder written evidence of which shall have been delivered to Purchaser; and

          (p) The Selling Stockholder shall have obtained the Montgomery Facility Release and the
Montgomery Facility Deed and delivered a copy thereof to Purchaser.

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          9.2 Conditions Precedent to Obligations of the Selling Stockholder. The obligations
of the Selling Stockholder to consummate the transactions contemplated by this Agreement are
subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions
(any or all of which may be waived by the Selling Stockholder in whole or in part to the extent
permitted by applicable Law):

          (a) the representations and warranties of Purchaser set forth in this Agreement qualified as
to materiality shall be true and correct, and those not so qualified shall be true and correct in
all material respects, in each case when made and at and as of the Closing Date as though made on
the Closing Date, except to the extent such representations and warranties relate to an earlier
date (in which case such representations and warranties qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all material respects, on and
as of such earlier date), and the Selling Stockholder shall have received a certificate signed by
an authorized officer of Purchaser, dated the Closing Date, to the foregoing effect;

          (b) Purchaser shall have performed and complied in all material respects with all agreements,
obligations and covenants required by this Agreement to be performed or complied with by Purchaser
on or prior to the Closing Date, and the Selling Stockholder shall have received a certificate
signed by an authorized officer of Purchaser, dated the Closing Date, to the foregoing effect;

          (c) no Legal Proceedings shall have been instituted or threatened against the Selling
Stockholder, the Company or its Subsidiaries, or Purchaser, seeking to restrain, delay or prohibit,
or to obtain substantial damages or other injunctive or other
equitable relief with respect to, the consummation of the transactions contemplated hereby,
and there shall not be in effect any Order by a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby or imposing any limitation on the operation or conduct of the Company’s or its Subsidiaries’
respective businesses;

          (d) the parties shall have received any consents, Permits, approvals and waivers of any
Governmental Body required in order for the parties to consummate the transactions contemplated
hereby, including any necessary approval, or termination or expiration of any waiting period
applicable to the transactions contemplated by this Agreement under the HSR Act;

          (e) Purchaser shall have delivered, or caused to be delivered, to the Selling Stockholder
evidence of the wire transfers referred to in Section 3.2(a) hereof; and

          (f) Purchaser and the Escrow Agent shall have executed and delivered counterparts of the
Indemnification Escrow Agreement.

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ARTICLE X

INDEMNIFICATION

          10.1 Survival. The representations and warranties of the parties contained in this
Agreement shall survive until the later of (a) the first anniversary of the Closing Date and (b)
ninety (90) days after the completion of Purchaser’s audit for the fiscal year ended December 31,
2006, except that the representations and warranties (i) set forth in Section 5.9 shall
survive until the expiration of the applicable statute of limitations, (ii) set forth in
Section 5.18 shall survive until December 31, 2010, (iii) set forth in Section 5.27
shall survive until September 30, 2007, (iv) set forth in Section 5.14 shall survive until
the third anniversary of the Closing Date, and (v) set forth in Sections 5.2, 5.4,
6.2 and 6.4 shall survive indefinitely. Unless otherwise expressly provided in this
Agreement, all of the covenants and obligations of the parties contained in this Agreement shall
survive the Closing indefinitely. Notwithstanding the foregoing, if a written claim or written
notice is given under Article X with respect to any representation or warranty prior to the
expiration of the applicable survival period, the claim with respect to such representation or
warranty shall continue indefinitely until such claim is finally resolved.

