UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, DC  20549

                          FORM 8-K

                       CURRENT REPORT

             Pursuant to Section 13 or 15(d) of
             The Securities Exchange Act of 1934


Date of Report  (Date of the earliest event reported)  June
17, 2005


                    Lifetime Brands, Inc
   (Exact name of registrant as specified in its charter)

                          Delaware
       (State or other jurisdiction of incorporation)




  0-19254                          11-2682486
 (Commission File Number)         (IRS Employer Identification No.)


One Merrick Avenue, Westbury, New York                11590
(Address of principal executive offices)           (Zip Code)


Registrant's telephone number, including area code: (516)683-6000


               LIfetime Hoan Corporation
(Former name or former address, if changed since last report)


Item 1.01.  Entry into a Material Definitive Agreement

On  June  17,  2005, Lifetime Brands, Inc announced  it  has
signed  an  agreement  to acquire the business  and  certain
assets  of  The  Pfaltzgraff  Co.  ("Pfaltzgraff"),  one  of
America's leading designers and marketers of dinnerware  and
tabletop  accessories  for the home.  Established  in  1811,
Pfaltzgraff had sales in 2004 of approximately $148 million.
Its  products are broadly distributed through retail  chains
and  sold  through company-owned factory stores as  well  as
through  Internet and catalog operations. Assuming that  the
transaction closes in July, Lifetime expects the Pfaltzgraff
business to contribute approximately $72 million in revenues
in  2005  and to be nominally profitable for the  year.  The
transaction  is subject to customary closing conditions  and
adjustments.   Lifetime  expects  to  fund  the  transaction
through its credit facility.


Item 9.01.  Financial Statements and Exhibits

  c)   Exhibits

     99  - The Asset Purchase Agreement dated as of June 17,
     2005  by and among The Pfaltzgraff Co., The Pfaltzgraff
     Manufacturing Co., Pfaltzgraff Investment Co.  and  The
     Pfaltzgraff Outlet Co. and Lifetime Brands,  Inc.,  PFZ
     Acquisition Corp. and PFZ Outlet Retail, Inc.



                          Signature

     Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.



                    Lifetime Hoan Corporation

                    By:       /s/ Robert McNally
                         Robert McNally
                         Vice President of Finance and
                         Chief Financial Officer


Date:  June 23, 2005

EXHIBIT 99


                  ASSET PURCHASE AGREEMENT

                        by and among

                    THE PFALTZGRAFF CO.,
             THE PFALTZGRAFF MANUFACTURING CO.,
               PFALTZGRAFF INVESTMENT CO. and
                 THE PFALTZGRAFF OUTLET CO.

                             and

                   LIFETIME BRANDS, INC.,
                  PFZ ACQUISITION CORP. and
                  PFZ OUTLET RETAIL , INC.

                  dated as of June 17, 2005




ARTICLE 1: DEFINITIONS; CONSTRUCTION                      1
     1.1  DEFINITIONS                                     1
     1.2  OTHER DEFINITIONS                               8
     1.3  CONSTRUCTION                                   10

ARTICLE 2: PURCHASE AND SALE OF ASSETS                   11
     2.1  AGREEMENT TO PURCHASE AND SELL                 11
     2.2  ASSETS                                         11
     2.3  EXCLUDED ASSETS                                12
     2.4  ASSUMPTION OF ASSUMED LIABILITIES              13
     2.5  EXCLUDED LIABILITIES                           13

ARTICLE 3: PURCHASE PRICE AND METHOD OF PAYMENT          14
     3.1  PURCHASE PRICE                                 14
     3.2  PAYMENT OF PURCHASE PRICE; HOLDBACK            14
     3.3  ALLOCATION OF CERTAIN ITEMS                    15
     3.4  PAYMENTS                                       16
     3.5  TAX ALLOCATION                                 16
     3.6  WORKING CAPITAL ADJUSTMENT                     16
     3.7  NON-CONTINUING STORES                          18
     3.8  CERTAIN PAYMENTS RELATED TO ASSUMED CONTRACTS  18

ARTICLE 4: THE CLOSING                                   19
     4.1  CLOSING                                        19
     4.2  CLOSING DELIVERIES                             19
     4.3  NONASSIGNABILITY OF CONTRACTS                  21

ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLERS     22
     5.1  ORGANIZATION                                   22
     5.2  AUTHORITY; NON-CONTRAVENTION                   22
     5.3  NO CONSENTS                                    23
     5.4  TAX MATTERS                                    23
     5.5  FINANCIAL STATEMENTS; ACCOUNTS RECEIVABLE;
             INVENTORY                                   23
     5.6  ABSENCE OF UNDISCLOSED LIABILITIES             24
     5.7  LEGAL PROCEEDINGS                              24
     5.8  COMPLIANCE WITH LAWS; LICENSES                 24
     5.9  TITLE TO ASSETS                                25
     5.10 CONTRACTS                                      25
     5.11 INTELLECTUAL PROPERTY                          27
     5.12 EMPLOYEES                                      28
     5.13 LABOR AND EMPLOYMENT MATTERS                   28
     5.14 ABSENCE OF CERTAIN CHANGES                     29
     5.15 BROKERS                                        29
     5.16 INSURANCE                                      29
     5.17 ENVIRONMENTAL MATTERS                          29
     5.18 REAL PROPERTY                                  30
     5.19 RELATED PARTY TRANSACTIONS; FOREIGN CORRUPT
             PRACTICES ACT                               31
     5.20 EMPLOYEE PLANS                                 32
     5.21 PRODUCT WARRANTY                               32
     5.22 SUFFICIENCY OF ASSETS                          32
     5.23 DISCLOSURE                                     32

ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYERS AND
           LIFETIME                                      32
     6.1  ORGANIZATION                                   32
     6.2  NO VIOLATION                                   33
     6.3  ENFORCEABLE AGREEMENT                          33
     6.4  NO BROKERS                                     34
     6.5  LITIGATION AND REGULATORY PROCEEDINGS          34
     6.6  CONSENTS AND APPROVALS                         34
     6.7  FUNDS                                          34
     6.8  INDEPENDENT REVIEW                             34

ARTICLE 7: COVENANTS OF THE PARTIES                      35
     7.1  FURTHER ASSURANCES; POST-CLOSING COOPERATION.  35
     7.2  CONDUCT OF BUSINESS                            36
     7.3  EMPLOYEES                                      39
     7.4  ACCESS TO OPERATIONS                           42
     7.5  COMMERCIALLY REASONABLE EFFORTS                43
     7.6  TRANSFER TAXES                                 43
     7.7  PUBLICITY                                      44
     7.8  EXPENSES                                       44
     7.9  BULK SALES                                     44
     7.10 APPLICATIONS FOR BUYER LICENSES                44
     7.11 DC LEASES AND FLEMINGTON LEASE                 44
     7.12 COOPERATION BY SELLERS                         45

ARTICLE 8: CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES  45
     8.1  GOVERNMENT APPROVALS                           45
     8.2  LEGAL ACTION                                   45

ARTICLE 9: CONDITIONS TO THE OBLIGATIONS OF BUYERS AND
              LIFETIME                                   45
     9.1  REPRESENTATIONS AND WARRANTIES OF SELLERS      46
     9.2  PERFORMANCE OF OBLIGATIONS OF SELLERS          46
     9.3  SELLER CLOSING CERTIFICATE                     46
     9.4  ANCILLARY AGREEMENTS                           46
     9.5  CORPORATE AUTHORIZATION                        46
     9.6  REQUIRED CONSENTS                              46
     9.7  FIRPTA CERTIFICATES                            47
     9.8  LICENSES                                       47
     9.9  NO ACTIONS OR ORDERS                           47
     9.10 PURCHASE ORDER UPDATE                          47
     9.11 NO LIENS                                       47

ARTICLE 10:CONDITIONS TO THE OBLIGATIONS OF SELLERS      47
     10.1 REPRESENTATIONS AND WARRANTIES OF BUYER AND
             LIFETIME                                    48
     10.2 PERFORMANCE OF OBLIGATIONS OF BUYER AND
             LIFETIME                                    48
     10.3 BUYER CLOSING CERTIFICATE                      48
     10.4 ANCILLARY AGREEMENTS                           48
     10.5 CORPORATE AUTHORIZATION                        48

ARTICLE 11:INDEMNIFICATION                               48
     11.1 INDEMNIFICATION OBLIGATIONS OF SELLERS         48
     11.2 INDEMNIFICATION OBLIGATIONS OF BUYER           49
     11.3 NOTICE OF CLAIMS                               49
     11.4 PROCEDURE FOR THIRD PARTY CLAIMS               50
     11.5 CLAIMS PERIOD                                  52
     11.6 LIMITATIONS                                    53
     11.7 INVESTIGATIONS                                 53
     11.8 OFFSET FOR INSURANCE RECOVERIES AND TAX
             BENEFITS                                    53
     11.9 CONSEQUENTIAL DAMAGES                          54
     11.10 EXCLUSIVE REMEDY                              54
     11.11 PARENT AGENCY                                 54
     11.12 TAX TREATMENT OF INDEMNITY PAYMENTS           54

ARTICLE 12:TERMINATION                                   54
     12.1 TERMINATION                                    54
     12.2 EFFECT OF TERMINATION                          55

ARTICLE 13:MISCELLANEOUS                                 56
     13.1 ENTIRE UNDERSTANDING                           56
     13.2 WAIVER AND AMENDMENT                           56
     13.3 HEADINGS                                       56
     13.4 COUNTERPARTS                                   56
     13.5 INTERPRETATION                                 56
     13.6 NOTICES                                        56
     13.7 ASSIGNMENT; SUCCESSORS IN INTEREST             57
     13.8 CONSTRUCTION                                   58
     13.9 CONTROLLING LAW                                58
     13.10 DISPUTE RESOLUTION; JURISDICTION; SPECIFIC
              PERFORMANCE                                58
     13.11 NO THIRD PARTY BENEFICIARIES                  59
     13.12 LIFETIME GUARANTEE OF BUYER OBLIGATIONS       59
LIST OF EXHIBITS:

Exhibit 4.2(a)(i)   Form of Bills of Sale
Exhibit 4.2(a)(ii)  Form of Assignment and Assumption
   Agreements
Exhibit 4.2(a)(iii) Form of Assignment and Assumption of
   Leases
Exhibit 4.2(a)(iv)  Form of Assignment of Trademarks
Exhibit 4.2(a)(v)   Form of Assignment of Copyrights
Exhibit 4.2(a)(x)   Form of Assignment of Domain Names

LIST OF SCHEDULES:

Schedule 1.1(a)     Designated Stores
Schedule 1.1(b)     Domain Names
Schedule 1.1(c)     Key Stores
Schedule 1.1(d)     Net Working Capital
Schedule 1.1(e)     Permitted Liens
Schedule 1.1(f)     Sellers' Knowledge
Schedule 1.1(g)     Buyers' Knowledge
Schedule 2.2(b)     Personal Property
Schedule 2.2(c)     Assumed Contracts
Schedule 2.2(d)     Personal Property Leases
Schedule 2.2(e)     Real Property Leases
Schedule 2.3(g)     Certain Litigation
Schedule 2.3(h)     Certain Excluded Assets
Schedule 3.5        Tax Allocation
Schedule 5.3        Consents
Schedule 5.5(a)     Financial Statements
Schedule 5.5(d)     Certain Products Liability Matters
Schedule 5.7        Legal Proceedings
Schedule 5.8(a)     Compliance with Laws
Schedule 5.8(b)     Licenses
Schedule 5.10(a)    Contracts
Schedule 5.11(a)(i) Owned I.P. Rights
Schedule 5.11(a)(ii)Licensed I.P. Rights
Schedule 5.11(c)    Software
Schedule 5.11(d)    Certain Intellectual Property Litigation
Schedule 5.11(e)    Design Licenses
Schedule 5.12       Certain Employees
Schedule 5.15       Sellers' Brokers
Schedule 5.16       Insurance
Schedule 5.17(a)    Environmental Matters
Schedule 5.17(b)    Releases of Hazardous Materials
Schedule 5.18       Leased Real Property
Schedule 5.19(a)    Related Party Transactions
Schedule 5.20       Employee Plans
Schedule 5.21       Form of Product Warranty
Schedule 5.22       Sufficiency of Assets
Schedule 6.4        Buyer's Brokers
Schedule 6.6        Buyer's Consents
Schedule 7.2(b)(v)  Permitted Raises
Schedule 7.3(a)     Candidate Employees
Schedule 9.6        Required Consents


                    ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made
and  entered into as of this 17th day of June, 2005,  by  and
among,  (a)  on  one hand, THE PFALTZGRAFF CO. ("Parent"),  a
corporation  organized under the laws of the Commonwealth  of
Pennsylvania,     THE    PFALTZGRAFF    MANUFACTURING     CO.
("Manufacturing"), a corporation organized under the laws  of
the  Commonwealth of Pennsylvania, PFALTZGRAFF INVESTMENT CO.
("InvestCo"), a corporation organized under the laws  of  the
State  of  Delaware,  and  THE  PFALTZGRAFF  OUTLET  CO.,   a
corporation organized under the laws of the State of Maryland
("Outlet"   and  together  with  Parent,  Manufacturing   and
InvestCo,  each  a "Seller" and collectively the  "Sellers");
and  (b)  on  the  other  hand,  LIFETIME  BRANDS,  INC.,   a
corporation   organized   under   the   laws   of    Delaware
("Lifetime"), PFZ ACQUISITION CORP., a corporation  organized
under  the laws of Delaware and a wholly-owned subsidiary  of
Lifetime ("Acquisition Sub"), and PFZ OUTLET RETAIL, INC.,  a
corporation organized under the laws of Delaware and a wholly-
owned subsidiary of Lifetime ("Retail Sub" and, together with
Acquisition   Sub,  each  a  "Buyer"  and  collectively   the
"Buyers").   Buyers,  Lifetime  and  Sellers  are   sometimes
individually referred to herein as a "Party" and collectively
as the "Parties".

     WHEREAS, the Parties desire to enter into this Agreement
pursuant  to  which Sellers propose to sell  to  Buyers,  and
Buyers  propose to purchase from Sellers (the "Acquisition"),
substantially  all  of the assets used or  held  for  use  by
Sellers  in  the conduct of the Business (as defined  below),
and  Buyers propose to assume certain of the liabilities  and
obligations of Sellers with respect to the Business; and

     WHEREAS,  the  Parties desire to  make  and  enter  into
certain representations, warranties, covenants and agreements
in connection with the Acquisition.

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

ARTICLE 1:  DEFINITIONS; CONSTRUCTION

1.1  Definitions.

      The  terms defined in this Section 1.1 shall,  for  all
purposes   of  this  Agreement,  have  the  meanings   herein
specified:

      "Affiliate" shall have the meaning assigned thereto  in
Rule 12b-2 under the United States Securities Exchange Act of
1934.

      "Ancillary Agreements" means the Conveyance  Documents,
the   Transition  Services  Agreement,  the  Product   Supply
Agreement, the DC Leases and the Flemington Lease.

       "Annual   Financial  Statements"  means  the   audited
consolidated   balance   sheet  and   the   related   audited
consolidated statements of income and cash flows of Parent as
of  and for the twelve (12) month periods ended December  31,
2004,  2003  and 2002, together with the reports  thereon  of
KPMG, independent certified public accountants.

      "Benchmark Working Capital" means Twenty-Seven  Million
Dollars ($27,000,000).

      "Benefit  Plan" means each written or oral plan,  fund,
program,  Contract or scheme providing for employee  benefits
or  for  remuneration, including each deferred  compensation,
bonus,  incentive  compensation, pension,  retirement,  stock
purchase,  stock  option or other equity  compensation  plan;
each  "welfare" plan (within the meaning of Section  3(1)  of
ERISA,  determined  without regard to whether  such  plan  is
subject to ERISA); each "pension" plan (within the meaning of
Section  3(2) of ERISA, determined without regard to  whether
such  plan  is  subject  to ERISA); each  severance  plan  or
Contract  providing  severance  benefits;  and  each  health,
vacation,  summer  hours, supplemental unemployment  benefit,
hospitalization insurance, medical, dental or legal  program,
agreement or arrangement.

      "Business"  means the business of designing,  sourcing,
marketing,  distributing and selling (but, for  avoidance  of
doubt, not manufacturing), at retail, wholesale and by direct
marketing  and  internet  marketing, ceramic  dinnerware  and
related household products, and licensing designs therefor to
and  from  third parties, as such business has been conducted
by Parent, Investco and Outlet through the Closing.

      "Business Day" means any day except Saturday, Sunday or
any  day on which banks are authorized or required by Law  to
close in York, Pennsylvania.

      "Business  Intellectual Property" means,  collectively,
the   Owned  I.P.  Rights,  the  Licensed  I.P.  Rights,  the
Technology,  the Domain Names, the Software,  all  Trademarks
not  otherwise  included in the Owned  I.P.  Rights  and  all
Copyrights not otherwise included in the Owned I.P. Rights.

       "Buyer  Indemnified  Parties"  means  Buyer  and   its
Affiliates, Lifetime and its Affiliates, and their respective
stockholders,   agents,   representatives,   successors   and
assigns.

      "Buyers' Knowledge" means all facts actually known,  or
with reasonable investigation would have been known, by those
individuals listed on Schedule 1.1(g) on the date hereof

      "Code"  means  the Internal Revenue Code  of  1986,  as
amended.

      "Contract"  means any written or oral agreement,  lease
(including  all real and personal property leases),  mortgage
policy,  plan, instrument, contract, note, power of attorney,
insurance  policy  covenant,  guaranty  arrangement,   escrow
account, commitment or other instrument.

       "Conveyance  Documents"  means,  interchangeably   and
collectively as the context requires, the Bills of Sale,  the
Assignment  and  Assumption Agreements, the  Assignments  and
Assumption  of  Leases,  the Assignment  of  Trademarks,  the
Assignment of Copyrights, the Assignments of Domain Names and
all  other documents executed and delivered by any Seller and
any  Buyer  at the Closing for the purpose of evidencing  the
transfer of any Assets to any Buyer or the assumption of  any
Assumed Liabilities by any Buyer.

      "Copyrights"  means the copyrights listed  on  Schedule
5.11(a)(i) and all other copyrights owned by any Seller.

      "Damages" means, as the context requires, Buyer  Losses
or Seller Losses.

      "DC  East"  means  the distribution facility  owned  by
Parent  that is located at 415 Zarfoss Road, West  Manchester
Twp., PA.

      "DC  Leases" means, collectively, (a) a mutually agreed
upon  written lease agreement between Parent and  Buyers  for
the lease of DC East to Buyers and (b) a mutually agreed upon
written  lease agreement between Seller Holding  Company  and
Buyers for the lease of DC West to Buyers.

      "DC  West"  means  the distribution facility  owned  by
Seller  Holding Company that is located at 515 Zarfoss  Road,
West Manchester Twp., PA.

      "Designated  Store" means a Store  listed  on  Schedule
1.1(a).

     "Dollars" or "$" means United States Dollars.

      "Domain  Names"  means  the internet  domain  names  of
Sellers listed on Schedule 5.11(a)(i).

      "Employee"  means all individuals shown on  a  Seller's
payroll  and personnel records as employed by such Seller  in
connection  with  the  operation of the  Business  (including
those  who  are actively employed or on leave, disability  or
other absence from employment).

      "Environmental Clean-up Site" means any location  which
is  listed or proposed for listing on the National Priorities
List,  the Comprehensive Environmental Response, Compensation
and  Liability  Information System, or on any  similar  state
list of sites requiring investigation or cleanup, or which is
the  subject  of  any  pending or  threatened  action,  suit,
proceeding  or  investigation related to or  arising  from  a
Release  of a Hazardous Material or any alleged violation  of
any Environmental Law

      "Environmental Laws" means all applicable Laws relating
to  pollution  or protection of the environment  or,  to  the
extent  related  to  exposure to Hazardous  Materials,  human
health  and  safety, including Laws relating to  Releases  or
threatened Releases of Hazardous Materials into the indoor or
outdoor  environment (including ambient air,  surface  water,
groundwater,  land,  surface and subsurface  strata),  worker
health   or   safety,   or   the   manufacture,   processing,
distribution, use, treatment, storage, release, transport  or
handling    of    Hazardous   Materials,   record    keeping,
notification,    disclosure   and   reporting    requirements
respecting  Hazardous Materials, the protection of endangered
or  threatened species of fish, wildlife or plants,  and  the
management or protection of natural resources.

      "Environmental Permits" means all Licenses required  to
be  obtained  under any Environmental Law in connection  with
the Sites or the Business as conducted at the Sites.

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

      "Final  Net  Working  Capital" means  the  Net  Working
Capital set forth on the Final Statement.

       "Financial  Statements"  means  the  Annual  Financial
Statements and the Interim Financial Statements.

      "Flemington Store" means the Store located at  50  Mine
Street in Flemington, New Jersey.

      "Flemington Lease" means a mutually agreed upon written
lease  agreement between Outlet and Retail Sub for the  lease
to Retail Sub of the Flemington Store.

     "GAAP" means United States generally accepted accounting
principles  as in effect on any applicable date, consistently
applied.

      "Governmental Entity" means any federal, state or local
or   foreign   government   or  any  court,   administrative,
arbitrative  or  regulatory agency  or  commission  or  other
governmental authority or agency, domestic or foreign.

     "Hazardous  Materials" means all substances  defined  as
"Hazardous     Substances,"    "Oils,"    "Pollutants"     or
"Contaminants"  in the National Oil and Hazardous  Substances
Pollution Contingency Plan, 40 C.F.R.  300.5, or toxic  mold,
asbestos   or   asbestos-containing   materials,   petroleum,
polychlorinated biphenyls, lead-containing materials,  radon,
urea   formaldehyde  or  any  other  substances,   chemicals,
materials  or  wastes that are regulated  by,  or  for  which
liability could be imposed under, any Environmental Law.

       "Indemnified  Party"  means  any  party  entitled   to
indemnification pursuant to Section 11.1 or 11.2.

       "Indemnifying  Party"  means  any  party  required  to
indemnify  a  Indemnified Party pursuant to Section  11.1  or
11.2.

      "Interim  Financial  Statements"  means  the  unaudited
balance sheet and the related unaudited statements of  income
and  cash flows of the Business as of and for the month ended
March 26, 2005.

     "Key Store" means a Store listed on Schedule 1.1(c).

      "Laws"  means all applicable federal, state,  local  or
foreign   laws  (including  common  law),  codes,   statutes,
ordinances,  orders, judgments, arbitration awards,  decrees,
administrative   or   judicial  promulgations,   injunctions,
determinations,   approvals,  rules,  regulations,   permits,
certificates, licenses and authorizations of, and  agreements
with, all Governmental Entities with jurisdiction.

     "Leased Real Property" means the real property leased by
Sellers  pursuant to the Real Property Leases, together  with
all  fixtures, improvements and appurtenances thereon (which,
for avoidance of doubt, shall not include DC East, DC West or
the Flemington Store).

      "Legal  Dispute" means any action, suit  or  proceeding
between  or among the Parties and/or their Affiliates arising
in  connection with any disagreement, dispute, controversy or
claim  arising  out  of or relating to  this  Agreement,  any
Conveyance  Document, the Buyer Closing Certificate,  or  the
Seller  Closing  Certificate,  or  any  of  the  transactions
contemplated hereby or thereby.

      "Licenses"  means all notifications, licenses,  permits
(including   environmental,   construction   and    operation
permits),     governmental     franchises,     registrations,
certificates,    approvals,   exemptions,    classifications,
registrations  and  other  similar  documents,   rights   and
authorizations issued by any Governmental Entity, other  than
any Patents, Copyrights and Trademarks.

      "Liens"  means all mortgages, liens, pledges,  security
interests,  charges, claims, restrictions, leases, possessory
rights,   options,   rights  of  first  refusal,   covenants,
easements, title and survey matters and any other encumbrance
of any kind or character.

       "Manufacturing   Business"  means  the   business   of
manufacturing   ceramic  dinnerware  and  related   household
products.

      "Material Adverse Effect" means (a) with respect to the
Business, any event, change or effect that has occurred (when
taken together with all other events, changes or effects that
have  occurred)  that  is,  or is reasonably  likely  to  be,
materially  adverse to the financial condition or results  of
operations of the Business and (b) with respect to  a  Party,
any  event,  change  or effect that has occurred  that  (when
taken together with all other events, changes or effects that
have  occurred) is likely to prevent or materially delay  the
performance   of  a  Party  under  this  Agreement   or   the
transactions contemplated hereby; provided that in each  case
a  Material Adverse Effect will not be deemed to include  (1)
events,  changes, effects, conditions or trends in  economic,
business  or  financial  conditions generally  affecting  the
ceramic dinnerware industry in the United States, (2) events,
changes or effects resulting from general economic, business,
political  or  financial  conditions  in  the  United  States
(including   changes  in  interest  levels   or   prices   of
securities),  (3)  changes  in  GAAP,  regulatory  accounting
principles or Laws applicable to the Business or such  Party,
as  applicable, (4) changes, effects or events  arising  from
national  or  international political or  social  conditions,
including the engagement by the United States in hostilities,
whether  or  not pursuant to the declaration  of  a  national
emergency  or  war,  or the occurrence  of  any  military  or
terrorist  attack, (5) changes, effects or events  resulting,
directly  or  indirectly,  from  the  announcement   of   the
Acquisition  or (6) changes, effects or events  arising  from
actions taken or omitted by a Party either as required by  or
as  contemplated in this Agreement or with the prior  consent
of the other Parties.

      "Net  Working  Capital"  has the  meaning  provided  on
Schedule 1.1(d).