          10.2 Indemnification by Selling Stockholder.

          (a) Subject to Section 10.5 hereof, the Selling Stockholder hereby agrees to
reimburse, defend, indemnify and hold Purchaser, the Company, and their respective directors,
officers, employees, Affiliates (present and future), stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the “Purchaser Indemnified
Parties”) harmless from and against any and all losses, liabilities,
obligations, damages and Expenses (individually, a “Loss” and, collectively,
“Losses”) based upon or resulting or arising from (x) any inaccuracy or breach of any of
the representations or warranties made by the Selling Stockholder or the Company in this Agreement
(both when made and as if such representations and warranties were made as of the Closing Date) or
in any certificate delivered hereunder, (y) any breach of or failure to perform any covenant or
agreement made by the Selling Stockholder or the Company in this Agreement or in any certificate
delivered hereunder, or (z) the failure of William R. Cunningham or the William R. Cunningham
Revocable Trust (the “Cunningham Parties”) to fulfill their respective obligations with
respect to the matter described on Schedule 10.2 (the “Scheduled Obligations”)
under the agreement described on Schedule 10.2 (the “Scheduled Agreement”), subject
(in the case of this clause (z)) to Purchaser using reasonable efforts to seek performance by the
Cunningham Parties under the Scheduled Agreement prior to seeking recovery pursuant to this
Section 10.2(a)(z); and

          (b) Purchaser acknowledges and agrees that the Selling Stockholder shall not have any
liability under any provision of this Agreement for any Loss to the extent that such Loss is the
direct result of any action taken by Purchaser in breach of this Agreement. Purchaser shall take
and shall cause its Affiliates to take all reasonable steps that a prudent business person would
take in the conduct of his or her business to mitigate

54

 

any Loss upon becoming aware of any event
that would reasonably be expected to, or does, give rise thereto; provided that the Purchaser shall
not be required to expend any non deminimus amount (unless paid by the Selling Stockholder) to
remedy the breach that gives rise to the Loss.

          10.3 Indemnification by Purchaser.

          (a) Subject to Section 10.5, Purchaser hereby agrees to reimburse, indemnify and hold
the Selling Stockholder and its respective directors, officers, employees, Affiliates,
stockholders, agents, attorneys, representatives, successors and assigns (collectively, the
“Selling Stockholder Indemnified Parties”) harmless from and against any and all Losses
based upon or resulting or arising from (x) any inaccuracy or breach of any of the representations
or warranties made by Purchaser in this Agreement (both when made and as if such representations
and warranties were made as of the Closing Date) or in any certificate delivered hereunder or (y)
any breach of or failure to perform any covenant or agreement made by Purchaser in this Agreement
or in any certificate delivered hereunder; and

          (b) Selling Stockholder acknowledges and agrees that the Purchaser shall not have any
liability under any provision of this Agreement for any Loss to the extent that such Loss is the
direct result of any action taken by Selling Stockholder in breach of this Agreement. Selling
Stockholder shall take and shall cause its Affiliates to take all reasonable steps that a prudent
business person would take in the conduct of his or her business to mitigate any Loss upon becoming
aware of any event that would reasonably be expected to, or does, give rise thereto; provided that
the Selling Stockholder shall not be required to expend any non deminimus amount (unless paid by
the Purchaser) to remedy the breach that gives rise to the Loss.

          10.4 Indemnification Procedures.

          (a) In the event that any Legal Proceedings shall be instituted, or that any claim shall be
asserted, by any Person not party to this Agreement in respect of an Indemnification Claim, the
party seeking indemnification (the “Indemnified Party”) shall promptly cause written notice
of the assertion of any Indemnification Claim of which it has knowledge that is covered by this
indemnity to be delivered to the party from whom indemnification is sought (the “Indemnifying
Party”); provided that no delay on the part of the Indemnified Party in giving any such notice
shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then
solely to the extent that) the Indemnifying Party is materially prejudiced by such delay. The
Indemnifying Party shall have the right, at its sole option and expense, to be represented by
counsel of its choice, which must be reasonably satisfactory to the Indemnified Party, and to
defend against, negotiate, settle or otherwise deal with any Indemnification Claim and if the
Indemnifying Party elects to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim, it shall within thirty (30) days (or sooner, if the nature of the
Indemnification Claim so requires) (the “Dispute Period”) notify the Indemnified Party of
its intent to do so. If the Indemnifying Party does not elect within the Dispute Period to defend
against, negotiate, settle or otherwise deal with any Indemnification Claim,the