      "Neutral Auditor" means a person who shall be, or shall
have  been,  an  audit  partner in  a  nationally  recognized
independent  accounting  firm  having  experience  with   the
tabletop market and industry, and who is not affiliated with,
or  retained by, either Buyer or any Seller, and who shall be
appointed by agreement of Buyers and Parent.

      "NLRB" means the United States National Labor Relations
Board.

        "Patents"   means   patents,   patent   applications,
continuations,  continuations  in  part,  reexaminations  and
reissues  owned  by  any Seller (whether utility,  design  or
otherwise).

      "Permitted Liens" means: (a) liens imposed by  Law  for
Taxes,  assessments  or  charges or  claims  by  Governmental
Entities   that  are  not  yet  due  or  are  being  properly
contested, which contest tolls collection of such  taxes  and
the  lien  thereof  and  provided that reasonably  acceptable
reserves are being maintained; (b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, landlords' and  other
like  liens  imposed  by  Law or  contract,  arising  in  the
ordinary course of business and securing obligations that are
not  due  and  payable; (c), solely with respect to  personal
property, pledges and deposits made in the ordinary course of
business    in   compliance   with   workers'   compensation,
unemployment  insurance  and other social  security  Laws  or
regulations;  (d), solely with respect to personal  property,
deposits  to secure the performance of bids, trade contracts,
leases,  statutory obligations, surety, indemnity and  appeal
bonds,  performance and return-of-money and  fiduciary  bonds
and  other obligations of a like nature, in each case in  the
ordinary   course   of   business;  (e)   easements,   zoning
restrictions, rights-of-way, licenses, covenants, conditions,
minor  defects, encroachments or irregularities in title  and
similar encumbrances on or affecting the Leased Real Property
that  do  not secure any monetary obligations and do not  and
will  not  materially interfere with the ordinary conduct  of
the Business as conducted or to be conducted by Buyers at the
affected  Leased Real Property; (f) provided such restriction
or  encumbrance  will  not unreasonably  interfere  with  the
conduct of the Business by Buyer at the affected Leased  Real
Property, any restriction or encumbrance that the interest or
title  of  any  lessor or sublessor under any  Real  Property
Lease may be subject to, but only if such Real Property Lease
for  the Leased Real Property is subordinate thereto  by  its
terms; and (g) those Liens set forth on Schedule 1.1(e).

      "Person" means an individual, a sole proprietorship,  a
partnership, a corporation, an association, an institution, a
joint stock company, a limited liability company, a trust,  a
joint   venture,   an  unincorporated  organization,   or   a
Governmental Entity or any other legal entity.

      "Product  Supply  Agreement" means a  written  purchase
order  from  a  Buyer for Four Million One  Hundred  Thousand
Dollars  ($4,100,000)  of  products  to  be  manufactured  by
Manufacturing, dated as of a date prior to the Closing  Date,
as accepted by Parent.

      "Release" means any release, spill, emission,  leaking,
leaching,  injecting, escaping, disposing, pumping, emptying,
dumping, deposit or discharge of a Hazardous Material.

      "SEC'  means the United States Securities and  Exchange
Commission.

      "Seller Benefit Plan" means with respect to any Seller,
each  Benefit  Plan  that is currently or  in  the  past  was
sponsored  or  maintained  or required  to  be  sponsored  or
maintained  by such Seller or to which such Seller  makes  or
has  in  the past made, or has or has had in the past or  may
have  in  the  future  an obligation to  make,  contributions
providing  for  employee benefits or  for  the  remuneration,
direct  or  indirect,  of  the employees,  former  employees,
officers,  contingent  workers or  leased  employees  of  the
business or the dependents of any of them.

      "Seller  Holding Company" means Susquehanna Pfaltzgraff
Co.,  a corporation organized under the laws of the State  of
Delaware, of which Parent is a wholly-owned Subsidiary.

      "Seller  Indemnified Parties" means  Parent,  InvestCo,
Outlet,   each  of  their  respective  Affiliates,  and   the
respective  stockholders, agents, representatives, successors
and assigns of any of the foregoing.

     "Seller Inventory" means the finished goods inventory of
Parent, Manufacturing and Outlet.

      "Seller  Receivables" means the accounts receivable  of
Sellers relating exclusively to the Business.

     "Seller Subsidiaries" means InvestCo and Outlet.

      "Sellers' Knowledge" means all facts actually known, or
with reasonable investigation would have been known, by those
individuals listed on Schedule 1.1(f) on the date hereof.

     "Site" means the Flemington Store, DC East and DC West.

      "Store"  means  a Pfaltzgraff retail  store,  the  Real
Property Lease for which is acquired hereunder.

      "Store  Closing Costs" means, with respect to a  Store,
all (a) payments required to be made to the applicable lessor
or   any  lender  of  such  lessor  in  connection  with  the
termination  of  the Real Property Lease  therefor,  and  (b)
expenses  actually incurred to return the physical  structure
of  the  Store to the condition required by the terms of  the
Real Property Lease therefor.

      "Taxes" means all taxes, assessments, charges,  duties,
fees,   levies  or  other  governmental  charges   (including
interest,   penalties  or  additions  associated  therewith),
including  income, franchise, capital stock,  real  property,
personal   property,   tangible,   withholding,   employment,
payroll,    social   security,   unemployment   compensation,
disability,  transfer,  sales, use, excise,  gross  receipts,
value-added  and all other taxes of any kind imposed  by  any
Governmental  Entity,  whether  disputed  or  not,  and   any
charges, interest or penalties imposed or that may be imposed
thereon by any Governmental Entity.

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

     "Trademarks" means the trade marks, trade names, service
marks  and logos listed on Schedule 5.11(a)(i) and all  other
trade  marks, trade names, service marks and logos  owned  by
any Seller.

      "Transition Services Agreement" means a mutually agreed
upon written Transition Services Agreement to be entered into
by and among Parent and Buyer as of the Closing Date.

1.2  Other Definitions

     In addition to the terms defined in Section 1.1, certain
other  terms  are  defined elsewhere in this Agreement,  and,
whenever  such terms are used in this Agreement,  they  shall
have  their  respective defined meanings, unless the  context
expressly  or  by  necessary implication otherwise  requires.
The  definitions  of terms of general applicability  are  set
forth in the sections listed below.

      Term                                     Section

      Acquisition                              Recitals
      Agreement                                Preamble
      Assets                                        2.2
      Assignment and Assumption Agreements   4.2(a)(ii)
      Assignment of Copyrights                4.2(a)(v)
      Assignment of Trademarks               4.2(a)(iv)
      Assignments and Assumption of Leases  4.2(a)(iii)
      Assignments of Domain Names             4.2(a)(x)
      Assumed Contracts                          2.2(g)
      Assumed Liabilities                           2.4
      Auditor Costs                              3.6(e)
      Bills of Sale                           4.2(a)(i)
      Borrowing Contracts                   5.10(a)(iv)
      Buyer                                    Preamble
      Buyer Closing Certificate             4.2(b)(vii)
      Buyer Licenses                                9.8
      Buyer Losses                                 11.1
      Candidate Employees                        7.3(a)
      Claim Notice                                 11.3
      Claimant                                 13.10(a)
      Claims Period                                11.5
      Closing                                       4.1
      Closing Statement                          3.6(b)
      Closing Date                                  4.1
      Closing Statement Dispute Notice           3.6(c)
      Closing Statement Disputed Matters         3.6(c)
      CMP                                      13.10(a)
      COBRA                                      8.3(f)
      Confidentiality Agreement                     7.4
      Covered Stores                             3.7(b)
      Design Licenses                           5.11(e)
      Excluded Assets                               2.3
      Excluded Liabilities                          2.5
      Final Statement                            3.6(f)
      Indemnity Cap                             11.6(a)
      InvestCo                                 Preamble
      Holdback                                   3.2(b)
      Licensed I.P. Rights                  5.11(a)(ii)
      Lifetime                                 Preamble
      Manufacturing                            Preamble
      Mediation Notice                         13.10(a)
      New Parent                                 7.1(f)
      Outlet                                   Preamble
      Owned I.P. Rights                      5.11(a)(i)
      Parent                                   Preamble
      Parties                                  Preamble
      Party                                    Preamble
      Per-Store Holdback                         3.2(b)
      Personal Property Leases                   2.2(d)
      Purchase Price                                3.1
      Real Property Leases                       2.2(e)
      Respondent                               13.10(a)
      Seller                                   Preamble
      Sellers                                  Preamble
      Seller Closing Certificate             4.2(a)(vi)
      Seller Losses                                11.2
      Seller Real Property Lease
         Consent Certificate                        9.6
      Seller Stationery                          7.1(d)
      Software                                  5.11(c)
      Store Closing List                         3.7(a)
      Technology                                5.11(d)
      Third Party Action                        11.4(a)
      Third Party Action Notice                 11.4(a)
      Threshold Amount                          11.6(c)
      Transferred Employees                      7.3(a)
      WARN Act                                   8.3(e)
      WARN Liabilities                           8.3(e)

1.3  Construction.

      Unless  the context of this Agreement otherwise clearly
requires,  (a) references to the plural include the singular,
and   references   to  the  singular  include   the   plural,
(b)  references  to  any gender include  the  other  genders,
(c)  the words "include," "includes" and "including"  do  not
limit the preceding terms or words and shall be deemed to  be
followed  by  the words "without limitation", (d)  the  terms
"hereof",  "herein", "hereunder", "hereto" and similar  terms
in  this Agreement refer to this Agreement as a whole and not
to  any particular provision of this Agreement, (e) the terms
"day"  and  "days,"  if not capitalized, mean  and  refer  to
calendar day(s) and (f) the terms "year" and "years" mean and
refer  to  calendar  year(s).   Unless  otherwise  set  forth
herein,   references  in  this  Agreement  to  any  document,
instrument    or   agreement   (including   this   Agreement)
(A)  includes  and incorporates all exhibits,  schedules  and
other   attachments  thereto,  (B)  includes  all  documents,
instruments  or agreements issued or executed in  replacement
thereof and (C) means such document, instrument or agreement,
or  replacement or predecessor thereto, as amended,  modified
or  supplemented  from time to time in  accordance  with  its
terms and in effect at any given time.  All Article, Section,
Exhibit  and  Schedule  references herein  are  to  Articles,
Sections,  Exhibits and Schedules of this  Agreement,  unless
otherwise specified.

ARTICLE 2:  PURCHASE AND SALE OF ASSETS

2.1  Agreement to Purchase and Sell.

       (a)   Subject  to  the  terms,  conditions  and  other
provisions  of this Agreement, at the Closing and  except  as
otherwise  specifically provided in this Article  2,  Sellers
will grant, sell, assign, transfer and deliver to Buyers, and
Buyers  will  purchase and acquire from Sellers,  all  right,
title and interest of Sellers in and to all of the Assets (as
hereinafter defined), free and clear of all Liens except  for
Permitted   Liens,  and  Buyers  will  assume   the   Assumed
Liabilities.

      (b)   Notwithstanding anything herein to the  contrary,
(i)  the particular Assets being purchased and the particular
Assumed Liabilities being assumed by each Buyer shall be  set
forth  with  reasonable specificity at  the  Closing  in  the
Conveyance  Documents; (ii) if, in the case of any particular
Asset, no Buyer is identified in the Conveyance Documents  as
the  purchaser of such Asset, Acquisition Sub shall be deemed
to  be the purchaser of such Asset; and (iii) if, in the case
of  any  particular Assumed Liability, no Buyer is identified
in   the   Conveyance  Documents  as  assuming  such  Assumed
Liability,  Acquisition Sub shall be deemed  to  assume  such
Assumed Liability.

2.2  Assets.

     Except as otherwise expressly set forth in Section  2.3,
the  term  "Assets" shall mean and shall consist of  all  the
assets,  properties and rights of Sellers used, or  held  for
use, primarily in the Business as of the Closing, including:

     (a)   all  rights in the Business Intellectual  Property
relating to the Business;

       (b)   all  furnishings,  furniture,  supplies,  tools,
machinery and equipment and other personal property and fixed
assets  that  are  owned  by Sellers  and  are  used  in  the
Business, other than the Excluded Assets, including the items
set forth on Schedule 2.2(b);

     (c)  the Contracts set forth on Schedule 2.2(c);

      (d)   the  leases  of personal property  set  forth  on
Schedule 2.2(d) (the "Personal Property Leases");

      (e)   the leases of real property set forth on Schedule
2.2(e) (the "Real Property Leases");

     (f)  the Design Licenses;

      (g)   any Contract made or entered into after the  date
hereof by Seller with respect to the Business in the ordinary
course  of  business  consistent with past  practice  not  in
violation  of  this  Agreement (the  Contracts  described  in
clauses (c), (d), (e), (f) and (g) being hereinafter referred
to as the "Assumed Contracts");

     (h)  all Seller Receivables;

       (i)   all  prepaid  expenses,  advances,  credits  and
deposits of Sellers;

     (j)  all Seller Inventory;

     (k)  all goodwill of the Business; and

      (l)  a copy of all books of account and other financial
records,  files,  documents, instruments, books  and  records
relating principally to the Business.

2.3  Excluded Assets.

     Notwithstanding anything to the contrary  set  forth  in
this  Agreement,  the Assets will not include  the  following
assets,  properties and rights of the Sellers  (collectively,
the "Excluded Assets"):

      (a)   all  ownership and other rights with  respect  to
Seller Benefit Plans;

     (b)  all Licenses;

     (c)  the charter documents of each Seller and the minute
books, stock ledgers, tax returns, books of account and other
constituent records relating to the organization, maintenance
and existence of each Seller as a corporation;

      (d)   the rights that accrue to each Seller under  this
Agreement  and  any other agreements between any  Seller  and
Buyer to be delivered pursuant to this Agreement;

     (e)  all insurance policies of Sellers;

     (f)  all cash and cash equivalents of Sellers;

       (g)   all  rights  arising  from  or  related  to  the
litigation listed on Schedule 2.3(g);

     (h)  the assets listed on Schedule 2.3(h);

      (i)   all  rights in or to any and all  real  property,
subject to the DC Leases and the Flemington Lease;

      (j)  all rights in or to any assets used exclusively in
the Manufacturing Business; and

      (k)   historical archives and historical items relating
to  the  Business that are neither used in nor useful in  the
conduct of the Business as currently conducted by Sellers.

2.4  Assumption of Assumed Liabilities.

     Subject to Section 2.1(b), in connection with the
purchase by Buyers of the Assets, at the Closing, effective
as of the Closing, Buyers shall assume and thereafter pay,
perform and discharge solely the following debts, obligations
and liabilities relating to the Business and the Assets, and
no others (collectively, the "Assumed Liabilities"):

      (a)   subject  to  Section 3.7 and 2.5(h),  all  debts,
liabilities  and  obligations of Sellers  under  the  Assumed
Contracts  to  be  paid, performed or discharged  by  Sellers
after the Closing;

     (b)  all debts, liabilities and obligations attributable
to or arising out of the ownership or operation of any Assets
or the Business after the Closing; and

     (c)  the debts, obligations and liabilities set forth on
Schedule 2.4(b).

2.5  Excluded Liabilities.

     Anything  herein  to  the contrary notwithstanding,  the
Assumed  Liabilities will not include, and in no  event  will
Buyer  assume, agree to pay, discharge or satisfy  any  debt,
liability  or  obligation under this Agreement  or  otherwise
have   any   responsibility  for,  any  debt,  liability   or
obligation  of  Sellers of any kind, whether known,  unknown,
contingent or otherwise other than those expressly set  forth
in  Section  2.4  (collectively, the "Excluded Liabilities").
Without  limiting the generality of the foregoing,  the  term
"Excluded  Liabilities" shall expressly  include  all  debts,
liabilities or obligations of Sellers of any kind:

      (a)   for  any Taxes of any Seller or any affiliate  of
such  Seller, including any sales, use or similar taxes  that
any  Seller  or  any affiliate of any Seller is  required  to
collect  or remit to any taxing authority, but not  including
any transfer taxes payable in accordance with Section 7.6;

     (b)  pertaining to any Excluded Asset;

     (c)  relating to, resulting from, or arising out of, any
non-Business operation of Sellers or any former operation  of
the  Business that has been discontinued or disposed of prior
to the Closing;

     (d)  pursuant to the Borrowing Contracts;

      (e)  arising out of or related to (i) any Benefit Plan,
(ii) any employee of any Seller or former employee who is not
a Transferred Employee, and (iii) any Transferred Employee to
the  extent attributable to events or circumstances occurring
or existing on or prior to the Closing.

      (f)   under the Assumed Contracts arising prior to  the
Closing;

      (g)   except  as  explicitly provided in  Section  2.4,
attributable to or arising out of the ownership or operations
of any Assets or the Business prior to the Closing; and

      (h)  arising under or relating to Environmental Laws or
Hazardous Materials relating to the operation of the Business
by Sellers prior to the Closing.

ARTICLE 3:  PURCHASE PRICE AND METHOD OF PAYMENT

3.1  Purchase Price.

      The  aggregate  amount to be paid for the  Assets  (the
"Purchase   Price")  will  be  Thirty-Four  Million   Dollars
($34,000,000), subject to adjustment pursuant to Section 3.6.
In  addition  to the foregoing payment, as consideration  for
the  grant,  sale, assignment, transfer and delivery  of  the
Assets,   Buyers  shall  assume  and  discharge  the  Assumed
Liabilities.

3.2  Payment of Purchase Price; Holdback.

      (a)   On the Closing Date, Buyer shall pay the Purchase
Price,  less the Holdback, if any, to Parent by wire transfer
of   immediately   available   funds   in   accordance   with
instructions  to  be provided to Buyers  by  Parent.   Buyers
shall retain the Holdback for distribution in accordance with
Sections 3.2(c) and (d).

      (b)   The  "Per-Store Holdback" shall be Three  Hundred
Thousand  Dollars  ($300,000).  The "Holdback"  shall  be  an
amount  equal  to (i) the Per-Store Holdback,  multiplied  by
(ii) the number of Key Stores, if any, for which all consents
necessary  to  assign  the Real Property  Lease  therefor  to
Buyers have not been obtained on or before the Closing Date.

      (c)   For  each  Key Store for which (i)  all  consents
necessary  to  assign the Real Property Lease  for  such  Key
Store to Buyers are obtained after the Closing Date but prior
to  the date on which such Real Property Lease expires or  is
terminated  by the applicable lessor in accordance  with  the
terms  thereof, and (ii) such Real Property Lease is assigned
to  Buyers  hereunder, Buyers shall promptly  pay  an  amount
equal  to the Per-Store Holdback from the Holdback to  Parent
by wire transfer of immediately available funds in accordance
with instructions to be provided to Buyers by Parent.

     (d)  For each Key Store for which all consents necessary
to  assign  the  Real Property Lease for such  Key  Store  to
Buyers are not obtained prior to the date on which such  Real
Property  Lease  expires or is terminated by  the  applicable
lessor in accordance with the terms thereof, an amount  equal
to the Per-Store Holdback shall be deducted from the Holdback
and  shall immediately revert to Buyers, and no Seller  shall
be entitled to be paid such Per-Store Holdback.

3.3  Allocation of Certain Items.

     With  respect to certain expenses incurred with  respect
to the Assets in the operation of the Business, the following
allocations  will  be  made between  Buyers  and  Sellers  at
Closing  by  appropriate  cash  payments  of  the  applicable
amounts from Buyers to Sellers and/or from Sellers to Buyers,
as the case may be:

      (a)   Rent.   Monthly rent and any additional  rent  or
charges  (including  common  area maintenance  charges)  with
respect  to  the  Leased Real Property  will  be  apportioned
between Buyers and Sellers based on the number of days in the
lease month before and after the Closing Date.

      (b)   Taxes.   Ad valorem property taxes for  the  2005
calendar year will be apportioned between Buyers and  Sellers
based  upon  the number of days in the taxable period  before
and  after the Closing Date and the amounts set forth in  the
current tax bills.  If current tax bills are not available at
the  time  of Closing, such taxes initially shall be prorated
on  the basis of tax bills for the prior calendar year.  Once
current   tax  bills  for  the  2005  calendar  year   become
available,  the Parties shall promptly adjust the  prorations
in accordance with such current tax bills.

       (c)    Utilities.   Utilities  (including   telephone,
electricity, gas, garbage and waste removal), water and sewer
charges  will  be apportioned based upon the number  of  days
occurring  before  and  after the  Closing  Date  during  the
billing  period  for each such charge, and Sellers  shall  be
credited  with  any deposits transferred to  the  account  of
Buyers;  provided, however, that at Buyers' election any  one
or  more of such utility accounts shall be closed as  of  the
Closing  Date,  in which event Sellers shall  be  liable  and
responsible  for all charges for service through the  Closing
Date  and shall be entitled to all deposits theretofore  made
by  Sellers with respect to such utility, and Buyers shall be
responsible for reopening and reinstituting such  service  in
Buyers'  name and shall be responsible for any fees, charges,
and  deposits  required in connection with such new  account.
If  current  utility bills are not available at the  time  of
Closing,  such utilities initially shall be prorated  on  the
basis  of  utility bills for the prior month, and  Buyer  and
Parent  shall  mutually  agree on a  reconciliation  of  such
proration  to  the actual utility bills promptly  after  such
bills become available after the Closing.

      (d)  All payments required under this Section 3.3 shall
be  made  within  ten  (10) Business  Days  after  a  written
statement  therefor, accompanied by supporting documentation,
has been submitted by Sellers to Buyers, or vice versa.

     (e)  This Section 3.3 shall survive the Closing.

3.4  Payments.

     All payments required under this Article 3 shall be made
in  Dollars  in  cash  by  the wire transfer  of  immediately
available  funds  to  such  bank  account(s)  as   shall   be
reasonably designated at least three (3) Business Days  prior
to   the   applicable  payment  date  in   writing   by   the
recipient(s).

3.5  Tax Allocation.

     Lifetime  shall prepare and deliver, within  sixty  (60)
days after the Final Statement has been finally determined in
accordance   with   Section  3.6,   a   proposed   allocation
(consistent with the provisions of Section 1060 of the  Code)
among the Assets (as determined for purposes of Section 1060)
provided   by   Buyers.   If  Sellers  disagree   with   such
allocation,  then  Sellers shall,  within  thirty  (30)  days
following  receipt of such allocation from Lifetime,  provide
Lifetime   with  a  written  notice  disputing  the  proposed
allocation.   If Sellers deliver a Closing Statement  Dispute
Notice to Lifetime, Sellers shall include with such notice  a
proposed  allocation  of the Purchase  Price  and  any  other
capitalized costs or amounts among the Assets, and Buyers and
Lifetime shall resolve any disagreement with respect to  such
proposed allocation under the procedures set forth in Section
3.6(d).    If  Sellers  disagree  with  Lifetime's   proposed
allocation  and  do  not provide a Closing Statement  Dispute
Notice,  Sellers and Lifetime shall resolve such disagreement
under  the  procedures set forth in Section 3.6(d).   Once  a
proposed   allocation  has  become  final  or  been  resolved
pursuant to the proceeding provisions, the Parties agree that
(a)  they  shall,  and, in the case of Sellers,  shall  cause
Seller Holding Company to, take no position for Tax purposes,
including   on  an  Internal  Revenue  Service   Form   8594,
inconsistent with such allocation, except as may be  required
to  reflect any adjustments to the Purchase Price as provided
for  herein; and (b) Lifetime shall prepare and file Internal
Revenue  Service  Forms 8594 reflecting such allocation  (for
avoidance  of  doubt,  Lifetime  shall  prepare  and  file  a
separate Internal Revenue Service Form 8594 for each Seller).
All  costs  and expenses of the Neutral Auditor in connection
with  this Section 3.5 shall be borne one-half by Buyers  and
one-half by Parent.

3.6  Working Capital Adjustment.

      (a)  On dates to be selected by Parent (of which Parent
shall provide prior notice to Lifetime), which shall be prior
to  the Closing Date, Sellers shall take a physical inventory
of  the  Seller Inventory.  In connection therewith,  Sellers
shall  permit  Buyers  to reasonably  observe  such  physical
inventory.  Sellers shall conduct such physical inventory  at
a  time  and in a manner so as to not interfere with Sellers'
operation of the Business.

     (b)  On or before the thirtieth (30th) day following the
Closing Date, Parent shall prepare and deliver to Buyer (i) a
statement,  as  of 11:59 p.m. on the day before  the  Closing
Date  (the  "Closing  Statement"), which  shall  reflect  Net
Working Capital  (using the value of the Seller Inventory  as
determined  in  accordance with Section 3.6(a))  and  (ii)  a
balance  sheet of the Business as of the Closing Date setting
forth  the  assets being purchased and the liabilities  being
assumed  by  Buyers hereunder, in the case  of  each  of  the
foregoing  clauses (i) and (ii), as determined in  accordance
with  GAAP  and  by applying the same accounting  principles,
policies  and  practices  that were  used  in  preparing  the
balance  sheet  included in the Annual Financial  Statements.
For  avoidance  of doubt, the Parties acknowledge  and  agree
that for the purpose of computing Net Working Capital and any
Closing  Statement  Disputed Matters, Sellers'  LIFO  reserve
shall  be equal to the LIFO reserve set forth on the  Interim
Financial Statements.

     (c)  If Buyers determine that there are any inaccuracies
in  the  Closing Statement, Buyers shall deliver to Parent  a
written notice (a "Closing Statement Dispute Notice") setting
forth  such  alleged  inaccuracies  (the  "Closing  Statement
Disputed   Matters")   no  later  than   5:00   p.m.,   York,
Pennsylvania  time on the thirtieth (30th) day after  receipt
of  the  Closing  Statement from Parent.  If  Buyers  do  not
deliver a Closing Statement Dispute Notice to Parent by  such
date  and  time, Buyers shall be deemed to have accepted  the
Closing Statement as prepared by Parent.

      (d)  Buyers and Parent shall endeavor in good faith  to
resolve  the  Closing Statement Disputed  Matters  by  mutual
agreement.  If, within thirty (30) Business Days after Buyers
deliver a Closing Statement Dispute Notice to Parent:

          (i)  Buyers and Parent are able to reach a mutually
               satisfactory   resolution   of   the   Closing
               Statement  Disputed Matters, then the  Closing
               Statement  shall  be revised to  reflect  such
               resolution, and such Closing Statement will be
               final,  binding and conclusive (but only  with
               respect  to  those Closing Statement  Disputed
               Matters  as  to which Buyers and  Parent  have
               reached    such    a   mutually   satisfactory
               resolution); or

          (ii) Buyers  and  Parent  are  unable  to  reach  a
               mutually   satisfactory  resolution   of   the
               Closing   Statement  Disputed  Matters,   then
               Buyers  and  Parent shall promptly submit  any
               remaining  Closing Statement Disputed  Matters
               to a Neutral Auditor.  Buyers and Parent shall
               supply  to  the  Neutral  Auditor  only   such
               supporting  documentation and  information  as
               the  Neutral Auditor may request.  The Neutral
               Auditor  will deliver to Buyers and  Parent  a
               written  determination (such determination  to
               include   a  work  sheet  setting  forth   all
               material calculations used in arriving at such
               determination  and to be based solely  on  the
               information provided to the Neutral Auditor by
               Buyers  and  Parent) of the Closing  Statement
               Disputed  Matters within thirty (30)  days  of
               receipt of such disputed items.

     (e)  All decisions of the Neutral Auditor shall be final
and  nonappealable,  and  the  Closing  Statement  shall   be
revised,  if necessary, to reflect the determination  of  the
Auditor.  All costs and expenses of the Neutral Auditor  (the
"Auditor  Costs") shall be borne one-half by Buyers and  one-
half by Parent.

      (f)   The  final Closing Statement, as  such  has  been
agreed  upon  by  Buyers and Parent,  or  as  such  has  been
determined  by  the Neutral Auditor pursuant hereto,  as  the
case may be, will constitute the "Final Statement".

      (g)   If (i) the Final Net Working Capital is less than
the Benchmark Working Capital, Parent shall pay the amount of
such deficiency to Buyers within ten (10) Business Days after
the  Final  Statement is determined; or (ii)  the  Final  Net
Working Capital exceeds the Benchmark Working Capital, Buyers
shall pay the amount of such excess to Parent within ten (10)
Business Days after the Final Statement is determined.

3.7  Non-Continuing Stores.

      (a)   Buyers shall deliver a written notice (the "Store
Closing  List") to Parent prior to November 30, 2005  setting
forth  a  list of the Stores that Buyers desire to close,  if
any.

     (b)  The Store Closing Costs arising from the closing of
the  Stores  (x)  closed on or before the Closing  Date  with
Lifetime's  consent, (y) closed after the  Closing  Date  but
prior  to  the  date the Store Closing List is  delivered  to
Parent   and  (z)  set  forth  on  the  Store  Closing   List
(collectively,  the  "Covered  Stores")  shall  be  paid   as
follows:

          (i)  Parent  shall  pay the first Two Million  Five
               Hundred Thousand Dollars ($2,500,000) of  such
               Store Closing Costs;

          (ii) if  the aggregate amount of such Store Closing
               Costs   exceeds  Two  Million   Five   Hundred
               Thousand  Dollars ($2,500,000),  Buyers  shall
               then  pay  the Store Closing Costs  in  excess
               thereof,  up to a total excess amount  of  Two
               Million    Five   Hundred   Thousand   Dollars
               ($2,500,000); and

          (iii)      if  the  aggregate amount of such  Store
               Closing  Costs  exceeds Five  Million  Dollars
               ($5,000,000), Buyers and Parent shall each pay
               one-half of the Store Closing Costs in  excess
               of Five Million Dollars ($5,000,000).

      (c)   No  Seller  shall be responsible  for  any  Store
Closing  Costs arising from the closing of any Store that  is
not a Covered Store.

3.8  Certain Payments Related to Assumed Contracts.

      If  any amount is required to be paid to a third Person
under any Assumed Contract (other than a Real Property Lease)
on account of any consent required for the assignment of such
Assumed  Contract to Buyer, Buyers shall pay such  amount  to
such third Person, or if such amount is paid by a Seller with
the  Acquisition  Sub's prior written  consent,  then  Buyers
shall  promptly reimburse such Seller for the full amount  of
the payment.

ARTICLE 4:  THE CLOSING

4.1  Closing.

     The  closing  of the transactions contemplated  by  this
Agreement  (the  "Closing")  shall  take  place  as  soon  as
reasonably  practicable, but in any event no later  than  the
fifth (5th) Business Day, following the day upon which all of
the  conditions  to  Closing have been  satisfied  or  waived
(other  than those conditions which by their terms cannot  be
satisfied  until the Closing but subject to the  satisfaction
of  such conditions) or such other date as is mutually agreed
upon  in  writing by the Parties (the "Closing  Date").   The
Closing  shall  take place at the offices of Venable  LLP  in
Baltimore,  Maryland.   Solely for financial  and  accounting
purposes, the Closing shall be deemed to have occurred as  of
12:01 a.m. York, Pennsylvania time on the Closing Date.

4.2  Closing Deliveries.

     At the Closing:

     (a)  Sellers shall deliver (executed as applicable) to
Buyers:

          (i)  Bills  of  Sale substantially in the  form  of
               Exhibit   4.2(a)(i),   transferring   to   the
               applicable  Buyer all of each Seller's  right,
               title  and  interest in and to  such  Seller's
               Assets   in  accordance  with  Section  2.1(b)
               (other than any Real Property Leases, Personal
               Property  Leases, Copyrights  and  Trademarks)
               (collectively, the "Bills of Sale");

          (ii) Assignment     and    Assumption    Agreements
               substantially   in   the   form   of   Exhibit
               4.2(a)(ii),  with  respect  to  each  Seller's
               liabilities    included   in    the    Assumed
               Liabilities (collectively, the "Assignment and
               Assumption Agreements");

          (iii)      Assignments  and  Assumption  of  Leases
               substantially   in   the   form   of   Exhibit
               4.2(a)(iii),  with  respect  to  the  Personal
               Property  Leases  and  Real  Property   Leases
               (collectively, the "Assignments and Assumption
               of  Leases") (which Assignments and Assumption
               of  Lease  shall provide (x) an  indemnity  of
               Buyers  from Parent for all liabilities  under
               the applicable Personal Property Lease or Real
               Property  Lease  arising on or  prior  to  the
               Closing, and (y) an indemnity of Sellers  from
               Buyers and Lifetime for all liabilities  under
               the applicable Personal Property Lease or Real
               Property Lease arising after the Closing);

          (iv) an  Assignment of Trademarks substantially  in
               the    form   of   Exhibit   4.2(a)(iv)   (the
               "Assignment of Trademarks");

          (v)  an  Assignment of Copyrights substantially  in
               the form of Exhibit 4.2(a)(v) (the "Assignment
               of Copyrights");

          (vi) a  certificate  of  an authorized  officer  of
               Parent as to the Sellers' compliance with  the
               conditions  set forth in Section 9.1  and  9.2
               (the "Seller Closing Certificate");

          (vii)     the Transition Services Agreement;

          (viii)    the Product Supply Agreement;

          (ix) each of the DC Leases and the Flemington Lease
               duly executed;

          (x)  Assignments  of Domain Names substantially  in
               the    form   of   Exhibit   4.2(a)(x)    (the
               "Assignments of Domain Names");

          (xi) the  Seller Real Property Consent Certificate;
               and

          (xii)      such  other  documents as  are  required
               under  this Agreement or reasonably  requested
               by Buyers.

     (b)  Buyers shall deliver (executed as applicable) to
Sellers:

          (i)  the Purchase Price, less the Holdback, if any;

          (ii) the Bills of Sale;

          (iii)     the Assignment and Assumption Agreements;

          (iv) the Assignments and Assumption of Leases;

          (v)  the Assignment of Trademarks;

          (vi) the Assignment of Copyrights;

          (vii)     a certificate of an authorized officer of
               Lifetime  as  to Lifetime's and  each  Buyer's
               compliance  with the conditions set  forth  in
               Section  10.1  and  10.2 (the  "Buyer  Closing
               Certificate");

          (viii)    the Transition Services Agreement;

          (ix) the Product Supply Agreement;

          (x)  each  of  the  DC  Leases and  the  Flemington
               Lease;

          (xi) all  documents reasonably necessary  to  cause
               the  registration of the Domain  Names  to  be
               transferred to Buyer; and

          (xii)      such  other  documents as  are  required
               under  this Agreement or reasonably  requested
               by Sellers.

4.3  Nonassignability of Contracts.

      (a)  Notwithstanding anything to the contrary contained
in  this  Agreement,  to  the extent that  the  grant,  sale,
assignment,  transfer or delivery to Buyers, of any  Contract
that  would be an Assumed Contract, or any claim or right  or
any  benefit arising thereunder or resulting therefrom  would
require any authorizations, approvals, consents or waivers of
a   Governmental  Entity  or  other  third  party,  and  such
authorizations, approvals, consents or waivers shall not have
been  obtained  prior  to  the  Closing,  the  Closing  shall
proceed,  without  the grant, sale, assignment,  transfer  or
delivery  of  such  Contract, and this  Agreement  shall  not
constitute a grant, sale, assignment, transfer or delivery of
such Contract or an attempt thereof.

      (b)   If the Closing proceeds without the grant,  sale,
transfer,  assignment or delivery of any Contract that  would
be  an  Assumed  Contract, then following  the  Closing,  the
parties shall use their commercially reasonable efforts,  and
cooperate   with   each  other,  to  obtain   promptly   such
authorizations, approvals, consents or waivers.  Pending such
authorization, approval, consent or waiver, Sellers shall use
commercially  reasonable  efforts,  and  the  Parties   shall
cooperate   with  each  other  in  any  mutually   agreeable,
reasonable  and lawful arrangements designed  to  provide  to
Buyers  all  of the benefits of use of such Contract  and  to
Sellers the benefits, including any indemnities, that Sellers
would  have obtained had the Contract been conveyed to Buyers
at the Closing.

     (c)  To the extent that the applicable Buyer is provided
all of the material benefits pursuant to this Section 4.3  of
any  Contract,  the applicable Buyer shall  perform  for  the
benefit of the other Persons that are parties thereto all  of
the   obligations  of  Sellers  thereunder  and  any  related
liabilities  that,  but  for the lack  of  an  authorization,
approval,  consent  or waiver to assign such  liabilities  to
such Buyer, would be Assumed Liabilities.

     (d)  Once authorization, approval, consent or waiver for
the grant, sale, assignment, transfer or delivery of any such
Contract   not   granted,  sold,  assigned,  transferred   or
delivered at the Closing is obtained, such Contract shall  be
deemed  to  have  been  granted,  assigned,  transferred  and
delivered  to the applicable Buyer at no additional  cost  to
such  Buyer.  To the extent that any such Contract cannot  be
transferred  or  the material benefits of any  such  Contract
cannot  be  provided  to the applicable Buyer  following  the
Closing  pursuant  to this Section 4.3, then  the  applicable
Buyer   and   Seller  shall  enter  into  such   arrangements
(including  subleasing, sublicensing  or  subcontracting)  to
provide  to  the Parties the material economic  (taking  into
account  Tax  costs and benefits) and operational equivalent,
of obtaining such authorization, approval, consent or waiver,
and  also  to  provide for the performance by  Buyer  of  the
obligations thereunder.  Sellers shall hold in trust for, and
pay  to  the applicable Buyer promptly upon receipt  thereof,
all  income, proceeds and other monies received by any Seller
in  connection with its use of any Contract (net of any Taxes
and  any  other costs imposed upon such Seller) in connection
with the arrangements under this Section 4.3.

ARTICLE 5:  REPRESENTATIONS AND WARRANTIES OF SELLERS

     Sellers,  jointly  and severally, hereby  represent  and
warrant to each Buyer and Lifetime as follows:

5.1  Organization.

     Each  Seller  is  a corporation duly organized,  validly
existing and in good standing under the laws of the state  in
which  it is incorporated, and each Seller has full corporate
power and authority to carry on the Business to the extent it
is  now being conducted by such Seller.  Each Seller is  duly
qualified or licensed to do business and is in good  standing
in  each  jurisdiction in which the failure to so qualify  or
become  licensed  would have a Material Adverse  Effect  with
respect  to  the  Business.  Parent  has  furnished  or  made
available to Buyer true and complete copies of each  Seller's
articles  of  incorporation and bylaws, each  as  amended  to
date.   In  each case, such organizational documents  are  in
full  force and effect, and no Seller is in violation of  any
provision of its articles of incorporation or bylaws.

5.2  Authority; Non-Contravention.

     Each Seller has the right, power and capacity to execute
and  deliver  this Agreement and any other agreement  entered
into  in  connection with this Agreement and to  perform  its
obligations  under  this Agreement and  any  other  agreement
entered into in connection with this Agreement to which it is
a  party  and  to  consummate  the transactions  contemplated
hereby  and  thereby.   The execution and  delivery  of  this
Agreement  and any other agreement entered into in connection
with  this  Agreement by any Seller and  the  performance  by
Sellers   of  their  respective  obligations  hereunder   and
thereunder and the consummation of the transactions  provided
for  herein and therein have been duly and validly authorized
and   approved  by  all  necessary  corporate  action.   This
Agreement has been, and any other agreement entered  into  in
connection  with  this Agreement will be as  of  the  Closing
Date,  duly executed and delivered by each Seller and  do  or
will,  as  the case may be, constitute the valid and  binding
agreements of each Seller, enforceable against each Seller in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and  other
similar  laws  affecting  the  enforceability  of  creditors'
rights  generally,  general  equitable  principles  and   the
discretion of courts in granting equitable remedies.  Subject
to  receipt  of  the  consents  and  approvals  described  in
Schedule  5.3,  neither the execution and  delivery  of  this
Agreement by Sellers nor the consummation of the transactions
contemplated hereby does or would, after the giving of notice
or the lapse of time or both, (i) conflict with, result in  a
breach  of,  constitute  a  default  under,  or  violate  the
articles  of incorporation or the bylaws of any Seller,  (ii)
conflict  with, result in a breach of, constitute  a  default
under,  or  violate any Law applicable to any  Seller,  (iii)
conflict  with, result in a breach of, constitute  a  default
under, result in the acceleration of, create in any party the
right  to  accelerate, amend, modify,  cancel  or  refuse  to
perform  under, or require any notice under any  Contract  or
other arrangement, including any express or implied warranty,
to  which any Seller is a party or by which it is bound or to
which  any  of its assets is subject, or (iv) result  in  the
creation of, or give any party the right to create, any Lien,
other  than Permitted Liens, or other rights upon any  right,
property or Asset of any Seller.

5.3  No Consents.

     Except  as  otherwise  set forth  on  Schedule  5.3,  no
material  permit, consent, approval, novation,  authorization
or  other order of or filing with any Governmental Entity  or
any   other  Person  is  required  in  connection  with   the
execution,  delivery and consummation of this  Agreement  and
any  other  agreement  entered into in connection  with  this
Agreement and the actions of Sellers contemplated hereby.

5.4  Tax Matters.

     All  Taxes  of  Sellers not otherwise assumed  by  Buyer
under this Agreement have been or will be paid by Sellers and
will  not result in the imposition of any Lien on any of  the
Assets.

5.5  Financial Statements; Accounts Receivable; Inventory.

      (a)  A copy of the Financial Statements is attached  as
Schedule 5.5(a).  Each of the balance sheets included in such
Financial   Statements  (including  the  related  notes   and
schedules)  fairly  presents in  all  material  respects  the
financial position of Sellers as of the date of such  balance
sheet,  and  each of the statements of income and cash  flows
included in such Financial Statements (including any  related
notes and schedules) fairly presents in all material respects
the  results of operations and changes in cash flows, as  the
case  may  be,  of  the Business for the  periods  set  forth
therein, in each case in accordance with GAAP (except for the
omission  of  footnotes  and, in  the  case  of  the  Interim
Financial  Statements, normal year-end  adjustments).   Since
December 31, 2004, there has been no material change  in  any
of  the  accounting policies, practices or procedures of  the
Business.

      (b)   The  Seller Receivables reflected on the  Interim
Financial Statements represent bona fide claims of  a  Seller
against  debtors  for  sales  of  products,  performance   of
services  or  other  charges arising on or  before  the  date
hereof.  The reserves relating to the Seller Receivables that
are  set  forth  on  the  Interim  Financial  Statements  are
adequate   and  calculated  consistent  with  past  practice.
Subject to such reserves, none of the Seller Receivables  are
subject to any defense or right of setoff.

      (c)   No  Seller is in possession of any inventory  not
owned by such Seller, except for goods a Seller has agreed to
sell  but has not yet shipped  Schedule 5.5(c) sets  forth  a
true  and complete list of all inventory to which any  Seller
has  taken title, but not taken physical delivery.  The  LIFO
reserve that is set forth on the Interim Financial Statements
is adequate and calculated consistent with past practice.

      (d)   Except  as  set  forth on  Schedule  5.5(d),  all
products  included in any Seller Inventory (i) are free  from
manufacturing  and  design  defects,  (ii)  contain  adequate
consumer  warnings  and instructions, and (iii)  to  Sellers'
Knowledge,  do  not contain any materials or  chemicals  that
would  require consumer warnings under the Safe Drinking  and
Toxic  Enforcement  Act of 1986 of the  State  of  California
(also known as Proposition 65).

5.6  Absence of Undisclosed Liabilities.

     All  liabilities and obligations relating to any of  the
Sellers,  any of the Assets or the Business, whether accrued,
absolute,  contingent  or otherwise,  and  whether  known  or
unknown,  that  are required under GAAP to  be  reflected  or
reserved against in the Financial Statements or disclosed  in
the  accompanying  notes thereto are so  reflected,  reserved
against  or  disclosed, except for liabilities or obligations
(a)  incurred after March 31, 2004 in the ordinary course  of
business  consistent  with  past  practice,  (b)  under  this
Agreement or in connection with the transactions contemplated
hereby,  and  (c)  which would not have  a  Material  Adverse
Effect with respect to the Business.

5.7  Legal Proceedings.

     Except as set forth in Schedule 5.7, there are no suits,
actions,  claims,  arbitration proceedings or  investigations
pending   or,  to  Sellers'  Knowledge,  threatened  against,
relating  to  or  involving any of the Sellers,  any  of  the
Assets  or the Business.  There are no actual or, to Sellers'
Knowledge,  threatened  actions, suits,  claims,  arbitration
proceedings  or  investigations  which  present  a  claim  to
restrain  or  prohibit the transactions contemplated  herein.
There   are  no  judgments,  orders,  injunctions,   decrees,
stipulations  or  awards  (whether  rendered  by   a   court,
administrative  agency,  or  by arbitration,  pursuant  to  a
grievance  or  other procedure) against or  relating  to  the
Assets or the Business before any Governmental Entity,  which
if  determined adversely, are reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect on any
of the Sellers, any of the Assets or the Business.

5.8  Compliance with Laws; Licenses.

      (a)   Except  as  set  forth on  Schedule  5.8(a),  the
Sellers,  the Assets and the Business are in compliance  with
all  Laws,  except where the failure to so comply  would  not
have  a Material Adverse Effect with respect to the Business,
and  has  obtained and maintained all Licenses applicable  to
the  conduct of the Business, except where the failure to  do
so  would not have a Material Adverse Effect with respect  to
the  Business.  No Seller has received notification that  has
not  lapsed,  been withdrawn or abandoned by any Governmental
Entity (i) asserting a material violation by the Business  of
any such Law, (ii) threatening to revoke any material License
of  the  Business, or (iii) materially restricting or in  any
material way limiting the operations of the Business.

      (b)   Schedule 5.8(b) lists all Licenses  held  by  any
Seller and required for the operation of the Business.

5.9  Title to Assets.

     Sellers  are the sole and exclusive legal and  equitable
owners of all right, title and interest in, and have good and
marketable title to, possess valid rights under a license to,
or  a  valid leasehold interest in, all of the Assets  (real,
personal and fixed, tangible and intangible), free and  clear
of  any  and all Liens, other than Permitted Liens.  Sellers'
interest in each Real Property Lease is subject to no  Liens,
other than Permitted Liens.

5.10 Contracts.

      (a)   Schedule  5.10(a) lists the  following  Contracts
relating  to  the Business, to which, as of the date  hereof,
any Seller is a party:

          (i)  each  Contract (or group of related Contracts)
               relating  to  the Business for  the  lease  of
               personal  property  to  or  from  any   Person
               providing  for  lease payments  in  excess  of
               Fifty Thousand Dollars ($50,000) per annum  or
               in  excess of Fifty Thousand Dollars ($50,000)
               in the aggregate;

          (ii) each  Contract (or group of related Contracts)
               relating  to the Business for the purchase  of
               supplies, or other personal property,  or  for
               the  furnishing  or receipt of  services,  the
               performance  of which (A) will extend  over  a
               period  of  more  than two (2)  years  or  (B)
               involves  consideration  in  excess  of  Fifty
               Thousand  Dollars ($50,000) per  annum  or  in
               excess of Fifty Thousand Dollars ($50,000)  in
               the aggregate;

          (iii)      each  Contract relating to the  Business
               concerning  a  partnership  or  joint  venture
               involving a share of profits, losses, costs or
               liabilities by a Seller with any other Person;

          (iv) each  Contract (or group of related Contracts)
               relating to the Business under which a  Seller
               has  created, incurred, assumed or  guaranteed
               any  indebtedness for borrowed money,  or  any
               capitalized  lease obligation, or under  which
               it  has  granted a Lien on any of the  Assets,
               including any letter of credit established  by
               a  Seller  for the benefit of any of  Sellers'
               suppliers  (the  Contracts described  in  this
               Section  5.10(a)(iv) being herein  called  the
               "Borrowing Contracts");

          (v)  each Contract relating to the Business binding
               a  Seller with respect to non-solicitation  or
               non-competition;

          (vi) each  Contract relating to the Business  under
               which  a  Seller  has agreed  to  sell  Seller
               Inventory  to  a customer of the Business  for
               consideration  in  excess  of  Fifty  Thousand
               Dollars ($50,000);

          (vii)      each Contract pursuant to which a Seller
               has  agreed  to sell any of its  assets  to  a
               third  Person (A) outside the ordinary  course
               of the Business, (B) within one (1) year prior
               to the Closing Date, and (C) for consideration
               in excess of Fifty Thousand Dollars ($50,000);

          (viii)    each Contract relating to the Business in
               which  a  Seller  has made product  warranties
               other  than  in  the ordinary  course  of  the
               Business;

          (ix) each  written  individual employment  Contract
               between any Employee and any Seller;

          (x)  each Contract relating to the Business between
               a distributor or sales agent and any Seller;

          (xi) each  other  Contract  (or  group  of  related
               Contracts)  relating to the Business  that  is
               not terminable at will by a Seller prior to or
               after  the Closing without prior notice and/or
               without   payment  of  any  amount  or   other
               penalty, pursuant to which a Seller is or  may
               become  subject  to  any  obligation  or   any
               liability in excess of Fifty Thousand  Dollars
               ($50,000),   or  the  performance   of   which
               involves  consideration  in  excess  of  Fifty
               Thousand Dollars ($50,000).

      (b)   Parent has made a complete copy of each  Contract
listed on Schedule 5.10(a) available to Buyers.  With respect
to  each  such Contract:  (i) each such Contract is  in  full
force  and  effect  and  a binding obligation  of  a  Seller,
enforceable in accordance with its terms with respect to such
Seller, and to Sellers' Knowledge, the other party or parties
thereto,   subject  to  applicable  bankruptcy,   insolvency,
reorganization, moratorium and other similar  laws  affecting
the  enforceability  of creditors' rights generally,  general
equitable principles and the discretion of courts in granting
equitable  remedies,  and (ii) no  Seller  is  in  breach  or
default  and no event has occurred that with notice or  lapse
of  time  would constitute a breach or default by any  Seller
or,  to  Sellers' Knowledge, permit termination, modification
or  acceleration by any other party under such Contract,  and
to Sellers' Knowledge, no other party is in breach or default
by the other party and no event has occurred that with notice
or  lapse  of  time would constitute a breach or default,  or
permit  termination, modification or acceleration by a Seller
under such Contract.

     (c)  Schedule 5.10(c) sets forth, as of the date hereof,
each open purchase order for Seller Inventory, including  the
type, volume and dollar amount thereof.

5.11 Intellectual Property.

               (a)    (i)    Schedule  5.11(a)(i)  lists  all
               trademarks,   trade  names,   service   marks,
               copyrights,   and   Internet   domain    names
               registered  (or  for which  applications  have
               been filed) in the name of (or in the case  of
               applications,  submitted  by)  a  Seller  (or,
               where  record  title  has  not  been  updated,
               assigned  to  a  Seller) and relating  to  the
               Business,   and   all  material   unregistered
               trademarks,  trade  names, service  marks  and
               copyrights relating to the Business for  which
               no   Seller   has  submitted  an   application
               (collectively, the "Owned I.P. Rights").

          (ii)       Schedule  5.11(a)(ii) list all  patents,
               trademarks,   trade  names,   service   marks,
               copyrights  and  applications  therefore,  and
               Internet  domain names licensed  to  a  Seller
               relating  to  the Business (collectively,  the
               "Licensed I.P. Rights").

          (iii)     No Seller owns any Patents.