55

 

Indemnified Party
may defend against, negotiate, settle or otherwise deal with such Indemnification Claim. If the
Indemnifying Party elects to defend against, negotiate, settle or otherwise deal with any
Indemnification Claim, (i) the Indemnifying Party shall use its commercially reasonable efforts to
defend and protect the interests of the Indemnified Party with respect to such Indemnification
Claim, (ii) the Indemnified Party, prior to or during the period in which the Indemnifying Party
assumes the defense of such matter, may take such reasonable actions as the Indemnified Party deems
necessary to preserve any and all rights with respect to such matter, without such actions being
construed as a waiver of the Indemnified Party’s rights to defense and indemnification pursuant to
this Agreement, and (iii) the Indemnified Party may participate, at his or its own expense, in the
defense of such Indemnification Claim; provided, however, that such Indemnified
Party shall be entitled to participate in any such defense with separate counsel at the expense of
the Indemnifying Party if, (A) so requested by the Indemnifying Party to participate or (B) in the
reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists
between the Indemnified Party and the Indemnifying Party that would make such separate
representation advisable; and provided, further, that the Indemnifying Party shall
not be required to pay for more than one such counsel for all indemnified parties in connection
with any Indemnification Claim. The parties hereto agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such Indemnification Claim.
Notwithstanding anything in this Section 10.4 to the contrary, the Indemnifying Party shall
not, without the written consent of the Indemnified Party, settle or compromise any Indemnification
Claim or permit a default or consent to entry of any judgment (each a “Settlement”) unless
(i) the claimant and such Indemnifying Party provide to such Indemnified Party an unqualified
release from all liability in respect of the Indemnification Claim (ii) such Settlement does not
impose any liabilities or obligations on the Indemnified Party and (iii) with respect to any
non-monetary provision of such Settlement, such provisions would not, in the Indemnified Party’s
reasonable judgment, have or be reasonably expected to have any
adverse effect on the business, assets, properties, condition (financial or otherwise),
results of operations or prospects of the Indemnified Party.

          (b) After any final decision, judgment or award shall have been rendered by a Governmental
Body of competent jurisdiction and the expiration of the time in which to appeal therefrom, or a
Settlement or arbitration shall have been consummated, or the Indemnified Party and the
Indemnifying Party shall have arrived at a mutually binding agreement with respect to an
Indemnification Claim hereunder, the Indemnified Party shall forward to the Indemnifying Party and
the Escrow Agent notice of any sums due and owing by the Indemnifying Party pursuant to this
Agreement with respect to such matter and the Indemnifying Party and/or Escrow Agent, as
applicable, shall make prompt payment thereof pursuant to the terms of the Indemnification Escrow
Agreement.

          (c) If the Indemnifying Party does not undertake within the Dispute Period to defend against
an Indemnification Claim, then the Indemnifying Party shall have the right to participate in any
such defense at its sole cost and expense, but, in such case, the Indemnified Party shall control
the investigation and defense and may settle or take any other actions the Indemnified Party deems
reasonably advisable without in any

56

 

way waiving or otherwise affecting the Indemnified Party’s
rights to indemnification pursuant to this Agreement.

          (d) In the event that an Indemnified Party should have a claim against the Indemnifying Party
hereunder which it determines to assert, but which does not involve a Legal Proceeding or claim by
a third party, the Indemnified Party shall send written notice to the Indemnifying Party describing
in reasonable detail the nature of such claim and the Indemnified Party’s estimate of the amount of
Losses attributable to such claim. The Indemnifying Party shall have thirty (30) days from the
date such claim notice is delivered during which to notify the Indemnified Party in writing of any
good faith objections it has to the Indemnified Party’s notice or claims for indemnification,
setting forth in reasonable detail each of the Indemnifying Party’s objections thereto. If the
Indemnifying Party does not deliver such written notice of objection within such thirty (30) day
period, the Indemnifying Party shall be deemed to have accepted responsibility for the prompt
payment of the Indemnified Party’s claims for indemnification, and shall have no further right to
contest the validity of such indemnification claims, and the Indemnified Party shall be permitted
to notify the Escrow Agent of the same and receive payment therefrom. If the Indemnifying Party
does deliver such written notice of objection within such thirty (30) day period, the Indemnifying
Party and the Indemnified Party shall attempt in good faith to resolve any such dispute within
forty-five (45) days of the delivery by the Indemnifying Party of such written notice of objection,
and if not resolved in such forty-five day period, may be resolved through Legal Proceedings
brought by either party or by such other means as such parties mutually agree.