      (b)  The Owned I.P. Rights are owned by Sellers free of
any  Liens other than Permitted Liens, are not subject to any
license  other than the Design Licenses (defined below),  and
are  not  subject  to  any  other arrangement  requiring  any
payment  to any Person or the obligation to grant  rights  to
any  Person in exchange.  To Sellers' Knowledge, the Licensed
I.P.  Rights  are  free  and clear of any  Liens  other  than
Permitted Liens, royalties or other obligations.  There is no
pending  or, to Sellers' Knowledge, threatened proceeding  in
which the validity or enforceability of the Owned I.P. Rights
or title thereto is being questioned.  To Sellers' Knowledge,
there  is  no pending or threatened proceeding in  which  the
validity  or  enforceability of the Licensed I.P.  Rights  or
title  thereto  is being questioned.  To Sellers'  Knowledge,
none  of the Owned I.P. Rights infringe any valid trademarks,
trade  names,  service marks, copyrights or  Internet  domain
names  of  a  third Person.  The Owned I.P. Rights,  together
with  the  Licensed I.P. Rights, constitute all  intellectual
property necessary for the operation of the Business.

      (c)  Sellers own, or possess valid rights under license
to,  all computer software programs that are material to  the
conduct  of  the Business including (i) any and all  material
software   implementations   of   algorithms,   models    and
methodologies,  whether in source code (where  available)  or
object   code,  (ii)  material  databases  and  compilations,
including  any and all data and collections of data,  whether
machine  readable or otherwise, (iii) material  descriptions,
flow-charts  and  other work product used  to  design,  plan,
organize  and develop any of the foregoing, (iv) the material
technology supporting any Internet site(s) operated by or  on
behalf of Sellers and relating primarily to the Business, (v)
all  Worldwide  Web  addresses and  URLs  for  such  Internet
site(s),  and  (vi)  all  material  documentation,  including
training   materials,  relating  to  any  of  the  foregoing,
(collectively, the "Software").  Schedule 5.11(c) contains  a
complete  and  accurate  list  and  description  of  all  the
Software (other than computer software generally available to
the public and having a cost of less than $1,000 per unit  of
license (e.g., seat, user, server or site)).  Except  as  set
forth  on Schedule 5.11(c), there are no infringement  suits,
actions  or  proceedings pending or, to  Sellers'  Knowledge,
threatened against any Seller with respect to the Software.

      (d)   Sellers own, or possess valid license rights  to,
all   material  know-how  used  in  the  Business,  including
operating  procedures and business plans  (collectively,  the
"Technology").   Except  as set forth  on  Schedule  5.11(d),
there  are  no  infringement suits,  actions  or  proceedings
pending  or,  to Sellers' Knowledge, threatened  against  any
Seller with respect to the Technology.

      (e)   Schedule 5.11(e) sets forth a true  and  complete
list of all agreements in which any Seller has granted rights
to  a  third Person to use any design included in  the  Owned
I.P. Rights (the "Design Licenses").

5.12 Employees.

     Schedule 5.12 contains a true and complete list  of  all
of  the Employees (whether full-time, part-time or otherwise)
as  of  the  date  hereof, specifying their position,  annual
salary  or  hourly  wage, 2004 bonus  (if  any)  and  current
accrued vacation.

5.13 Labor and Employment Matters.

      (a)   The  Employees  are not represented  by  a  labor
organization or group that was either certified by any  labor
relations   board,   including  the  NLRB,   or   any   other
Governmental Entity, or voluntarily recognized by any  Seller
as  the  exclusive bargaining representative  of  a  unit  of
employees,   and  to  Sellers'  Knowledge,  no  Employee   is
represented  by  any other labor union or  organization.   No
Seller  is  a party to or has any obligation under any  union
contract,  or any obligation (other than obligations  imposed
by  Law)  to  recognize  or  deal with  any  labor  union  or
organization,  and there are no such contracts pertaining  to
or  which determine the terms or conditions of employment  of
any Employee.

      (b)   To  Sellers'  Knowledge,  (i)  no  representation
election  petition or application for certification has  been
filed by the employees of the Business or is pending with the
NLRB  or  any  other  Governmental  Entity  relating  to  the
Business, and (B) no overt union organizing campaign or other
overt  attempt  to  organize  or  establish  a  labor  union,
employee   organization  or  labor  organization   or   group
involving  employees of the Business is  in  progress  or  is
threatened.

      (c)  No labor dispute, walk out, strike, slowdown, hand
billing, picketing, work stoppage (sympathetic or otherwise),
or other "concerted action" organized by the employees of the
Business  is in progress or, to Sellers' Knowledge, has  been
threatened.

      (d)   Except  for the severance plans and policies  set
forth  in  Schedule 5.20, all Employees may be terminated  at
any  time with or without cause and without any severance  or
other liability.

      (e)  Except as set forth on Schedule 5.7 and/or 5.8(a),
each  of the Sellers have complied with each, and is  not  in
violation  in  any material respect of any, Law  relating  to
anti-discrimination  and equal employment  opportunities  and
there are, and have been, no material violations of any other
Law  respecting the hiring, hours, wages, occupational safety
and health, employment, promotion, termination or benefits of
any Employee or other person.

      (f)   All  personnel  of  Sellers  have  been  properly
characterized for United States federal income  tax  purposes
as employees or independent contractors, as applicable.

5.14 Absence of Certain Changes.

     Since  December 31, 2004, there has not been any  change
with  respect to the Business that has had a Material Adverse
Effect on the Business.

5.15 Brokers.

     Except  as  indicated on Schedule 5.15, Seller  has  not
dealt  with any broker, finder or agent with respect to  this
Agreement or any of the transactions contemplated hereby  and
all such fees, commissions or other amounts due to any Person
set  forth on Schedule 5.15 shall be for the account  of  the
Sellers.

5.16 Insurance.

     Schedule 5.16 sets forth a correct and complete list  of
all  current insurance policies and coverages relating to the
Business for which any Seller is an insured party.  All  such
policies  are  in full force and effect and all premiums  due
and payable in respect thereof have been paid.  Schedule 5.16
also sets forth a list of all pending claims with respect  to
such   policies.   No  Seller  has  received  a   notice   of
cancellation  of  any such policy or of any material  changes
that  are  required  in  the conduct of  the  Business  as  a
condition  to the continuation of coverage under, or  renewal
of,  any  such policy.  To Sellers' Knowledge,  there  is  no
existing default or event which, with the giving of notice or
lapse  of time or both, would constitute a default under  any
such policy or entitle any insurer to terminate or cancel any
such policy with respect to the Business.  No Seller has  any
Knowledge of any threatened termination of any such policy.

5.17 Environmental Matters.

      (a)   Except  as set forth in Schedule 5.17(a)  (i)  no
Seller has received any notice, notification, demand, request
for information, citation, summons, complaint, order or other
communication regarding any actual or alleged violation of or
liability  under any Environmental Law with  respect  to  the
Assets, the Business or any of the Leased Real Property, (ii)
no  investigation, claim, suit, proceeding or review  arising
under any Environmental Law with respect to any of the Leased
Real  Property,  the  Business or the Assets  is  pending  or
threatened against any Seller, and (iii) no penalty  or  fine
has  been  assessed against any Seller with  respect  to  any
matters  relating to or arising out of any violation  of  any
Environmental  Law with respect to the Leased Real  Property,
the Business or the Assets.

      (b)  Except as set forth on Schedule 5.17(b), no Seller
has  Released  any  Hazardous Materials at  the  Leased  Real
Property.

      (c)   There  have been no environmental investigations,
studies,  audits, tests, reviews or other analyses  conducted
by,  on  behalf  of,  or which are in the possession  of  the
Sellers (or any representatives thereof) with respect to  any
Leased  Real  Property which have not been delivered  to  the
Buyer prior to execution of this Agreement.

      (d)   The  Sellers  have obtained  and  hold,  and,  to
Sellers' Knowledge, are in compliance with all provisions of,
all Environmental Permits required to be obtained and held by
Sellers  in  connection with the Sites  or  the  Business  as
conducted at the Sites.

     (e)  To Sellers' Knowledge, while Sellers have owned the
Sites,  no  Seller  has  transported  or  arranged  for   the
treatment, storage, handling, disposal, or transportation  of
any  Hazardous  Material to any off-Site  location  from  the
Sites which has resulted, or could result, in a liability  to
any Seller under Environmental Laws.

      (f)   No  Site is a current, or to Sellers'  Knowledge,
proposed, Environmental Clean-up Site.

     (g)  To Sellers' Knowledge, there are no (i) underground
storage  tanks,  active  or abandoned,  (ii)  polychlorinated
biphenyl   containing  equipment,  (iii)   friable   asbestos
containing materials, or (iv) toxic mold at any Site.

      (h)   This Section 5.17 contains the sole and exclusive
representations and warranties of the Sellers with respect to
any matters arising under any Environmental Law.

5.18 Real Property.

     (a)   The  Real  Property Leases and the  real  property
demised  by  the DC Leases and the Flemington Lease  are  the
only  real  property  interests used in  connection  with  or
otherwise necessary to the Business.  A Seller is the current
tenant  under  each Real Property Lease.  The  Real  Property
Leases are subject to no Liens except Permitted Liens.

     (b)  True and correct copies of the Real Property Leases
(and  all  modifications and extensions  thereof)  have  been
delivered to Buyers by Sellers.

     (b)  To Sellers' Knowledge:

          (i)  a  Seller has a valid and subsisting leasehold
               estate in and the right to quiet enjoyment  to
               each  parcel of Leased Real Property  for  the
               full  term  of  the applicable  Real  Property
               Lease;

          (ii) the Real Property Leases are in full force and
               effect and are enforceable in accordance  with
               their terms; and

          (iii)      there  is  not any existing  default  or
               event  of default and no circumstance  exists,
               which,  with notice, the passage of  time,  or
               both,  could  constitute a default  under  any
               Real Property Lease.

     (c)   A  Seller  is  in possession of  the  Leased  Real
Property.

     (d)   The full security deposit required under each Real
Property  Lease is being held by or on behalf of  the  lessor
thereunder, and no penalties are accrued and unpaid under any
Real Property Lease.

     (e)  No landlord or tenant under any Real Property Lease
has exercised any option or right to cancel or terminate such
Real  Property Lease or shorten or lengthen the term thereof,
lease  additional premises, reduce or relocate  the  premises
demised by such Real Property Lease or purchase any property.
No Seller is a party to any oral lease of real property.

5.19 Related Party Transactions; Foreign Corrupt Practices
Act.

     (a)  Except as set forth on Schedule 5.19(a):

          (i)  no  officer  or  director  of  any  Seller  is
               currently indebted to any Seller, nor  is  any
               Seller indebted (or committed to make loans or
               extend  or  guarantee credit) to any  of  such
               individuals;

          (ii) to  Sellers' Knowledge, as of the date hereof,
               no  officer or director of any Seller has  any
               direct  or indirect ownership interest in  any
               firm or corporation with which any Seller  has
               a  material  business relationship;  provided,
               however, that the foregoing representation  in
               this  Section 5.19(a)(ii) shall not  apply  in
               cases where an officer or director of a Seller
               owns  stock in an amount less than 5%  of  the
               outstanding capital stock of a publicly traded
               company; and

          (iii)      (A)  there are no agreements related  to
               the Business among any of the Sellers or among
               any Seller and the Seller Holding Company, (B)
               no  Seller is currently indebted (or committed
               to  make  loans or extend or guarantee credit)
               to  any  other  Seller or the  Seller  Holding
               Company, and (C) the Seller Holding Company is
               not  currently indebted (or committed to  make
               loans  or extend or guarantee credit)  to  any
               Seller.

      (b)   No  Seller has, to obtain or retain any business,
directly or indirectly offered, paid or promised to  pay,  or
authorized the payment of, any money or other thing of  value
in  excess  of Five Hundred Dollars ($500) to any  Person  in
violation of the United States Foreign Corrupt Practices  Act
then in effect.

5.20 Employee Plans.

     Schedule 5.20 lists each Benefit Plan that is sponsored,
maintained or contributed to or required to be contributed to
by  any  Seller  for  the benefit of any Employee  or  former
Employee of any Seller and each Seller Benefit Plan.

5.21 Product Warranty

     Schedule  5.21 sets forth the form of Parent's  standard
product  warranty provided to retail consumers in  connection
the sale of Parent's products to such consumers.

5.22 Sufficiency of Assets

      Except  as  set forth on Schedule 5.22, the Assets  (i)
except for the Excluded Assets, constitute all of the assets,
tangible and intangible, of any nature whatsoever, which  are
used  to  operate  and  conduct the Business  in  the  manner
presently  operated  and  conducted  by  Sellers,  and   (ii)
correspond to the Financial Statements.

5.23 Disclosure

     No representation or warranty or other statement made by
any  Seller  in  this Agreement, the Ancillary Agreements  or
otherwise  in  connection with the transactions  contemplated
hereby  contains  any untrue statement or omits  to  state  a
material fact necessary to make any of them, in light of  the
circumstances in which it was made, not misleading.

ARTICLE 6:  REPRESENTATIONS AND WARRANTIES OF BUYERS AND
            LIFETIME

     Buyers  and  Lifetime,  jointly  and  severally,  hereby
represent and warrant to each Seller as follows:

6.1  Organization.

     (a)  Each Buyer is a duly organized and validly existing
corporation, in good standing under the laws of the State  of
Delaware  and has full corporate power and authority  to  own
and/or  lease all of its properties and assets, and to  carry
on its business as now being conducted.

      (b)   Lifetime is a duly organized and validly existing
corporation, in good standing under the laws of the State  of
Delaware  and has full corporate power and authority  to  own
and/or  lease all of its properties and assets, and to  carry
on its business as now being conducted.

6.2  No Violation.

     Subject   to  receipt  of  the  consents  and  approvals
described in Schedule 6.6, none of the execution and delivery
of  this  Agreement by Buyers, the execution and delivery  of
this  Agreement  by  Lifetime, or  the  consummation  of  the
transactions  contemplated hereby does or  would,  after  the
giving  of notice or the lapse of time or both, (i)  conflict
with,  result in a breach of, constitute a default under,  or
violate the articles of incorporation or the bylaws of Buyers
or  Lifetime,  (ii) conflict with, result  in  a  breach  of,
constitute a default under, or violate any Law applicable  to
Buyers  or  Lifetime, or (iii) conflict  with,  result  in  a
breach  of,  constitute  a  default  under,  result  in   the
acceleration of, create in any party the right to accelerate,
terminate, amend, modify, cancel or refuse to perform  under,
or   require   any  notice  under  any  Contract   or   other
arrangement,  including any express or implied  warranty,  to
which  Buyers or Lifetime is a party or by which it is  bound
or to which any of its assets is subject; except, in the case
of  clause  (iii) above, for such conflicts  that  would  not
adversely  affect  the  ability  of  Buyers  or  Lifetime  to
complete its obligations hereunder.

6.3  Enforceable Agreement.

     Each of each Buyer and Lifetime has the right, power and
capacity to execute and deliver this Agreement and any  other
agreement entered into in connection with this Agreement  and
to perform its obligations under this Agreement and any other
agreement  entered into in connection with this Agreement  to
which  it  is  a party to and to consummate the  transactions
contemplated hereby and thereby.  The execution and  delivery
of  this  Agreement and any other agreement entered  into  in
connection  with this Agreement by Buyer and the  performance
by Buyers of its obligations hereunder and thereunder and the
consummation  of  the transactions provided  for  herein  and
therein  have  been  duly  and  validly  authorized  by   all
necessary  corporate  action on  the  part  of  Buyers.   The
execution  and  delivery  of this  Agreement  and  any  other
agreement  entered into in connection with this Agreement  by
Lifetime  and the performance by Lifetime of its  obligations
hereunder  and  thereunder  and  the  consummation   of   the
transactions provided for herein and therein have  been  duly
and  validly authorized by all necessary corporate action  on
the  part  of  Lifetime.   Upon  execution  and  delivery  by
Sellers,  this  Agreement, and each other  agreement  entered
into  in  connection with this Agreement will be, as  of  the
Closing  Date, duly executed and delivered by  each  of  each
Buyer and Lifetime, and will be the legal, valid, and binding
agreement of each of each Buyer and Lifetime, enforceable  in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and  other
similar  laws  affecting  the  enforceability  of  creditors'
rights  generally,  general  equitable  principles  and   the
discretion of courts in granting equitable remedies.

6.4  No Brokers.

     Except  as indicated on Schedule 6.4, neither Buyer  nor
Lifetime  has any liability, directly or indirectly,  to  pay
any  fees, commissions or other amounts to any broker, finder
or  agent  with  respect  to this Agreement  or  any  of  the
transactions   contemplated  hereby  and   all   such   fees,
commissions or other amounts due to any Person set  forth  on
Schedule 6.4 shall be for the account of Buyers.

6.5  Litigation and Regulatory Proceedings.

     There   is   no  claim,  action,  suit,  proceeding   or
governmental  investigation pending or, to the  knowledge  of
Buyers or Lifetime, threatened against Buyers or Lifetime, by
or before any Governmental Entity or by any third party which
challenges the validity of this Agreement or which  would  be
reasonably likely to adversely affect or restrict the ability
of   Buyers   or  Lifetime  to  consummate  the  transactions
contemplated by this Agreement.

6.6  Consents and Approvals.

     Except  for  the approval of the Bank of New York,  Inc.
(as  Agent  for the lenders under Lifetime's credit facility)
and  the  required regulatory approvals set forth on Schedule
6.6,  no  consents, approvals, filings or registrations  with
any  third party or any public body, agency or authority  are
required  by  Buyers  or  Lifetime  in  connection  with  the
consummation  of  the  transactions  contemplated   by   this
Agreement by Lifetime and Buyers.

6.7  Funds.

      At the Closing, Buyers will have the funds necessary to
consummate  the  Acquisition and pay the  Purchase  Price  in
accordance with the terms of this Agreement.

6.8  Independent Review.

     Buyers and Lifetime have conducted their own independent
review  and analysis of the Business and its condition,  cash
flow  and  prospects, the Assets and the Assumed Liabilities,
and  acknowledge that Buyers and Lifetime have been  provided
access to the properties, premises and records of Sellers for
this  purpose.   In  entering  this  Agreement,  Buyers   and
Lifetime have relied exclusively upon their own investigation
and analysis and the representations and warranties contained
herein, in the Ancillary Agreements, the Seller Real Property
Lease   Consent   Certificate,   and   the   Seller   Closing
Certificate, and therefore Buyers and Lifetime:

      (a)  acknowledge that they have had the opportunity  to
visit   Sellers  and  meet  with  their  officers  and  other
representatives  to discuss the Business and  its  condition,
cash   flow  and  prospects,  the  Assets  and  the   Assumed
Liabilities;

      (b)   acknowledge  that they have undertaken  such  due
diligence  (including  a review of the  assets,  liabilities,
books,  records and contracts of the Business) as  they  have
deemed adequate;

     (c)  agree, to the fullest extent permitted by Law, that
except  with  respect to the representations  and  warranties
contained  herein,  in the Ancillary Agreements,  the  Seller
Real  Property  Lease  Consent Certificate,  and  the  Seller
Closing  Certificate,  no Seller nor any  of  its  directors,
officers,  employees, Affiliates, agents  or  representatives
shall  have  any  liability or responsibility  whatsoever  to
Buyer  or  Lifetime on any basis (including  in  contract  or
tort,  under  federal or state securities laws or  otherwise)
based  upon  any information provided or made  available,  or
statements made, to Buyer or Lifetime prior to the  execution
of this Agreement;

      (d)   represent that, as of the date hereof, to Buyers'
Knowledge, there is no condition or event that constitutes or
may  constitute a breach by any Seller of the representations
and warranties set forth in Article 5; and

      (e)   acknowledge that, except for the  representations
and  warranties made expressly by Sellers in this  Agreement,
the  Ancillary  Agreements, the Seller  Real  Property  Lease
Consent  Certificate, and the Seller Closing Certificate,  no
Seller  nor  any  of  their directors,  officers,  employees,
Affiliates,   agents   or  representatives   has   made   any
representation or warranty, either express or implied, as  to
the  accuracy  or  completeness of  any  of  the  information
provided  or  made  available to  Buyer,  Lifetime  or  their
respective  agents or representatives prior to the  execution
of this Agreement.

ARTICLE 7:  COVENANTS OF THE PARTIES

7.1  Further Assurances; Post-Closing Cooperation.

      (a)  From and after the Closing Date, from time to time
and  without  further consideration, each Party will  execute
and deliver such instruments and take such other commercially
reasonable action reasonably requested by one or more of  the
other   Parties   in   order  to  effect   the   transactions
contemplated by this Agreement.

      (b)  Following the Closing, each Party will afford each
other  Party, its counsel and its accountants, during  normal
business  hours, reasonable access to the books, records  and
other  data relating solely to the Business in its possession
and  the right to make copies and extracts therefrom, to  the
extent  that  such access may be reasonably required  by  the
requesting  Party in connection with (i) the  preparation  of
Tax  Returns,  (ii) compliance with the requirements  of  any
Governmental  Entity, (iii) any actual  or  threatened  legal
action,  or (iv) for any other legitimate or proper  business
purpose.

      (c)   Following  the Closing, Buyer will  preserve  and
maintain  all books, records and other data included  in  the
Assets  for such period that Sellers would have been required
to  have  preserved  and maintained such books,  records  and
other  data  under  applicable Laws, and Sellers  shall  have
access  to  such books, records and other data in  accordance
with Section 7.1(b).

      (d)  Buyer hereby grants to Seller Holding Company  and
the  Susquehanna Pfaltzgraff Foundation and their  respective
successors, assigns and Affiliates a non-transferrable,  non-
exclusive,  royalty-free license, for a  period  of  six  (6)
months  after the Closing Date or until the Seller Stationery
(as defined below) is exhausted, whichever is shorter, to use
the   word  "Pfaltzgraff,"  derivations  thereof,   and   any
Trademark  (i) as a part of the legal name and any fictitious
names or other similar trade names of such entities, and (ii)
on  stationery, form documents, packaging and  other  printed
materials  of Sellers in existence on the Closing  Date  (the
"Seller  Stationery").  For avoidance of doubt,  the  Parties
agree that nothing herein, and no rights obtained by Buyer or
Lifetime pursuant hereto, shall limit the right of members of
the  Appell  family to use the "Pfaltzgraff"  name  for  non-
commercial purposes.

      (e)   Anything  herein to the contrary notwithstanding,
until  August 31, 2006, Parent shall (i) maintain a net worth
of  at  least the amount of the Indemnity Cap, (ii) (A)  own,
free and clear of any and all Liens, liquid assets and/or (B)
have  entered  into  and  be a party  to  a  valid  agreement
enforceable  by Parent with an entity affiliated with  Parent
pursuant  to which such entity will provide to Parent  within
three (3) Business Days of a request by Parent liquid assets,
which  liquid assets in the aggregate shall be sufficient  to
permit  Parent  to  satisfy Sellers' obligations  to  provide
indemnification under this Agreement.

      (f)   The Parties agree that, prior to the first  (1st)
anniversary of the Closing Date, Parent may transfer  all  or
part  of its assets to an entity controlled by a majority  of
the  same Persons that control Seller Holding Company on  the
date  hereof (the "New Parent") if, prior to the date of such
transfer,  New  Parent delivers to Buyer a  written  document
executed  on behalf of New Parent that (i) notifies Buyer  of
the   anticipated  effective  date  of  such  transfer;  (ii)
certifies that the assets to be transferred to New Parent  in
such    transfer   are   sufficient   to   satisfy   Sellers'
indemnification  obligations hereunder, if the  assets  being
transferred  to  New  Parent are not all  of  the  assets  of
Parent; and (iii) sets forth New Parent's agreement to assume
all  of  Sellers' obligations under this Agreement, effective
as of the effective time of such transfer.

7.2  Conduct of Business.

     Except with the prior written consent of Lifetime (which
consent  shall  not be unreasonably withheld or  delayed)  or
except  as  otherwise expressly permitted  pursuant  to  this
Agreement, from the date hereof and through the Closing, with
respect to the Business:

     (a)  Sellers shall:

          (i)  maintain  their corporate existence and  carry
               on  the  Business  in the ordinary  course  in
               substantially  the same manner  as  heretofore
               conducted and in any event in accordance  with
               all applicable Laws;

          (ii) use   commercially   reasonable   efforts   to
               preserve intact its business organization;

          (iii)      use  commercially reasonable efforts  to
               keep available the services of its Employees;

          (iv) use   commercially   reasonable   efforts   to
               preserve   its   current  relationships   with
               customers,  suppliers, and other Persons  with
               whom it has business relations with respect to
               the Business;

          (v)  operate  and maintain the Leased Real Property
               in the ordinary course of business;

          (vi) perform  all  covenants and obligations  under
               each   Real   Property  Lease,   License   and
               Permitted Lien;

          (vii)     promptly give Buyer a copy of each notice
               received or sent under a Real Property  Lease;
               and

          (viii)     maintain  their  books  and  records  in
               accordance with past practices.

     (b)  Sellers shall not:

          (i)  sell,  transfer  or otherwise dispose  of  any
               Asset,  other  than the sale of Assets  (other
               than  Real  Property Leases) in  the  ordinary
               course of business;

          (ii) create,   incur  or  assume  any  indebtedness
               secured  by any Asset, other than indebtedness
               that  will  be  satisfied at or prior  to  the
               Closing;

          (iii)      grant, create, incur or suffer to  exist
               any  Lien, other than Permitted Liens, on  any
               Asset  (other than Real Property Leases)  that
               did not exist on the date hereof;

          (iv) incur  any  liability or obligation (absolute,
               accrued or contingent) related to the Business
               or  the  Assets, except in the ordinary course
               of business consistent with past practice;

          (v)  increase  the rate of compensation of  any  of
               the  Employees,  or pay or agree  to  pay  any
               bonus  to, or provide any new employee benefit
               or  incentive to, any of the Employees, except
               for  increases,  payments,  contributions  and
               bonuses (A) that are regularly scheduled as  a
               result   of   the   normal   progression   and
               advancement  of  Employees  in  the   ordinary
               course and consistent with past practices, (B)
               the  amounts  of which have been  specifically
               disclosed  to,  and approved  in  advance  by,
               Buyer,  or (C) that are set forth on  Schedule
               7.2(b)(v);

          (vi) enter  into  or  modify  (except  as  may   be
               required   by  applicable  Law)  any  pension,
               retirement,  stock  option,  stock   purchase,
               stock   appreciation  right,  savings,  profit
               sharing,  deferred  compensation,  consulting,
               bonus,   group  insurance  or  other  employee
               benefit,  incentive or welfare contract,  plan
               or arrangement, or any trust agreement related
               thereto,  in respect of any of the  Employees,
               except  in  the  ordinary course  of  business
               consistent with past practice;

          (vii)      enter into, modify or amend, cancel,  or
               waive   any  right  under  (A)   any  Contract
               relating to the employment or severance of  an
               Employee,  except  in the ordinary  course  of
               business  consistent with  past  practice;  or
               (B) any Assumed Contract;

          (viii)      incur   any  commitments  for   capital
               expenditures  relating  to  the  Business   in
               excess   of   One  Hundred  Thousand   Dollars
               ($100,000);

          (ix) exercise  any right or option under  any  Real
               Property Lease;

          (x)  adopt   or  propose  any  amendment   to   the
               organizational  documents of any  Seller  that
               could be expected to delay the consummation of
               the transactions contemplated hereby;

          (xi) take  any  action or engage in any transaction
               that  is  material to, or outside the ordinary
               course of, the Business;

          (xii)      make  any filings or registrations  with
               any   Governmental  Entity,   except   routine
               filings and registrations made in the ordinary
               course  of  the Business consistent with  past
               practice;

          (xiii)     be  party  to  any merger,  acquisition,
               consolidation, recapitalization,  liquidation,
               dissolution  or similar transaction  involving
               the Business;

          (xiv)       make  any  changes  in  its  accounting
               methods, principles or practices;

          (xv) make  any  Tax election, change its method  of
               Tax accounting or settle any claim relating to
               Taxes;

          (xvi)      take  any action or omit to do  any  act
               which  action  or omission will  cause  it  to
               breach   any  obligation  contained  in   this
               Agreement  or  cause  any  representation   or
               warranty of Seller not to be true and  correct
               as of the Closing Date;

          (xvii)     demolish or materially alter any  Leased
               Real Property; or

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

7.3  Employees.

      (a)   As  soon  as practicable after the  date  hereof,
Sellers  shall  provide Buyers with a list, as  of  the  date
hereof,  Schedule 7.3(a), containing the name,  position  and
base salary of each Employee, noting whether such Employee is
not  actively employed (e.g., Employees on vacation or  leave
of  absence,  including maternity, family and medical  leave,
sick, military (whether qualified or otherwise) or short-term
disability leave).  With respect to the Employees:

          (i)  At  least five (5) Business Days prior to  the
               Closing Date, Buyers shall provide Parent with
               a list of Employees to whom neither Buyer will
               offer employment (the "Declined Employees");

          (ii) At  least five (5) Business Days prior to  the
               Closing Date, Buyers shall provide Parent with
               a list of Employees to whom a Buyer will offer
               employment (the "Definite Employees"), and the
               applicable  Buyer  shall offer  employment  to
               such  Definite Employees effective as  of  the
               Closing Date; and

          (iii)      Employees  who  are  not  identified  as
               either    Declined   Employees   or   Definite
               Employees   are  herein  called  "Transitional
               Employees."  Either Buyer may offer employment
               to  such  Transitional Employees, if  any,  as
               Buyers,   in  their  sole  discretion,   shall
               determine  at any time on or before  July  29,
               2005  (the  "Offer  Completion  Date").    The
               Definite   Employees  and   the   Transitional
               Employees   to  whom  Buyers  make  employment
               offers prior to the Offer Completion Date  are
               herein   collectively  called  the  "Candidate
               Employees".

          (iv) As of the Closing Date, the number of salaried
               Candidate Employees, including Store managers,
               offered   employment  by  Buyers  collectively
               shall  not  be  less  than One  Hundred  Fifty
               (150).

          (v)  Notwithstanding   anything   herein   to   the
               contrary,  Buyers  shall be  responsible,  and
               shall  reimburse Sellers, for  all  costs  and
               liabilities associated with the employment  by
               Sellers of the Transitional Employees incurred
               by any Seller between the Closing Date and the
               Offer Completion Date; provided, however, that
               Buyers shall not be responsible for any of the
               costs  of providing health benefits under  the
               Seller   Benefit  Plans  to  the  Transitional
               Employees during such period of time.

          (vi) Prior  to  the  Closing  Date,  Sellers  shall
               provide Buyers and Lifetime reasonable  access
               to the Employees, and, to the extent permitted
               by  applicable law, such information regarding
               such  Employees as is contained  in  personnel
               records, for purposes of permitting Buyers  to
               determine which Employees to offer to  employ.
               Each Buyer's offers to the Candidate Employees
               shall be on terms and conditions that are,  in
               the aggregate, no less favorable than those to
               which  the  Candidate Employees are  currently
               subject,    including,   without   limitation,
               salary,   incentive   compensation,   employee
               benefit  plans and benefit arrangements  that,
               in  the aggregate, are at least comparable  to
               such   employee  benefit  plans  and   benefit
               arrangements as are currently provided to  the
               Candidate Employees, but without regard to (A)
               defined benefit pension benefits and (B) post-
               retirement  welfare  benefits.   Buyers  shall
               maintain the foregoing comparable benefits for
               the  Transferred Employees (as defined  below)
               until the earlier of (X) the date that is  one
               (1)  year after the Closing Date and  (Y)  the
               date on which such Transferred Employee ceases
               to  be  employed by a Buyer or any  affiliate,
               successor  or  assignee of a  Buyer.   Buyer's
               offers  of  employment to Candidate  Employees
               shall be made as soon as practicable following
               the  date hereof; provided, however, that  all
               such  offers of employment shall  be  made  no
               later  than (x) the Closing Date, in the  case
               of  each Definite Employee, and (y) the  Offer
               Completion   Date,  in  the   case   of   each
               Transitional Employee to whom any Buyer  makes
               an   employment  offer  pursuant  to   Section
               7.3(a)(iii).

          (vii)     Those Candidate Employees who accept such
               offers  of employment, and commence employment
               with a Buyer effective on or after the Closing
               Date  (or,  if applicable, upon expiration  of
               any  leave  or  period of  absence)  shall  be
               referred to herein as "Transferred Employees."

      (b)  Without limiting the generality of Section 7.3(a),
each  Buyer  agrees  that (i) such Buyer  shall  provide  the
applicable Transferred Employees and their beneficiaries with
coverage  under a "group health plan" (as defined in  Section
4980B(g)(2)  of  the Code); (ii) such Buyer  will  cause  the
benefit   plans  applicable  to  the  applicable  Transferred
Employees to recognize previous service with Sellers for  the
purpose of determining eligibility and vesting for succeeding
benefits;  (iii) such Buyer will cause its group health  plan
to recognize all deductibles and coinsurance payments accrued
by  the applicable Transferred Employees prior to the Closing
Date  and  to  waive, to the extent waived under  the  Seller
Benefit Plans, any preexisting condition limitations for  the
Transferred Employees; (iv) for the remainder of the calendar
year in which the Closing occurs and for the succeeding year,
the  vacation  and  holiday plan offered to  the  Transferred
Employees  shall  be equal to and be in  place  of  what  the
applicable  Seller  would have provided to  such  Transferred
Employees had they remained employees of such Seller; and (v)
such  Buyer shall maintain for at least one (1) year starting
on   the   Closing  Date  the  same  severance   arrangements
applicable to the Transferred Employees that were  in  effect
immediately  before  the Closing Date, and  Buyer  shall  pay
severance  benefits  to Transferred Employees  in  accordance
with the terms of such severance arrangements.

      (c)   Buyers assume no liability with respect  to,  and
receive no right or interest in, any Seller Benefit Plan.  At
the  close  of  Business on the effective date of  employment
with  a  Buyer  (the "Commencement Date"),  each  Transferred
Employee  shall  cease participation in  all  Seller  Benefit
Plans,  except  with respect to benefits accrued  as  of,  or
claims  incurred  on or prior to, such date.   Sellers  shall
provide  each  Transferred Employee with the following:   (i)
full vesting of any award or benefit under any Seller Benefit
Plan  where such vesting was otherwise conditioned  upon  the
future  performance of services with Seller, including  under
any  Benefit Plan that is intended to be tax-qualified  under
section  401(a)  of  the  Code and  under  any  related  non-
qualified plan; and (ii) payment, prior to the Closing  Date,
of  any  annual  bonus  award that such Transferred  Employee
would have earned under Sellers' bonus program for the fiscal
year  in  which  the  Closing Date occurs,  assuming  maximum
performance was achieved, but prorated to reflect the portion
of  the  year  actually  worked for a  Seller.   Buyers  will
provide   Sellers  with  such  information  as  is   required
concerning  Transferred Employees in order to enable  Sellers
to determine whether, and if so, when, a Transferred Employee
will  be  entitled to any benefits under any  Seller  Benefit
Plan.

      (d)  Sellers shall assume and be responsible for claims
for   workers  compensation  or  for  the  type  of  benefits
described in Section 3(1) of ERISA (whether or not covered by
ERISA) that are incurred by a Transferred Employee and  their
beneficiaries and dependents on or prior to such  Transferred
Employee's Commencement Date.  The applicable Buyer shall  be
responsible  for disability benefits and workers compensation
benefits for each Transferred Employee employed by such Buyer
for   claims   incurred  after  such  Transferred  Employee's
Commencement   Date.   For  purposes  of  the  foregoing,   a
medical/dental  claim shall be considered incurred  when  the
medical  services  are  rendered  or  medical  supplies   are
provided,  and  not when the condition arose;  provided  that
claims  relating to a hospital confinement that commences  on
or  prior  to a Transferred Employee's Commencement Date  but
continues thereafter shall be treated as incurred on or prior
to   such   Commencement  Date.   A  disability  or   workers
compensation claim shall be considered incurred on  or  prior
to a Commencement Date if the injury or condition giving rise
to the claim occurs on or prior to such Commencement Date.

      (e)   The Sellers will not, at any time with the ninety
(90) day period ending on the Closing Date:  (i) effectuate a
"plant  closing" or "mass layoff" (as such terms are  defined
in the Worker Adjustment and Retraining Notification Act (the
"WARN  Act"))  without complying fully with  the  notice  and
other  requirements of the WARN Act; or (ii)  effectuate  any
similar  action  without complying fully with any  applicable
Law  or local Law requiring notice to employees in the  event
of  a plant closing or layoff.  All communications of Sellers
to employees with respect to WARN Act or similar matters will
be  subject to approval by Buyers (which approval will not be
unreasonably  withheld  or delayed).   In  addition,  Sellers
hereby  agree to indemnify Lifetime and Buyers and to  defend
and  hold  Lifetime and Buyers harmless from and against  any
and  all  claims, losses, damages, expenses, obligations  and
liabilities  (including costs of collection, attorney's  fees
and  other  costs  of  defense)  ("WARN  Liabilities")  which
Lifetime or Buyers may incur in connection with any  suit  or
claim  or violation brought against Lifetime or Buyers  under
the  WARN Act or any similar Law or local Law, which  relates
to any action taken by, or any failure to act by, any Seller.
Each  Buyer hereby agrees to indemnify Sellers and to  defend
and  hold Sellers harmless from and against any and all  WARN
Liabilities  which Sellers may incur in connection  with  any
suit  or claim or violation brought against any Seller  under
the  WARN Act or any similar Law, which relates to any action
taken by, or any failure to act by, such Buyer following  the
Closing.

     (f)  Sellers shall be responsible for satisfying any and
all   obligations  and  liabilities  under  the  continuation
coverage  provisions  of  the  Consolidated  Omnibus   Budget
Reconciliation  Act  of  1985,  as  amended  ("COBRA"),   and
applicable state Law to provide continuation coverage  to  or
with  respect to all employees or former employees of Sellers
and their beneficiaries as a result of any "qualifying event"
occurring  prior  to  the Closing  or  as  a  result  of  the
transactions contemplated by this Agreement.

      (g)   Nothing in this Section 7.3, express or  implied,
shall   confer  upon  any  Transferred  Employee,  or   legal
representative  or  beneficiary  thereof,   any   rights   or
remedies,  including  any  right to employment  or  continued
employment  for  any  specified period,  or  compensation  or
benefits  of  any  nature  or  kind  whatsoever  under   this
Agreement.  Except as set forth in this Section 7.3,  nothing
herein  shall be construed to prevent Buyers from terminating
or modifying to any extent or in any respect any benefit plan
that the Buyers may establish or maintain.

      (h)  Each Buyer will credit each applicable Transferred
Employee  with such number of unused vacation days and  other
paid  time off accrued by such Transferred Employee prior  to
the  Closing  Date  in  accordance  with  Sellers'  personnel
policies applicable to such Transferred Employees on the date
hereof.

7.4  Access to Operations.

     Buyers  and  Lifetime may, prior to  the  Closing  Date,
directly  or  through their representatives,  review,  during
normal  business  hours and upon reasonable prior  notice  to
Parent,  the  premises  and  books  and  records  of  Sellers
relating to the Business to the extent it deems necessary  or
advisable to familiarize itself with such premises and  other
matters.  Any information obtained by Buyer, Lifetime or  any
of  their representatives pursuant to this Agreement shall be
subject  to  the provisions of the Confidentiality  Agreement
(the  "Confidentiality Agreement"), dated February 10,  2005,
by  and  between  Lifetime and Seller Holding Company,  which
agreement remains in full force and effect.

7.5  Commercially Reasonable Efforts.

       (a)    The  Parties  shall  cooperate  and  use  their
respective commercially reasonable efforts to take, or  cause
to be taken, all appropriate action, and to make, or cause to
be  made,  all  filings necessary, proper or advisable  under
applicable   Laws  to  consummate  and  make  effective   the
transactions contemplated by this Agreement, including  their
respective  commercially reasonable efforts to obtain,  prior
to   the   Closing  Date,  all  consents  and  approvals   of
Governmental  Entities as are necessary for  consummation  of
the  transactions  contemplated  by  this  Agreement  and  to
fulfill the conditions to Closing.

      (b)   Each  Party  shall have the right  to  review  in
advance  and  to  consult with any other  Party,  subject  to
applicable Laws relating to the exchange of information, with
respect  to all material information submitted to  any  third
party  or  any  Governmental Entity in  connection  with  the
transactions  contemplated by this Agreement.  In  exercising
the  foregoing right, the Parties agree to act reasonably and
as  promptly as practicable.  Each Party agrees that it  will
consult  with  the other Parties hereto with respect  to  the
obtaining of all material consents, registrations, approvals,
permits   and   authorizations  of  all  third  parties   and
Governmental  Entities necessary or advisable  to  consummate
the  transactions  contemplated by this Agreement,  and  each
Party  will keep the other Parties apprised of the status  of
material  matters relating to completion of the  transactions
contemplated hereby.

     (c)  In the event any claim, action, suit, investigation
or  other  proceeding  by any Governmental  Entity  or  other
Person  is commenced that questions the validity or  legality
of  the transactions contemplated hereby or seeks damages  in
connection therewith, the Parties agree to cooperate and  use
all  commercially reasonable efforts to defend  against  such
claim,  action, suit, investigation or other proceeding  and,
if an injunction or other order is issued in any such action,
suit  or other proceeding, to use all commercially reasonable
efforts to have such injunction or other order lifted, and to
cooperate  reasonably regarding any other impediment  to  the
consummation of the transactions contemplated hereby.

7.6  Transfer Taxes.

     All   national,  federal,  state,  provincial  or  local
transfer taxes in any country, including excise, sales,  use,
value  added,  real  property transfer,  stamp,  documentary,
filing,  recordation, notarial and other  similar  taxes  and
fees  that  may  be imposed or assessed as a  result  of  the
transactions  contemplated by this Agreement,  together  with
any interest, additions or penalties with respect thereto and
any  interest in respect of such additions or penalties shall
be   paid  by  Buyers.   Sellers  shall  be  responsible  for
preparing all Tax Returns or other filings in connection with
transfer  taxes described in this Section 7.6.  Buyers  shall
provide   Sellers  with  such  cooperation  as  Sellers   may
reasonably   request  in  connection  with  the  preparation,
execution and filing of such Tax Returns or other filings.

7.7  Publicity.

     Except  as  otherwise  required by  Law  as  advised  by
counsel, none of the Parties shall issue any press release or
make any other public statement, in each case relating to  or
connected  with  or  arising out of  this  Agreement  or  the
matters contained herein, without obtaining the prior written
approval of Sellers and Buyers to the contents and the manner
of presentation and publication thereof, which approval shall
not be unreasonably withheld or delayed.

7.8  Expenses.

     Except  as  otherwise set forth in this  Agreement,  the
Parties shall pay all of their own expenses relating  to  the
transactions  contemplated by this Agreement, including,  the
fees  and  expenses  of  their own  agents,  representatives,
financial advisors, accountants, appraisers and counsel.

7.9  Bulk Sales.

     Sellers  and  Buyers  hereby waive compliance  with  the
provisions  of  the  "bulk sales"  or  similar  Laws  of  any
jurisdiction,  to  the extent applicable to the  transactions
contemplated hereby.

7.10 Applications for Buyer Licenses.

     As  promptly as practicable after the execution of  this
Agreement,  each of Buyer and Lifetime shall, as  applicable,
file with the relevant Governmental Entities all applications
necessary  to  obtain  the  Buyer  Licenses.   Sellers   will
cooperate  with  Buyer and Lifetime as reasonably  necessary,
upon  Lifetime's  request and at Lifetime's expense,  in  the
preparation and filing of such applications.

7.11 DC Leases and Flemington Lease.

      Sellers shall cause the owners of DC East, DC West  and
the facility to be demised by the Flemington Lease to execute
and  deliver  the DC Leases and the Flemington Lease  at  the
Closing.    Seller's   shall  pay  any  and   all   brokerage
commissions  and fees and any transfer taxes due and  payable
in connection with the same.

7.12 Cooperation by Sellers.

     Sellers  will  cooperate with Buyers in connection  with
the  obligations  of  Lifetime  to  file  with  the  SEC  the
financial  statements  and  pro forma  financial  information
required  to  be included by it in its periodic  reports  and
other   filings  (i.e.,  Forms  8-K,  10-K   and   10-Q   and
registration  statements filed under the  Securities  Act  of
1933)  by  (i)  making available to Buyers and  Lifetime  the
relevant   financial   statements  and  records,   documents,
representations  and  information  of  Sellers  and  such  of
Sellers'   employees  as  have  knowledge  thereof   as   may
reasonably    be   requested   by   Buyers   and    Lifetime;
(ii)  instructing the independent accountants of  Sellers  to
provide  at the request of Lifetime, such opinions,  consents
and comfort letters with respect to such financial statements
and  pro forma financial information that may be required  or
reasonably  necessary; and (iii) providing to the independent
accountants   of  Sellers  such  information,   records   and
representations  as  they may request  for  purposes  of  the
foregoing.   All fees and expenses, including  the  fees  and
expenses  of independent accountants, in connection with  any
of  the  foregoing shall be paid by Buyers, or if paid  by  a
Seller, then Buyers shall promptly reimburse such Seller  for
the full amount of the payment.

ARTICLE 8:  CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES

     The  obligations  of  each Party to  this  Agreement  to
effect  the transactions contemplated hereby shall be subject
to  the  satisfaction on or prior to the Closing Date of  the
following conditions, unless waived by each Buyer and by each
Seller:

8.1  Government Approvals.

     All  approvals of, or declarations or filings  with,  or
expiration  of  waiting periods imposed by, any  Governmental
Entity  necessary  for the consummation of  the  transactions
contemplated  by  this  Agreement  shall  have  been   filed,
occurred or been obtained.

8.2  Legal Action.

     No  temporary restraining order, preliminary  injunction
or   permanent  injunction  or  other  order  preventing  the
consummation  of the transactions contemplated  hereby  shall
have been issued by any federal or state court and remain  in
effect.

ARTICLE 9:  CONDITIONS TO THE OBLIGATIONS OF BUYERS AND
            LIFETIME

     The  obligations of Buyers and Lifetime  to  effect  the
transactions   contemplated  hereby  are   subject   to   the
satisfaction on or prior to the Closing Date of the following
conditions, unless waived by Buyers and Lifetime:

9.1  Representations and Warranties of Sellers.

     The  representations and warranties of Sellers set forth
in  this  Agreement shall be true and correct in all material
respects  (except that those representations  and  warranties
that are limited by materiality shall be true and correct  in
all  respects) as of the date of this Agreement and as of the
Closing Date as if made at and as of the Closing Date (except
where  such representations or warranties are made  expressly
as of a specific date, and then as of such date).

9.2  Performance of Obligations of Sellers.

     Sellers  shall  have performed in all material  respects
all  obligations  required to be performed by  each  of  them
under this Agreement on or prior to the Closing Date.

9.3  Seller Closing Certificate.

     An  authorized officer of Parent shall have executed and
delivered to Buyer the Seller Closing Certificate.

9.4  Ancillary Agreements

     Parent  shall have executed and delivered the Transition
Services Agreement and the Product Supply Agreement.   Outlet
shall have executed and delivered the Flemington Lease.  Each
of  Seller Holding Company and Parent shall have executed and
delivered  the DC Leases, as applicable.  There shall  be  no
default by lessor under any DC Lease or the Flemington  Lease
(whether or not it is executed or delivered by Buyers).

9.5  Corporate Authorization.

     Buyer  shall  have  received copies  of  the  board  and
stockholder   resolutions  of  each  Seller  approving   this
Agreement and the transactions contemplated hereby, certified
by appropriate officer of each Seller.

9.6  Required Consents.

     Sellers  shall have notified the lessor under each  Real
Property  lease  of  the proposed assignment  by  the  lessee
thereunder to Retail Sub of such Real Property Lease pursuant
to  this  Agreement and shall have requested such  lessor  to
consent  to  such  assignment and not less  than  twenty-five
percent  (25%)  of  all of the lessors of  all  Real  Propety
Leases  shall  have  advised Sellers that such  lessors  will
consent  to  such  assignment and not more  than  twenty-five
percent  (25%) of all of the lessors under all Real  Property
Leases  shall  have given Sellers any reason to believe  that
such  lessors will not consent to such assignment and  Parent
shall  have delivered to Buyers a certificate to such  effect
(the  "Seller Real Property Lease Consent Certificate").   In
addition, Sellers shall have obtained all consents listed  on
Schedule 9.6, which shall be in form and substance reasonably
acceptable to Buyer.

9.7  FIRPTA Certificates.

     Each of Parent, Investco and Outlet shall have delivered
to Buyers a certificate in the form attached as Schedule 9.7.

9.8  Licenses.

      Buyers  or Lifetime, as applicable, shall have  applied
for or obtained all material Licenses that (a) are reasonably
necessary for the operation of the Business, and (b)  can  be
obtained  prior  to  the Closing pursuant to  applicable  Law
(collectively, the "Buyer Licenses"); and with respect to any
such License for which any Buyer or Lifetime has applied, but
which  has  not  yet  been granted as  of  the  Closing,  the
Governmental  Entity  with authority to  grant  such  License
shall  not  have  issued  any order or  notice  stating  such
Governmental Entity's intent to deny such application.

9.9  No Actions or Orders.

     No  claim,  action,  litigation,  arbitration  or  other
proceeding shall be pending or threatened before any court or
other Governmental Entity or before any other Person, and  no
judgment  or order thereof shall be in effect that would  (i)
prevent  consummation of any of the transactions contemplated
by  this  Agreement or any of the Ancillary Agreements,  (ii)
affect  adversely the right of Buyers to own  the  Assets  or
(iii) restrain or prohibit Buyers' ownership or operation (or
that  of  any  of  their Affiliates) of all or  any  material
portion  of the Business or the Assets, or compel  Buyers  or
any of their Affiliates to dispose of or hold separate all or
any  material portion of the Business or Assets or all or any
material  portion of the business and assets  of  Buyers  and
their Affiliates.  No Law shall have been enacted or shall be
deemed  applicable to the transactions contemplated  by  this
Agreement or any of the Ancillary Agreements which has any of
the  effects  set forth in the foregoing clauses (i)  through
(iii).

9.10 Purchase Order Update.

      Sellers  shall  have delivered to  Lifetime  a  revised
version  of Schedule 5.10(c), updated as of the date that  is
two (2) Business Days prior to the Closing Date.

9.11 No Liens.

     Buyer shall have received evidence in form and substance
satisfactory  to  Buyer that all Liens other  than  Permitted
Liens with respect to the Assets have been released.

ARTICLE 10: CONDITIONS TO THE OBLIGATIONS OF SELLERS

     The  obligations  of Sellers to effect the  transactions
contemplated  hereby are subject to the  satisfaction  on  or
prior to the Closing Date of the following conditions, unless
waived by all Sellers:

10.1 Representations and Warranties of Buyer and Lifetime.

     The representations and warranties of Buyer and Lifetime
set  forth in this Agreement shall be true and correct in all
material  respects  (except  that those  representations  and
warranties that are limited by materiality shall be true  and
correct in all respects) as of the date of this Agreement and
as  of  the Closing Date as if made at and as of the  Closing
Date  (except  where such representations or  warranties  are
made  expressly  as of a specific date and then  as  of  such
date).

10.2 Performance of Obligations of Buyer  and Lifetime.

     Each  of Buyer and Lifetime shall have performed in  all
material respects all obligations required to be performed by
it under this Agreement on or prior to the Closing Date.