          10.5 Limitations on Indemnification for Breaches of Representations and Warranties.

          (a) Any Indemnification Claim required to be made by either Purchaser or the Selling
Stockholder, as the case may be, on or prior to the expiration of the applicable survival period
set forth in Section 10.1, and not made, shall be irrevocably and unconditionally released
and waived by such party.

          (b) Notwithstanding the provisions of this Article X, the Selling Stockholder shall
not have any indemnification obligations for Losses under Section 10.2(a)(x) unless the
aggregate amount of all such Losses exceeds five hundred thousand dollars $500,000 (the “Basket
Amount”); provided, that from and after such time as the total amount of Losses under
Section 10.2(a)(x) exceeds the Basket Amount then the Selling Stockholder shall be liable
for the entire Basket Amount and for all amounts exceeding the Basket Amount, and (ii) with the
exception of indemnification for breaches of representations, warranties, and covenants set forth
in Section 5.4, in no event shall the aggregate indemnification to be paid by the Selling
Stockholder under Section 10.2(a)(x) exceed an amount equal to the sum of the
Indemnification Escrow Amount and the Earnout Escrow Amount. Notwithstanding the provisions of
this Article X, in no event shall the aggregate indemnification to be paid by the Selling
Stockholder under Section 10.2(a)(z) exceed $350,000.

57

 

          (c) Subject to the provisions set forth in this Article X, Purchaser and the Selling
Stockholder hereby acknowledge and agree that the Indemnification Escrow Amount shall be available
to compensate the Purchaser Indemnified Parties for any and all Losses, incurred or sustained by
such parties, provided, however, that the termination of the Indemnification Escrow
Agreement shall not serve as a bar to recovery from the Selling Stockholder of any indemnifiable
Losses that are not specifically limited to recovery prior to the termination of the
Indemnification Escrow Agreement.

          (d) Neither party shall make any claim for indemnification under this Article X in
respect of any matter that is taken into account in the calculation of any adjustment to the
Purchase Price pursuant to Section 3.3.

          (e) The amount of Losses payable by an Indemnifying Party under this Article X shall (x) be
reduced by any insurance proceeds recovered or, as determined in good faith by the Indemnified
Party, recoverable, by the Indemnified Party with respect to the claim for which indemnification is
sought (whether or not the Indemnified Party chooses to pursue such recovery), in each case (i) net
of any applicable deductibles or similar costs or payments and (ii) net of any increase in the
premium or other costs of obtaining insurance coverage reasonably related to such claim, as
determined in good faith by the Indemnified Party, and (y) be reduced by the actual reduction in
Taxes due and payable by the Indemnified Party in the fiscal year in which such claim occurs below
the amount of Taxes that otherwise would have been paid by the Indemnified party in such fiscal
year solely but for the tax effect of the payment by the Indemnifying Party to the Indemnified
Party in respect of such Loss, as determined in good faith by the Indemnified Party (it being
agreed and understood that (1) in the event that the reduction to the amount of Losses as a result
of the application of this clause (y) cannot be computed in good faith by the Indemnified Party at
the time payment from the Indemnifying Party in respect of Losses under this Article X is otherwise
due, that such
payment shall nonetheless be made by Indemnifying Party to the Indemnified Party at such time
without any reduction thereto pursuant to this clause (y), and that the Indemnified Party shall
reimburse the Indemnifying Party for the amount of any such reduction required pursuant to this
clause (y) promptly following such time as the amount of any such reduction is determined in good
faith by the Indemnified Party, and (2) this clause (y) does not require the Indemnified Party to
take any action or make any election that it determines in good is not in the best interests of the
Indemnified Party.

          (f) The disclosure of any matter or item in any Schedule hereto shall not be deemed to
constitute an acknowledgment that any such matter is required to be disclosed.

          (g) For purposes of this Article X, the terms “material” and “Material Adverse Effect”, as
such terms are used in any representation or warranty contained in Article V or VI or in any
certificate delivered hereunder, shall be disregarded and, for purposes of this Article X, such
representation and warranties shall be deemed to be not qualified by such terms.

58

 

          (h) The right of the Indemnified Parties to indemnification or to assert or recover on any
claim, shall not be affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the execution and
delivery of this Agreement or the Closing Date, with respect to the accuracy of or compliance with,
any of the representations, warranties, covenants, or agreements set forth in this Agreement. The
waiver of any condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or agreement, shall not affect the right to
indemnification or other remedy based on such representations, warranties, covenants, and
obligations.

          10.6 Tax Treatment of Indemnity Payments. The Selling Stockholder and Purchaser agree
to treat any indemnity payment made pursuant to this Article X as an adjustment to the
Purchase Price for federal, state, local and foreign income tax purposes.

          10.7 No Consequential Damages. Notwithstanding anything to the contrary elsewhere in
this Agreement, no party shall, in any event, be liable to any other Person for any consequential,
incidental, indirect, or punitive damages of such other Person, including loss of future revenue,
income or profits, diminution of value or loss of business reputation or opportunity relating to a
breach of or alleged breach hereof, except with respect to any claim based upon fraud or willful
misrepresentation or willful misconduct or criminal acts.

          10.8 Exclusive Remedy. Following the Closing Date, the sole and exclusive remedy for
any breach of or inaccuracy, or alleged breach of or inaccuracy, of any representation or
warranty in this Agreement or any covenant or agreement to be performed on or prior to the
Closing Date, shall be indemnification in accordance with this Article X, except with
respect to any claim based upon fraud or willful misrepresentation or willful misconduct by
Purchaser or the Selling Stockholder.

ARTICLE XI

MISCELLANEOUS

          11.1 Payment of Sales, Use or Similar Taxes. All sales, use, transfer, intangible,
recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable
to, or resulting from, the transactions contemplated by this Agreement shall be borne by the
Purchaser.

          11.2 Expenses. Except as otherwise provided in this Agreement, each of the Selling
Stockholder and Purchaser shall bear its own expenses incurred in connection with the negotiation
and execution of this Agreement and each other agreement, document and instrument contemplated by
this Agreement and the consummation of the transactions contemplated hereby and thereby.

          11.3 Submission to Jurisdiction; Consent to Service of Process.

          (a) The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any
federal or state court located within the State of New York over any

59

 

dispute arising out of or
relating to this Agreement or any of the transactions contemplated hereby and each party hereby
irrevocably agrees that all claims in respect of such dispute or any suit, action proceeding
related thereto may be heard and determined in such courts. The parties hereby irrevocably waive,
to the fullest extent permitted by applicable law, any objection which they may now or hereafter
have to the laying of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law.

          (b) Each of the parties hereto hereby consents to process being served by any party to this
Agreement in any suit, action or proceeding by delivery of a copy thereof in accordance with the
provisions of Section 11.7.

          11.4 Entire Agreement; Amendments and Waivers. This Agreement (including the
schedules and exhibits hereto), the Indemnification Escrow Agreement and the Confidentiality
Agreement represent the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof. This Agreement can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific reference to
this Agreement signed by the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver
by the party taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of such breach or as
a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy.

          11.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and performed in such State.