10.3 Buyer Closing Certificate.

     An authorized officer of Buyer and an authorized officer
of  Lifetime shall have executed and delivered to Sellers the
Buyer Closing Certificate.

10.4 Ancillary Agreements.

     Buyer  shall have executed and delivered the  Transition
Services  Agreement,  the Product Supply  Agreement,  the  DC
Leases and the Flemington Lease.

10.5 Corporate Authorization.

     Parent shall have received copies of the resolutions  of
each  Buyer and of Lifetime approving this Agreement and  the
transactions  contemplated hereby, certified  by  appropriate
officers of Buyers and Lifetime, as applicable.

ARTICLE 11: INDEMNIFICATION

11.1 Indemnification Obligations of Sellers

     Each  Seller  shall  jointly  and  severally  indemnify,
defend and hold harmless the Buyer Indemnified Parties  from,
against  and  in respect of any and all claims,  liabilities,
obligations,  losses,  costs,  expenses,  penalties,   fines,
judgments and damages (at equity or law), whenever arising or
incurred  (including reasonable attorneys' fees and expenses)
arising out of or relating to:

      (a)  any breach or inaccuracy of any representation  or
warranty  made by Sellers in this Agreement or any Conveyance
Document,  or by Parent in the Seller Closing Certificate  or
the Seller Real Property Lease Consent Certificate;

       (b)    any  breach  of  any  covenant,  agreement   or
undertaking  made  by  any Seller in this  Agreement  or  any
Conveyance Document; and

     (c)  the Excluded Liabilities.

     The  claims,  liabilities, obligations,  losses,  costs,
expenses,  penalties, fines, judgments  and  damages  of  the
Buyer  Indemnified Parties described in this Section 11.1  as
to  which  the  Buyer  Indemnified Parties  are  entitled  to
indemnification are hereinafter collectively referred  to  as
"Buyer Losses."

11.2 Indemnification Obligations of Buyer.

     Each  of  each  Buyer  and  Lifetime  will  jointly  and
severally  indemnify,  defend and hold  harmless  the  Seller
Indemnified Parties from, against and in respect of  any  and
all   claims,   liabilities,  obligations,   losses,   costs,
expenses, penalties, fines, judgments and damages (at  equity
or  law),  whenever arising or incurred (including reasonable
attorneys' fees and expenses) arising out of or relating to:

     (a)  the Assumed Liabilities;

      (b)  any breach or inaccuracy of any representation  or
warranty  made by any Buyer or Lifetime in this Agreement  or
any  Conveyance Document, or by Lifetime in the Buyer Closing
Certificate;

       (c)    any  breach  of  any  covenant,  agreement   or
undertaking  made by any Buyer or Lifetime in this  Agreement
or any Conveyance Document; and

      (d)   any  obligations or liabilities arising from  and
after  the  Closing  Date as a result of the  operations  and
activities of the Business conducted by any Buyer (or any  of
their Affiliates) from and after the Closing Date.

     The  claims,  liabilities, obligations,  losses,  costs,
expenses,  penalties, fines, judgments  and  damages  of  the
Seller Indemnified Parties described in this Section 11.2  as
to  which  the  Seller Indemnified Parties  are  entitled  to
indemnification are hereinafter collectively referred  to  as
"Seller Losses."

11.3 Notice of Claims.

     The  Indemnified Party shall notify Parent or Buyer,  as
the case may be, in writing promptly after becoming aware  of
any  Damages which an Indemnified Party shall have determined
has  given  rise  to  a claim by such Indemnified  Party  for
indemnification under this Article 11.  Such  written  notice
(a  "Claim Notice") shall include an estimate of the Damages,
if  known,  the method of computation thereof and a reference
to  the  specific provisions of this Agreement in respect  of
which  indemnification  is sought.  As  soon  as  practicable
after  the  date of such Claim Notice, the Indemnified  Party
shall  provide  the Indemnifying Party or his or  her  agents
access  to  all requested books and records in the possession
or  control  of the Indemnified Party which the  Indemnifying
Party reasonably determines to be related to such claim.   If
the  Indemnifying  Party expressly notifies  the  Indemnified
Party  that  it  does not dispute the claim or the  estimated
amount  of  Damages  described  in  such  Claim  Notice,  the
estimated  Damages in the amount specified in the Indemnified
Party's  Claim Notice will be conclusively deemed a liability
of  the  Indemnifying Party and the Indemnifying Party  shall
pay  the  amount  of  such Damages to the Indemnified  Party.
Otherwise, the dispute shall be resolved, and the amount,  if
any,  of  Damages payable by the Indemnifying  Party  to  the
Indemnified  Party  shall be determined, in  accordance  with
Section 13.10 below.  The provisions of this Section 11.3  do
not apply to Third Party Actions.

11.4 Procedure for Third Party Claims.

      (a)   If  any  third Person shall commence  an  action,
claim,   proceeding,   arbitration  or   suit   against   any
Indemnified Party with respect to any matter (a "Third  Party
Action")  which  may give rise to a claim for indemnification
under  this  Article  11,  then the Indemnified  Party  shall
notify  Parent  or  Buyer, as the case  may  be,  in  writing
promptly  after  becoming aware of such  Third  Party  Action
(such  notice being hereinafter called a "Third Party  Action
Notice"),  which  notice  shall  include  a  description  (in
reasonable detail) of the Third Party Action, an estimate  of
the  Damages, if known, the method of computation thereof and
a  reference to the specific provisions of this Agreement  in
respect  of which indemnification is sought. The Indemnifying
Party  will have twenty (20) days from receipt of such  Third
Party  Action  Notice to determine whether  or  not  (i)  the
Indemnifying Party will, at its sole cost and expense, defend
against  such Third Party Action and/or (ii) the Indemnifying
Party is disputing the claim for indemnity hereunder.

      (b)   If, by 5:00 p.m., York, Pennsylvania time on  the
last  day of the twenty (20) day period set forth in  Section
4(a),  the  Indemnifying Party (i) does not  respond  to  the
Third  Party Action Notice, (ii) responds to the Third  Party
Action Notice, but disputes the claim for indemnity hereunder
and  elects  not to assume the defense, or (iii) responds  to
the  Third Party Action Notice and does not dispute the claim
for  indemnity  but  elects not to assume  the  defense,  the
Indemnified Party shall have the right to defend against  any
such  Third  Party  Action by appropriate proceedings  or  to
settle  or pay any such Third Party Action for such an amount
as  the  Indemnified Party shall deem reasonably  appropriate
and  the  Indemnifying Party shall promptly pay  all  Damages
actually resulting from the final determination of the  Third
Party  Action  in  accordance with  subparagraph  (e)  below;
provided that in the case of clause (ii) of this subparagraph
(b),  any right of the Indemnified Party to recover from  the
Indemnifying  Party  shall depend on the  resolution  of  the
dispute  as  to  the  right of indemnity in  accordance  with
Section 13.10 hereof.

      (c)   If  the Indemnifying Party disputes the right  to
indemnity, but nevertheless elects to defend against any such
Third  Party  Action or settle or pay any  such  Third  Party
Action,  any  right of the Indemnified Party to recover  from
the  Indemnifying Party shall depend on the resolution of the
dispute  as  to  the  right of indemnity in  accordance  with
Section 13.10 hereof.

     (d)  Notwithstanding anything herein to the contrary, if
the Indemnifying Party notifies the Indemnified Party that it
will defend against or settle any Third Party Action:

          (i)  such  defense or settlement shall  be  at  the
               sole  cost  and  expense of  the  Indemnifying
               Party,  except for costs and expenses  of  the
               Indemnified Party's counsel, if any,  pursuant
               to items (v) and (vi) below;

          (ii) the  Indemnifying Party and its counsel  shall
               conduct  such  defense or  settlement  at  all
               times in good faith;

          (iii)      the  Indemnifying Party and its  counsel
               shall,  at  the  reasonable  request  of   the
               Indemnified Party, provide periodic updates to
               the  Indemnified Party in order  to  keep  the
               Indemnified  Party fully informed  as  to  its
               conduct  of  such  defense or settlement,  and
               shall  not  compromise or  settle  such  Third
               Party Action without the prior written consent
               of   the   Indemnified  Party   (not   to   be
               unreasonably withheld or delayed) unless  such
               settlement or compromise does not subject  the
               Indemnified Party to any monetary liability or
               injunction  or  other  equitable  relief,  and
               includes a complete release of the Indemnified
               Party from all liability with respect to  such
               Third Party Action;

          (iv) the   Indemnified   Party   shall   reasonably
               cooperate   with   the   Indemnifying   Party,
               including making available to the Indemnifying
               Party,  all  relevant witnesses and  pertinent
               documents   and  information  and  appropriate
               personnel;

          (v)  the  Indemnified Party may elect to employ its
               own counsel and participate in such defense or
               settlement  at  the Indemnified  Party's  sole
               cost  and  expense, but the  control  of  such
               defense and the settlement shall rest with the
               Indemnifying Party;

          (vi) notwithstanding   the   Indemnifying   Party's
               election to defend against or settle the Third
               Party Action, the Indemnified Party may,  upon
               written  notice  to  the  Indemnifying  Party,
               elect to employ its own counsel (who shall  be
               reasonably   acceptable  to  the  Indemnifying
               Party)  if  the Indemnifying Party is  also  a
               Person against whom the Third Party Action  is
               made   and  the  Indemnified  Party  has  been
               advised by counsel that (x) representation  of
               both  parties  by  the same counsel  would  be
               inappropriate  under applicable  standards  of
               professional  conduct or (y)  the  Indemnified
               Party has available to it one or more defenses
               or  counterclaims that are inconsistent  with,
               different from, or in addition to one or  more
               of   those  that  may  be  available  to   the
               Indemnifying Party with respect to such  Third
               Party Action; and

          (vii)      in  no event shall the Indemnified Party
               consent to the entry of any judgment or  enter
               into any settlement with respect to such Third
               Party Action without the prior written consent
               of the Indemnifying Party (which consent shall
               not be unreasonably withheld or delayed).

      (e)   Subject  to the other provisions of this  Section
11.4, if the Indemnifying Party:

          (i)  does  not  respond  to a  Third  Party  Action
               Notice  by 5:00 p.m., York, Pennsylvania  time
               on  the last day of the twenty (20) day period
               set forth in Section 11.4(a);

          (ii) does  not  elect to defend against  any  Third
               Party Action for which it does not dispute the
               Indemnified Party's right to indemnity;

          (iii)      does  not  elect to defend  against  any
               Third  Party Action for which it disputes  the
               Indemnified  Party's right to  indemnity,  and
               such  dispute is resolved, in accordance  with
               Section  13.10,  in  a  manner  affirming  the
               Indemnified Party's right to indemnity;

          (iv) elects  to  defend  against  any  Third  Party
               Action  for  which  it does  not  dispute  the
               Indemnified   Party's   right   to   indemnity
               hereunder; or

          (v)  elects  to  defend  against  any  Third  Party
               Action for which it does dispute the right  to
               indemnity,  to  the  extent  the  dispute   is
               resolved in a manner affirming the Indemnified
               Party's right to indemnity; then:

           the  Damages resulting from the settlement or  the
final,  non-appealable  adjudication  of  such  Third   Party
Action,  or  that portion thereof as to which the defense  is
unsuccessful,  shall  promptly be paid  by  the  Indemnifying
Party to the Indemnified Party.

11.5 Claims Period.

      The period during which a claim for indemnification may
be asserted under this Agreement by an Indemnified Party (the
"Claims  Period") shall begin on the Closing Date  and  shall
terminate  on  August  31, 2006; and provided  further,  that
notwithstanding the foregoing, the Claims Period during which
a  claim for indemnification may be asserted with respect  to
Section  5.4  shall  begin  on the  Closing  Date  and  shall
terminate  thirty  (30)  days after  the  expiration  of  the
statute  of  limitations applicable thereto.  Notwithstanding
the foregoing, if, prior to the close of business on the last
day  of  the Claims Period, an Indemnifying Party shall  have
been properly notified of a claim for indemnity hereunder and
such  claim shall not have been finally resolved or  disposed
of  at  such  date, such claim shall continue to survive  and
shall remain a basis for indemnity hereunder until such claim
is  finally  resolved or disposed of in accordance  with  the
terms hereof.

11.6 Limitations.

      Notwithstanding  anything to  the  contrary  set  forth
herein:

      (a)   the total amount of Damages for which all Sellers
shall  be  collectively responsible pursuant  to  claims  for
indemnification  asserted  under Section  11.1(a)  shall  not
exceed,   in   the   aggregate,  Seventeen  Million   Dollars
($17,000,000) (the "Indemnity Cap");

      (b)   the total amount of Damages for which all  Buyers
and  Lifetime shall be collectively responsible  pursuant  to
claims  for  indemnification asserted under  Section  11.2(b)
shall not exceed, in the aggregate, the Indemnity Cap;

      (c)   the Buyer Indemnified Parties shall have no right
of  indemnification  hereunder unless the  amount  for  which
indemnification  would otherwise be payable with  respect  to
Buyer  Losses  exceeds, in the aggregate, Two  Hundred  Fifty
Thousand Dollars ($250,000) (the "Threshold Amount") and,  in
such  event, such right of indemnification shall be only  for
Buyer  Losses which, in the aggregate, are in excess  of  the
Threshold Amount; and

      (d)  the Seller Indemnified Parties shall have no right
of  indemnification  hereunder unless the  amount  for  which
indemnification  would otherwise be payable with  respect  to
Seller Losses exceeds, in the aggregate, the Threshold Amount
and,  in  such event, such right of indemnification shall  be
only for Seller Losses which, in the aggregate, are in excess
of the Threshold Amount.

11.7 Investigations.

      No Party shall be entitled to indemnification hereunder
for  the  breach  or  inaccuracy  of  any  representation  or
warranty  if  such Party has knowledge of such breach  at  or
prior to the Closing.

11.8 Offset for Insurance Recoveries and Tax Benefits.

      (a)   All  claims  for Buyer Losses  or  Seller  Losses
hereunder  shall  be  made  net  of  any  insurance  proceeds
actually  recovered  by the Indemnified Party  claiming  such
indemnification.   Each  Indemnified Party  shall  diligently
pursue  and  seek  to  recover any  such  insurance  proceeds
available under insurance policies under the control of  such
Indemnified Party.

      (b)   The  amount of any Buyer Losses or Seller  Losses
hereunder shall be net of any foreign, federal, or  state  or
local  income  Tax  benefit actually realized  or  the  then-
present  value (based on a discount rate of 5%) of  any  such
income Tax benefit reasonably expected to be realized by  the
Indemnified  Party  by reason of the facts and  circumstances
giving rise to the indemnification.

11.9 Consequential Damages.

     Except as provided in Section 11.7 hereof, no event will
any  Party  be liable hereunder for any special,  incidental,
indirect  or  consequential damages of any  kind  or  nature,
regardless  of the form of action through which such  damages
are  sought.  In no event will any Party be liable  hereunder
for  lost  profits resulting from an alleged breach  of  this
Agreement,  even if under applicable Law, such  lost  profits
would not be considered consequential or special damages.

11.10     Exclusive Remedy.

     Except as set forth in Section 7.6 and Section 12.2, and
excluding fraud, the indemnification rights provided in  this
Article  11  shall be the exclusive remedy of the Indemnified
Parties  and their successors and assigns arising out  of  or
relating to this Agreement, the Conveyance Documents and  the
transactions  contemplated  hereby  and  thereby;   provided,
however,   that   the  foregoing  shall  not   prohibit   any
Indemnified  Party from seeking specific performance  of  its
rights under this Agreement.

11.11     Parent Agency.

     Upon  the  execution of this Agreement by  each  of  the
Seller Subsidiaries, and without any further act of by any of
them, Parent shall be, and hereby is, appointed as agent  and
attorney-in-fact   for  each  of  the   Seller   Subsidiaries
effective  upon  the  Closing Date, and each  of  the  Seller
Subsidiaries hereby authorizes Parent to take such action  on
behalf  of  any  or all of them as Parent  may  in  its  sole
discretion deem appropriate in respect of this Agreement  and
the  transactions  contemplated hereby, and  to  receive  all
notices  or  documents given or to be given to  any  of  them
pursuant hereto.

11.12     Tax Treatment of Indemnity Payments.

   Buyers and Sellers agree to treat, and Sellers agree to
cause Seller Holding Company to treat, to the extent
permitted under applicable law, indemnification payments
hereunder as adjustments to the Purchase Price for tax
purposes.

ARTICLE 12: TERMINATION

12.1 Termination.

     This Agreement may be terminated prior to the Closing:

     (a)  by mutual written consent of Buyers and Sellers;

     (b)  by Buyers:

          (i)  if  there  has  been a material  breach  by  a
               Seller   of  any  representation  or  warranty
               contained  herein  or in the  due  and  timely
               performance  of  any  covenant  or   agreement
               contained  herein  and  Buyers  have  notified
               Parent  of  such  breach in  writing  and  the
               breach  has not been cured within twenty  (20)
               Business Days after the notice of the  breach;
               or

          (ii) if  the Closing shall not have occurred on  or
               before  December  31, 2005 by  reason  of  the
               failure  of  any  condition  precedent   under
               Section  8.1  or  Section  8.2  (unless   such
               failure was within the control of Buyers); or

     (c)  by a Seller:

          (i)  if there has been a material breach by a Buyer
               of  any  representation or warranty  contained
               herein or in the due and timely performance of
               any covenant or agreement contained herein and
               Seller  has notified Buyers of such breach  in
               writing  and  the breach has  not  been  cured
               within  twenty  (20) Business Days  after  the
               notice of the breach; or

          (ii) if  the Closing shall not have occurred on  or
               before  December  31, 2005 by  reason  of  the
               failure  of  any  condition  precedent   under
               Section  8.1  or  Section  8.2  (unless   such
               failure was within the control of a Seller).

12.2 Effect of Termination.

     In  the  event  of  termination of this Agreement,  this
Agreement shall forthwith become void and there shall  be  no
liability or obligation on the part of the Parties  or  their
respective  officers or directors except for  obligations  of
Buyer   under  the  Confidentiality  Agreement,  which  shall
survive  termination.  Notwithstanding the foregoing, nothing
contained  herein shall relieve any Party from liability  for
any material breach of any covenant, agreement or undertaking
in  this Agreement occurring prior to the termination of this
Agreement.

ARTICLE 13: MISCELLANEOUS

13.1 Entire Understanding.

     This  Agreement  (including the Schedules  and  Exhibits
hereto),   the  Confidentiality  Agreement  and   the   other
agreements  and  instruments, the execution and  delivery  of
which   are  provided  for  herein,  constitute  the   entire
agreement  and  understanding  of  the  Parties  hereto  with
respect  to  the  subject matter hereof,  and  terminate  and
supersede   any   and  all  prior  correspondence,   offering
materials, agreements, arrangements and understandings,  oral
or  written, among the Parties concerning the subject  matter
hereof and thereof.

13.2 Waiver and Amendment.

     No  waiver,  amendment, modification or  change  of  any
provision  of  this Agreement shall be effective  unless  and
until  made in writing and signed by the Parties.  No waiver,
forbearance or failure by any Party of its rights to  enforce
any provision of this Agreement shall constitute a waiver  or
estoppel of such Party's right to enforce any other provision
of  this  Agreement or a continuing waiver by such  Party  of
compliance with any provision.

13.3 Headings.

     The  headings  herein are for convenience only,  do  not
constitute a part of this Agreement, and shall not be  deemed
to limit or affect any of the provisions hereof.

13.4 Counterparts.

     This  Agreement may be executed by facsimile and in  two
or  more  counterparts, each of which shall be deemed  to  be
original, but all of which together shall constitute one  and
the same instrument.

13.5 Interpretation.

     The  provisions  of this Agreement are  intended  to  be
interpreted  and  construed in a manner so as  to  make  such
provisions valid, binding and enforceable.  In the event that
any provision of this Agreement is determined to be partially
or  wholly  invalid,  illegal  or  unenforceable,  then  such
provision shall be deemed to be modified or restricted to the
extent  necessary to make such provision valid,  binding  and
enforceable,  or,  if such provision cannot  be  modified  or
restricted  in  a manner so as to make such provision  valid,
binding and enforceable, then such provision shall be  deemed
to  be  excised from this Agreement and the validity, binding
effect and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired in any manner.

13.6 Notices.

     All  notices, requests, demands and other communications
under  this Agreement shall be in writing and shall be deemed
to  have  been delivered and received (a) three (3)  business
days  after  having been mailed in a general or  branch  post
office  and  enclosed in a registered or certified  post-paid
envelope; or (b) if personally delivered, or if delivered  by
overnight mail or courier service, when actually received  by
the Party to whom the notice is sent (or upon confirmation of
such receipt received by sending Party); in each case, to the
address of the respective Party stated below or to such other
changed  addresses as such Party may have fixed by notice  as
provided herein:

     If to any Seller:   The Pfaltzgraff Co.
                         140 East Market Street
                         York, Pennsylvania  17401
                         United States of America
                         Fax:  +1 (717) 771-1440
                         Attn:  Craig W. Bremer, Esq.

     with a copy to:     Venable LLP
                         1800 Mercantile Bank & Trust Building
                         Two Hopkins Plaza
                         Baltimore, MD  21201
                         United States of America
                         Fax:  +1 (410) 244-7742
                         Attn:  Michael J. Baader, Esq.

     If to a Buyer or
     Lifetime:           Lifetime Brands, Inc.
                         1 Merrick Ave.
                         Westbury, NY 11590
                         Fax:  (516) 683-6006
                         Attn: Ronald Shiftan, Vice Chairman

     with a copy to:     Samuel B. Fortenbaugh III, Esq.
                         1211 Avenue of the Americas, 27th Floor
                         New York, NY 10036
                         Fax: (212) 596-3391

13.7 Assignment; Successors in Interest.

     No  assignment or transfer by any Party of such  Party's
rights  and  obligations under this Agreement  will  be  made
except with the prior written consent of the other Parties to
this  Agreement;  provided  that Buyers  shall,  without  the
obligation to obtain the prior written consent of  any  other
Party to this Agreement, be entitled to assign this Agreement
or  all or any part of its rights or obligations hereunder to
one (1) or more wholly-owned subsidiaries of a Buyer, but any
such assignment shall not relieve the assigning Buyer of  any
of  its obligations or duties hereunder.  This Agreement will
be  binding upon and will inure to the benefit of the Parties
and their successors and permitted assigns, and any reference
to  a  Party  will  also be a reference  to  a  successor  or
permitted assign.

13.8 Construction.

     The Parties have participated jointly in the negotiation
and drafting of this Agreement.  In the event an ambiguity or
question  of intent or interpretation arises, this  Agreement
shall  be construed as if drafted jointly by the Parties  and
no  presumption  or burden of proof shall arise  favoring  or
disfavoring any Party by virtue of the authorship of  any  of
the provisions of this Agreement.

13.9 Controlling Law.

     This  Agreement  will be governed by and  construed  and
enforced  in  accordance  with  the  internal  laws  of   the
Commonwealth of Pennsylvania without regard to choice of  law
principles.

13.10     Dispute Resolution; Jurisdiction; Specific
Performance.

     (a)  If a dispute arises out of this Agreement or any of
the  other  agreements  and instruments,  the  execution  and
delivery of which are provided for herein, or a breach of any
of  the  foregoing,  and  if the dispute  cannot  be  settled
through  negotiation, the Parties agree first to try in  good
faith   to   settle  the  dispute  by  mediation   in   York,
Pennsylvania   administered  by  the   American   Arbitration
Association  under its Commercial Mediation  Procedures  (the
"CMP")   before  resorting  to  another  dispute   resolution
procedure.    Promptly  upon  written  notice  (a  "Mediation
Notice")  from one Party (the "Claimant") to the other  Party
(the  "Respondent")  of  the Claimant's  desire  to  initiate
mediation, the Claimant and Respondent shall jointly select a
single mediator who shall have the authority to conduct  such
mediation.   If  the Claimant and Respondent  are  unable  to
agree  within  ten (10) days after delivery  of  a  Mediation
Notice  to  Respondent, the mediator shall be selected  by  a
judge  sitting on the Court of Common Pleas for York  County,
Pennsylvania.   Notwithstanding anything in the  CMP  to  the
contrary,  the  expenses  of the  mediation  shall  be  borne
equally  by the parties to the mediation, provided,  however,
that  each party shall pay for and bear the cost of  its  own
experts, evidence and legal counsel.

     (b)  Each of the Parties hereby irrevocable consents and
agrees  that all Legal Disputes that are not resolved through
mediation  in  accordance  with  Section  13.10(a)  shall  be
brought  only to the exclusive jurisdiction of the courts  of
the  Commonwealth  of  Pennsylvania  or  the  federal  courts
located  in  the Commonwealth of Pennsylvania.   The  Parties
agree  that,  after  a Legal Dispute is  before  a  court  as
specified in this Section 13.10(b) and during the pendency of
such  Legal Dispute before such court, all actions, suits  or
proceedings with respect to such Legal Dispute or  any  other
Legal  Dispute,  including any counterclaim,  cross-claim  or
interpleader, shall be subject to the exclusive  jurisdiction
of such court.  Each of the Parties hereby waives, and agrees
not  to assert, as a defense in any legal dispute, that  such
Party  is  not subject thereto or that such action,  suit  or
proceeding may not be brought or is not maintainable in  such
court or that such Party's property is exempt or immune  from
execution, that the action, suit or proceeding is brought  in
an  inconvenient forum or that the venue of the action,  suit
or  proceeding  described  in this Section  13.10  after  the
expiration of any period permitted for appeal and subject  to
any  stay  during  appeal  shall be  conclusive  and  may  be
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by applicable laws.

      (c)  The Parties agree that the remedies at law of  any
Party  for  any actual or threatened breach of this Agreement
would be inadequate and that the Parties shall be entitled to
specific performance of this Agreement, including entry of an
ex  parte,  temporary restraining order in state  or  federal
court,  preliminary and permanent injunctive  relief  against
activities  in  violation of any of  the  covenants  in  this
Agreement,  or  both, in addition to any  damages  and  legal
expenses which a Party may be legally entitled to recover.

13.11     No Third Party Beneficiaries.

     Except  as  specifically provided herein, this Agreement
shall  not confer any rights of remedies on any Person  other
than   the  Parties  and  their  respective  successors   and
permitted assigns; provided, however, that the provisions  in
Article 11 above concerning indemnification are intended  for
the  benefit  of  the  Persons specified  therein  and  their
respective legal representatives.

13.12     Lifetime Guarantee of Buyer Obligations.

     Lifetime  agrees to take all action necessary  to  cause
Buyers  to  perform  all of their agreements,  covenants  and
obligations  under this Agreement.  Lifetime  unconditionally
guarantees  to  Sellers the full and complete performance  by
Buyers   solely  of  their  pre-Closing  and   Closing   Date
obligations  under  this Agreement.  Lifetime  hereby  waives
diligence, presentment, demand of performance, filing of  any
claim,  any  right  to require any proceeding  first  against
Buyers,  protest,  notice  and  all  demands  whatsoever   in
connection with the performance of its obligations set  forth
in this Section 13.12.

   The remainder of this page is left blank intentionally.
               Signatures follow on next page.
     IN  WITNESS WHEREOF, the Parties have each executed  and
delivered  this Asset Purchase Agreement as of  the  day  and
year first above written.

                       PFZ ACQUISITION CORP.


                       By:
                       Name:
                       Title:

                       PFZ OUTLET RETAIL, INC.


                       By:
                       Name:
                       Title:

                       LIFETIME BRANDS, INC.


                       By:
                       Name:
                       Title:

              Signatures continue on next page

                       THE PFALTZGRAFF CO.


                       By:
                       Name:
                       Title:

                       PFALTZGRAFF INVESTMENT CO.


                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF OUTLET CO.


                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF MANUFACTURING CO.


                       By:
                       Name:
                       Title:



                          BILL OF SALE

      THIS BILL OF SALE (this "Bill of Sale") is made and entered
into  effective  as  of  _________  ___,  2005,  by  and  between
______________________________,   a   ____________    corporation
("Buyer"),  and  ______________________________,  a  ____________
corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware.  All capitalized terms used
and  not  otherwise  defined  herein  will  have  the  respective
meanings ascribed to such terms in the Purchase Agreement.

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement,  Seller  hereby  sells, transfers,  assigns,  conveys,
grants  and  delivers to Buyer, effective as of the  Closing  (as
defined in the Purchase Agreement), all of Seller's right,  title
and  interest in and to all of the assets, properties and  rights
of  Seller  used,  or  held for use primarily  in  the  Business,
including, without limitation, the assets described on Schedule A
annexed hereto and incorporated herein by this reference.

      Nothing  in this Bill of Sale shall be deemed to supersede,
enlarge   or  modify  any  of  the  provisions  of  the  Purchase
Agreement,  all  of which survive the execution and  delivery  of
this Bill of Sale as provided and subject to the limitations  set
forth  in the Purchase Agreement.  If any conflict exists between
the  terms  of  this Bill of Sale and the terms of  the  Purchase
Agreement,  the terms of the Purchase Agreement shall govern  and
control.

      The  Seller  agrees that from time to time at  the  Buyer's
request,  the  Seller  will  execute  and  deliver  such  further
instruments  of  conveyance  and transfer  and  take  such  other
actions  as may be reasonably required to carry out the  purposes
of this Bill of Sale

      This  Bill  of Sale shall be governed by and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

       This  Bill  of  Sale  may  be  executed  in  two  or  more
counterparts, each of which shall be deemed an original, and  all
of which shall together constitute one and the same instrument.

     The remainder of this page is left blank intentionally.
                 Signatures follow on next page.
     IN WITNESS WHEREOF, Seller and Buyer have executed this Bill
of Sale as of the date first set forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:




Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public




Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
                         TO BILL OF SALE

                      [insert description]

               ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment")
is  made and entered into effective as of _________ ___, 2005, by
and   between   ______________________________,  a   ____________
corporation  ("Buyer"),  and  ______________________________,   a
____________ corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware.  All capitalized terms used
and  not  otherwise  defined  herein  will  have  the  respective
meanings ascribed to such terms in the Purchase Agreement.

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement:

      1.    Effective  as of the Closing, Seller hereby  assigns,
transfers coveys and delegates to Buyer and Buyer hereby  assumes
and  agrees  to pay, perform, discharge or otherwise  satisfy  in
accordance  with  their  respective terms,  all  of  the  Assumed
Liabilities  associated with the Assets  conveyed  to  the  Buyer
pursuant  to the to that certain Bill of Sale, dated  as  of  the
date  hereof,  by  Seller.   Except for the  Assumed  Liabilities
assumed herein, Buyer does not assume, agree to pay or satisfy or
have  any responsibility or obligation whatsoever for any  debts,
liabilities or obligations of Seller.

       2.    Nothing  in  this  Assignment  shall  be  deemed  to
supersede,  enlarge  or  modify any  of  the  provisions  of  the
Purchase Agreement, all of which shall survive the execution  and
delivery  of this Assignment as provided in, and subject  to  the
limitations  set  forth  in,  the  Purchase  Agreement.   If  any
conflict  exists  between the terms of this  Assignment  and  the
terms  of  the  Purchase  Agreement, the terms  of  the  Purchase
Agreement shall govern and control.

      This  Assignment  shall be governed  by  and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

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

     The remainder of this page is left blank intentionally.
                 Signatures follow on next page.
      IN  WITNESS  WHEREOF, Seller and Buyer have  executed  this
Assignment  and  Assumption Agreement as of the  date  first  set
forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:





Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public




Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
             TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                      [insert description]


               ASSIGNMENT AND ASSUMPTION OF LEASES

     THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment")
is  made and entered into effective as of _________ ___, 2005, by
and   between   ______________________________,  a   ____________
corporation  ("Buyer"),  and  ______________________________,   a
____________ corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware; and

      WHEREAS,  Seller  is a party to those leases  described  on
Schedule  A  annexed  hereto  and  incorporated  herein  by  this
reference (the "Transferred Leases").

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement:

      1.    Seller hereby assigns, transfers and sets  over  unto
Buyer,  effective  as of the Effective Time (as  defined  in  the
Purchase Agreement), all of Seller's right, title and interest in
and  to (i) the Transferred Leases and (ii) all security deposits
heretofore made by Seller pursuant to the Transferred Leases.

      2.    Buyer  hereby  accepts the foregoing  assignment  and
agrees  to  perform  all  of  the terms  and  conditions  of  the
Transferred  Leases to be performed on the part  of  Seller,  and
assumes  all  of the liabilities and obligations of Seller  under
the  Transferred  Leases  arising or accruing  at  or  after  the
Effective Time.

      This  Assignment  shall be governed  by  and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

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

      Nothing  in  this Assignment shall be deemed to  supersede,
enlarge   or  modify  any  of  the  provisions  of  the  Purchase
Agreement, all of which shall survive the execution and  delivery
of this Assignment as provided in, and subject to the limitations
set  forth  in,  the Purchase Agreement.  If any conflict  exists
between  the  terms  of  this Assignment and  the  terms  of  the
Purchase  Agreement,  the terms of the Purchase  Agreement  shall
govern and control.
     IN WITNESS WHEREOF, Seller and Buyer have executed this
Assignment and Assumption of Leases as of the date first set
forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:




Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public




Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
             TO ASSIGNMENT AND ASSUMPTION OF LEASES

                      [insert description]


                      ASSIGNMENT OF TRADEMARKS

      THIS ASSIGNMENT OF TRADEMARKS (this "Assignment of Trademarks")
is  made  as  of the ______ day of ___________, 2005, THE PFALTZGRAFF
CO.,  a  corporation organized under the laws of the Commonwealth  of
Pennsylvania  ("Parent"),  THE  PFALTZGRAFF  MANUFACTURING   CO.,   a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania   ("Manufacturing"),  PFALTZGRAFF  INVESTMENT   CO.,   a
corporation  organized  under  the laws  of  the  State  of  Delaware
("Investco"), and THE PFALTZGRAFF OUTLET CO., a corporation organized
under  the  laws  of  the  State of Maryland (together  with  Parent,
Manufacturing  and  Investco, collectively the "Assignors"),  to  PFZ
ACQUISITION  CORP., a corporation organized under  the  laws  of  the
State of Delaware ("Assignee").

     WHEREAS, Assignee and Assignors are parties to an Asset Purchase
Agreement (the "Agreement"), dated as of June 17, 2005, by and among,
on one hand, Assignors, and on the other hand, LIFETIME BRANDS, INC.,
a  corporation  organized  under the laws  of  Delaware,  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware, and
Assignee; and

      WHEREAS, in accordance with the Agreement, Assignors desire  to
transfer  and assign to Assignee, and Assignee desires to accept  the
transfer  and  assignment of, all of Assignors' respective  worldwide
right, title and interest in and to all of Assignors' Trademarks  (as
defined   in   the  Agreement),  including  without  limitation   the
Trademarks  listed  in  Schedule A annexed  hereto  and  incorporated
herein by this reference.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein  and in the Agreement and other good  and  valuable
consideration,  the  receipt  and sufficiency  of  which  are  hereby
acknowledged,  Assignors hereby transfer and assign to Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignors' worldwide right, title and interest in, to and  under  the
Trademarks,  ,  and  all rights to sue for past infringement  of  any
Trademark, the same to be held and enjoyed by the said Assignee,  its
successors  and assigns from and after the date hereof as  fully  and
entirely  as  the same would have been held and enjoyed by  the  said
Assignors had this Assignment not been made.

      Except  to the extent that federal law preempts state law  with
respect  to the matters covered hereby, this Assignment of Trademarks
shall be governed by and construed in accordance with the laws of the
Commonwealth  of  Pennsylvania without regard to  the  principles  of
conflicts of laws thereunder.

      This  Assignment of Trademarks may be executed in two  or  more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      Nothing  in  this Assignment of Trademarks shall be  deemed  to
supersede,  enlarge or modify any of the provisions of  the  Purchase
Agreement,  all of which shall survive the execution and delivery  of
this  Assignment  of Trademarks as provided in, and  subject  to  the
limitations  set forth in, the Purchase Agreement.  If  any  conflict
exists  between  the terms of this Assignment of Trademarks  and  the
terms  of the Purchase Agreement, the terms of the Purchase Agreement
shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
      IN  WITNESS WHEREOF, each Assignor and the Assignee has  caused
its  duly  authorized officer to execute this Assignment as  of  date
first set forth hereinabove.

                       THE PFALTZGRAFF CO.:

                       By:
                       Name:
                       Title:


                       PFALTZGRAFF INVESTMENT CO.:

                       By:
                       Name:
                       Title:


                       THE PFALTZGRAFF OUTLET CO.:

                       By:
                       Name:
                       Title:


                       THE PFALTZGRAFF MANUFACTURING CO.:

                       By:
                       Name:
                       Title:


Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________,   _______________   of   The   Pfaltzgraff    Co.,
_________________,  _______________ of The Pfaltzgraff  Manufacturing
Co., _________________, _______________ of Pfaltzgraff Investment Co.
and _________________, _______________ of The Pfaltzgraff Outlet Co.,
each  personally  known  to me (or proved  to  me  on  the  basis  of
satisfactory  evidence) to be the person whose name is subscribed  to
the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity and that by his/her signature  on
the  instrument the person, or the entity upon behalf of which he/she
acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

PFZ ACQUISITION CORP.:

By:
Name:
Title:

                           SCHEDULE A
                   TO ASSIGNMENT OF TRADEMARKS

Registered Trademarks

Trademark               U.S. Registration No.      Registration Date




Pending Trademark Applications

Trademark               U.S. Serial No.            Application Date





                      ASSIGNMENT OF COPYRIGHTS

      THIS ASSIGNMENT OF COPYRIGHTS (this "Assignment of Copyrights")
is made as of the ______ day of ___________, 2005, by THE PFALTZGRAFF
CO.,  a  corporation organized under the laws of the Commonwealth  of
Pennsylvania  ("Parent"),  THE  PFALTZGRAFF  MANUFACTURING   CO.,   a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania   ("Manufacturing"),  PFALTZGRAFF  INVESTMENT   CO.,   a
corporation  organized  under  the laws  of  the  State  of  Delaware
("Investco"), and THE PFALTZGRAFF OUTLET CO., a corporation organized
under  the  laws  of  the  State of Maryland (together  with  Parent,
Manufacturing  and  Investco, collectively the "Assignors"),  to  PFZ
ACQUISITION  CORP., a corporation organized under  the  laws  of  the
State of Delaware ("Assignee").

     WHEREAS, Assignee and Assignors are parties to an Asset Purchase
Agreement (the "Agreement"), dated as of June 17, 2005, by and among,
on one hand, Assignors, and on the other hand, LIFETIME BRANDS, INC.,
a  corporation  organized  under the laws  of  Delaware,  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware, and
Assignee; and

      WHEREAS, in accordance with the Agreement, Assignors desire  to
transfer  and assign to Assignee, and Assignee desires to accept  the
transfer  and  assignment of, all of Assignors' respective  worldwide
right, title and interest in and to all of Assignors' Copyrights  (as
defined   in   the  Agreement),  including  without  limitation   the
Copyrights  listed  in  Schedule A annexed  hereto  and  incorporated
herein by this reference.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein  and in the Agreement and other good  and  valuable
consideration,  the  receipt  and sufficiency  of  which  are  hereby
acknowledged,  Assignors hereby transfer and assign to Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignors' worldwide right, title and interest in, to and  under  the
Copyrights,  and  all  rights to sue for  past  infringement  of  any
Copyright, the same to be held and enjoyed by the said Assignee,  its
successors  and assigns from and after the date hereof as  fully  and
entirely  as  the same would have been held and enjoyed by  the  said
Assignors had this Assignment not been made.

      Except  to the extent that federal law preempts state law  with
respect  to the matters covered hereby, this Assignment of Copyrights
shall be governed by and construed in accordance with the laws of the
Commonwealth  of  Pennsylvania without regard to  the  principles  of
conflicts of laws thereunder.

      This  Assignment of Copyrights may be executed in two  or  more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      Nothing  in  this Assignment of Copyrights shall be  deemed  to
supersede,  enlarge or modify any of the provisions of  the  Purchase
Agreement,  all of which shall survive the execution and delivery  of
this  Assignment  of Copyrights as provided in, and  subject  to  the
limitations  set forth in, the Purchase Agreement.  If  any  conflict
exists  between  the terms of this Assignment of Copyrights  and  the
terms  of the Purchase Agreement, the terms of the Purchase Agreement
shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
      IN  WITNESS WHEREOF, each Assignor and the Assignee has  caused
its  duly  authorized officer to execute this Assignment as  of  date
first set forth hereinabove.

                       THE PFALTZGRAFF CO.:

                       By:
                       Name:
                       Title:


                       PFALTZGRAFF INVESTMENT CO.:

                       By:
                       Name:
                       Title:


                       THE PFALTZGRAFF OUTLET CO.:

                       By:
                       Name:
                       Title:


                       THE PFALTZGRAFF MANUFACTURING CO.:

                       By:
                       Name:
                       Title:


Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________,   _______________   of   The   Pfaltzgraff    Co.,
_________________,  _______________ of The Pfaltzgraff  Manufacturing
Co., _________________, _______________ of Pfaltzgraff Investment Co.
and _________________, _______________ of The Pfaltzgraff Outlet Co.,
each  personally  known  to me (or proved  to  me  on  the  basis  of
satisfactory  evidence) to be the person whose name is subscribed  to
the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity and that by his/her signature  on
the  instrument the person, or the entity upon behalf of which he/she
acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

PFZ ACQUISITION CORP.:

By:
Name:
Title:

                           SCHEDULE A
                   TO ASSIGNMENT OF COPYRIGHTS

Registered Copyrights

Copyright     Author(s)     U.S. Registration No.    Registration Date




Pending Copyright Applications

Copyright        Author(s)      Application No.     Application Date




                     ASSIGNMENT OF DOMAIN NAMES

     THIS  ASSIGNMENT OF DOMAIN NAMES (this "Assignment") is made  as
of   the   ______   day  of  ___________,  2005,   by   and   between
______________________________,    a     ____________     corporation
("Assignor"),  and  ______________________________,  a   ____________
corporation ("Assignee").

     WHEREAS, Assignee and Assignor are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made and entered  into
as  of the 17th day of June, 2005, by and among, (a) on one hand, THE
PFALTZGRAFF  CO.,  a  corporation organized under  the  laws  of  the
Commonwealth  of Pennsylvania, THE PFALTZGRAFF MANUFACTURING  CO.,  a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania,  PFALTZGRAFF INVESTMENT CO.,  a  corporation  organized
under  the laws of the State of Delaware, and THE PFALTZGRAFF  OUTLET
CO., a corporation organized under the laws of the State of Maryland;
and  (b)  on  the  other hand, LIFETIME BRANDS, INC.,  a  corporation
organized  under  the  laws  of Delaware, PFZ  ACQUISITION  CORP.,  a
corporation  organized  under the laws of Delaware,  and  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware; and

     WHEREAS,  Assignor is the owner of the registered  domain  names
listed  on Schedule A annexed hereto and incorporated herein by  this
reference (the "Domain Names") and the goodwill symbolized thereby.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein and in the Purchase Agreement and  other  good  and
valuable  consideration,  the receipt and  sufficiency  of  which  is
hereby acknowledged:

     1.    Assignor  hereby transfers and assigns  to  Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignor's  worldwide right, title and interest in and to the  Domain
Names,  and  all rights to sue for past infringement  of  any  Domain
Name,  and for the use and benefit of Assignee's successors,  assigns
and legal representatives.

     2.   Assignor hereby agrees and promises that it, as well as its
successors  and  assigns,  will  execute  and  deliver  any  and  all
documents  and  information that are necessary for  the  Assignee  to
register the aforesaid Domain Names.

      3.    This  Assignment shall be governed by  and  construed  in
accordance with the laws of the Commonwealth of Pennsylvania  without
regard to the principles of conflicts of laws thereunder.

       4.     This  Assignment  may  be  executed  in  two  or   more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      5.    Nothing in this Assignment shall be deemed to  supersede,
enlarge  or  modify any of the provisions of the Purchase  Agreement,
all  of  which  shall  survive the execution  and  delivery  of  this
Assignment as provided in, and subject to the limitations  set  forth
in, the Purchase Agreement.  If any conflict exists between the terms
of this Assignment and the terms of the Purchase Agreement, the terms
of the Purchase Agreement shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
     IN  WITNESS  WHEREOF, the Assignor and the  Assignee  have  each
caused its duly authorized officer to execute this Assignment  as  of
date first set forth hereinabove.

                       [ASSIGNOR]:

                       By:
                       Name:
                       Title:




Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________, _______________ of _____________, personally known
to  me (or proved to me on the basis of satisfactory evidence) to  be
the  person  whose  name is subscribed to the within  instrument  and
acknowledged  to  me  that  he/she  executed  the  same  in   his/her
authorized  capacity and that by his/her signature on the  instrument
the person, or the entity upon behalf of which he/she acted, executed
the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public


Accepted:

[ASSIGNEE].:

By:
Name:
Title:


                             SCHEDULE A
                    TO ASSIGNMENT OF DOMAIN NAMES


                           [to be listed]

                       SCHEDULE 1.1(d)
                     NET WORKING CAPITAL


"Net Working Capital" means the following, as set forth on a
consolidated balance sheet of Parent:

     (a)  The sum of:

          (i)  trade accounts receivable, less reserves for
               bad debts, returns and allowances,

          (ii) Seller Inventory, less a LIFO reserve,
               reserves for obsolescence, shrinkage and FIFO
               valuation, and a lower of cost or market
               adjustment, and

          (iii)     other current assets;

     (b)  less:

          (i)  trade accounts payable, and

          (ii) accrued liabilities.

Notwithstanding anything herein to the contrary, Net Working
Capital shall not include any assets or liabilities
associated with the Designated Stores.

                       SCHEDULE 1.1(f)
                     SELLERS' KNOWLEDGE


Marsha Everton
Michael Sibol
Craig Bremer
                       SCHEDULE 1.1(g)
                      BUYERS' KNOWLEDGE


Ronald Shiftan
Robert McNally
Jeffrey Siegel

                        SCHEDULE 9.7

                CERTIFICATION PROVIDED UNDER
               TREASURY REGULATIONS  1.1445-2


     Section 1445 of the Internal Revenue Code provides that
a transferee of a U.S. real property interest must withhold
tax if the transferor is a foreign person.  For U.S. tax
purposes (including Section 1445), the owner of a
disregarded entity (which has legal title to a U.S. real
property interest under local law) will be the transferor of
the property and not the disregarded entity.  To inform the
transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by [INSERT NAME
OF TRANSFEROR - PARENT, INVESTCO, MANUFACTURING OR OUTLET,
AS APPROPRIATE], the undersigned hereby certifies the
following on behalf of [INSERT NAME OF TRANSFEROR]:

     1.  [INSERT NAME OF TRANSFEROR] is not a foreign
corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Internal Revenue
Code and Income tax Regulations);

     2.  [INSERT NAME OF TRANSFEROR] is not a disregarded
entity as defined in Treasury Regulations  1.1445-
2(b)(2)(iii);

     3.  [INSERT NAME OF TRANSFEROR]'s U.S. employer
identification number is ___________; and

     4.  [INSERT NAME OF TRANSFEROR]'s office address is
_______________________________________________________.

     [INSERT NAME OF TRANSFEROR] understands that this
certification may be disclosed to the Internal Revenue
Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment or both.

     Under penalties of perjury, I declare that I have
examined this certification and to the best of my knowledge
and belief it is true, correct and complete, and I further
declare that I have authority to sign this document on
behalf of [INSERT NAME OF TRANSFEROR].

                                        ___________________
                                        [NAME]
                                        [TITLE]
                                        [DATE]
[{"type": "8-K", "sequence": "1", "filename": "pfzf8k05.txt", "description": "PFALTZGRAFF 8K", "secsgml_size_bytes": 213589}]
{"company-data": {"conformed-name": "LIFETIME BRANDS, INC", "cik": "0000874396", "assigned-sic": "3420", "irs-number": "112682486", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-19254", "film-number": "05913964"}, "business-address": {"street1": "ONE MERRICK AVENUE", "city": "WESTBURY", "state": "NY", "zip": "11590", "phone": "5166836000"}, "mail-address": {"street1": "ONE MERRICK AVENUE", "street2": "ONE MERRICK AVENUE", "city": "WESTBURY", "state": "NY", "zip": "11590-6601"}, "former-company": {"former-conformed-name": "LIFETIME HOAN CORP", "date-changed": "19930328"}}
UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, DC  20549

                          FORM 8-K

                       CURRENT REPORT

             Pursuant to Section 13 or 15(d) of
             The Securities Exchange Act of 1934

Date of Report  (Date of the earliest event reported)  June
17, 2005

                    Lifetime Brands, Inc
   (Exact name of registrant as specified in its charter)

                          Delaware
       (State or other jurisdiction of incorporation)

  0-19254                          11-2682486
 (Commission File Number)         (IRS Employer Identification No.)

One Merrick Avenue, Westbury, New York                11590
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code: (516)683-6000

               LIfetime Hoan Corporation
(Former name or former address, if changed since last report)

Item 1.01.  Entry into a Material Definitive Agreement

On  June  17,  2005, Lifetime Brands, Inc announced  it  has
signed  an  agreement  to acquire the business  and  certain
assets  of  The  Pfaltzgraff  Co.  ("Pfaltzgraff"),  one  of
America's leading designers and marketers of dinnerware  and
tabletop  accessories  for the home.  Established  in  1811,
Pfaltzgraff had sales in 2004 of approximately $148 million.
Its  products are broadly distributed through retail  chains
and  sold  through company-owned factory stores as  well  as
through  Internet and catalog operations. Assuming that  the
transaction closes in July, Lifetime expects the Pfaltzgraff
business to contribute approximately $72 million in revenues
in  2005  and to be nominally profitable for the  year.  The
transaction  is subject to customary closing conditions  and
adjustments.   Lifetime  expects  to  fund  the  transaction
through its credit facility.

Item 9.01.  Financial Statements and Exhibits

  c)   Exhibits

     99  - The Asset Purchase Agreement dated as of June 17,
     2005  by and among The Pfaltzgraff Co., The Pfaltzgraff
     Manufacturing Co., Pfaltzgraff Investment Co.  and  The
     Pfaltzgraff Outlet Co. and Lifetime Brands,  Inc.,  PFZ
     Acquisition Corp. and PFZ Outlet Retail, Inc.

                          Signature

     Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.

                    Lifetime Hoan Corporation

                    By:       /s/ Robert McNally
                         Robert McNally
                         Vice President of Finance and
                         Chief Financial Officer

Date:  June 23, 2005

EXHIBIT 99

                  ASSET PURCHASE AGREEMENT

                        by and among

                    THE PFALTZGRAFF CO.,
             THE PFALTZGRAFF MANUFACTURING CO.,
               PFALTZGRAFF INVESTMENT CO. and
                 THE PFALTZGRAFF OUTLET CO.