          11.6 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (a) when delivered personally by hand (with written confirmation
of receipt), (b) when sent by facsimile (with written confirmation of transmission) or (c) one
business day following the day sent by overnight courier (with written confirmation of receipt), in
each case at the following addresses and facsimile numbers (or to such other address or facsimile
number as a party may have specified by notice given to the other party pursuant to this
provision):

60

 

If to the Selling Stockholder, to:

Transcraft Investment Partners, L.P.

c/o Lincolnshire Management, Inc.

780 Third Avenue, 40th Floor

New York, NY 10017

Attention: Mr. Charles C. Mills

Phone: (212) 319-3633

Facsimile: (212) 755-5457

With a copy (which shall not constitute notice) to:

Pitney Hardin, LLP

Seven Times Square, 20th Floor

New York, NY 10036

Attention: Barry T. Mehlman, Esq.

Phone: (212) 297-5851

Facsimile: (212) 916-2940

If to Purchaser, to:

Wabash National Corporation

1000 Sagamore Parkway South

Lafayette, IN 47905

Attention: Chief Financial Officer

Phone: (765) 771-5300

Facsimile: (765) 771-5579

With a copy (which shall not constitute notice) to:

Wabash National Corporation

1000 Sagamore Parkway South

Lafayette, IN 47905

Attention: General Counsel

Phone: (765) 771-5300

Facsimile: (765) 771-5579

With a further copy (which shall not constitute notice) to:

Hogan & Hartson L.L.P.

111 South Calvert Street

Baltimore, MD 21202

Attention: Michael J. Silver, Esq.

Phone: (410) 659-2700

Facsimile: (410) 539-6981

With a further copy (which shall not constitute notice) to:

Hogan & Hartson L.L.P.

875 Third Avenue

New York, New York 10022

Attention: Alexander B. Johnson, Esq.

Phone: (212) 918-3000

Facsimile: (212) 918-3100

61

 

          11.7 Severability. If any term or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any law or public policy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. Except as otherwise expressly provided for in this
Agreement, nothing contained in any representation or warranty, or the fact that any representation
or warranty may or may not be more specific than any other representation or warranty, shall in any
way limit or restrict the scope, applicability or meaning of any other representation or warranty
contained in this Agreement.

          11.8 Binding Effect; No Third-Party Beneficiaries; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to create any third party
beneficiary rights in any person or entity not a party to this Agreement except as contemplated by
Sections 10.2 and 10.3. No assignment of this Agreement or of any rights or
obligations hereunder may be made by either the Selling Stockholder or Purchaser, directly or
indirectly (by operation of law or otherwise), without the prior written consent of the other
parties hereto and any attempted assignment without the required consents shall be void;
provided, however, that Purchaser may assign its rights, interests and obligations
hereunder to any direct or indirect subsidiary or financing source; provided,
further, that no assignment of any obligations hereunder shall relieve the parties hereto
of any such obligations. Upon any such permitted assignment, the references in this Agreement to
Purchaser shall also apply to any such assignee unless the context otherwise requires.

          11.9 Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original copy of this Agreement and all of which, when taken
together, shall be deemed to constitute one and the same agreement.

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **

62

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first written above.

	 	 	 	 	 
	 	WABASH NATIONAL CORPORATION

 	 
	 	By:  	/s/ Robert J. Smith
 	 
	 	 	Name:  	Robert J. Smith 	 
	 	 	Title:  	Senior Vice President, Chief
 Financial
Officer 	 
	 

	 	 	 	 	 
	 	TRANSCRAFT CORPORATION

 	 
	 	By:  	/s/ Charles Mills
 	 
	 	 	Name:  	Charles Mills 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	TRANSCRAFT INVESTMENT
 PARTNERS, L.P.

 	 
	 	By:  	Transcraft G.P., Inc.
 	 
	 	 	Its General Partner 	 
	 	 	 	 

	 	 	 	 	 
	 	By:  	                        /s/ Charles Mills
 	 
	 	 	Name:  	Charles Mills 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

63

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