                             and

                   LIFETIME BRANDS, INC.,
                  PFZ ACQUISITION CORP. and
                  PFZ OUTLET RETAIL , INC.

                  dated as of June 17, 2005

ARTICLE 1: DEFINITIONS; CONSTRUCTION                      1
     1.1  DEFINITIONS                                     1
     1.2  OTHER DEFINITIONS                               8
     1.3  CONSTRUCTION                                   10

ARTICLE 2: PURCHASE AND SALE OF ASSETS                   11
     2.1  AGREEMENT TO PURCHASE AND SELL                 11
     2.2  ASSETS                                         11
     2.3  EXCLUDED ASSETS                                12
     2.4  ASSUMPTION OF ASSUMED LIABILITIES              13
     2.5  EXCLUDED LIABILITIES                           13

ARTICLE 3: PURCHASE PRICE AND METHOD OF PAYMENT          14
     3.1  PURCHASE PRICE                                 14
     3.2  PAYMENT OF PURCHASE PRICE; HOLDBACK            14
     3.3  ALLOCATION OF CERTAIN ITEMS                    15
     3.4  PAYMENTS                                       16
     3.5  TAX ALLOCATION                                 16
     3.6  WORKING CAPITAL ADJUSTMENT                     16
     3.7  NON-CONTINUING STORES                          18
     3.8  CERTAIN PAYMENTS RELATED TO ASSUMED CONTRACTS  18

ARTICLE 4: THE CLOSING                                   19
     4.1  CLOSING                                        19
     4.2  CLOSING DELIVERIES                             19
     4.3  NONASSIGNABILITY OF CONTRACTS                  21

ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLERS     22
     5.1  ORGANIZATION                                   22
     5.2  AUTHORITY; NON-CONTRAVENTION                   22
     5.3  NO CONSENTS                                    23
     5.4  TAX MATTERS                                    23
     5.5  FINANCIAL STATEMENTS; ACCOUNTS RECEIVABLE;
             INVENTORY                                   23
     5.6  ABSENCE OF UNDISCLOSED LIABILITIES             24
     5.7  LEGAL PROCEEDINGS                              24
     5.8  COMPLIANCE WITH LAWS; LICENSES                 24
     5.9  TITLE TO ASSETS                                25
     5.10 CONTRACTS                                      25
     5.11 INTELLECTUAL PROPERTY                          27
     5.12 EMPLOYEES                                      28
     5.13 LABOR AND EMPLOYMENT MATTERS                   28
     5.14 ABSENCE OF CERTAIN CHANGES                     29
     5.15 BROKERS                                        29
     5.16 INSURANCE                                      29
     5.17 ENVIRONMENTAL MATTERS                          29
     5.18 REAL PROPERTY                                  30
     5.19 RELATED PARTY TRANSACTIONS; FOREIGN CORRUPT
             PRACTICES ACT                               31
     5.20 EMPLOYEE PLANS                                 32
     5.21 PRODUCT WARRANTY                               32
     5.22 SUFFICIENCY OF ASSETS                          32
     5.23 DISCLOSURE                                     32

ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYERS AND
           LIFETIME                                      32
     6.1  ORGANIZATION                                   32
     6.2  NO VIOLATION                                   33
     6.3  ENFORCEABLE AGREEMENT                          33
     6.4  NO BROKERS                                     34
     6.5  LITIGATION AND REGULATORY PROCEEDINGS          34
     6.6  CONSENTS AND APPROVALS                         34
     6.7  FUNDS                                          34
     6.8  INDEPENDENT REVIEW                             34

ARTICLE 7: COVENANTS OF THE PARTIES                      35
     7.1  FURTHER ASSURANCES; POST-CLOSING COOPERATION.  35
     7.2  CONDUCT OF BUSINESS                            36
     7.3  EMPLOYEES                                      39
     7.4  ACCESS TO OPERATIONS                           42
     7.5  COMMERCIALLY REASONABLE EFFORTS                43
     7.6  TRANSFER TAXES                                 43
     7.7  PUBLICITY                                      44
     7.8  EXPENSES                                       44
     7.9  BULK SALES                                     44
     7.10 APPLICATIONS FOR BUYER LICENSES                44
     7.11 DC LEASES AND FLEMINGTON LEASE                 44
     7.12 COOPERATION BY SELLERS                         45

ARTICLE 8: CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES  45
     8.1  GOVERNMENT APPROVALS                           45
     8.2  LEGAL ACTION                                   45

ARTICLE 9: CONDITIONS TO THE OBLIGATIONS OF BUYERS AND
              LIFETIME                                   45
     9.1  REPRESENTATIONS AND WARRANTIES OF SELLERS      46
     9.2  PERFORMANCE OF OBLIGATIONS OF SELLERS          46
     9.3  SELLER CLOSING CERTIFICATE                     46
     9.4  ANCILLARY AGREEMENTS                           46
     9.5  CORPORATE AUTHORIZATION                        46
     9.6  REQUIRED CONSENTS                              46
     9.7  FIRPTA CERTIFICATES                            47
     9.8  LICENSES                                       47
     9.9  NO ACTIONS OR ORDERS                           47
     9.10 PURCHASE ORDER UPDATE                          47
     9.11 NO LIENS                                       47

ARTICLE 10:CONDITIONS TO THE OBLIGATIONS OF SELLERS      47
     10.1 REPRESENTATIONS AND WARRANTIES OF BUYER AND
             LIFETIME                                    48
     10.2 PERFORMANCE OF OBLIGATIONS OF BUYER AND
             LIFETIME                                    48
     10.3 BUYER CLOSING CERTIFICATE                      48
     10.4 ANCILLARY AGREEMENTS                           48
     10.5 CORPORATE AUTHORIZATION                        48

ARTICLE 11:INDEMNIFICATION                               48
     11.1 INDEMNIFICATION OBLIGATIONS OF SELLERS         48
     11.2 INDEMNIFICATION OBLIGATIONS OF BUYER           49
     11.3 NOTICE OF CLAIMS                               49
     11.4 PROCEDURE FOR THIRD PARTY CLAIMS               50
     11.5 CLAIMS PERIOD                                  52
     11.6 LIMITATIONS                                    53
     11.7 INVESTIGATIONS                                 53
     11.8 OFFSET FOR INSURANCE RECOVERIES AND TAX
             BENEFITS                                    53
     11.9 CONSEQUENTIAL DAMAGES                          54
     11.10 EXCLUSIVE REMEDY                              54
     11.11 PARENT AGENCY                                 54
     11.12 TAX TREATMENT OF INDEMNITY PAYMENTS           54

ARTICLE 12:TERMINATION                                   54
     12.1 TERMINATION                                    54
     12.2 EFFECT OF TERMINATION                          55

ARTICLE 13:MISCELLANEOUS                                 56
     13.1 ENTIRE UNDERSTANDING                           56
     13.2 WAIVER AND AMENDMENT                           56
     13.3 HEADINGS                                       56
     13.4 COUNTERPARTS                                   56
     13.5 INTERPRETATION                                 56
     13.6 NOTICES                                        56
     13.7 ASSIGNMENT; SUCCESSORS IN INTEREST             57
     13.8 CONSTRUCTION                                   58
     13.9 CONTROLLING LAW                                58
     13.10 DISPUTE RESOLUTION; JURISDICTION; SPECIFIC
              PERFORMANCE                                58
     13.11 NO THIRD PARTY BENEFICIARIES                  59
     13.12 LIFETIME GUARANTEE OF BUYER OBLIGATIONS       59
LIST OF EXHIBITS:

Exhibit 4.2(a)(i)   Form of Bills of Sale
Exhibit 4.2(a)(ii)  Form of Assignment and Assumption
   Agreements
Exhibit 4.2(a)(iii) Form of Assignment and Assumption of
   Leases
Exhibit 4.2(a)(iv)  Form of Assignment of Trademarks
Exhibit 4.2(a)(v)   Form of Assignment of Copyrights
Exhibit 4.2(a)(x)   Form of Assignment of Domain Names

LIST OF SCHEDULES:

Schedule 1.1(a)     Designated Stores
Schedule 1.1(b)     Domain Names
Schedule 1.1(c)     Key Stores
Schedule 1.1(d)     Net Working Capital
Schedule 1.1(e)     Permitted Liens
Schedule 1.1(f)     Sellers' Knowledge
Schedule 1.1(g)     Buyers' Knowledge
Schedule 2.2(b)     Personal Property
Schedule 2.2(c)     Assumed Contracts
Schedule 2.2(d)     Personal Property Leases
Schedule 2.2(e)     Real Property Leases
Schedule 2.3(g)     Certain Litigation
Schedule 2.3(h)     Certain Excluded Assets
Schedule 3.5        Tax Allocation
Schedule 5.3        Consents
Schedule 5.5(a)     Financial Statements
Schedule 5.5(d)     Certain Products Liability Matters
Schedule 5.7        Legal Proceedings
Schedule 5.8(a)     Compliance with Laws
Schedule 5.8(b)     Licenses
Schedule 5.10(a)    Contracts
Schedule 5.11(a)(i) Owned I.P. Rights
Schedule 5.11(a)(ii)Licensed I.P. Rights
Schedule 5.11(c)    Software
Schedule 5.11(d)    Certain Intellectual Property Litigation
Schedule 5.11(e)    Design Licenses
Schedule 5.12       Certain Employees
Schedule 5.15       Sellers' Brokers
Schedule 5.16       Insurance
Schedule 5.17(a)    Environmental Matters
Schedule 5.17(b)    Releases of Hazardous Materials
Schedule 5.18       Leased Real Property
Schedule 5.19(a)    Related Party Transactions
Schedule 5.20       Employee Plans
Schedule 5.21       Form of Product Warranty
Schedule 5.22       Sufficiency of Assets
Schedule 6.4        Buyer's Brokers
Schedule 6.6        Buyer's Consents
Schedule 7.2(b)(v)  Permitted Raises
Schedule 7.3(a)     Candidate Employees
Schedule 9.6        Required Consents

                    ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made
and  entered into as of this 17th day of June, 2005,  by  and
among,  (a)  on  one hand, THE PFALTZGRAFF CO. ("Parent"),  a
corporation  organized under the laws of the Commonwealth  of
Pennsylvania,     THE    PFALTZGRAFF    MANUFACTURING     CO.
("Manufacturing"), a corporation organized under the laws  of
the  Commonwealth of Pennsylvania, PFALTZGRAFF INVESTMENT CO.
("InvestCo"), a corporation organized under the laws  of  the
State  of  Delaware,  and  THE  PFALTZGRAFF  OUTLET  CO.,   a
corporation organized under the laws of the State of Maryland
("Outlet"   and  together  with  Parent,  Manufacturing   and
InvestCo,  each  a "Seller" and collectively the  "Sellers");
and  (b)  on  the  other  hand,  LIFETIME  BRANDS,  INC.,   a
corporation   organized   under   the   laws   of    Delaware
("Lifetime"), PFZ ACQUISITION CORP., a corporation  organized
under  the laws of Delaware and a wholly-owned subsidiary  of
Lifetime ("Acquisition Sub"), and PFZ OUTLET RETAIL, INC.,  a
corporation organized under the laws of Delaware and a wholly-
owned subsidiary of Lifetime ("Retail Sub" and, together with
Acquisition   Sub,  each  a  "Buyer"  and  collectively   the
"Buyers").   Buyers,  Lifetime  and  Sellers  are   sometimes
individually referred to herein as a "Party" and collectively
as the "Parties".

     WHEREAS, the Parties desire to enter into this Agreement
pursuant  to  which Sellers propose to sell  to  Buyers,  and
Buyers  propose to purchase from Sellers (the "Acquisition"),
substantially  all  of the assets used or  held  for  use  by
Sellers  in  the conduct of the Business (as defined  below),
and  Buyers propose to assume certain of the liabilities  and
obligations of Sellers with respect to the Business; and

     WHEREAS,  the  Parties desire to  make  and  enter  into
certain representations, warranties, covenants and agreements
in connection with the Acquisition.

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

ARTICLE 1:  DEFINITIONS; CONSTRUCTION

1.1  Definitions.

      The  terms defined in this Section 1.1 shall,  for  all
purposes   of  this  Agreement,  have  the  meanings   herein
specified:

      "Affiliate" shall have the meaning assigned thereto  in
Rule 12b-2 under the United States Securities Exchange Act of
1934.

      "Ancillary Agreements" means the Conveyance  Documents,
the   Transition  Services  Agreement,  the  Product   Supply
Agreement, the DC Leases and the Flemington Lease.

       "Annual   Financial  Statements"  means  the   audited
consolidated   balance   sheet  and   the   related   audited
consolidated statements of income and cash flows of Parent as
of  and for the twelve (12) month periods ended December  31,
2004,  2003  and 2002, together with the reports  thereon  of
KPMG, independent certified public accountants.

      "Benchmark Working Capital" means Twenty-Seven  Million
Dollars ($27,000,000).

      "Benefit  Plan" means each written or oral plan,  fund,
program,  Contract or scheme providing for employee  benefits
or  for  remuneration, including each deferred  compensation,
bonus,  incentive  compensation, pension,  retirement,  stock
purchase,  stock  option or other equity  compensation  plan;
each  "welfare" plan (within the meaning of Section  3(1)  of
ERISA,  determined  without regard to whether  such  plan  is
subject to ERISA); each "pension" plan (within the meaning of
Section  3(2) of ERISA, determined without regard to  whether
such  plan  is  subject  to ERISA); each  severance  plan  or
Contract  providing  severance  benefits;  and  each  health,
vacation,  summer  hours, supplemental unemployment  benefit,
hospitalization insurance, medical, dental or legal  program,
agreement or arrangement.

      "Business"  means the business of designing,  sourcing,
marketing,  distributing and selling (but, for  avoidance  of
doubt, not manufacturing), at retail, wholesale and by direct
marketing  and  internet  marketing, ceramic  dinnerware  and
related household products, and licensing designs therefor to
and  from  third parties, as such business has been conducted
by Parent, Investco and Outlet through the Closing.

      "Business Day" means any day except Saturday, Sunday or
any  day on which banks are authorized or required by Law  to
close in York, Pennsylvania.

      "Business  Intellectual Property" means,  collectively,
the   Owned  I.P.  Rights,  the  Licensed  I.P.  Rights,  the
Technology,  the Domain Names, the Software,  all  Trademarks
not  otherwise  included in the Owned  I.P.  Rights  and  all
Copyrights not otherwise included in the Owned I.P. Rights.

       "Buyer  Indemnified  Parties"  means  Buyer  and   its
Affiliates, Lifetime and its Affiliates, and their respective
stockholders,   agents,   representatives,   successors   and
assigns.

      "Buyers' Knowledge" means all facts actually known,  or
with reasonable investigation would have been known, by those
individuals listed on Schedule 1.1(g) on the date hereof

      "Code"  means  the Internal Revenue Code  of  1986,  as
amended.

      "Contract"  means any written or oral agreement,  lease
(including  all real and personal property leases),  mortgage
policy,  plan, instrument, contract, note, power of attorney,
insurance  policy  covenant,  guaranty  arrangement,   escrow
account, commitment or other instrument.

       "Conveyance  Documents"  means,  interchangeably   and
collectively as the context requires, the Bills of Sale,  the
Assignment  and  Assumption Agreements, the  Assignments  and
Assumption  of  Leases,  the Assignment  of  Trademarks,  the
Assignment of Copyrights, the Assignments of Domain Names and
all  other documents executed and delivered by any Seller and
any  Buyer  at the Closing for the purpose of evidencing  the
transfer of any Assets to any Buyer or the assumption of  any
Assumed Liabilities by any Buyer.

      "Copyrights"  means the copyrights listed  on  Schedule
5.11(a)(i) and all other copyrights owned by any Seller.

      "Damages" means, as the context requires, Buyer  Losses
or Seller Losses.

      "DC  East"  means  the distribution facility  owned  by
Parent  that is located at 415 Zarfoss Road, West  Manchester
Twp., PA.

      "DC  Leases" means, collectively, (a) a mutually agreed
upon  written lease agreement between Parent and  Buyers  for
the lease of DC East to Buyers and (b) a mutually agreed upon
written  lease agreement between Seller Holding  Company  and
Buyers for the lease of DC West to Buyers.

      "DC  West"  means  the distribution facility  owned  by
Seller  Holding Company that is located at 515 Zarfoss  Road,
West Manchester Twp., PA.

      "Designated  Store" means a Store  listed  on  Schedule
1.1(a).

     "Dollars" or "$" means United States Dollars.

      "Domain  Names"  means  the internet  domain  names  of
Sellers listed on Schedule 5.11(a)(i).

      "Employee"  means all individuals shown on  a  Seller's
payroll  and personnel records as employed by such Seller  in
connection  with  the  operation of the  Business  (including
those  who  are actively employed or on leave, disability  or
other absence from employment).

      "Environmental Clean-up Site" means any location  which
is  listed or proposed for listing on the National Priorities
List,  the Comprehensive Environmental Response, Compensation
and  Liability  Information System, or on any  similar  state
list of sites requiring investigation or cleanup, or which is
the  subject  of  any  pending or  threatened  action,  suit,
proceeding  or  investigation related to or  arising  from  a
Release  of a Hazardous Material or any alleged violation  of
any Environmental Law

      "Environmental Laws" means all applicable Laws relating
to  pollution  or protection of the environment  or,  to  the
extent  related  to  exposure to Hazardous  Materials,  human
health  and  safety, including Laws relating to  Releases  or
threatened Releases of Hazardous Materials into the indoor or
outdoor  environment (including ambient air,  surface  water,
groundwater,  land,  surface and subsurface  strata),  worker
health   or   safety,   or   the   manufacture,   processing,
distribution, use, treatment, storage, release, transport  or
handling    of    Hazardous   Materials,   record    keeping,
notification,    disclosure   and   reporting    requirements
respecting  Hazardous Materials, the protection of endangered
or  threatened species of fish, wildlife or plants,  and  the
management or protection of natural resources.

      "Environmental Permits" means all Licenses required  to
be  obtained  under any Environmental Law in connection  with
the Sites or the Business as conducted at the Sites.

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

      "Final  Net  Working  Capital" means  the  Net  Working
Capital set forth on the Final Statement.

       "Financial  Statements"  means  the  Annual  Financial
Statements and the Interim Financial Statements.

      "Flemington Store" means the Store located at  50  Mine
Street in Flemington, New Jersey.

      "Flemington Lease" means a mutually agreed upon written
lease  agreement between Outlet and Retail Sub for the  lease
to Retail Sub of the Flemington Store.

     "GAAP" means United States generally accepted accounting
principles  as in effect on any applicable date, consistently
applied.

      "Governmental Entity" means any federal, state or local
or   foreign   government   or  any  court,   administrative,
arbitrative  or  regulatory agency  or  commission  or  other
governmental authority or agency, domestic or foreign.

     "Hazardous  Materials" means all substances  defined  as
"Hazardous     Substances,"    "Oils,"    "Pollutants"     or
"Contaminants"  in the National Oil and Hazardous  Substances
Pollution Contingency Plan, 40 C.F.R.  300.5, or toxic  mold,
asbestos   or   asbestos-containing   materials,   petroleum,
polychlorinated biphenyls, lead-containing materials,  radon,
urea   formaldehyde  or  any  other  substances,   chemicals,
materials  or  wastes that are regulated  by,  or  for  which
liability could be imposed under, any Environmental Law.

       "Indemnified  Party"  means  any  party  entitled   to
indemnification pursuant to Section 11.1 or 11.2.

       "Indemnifying  Party"  means  any  party  required  to
indemnify  a  Indemnified Party pursuant to Section  11.1  or
11.2.

      "Interim  Financial  Statements"  means  the  unaudited
balance sheet and the related unaudited statements of  income
and  cash flows of the Business as of and for the month ended
March 26, 2005.

     "Key Store" means a Store listed on Schedule 1.1(c).

      "Laws"  means all applicable federal, state,  local  or
foreign   laws  (including  common  law),  codes,   statutes,
ordinances,  orders, judgments, arbitration awards,  decrees,
administrative   or   judicial  promulgations,   injunctions,
determinations,   approvals,  rules,  regulations,   permits,
certificates, licenses and authorizations of, and  agreements
with, all Governmental Entities with jurisdiction.

     "Leased Real Property" means the real property leased by
Sellers  pursuant to the Real Property Leases, together  with
all  fixtures, improvements and appurtenances thereon (which,
for avoidance of doubt, shall not include DC East, DC West or
the Flemington Store).

      "Legal  Dispute" means any action, suit  or  proceeding
between  or among the Parties and/or their Affiliates arising
in  connection with any disagreement, dispute, controversy or
claim  arising  out  of or relating to  this  Agreement,  any
Conveyance  Document, the Buyer Closing Certificate,  or  the
Seller  Closing  Certificate,  or  any  of  the  transactions
contemplated hereby or thereby.

      "Licenses"  means all notifications, licenses,  permits
(including   environmental,   construction   and    operation
permits),     governmental     franchises,     registrations,
certificates,    approvals,   exemptions,    classifications,
registrations  and  other  similar  documents,   rights   and
authorizations issued by any Governmental Entity, other  than
any Patents, Copyrights and Trademarks.

      "Liens"  means all mortgages, liens, pledges,  security
interests,  charges, claims, restrictions, leases, possessory
rights,   options,   rights  of  first  refusal,   covenants,
easements, title and survey matters and any other encumbrance
of any kind or character.

       "Manufacturing   Business"  means  the   business   of
manufacturing   ceramic  dinnerware  and  related   household
products.

      "Material Adverse Effect" means (a) with respect to the
Business, any event, change or effect that has occurred (when
taken together with all other events, changes or effects that
have  occurred)  that  is,  or is reasonably  likely  to  be,
materially  adverse to the financial condition or results  of
operations of the Business and (b) with respect to  a  Party,
any  event,  change  or effect that has occurred  that  (when
taken together with all other events, changes or effects that
have  occurred) is likely to prevent or materially delay  the
performance   of  a  Party  under  this  Agreement   or   the
transactions contemplated hereby; provided that in each  case
a  Material Adverse Effect will not be deemed to include  (1)
events,  changes, effects, conditions or trends in  economic,
business  or  financial  conditions generally  affecting  the
ceramic dinnerware industry in the United States, (2) events,
changes or effects resulting from general economic, business,
political  or  financial  conditions  in  the  United  States
(including   changes  in  interest  levels   or   prices   of
securities),  (3)  changes  in  GAAP,  regulatory  accounting
principles or Laws applicable to the Business or such  Party,
as  applicable, (4) changes, effects or events  arising  from
national  or  international political or  social  conditions,
including the engagement by the United States in hostilities,
whether  or  not pursuant to the declaration  of  a  national
emergency  or  war,  or the occurrence  of  any  military  or
terrorist  attack, (5) changes, effects or events  resulting,
directly  or  indirectly,  from  the  announcement   of   the
Acquisition  or (6) changes, effects or events  arising  from
actions taken or omitted by a Party either as required by  or
as  contemplated in this Agreement or with the prior  consent
of the other Parties.

      "Net  Working  Capital"  has the  meaning  provided  on
Schedule 1.1(d).

      "Neutral Auditor" means a person who shall be, or shall
have  been,  an  audit  partner in  a  nationally  recognized
independent  accounting  firm  having  experience  with   the
tabletop market and industry, and who is not affiliated with,
or  retained by, either Buyer or any Seller, and who shall be
appointed by agreement of Buyers and Parent.

      "NLRB" means the United States National Labor Relations
Board.

        "Patents"   means   patents,   patent   applications,
continuations,  continuations  in  part,  reexaminations  and
reissues  owned  by  any Seller (whether utility,  design  or
otherwise).

      "Permitted Liens" means: (a) liens imposed by  Law  for
Taxes,  assessments  or  charges or  claims  by  Governmental
Entities   that  are  not  yet  due  or  are  being  properly
contested, which contest tolls collection of such  taxes  and
the  lien  thereof  and  provided that reasonably  acceptable
reserves are being maintained; (b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's, landlords' and  other
like  liens  imposed  by  Law or  contract,  arising  in  the
ordinary course of business and securing obligations that are
not  due  and  payable; (c), solely with respect to  personal
property, pledges and deposits made in the ordinary course of
business    in   compliance   with   workers'   compensation,
unemployment  insurance  and other social  security  Laws  or
regulations;  (d), solely with respect to personal  property,
deposits  to secure the performance of bids, trade contracts,
leases,  statutory obligations, surety, indemnity and  appeal
bonds,  performance and return-of-money and  fiduciary  bonds
and  other obligations of a like nature, in each case in  the
ordinary   course   of   business;  (e)   easements,   zoning
restrictions, rights-of-way, licenses, covenants, conditions,
minor  defects, encroachments or irregularities in title  and
similar encumbrances on or affecting the Leased Real Property
that  do  not secure any monetary obligations and do not  and
will  not  materially interfere with the ordinary conduct  of
the Business as conducted or to be conducted by Buyers at the
affected  Leased Real Property; (f) provided such restriction
or  encumbrance  will  not unreasonably  interfere  with  the
conduct of the Business by Buyer at the affected Leased  Real
Property, any restriction or encumbrance that the interest or
title  of  any  lessor or sublessor under any  Real  Property
Lease may be subject to, but only if such Real Property Lease
for  the Leased Real Property is subordinate thereto  by  its
terms; and (g) those Liens set forth on Schedule 1.1(e).

      "Person" means an individual, a sole proprietorship,  a
partnership, a corporation, an association, an institution, a
joint stock company, a limited liability company, a trust,  a
joint   venture,   an  unincorporated  organization,   or   a
Governmental Entity or any other legal entity.

      "Product  Supply  Agreement" means a  written  purchase
order  from  a  Buyer for Four Million One  Hundred  Thousand
Dollars  ($4,100,000)  of  products  to  be  manufactured  by
Manufacturing, dated as of a date prior to the Closing  Date,
as accepted by Parent.

      "Release" means any release, spill, emission,  leaking,
leaching,  injecting, escaping, disposing, pumping, emptying,
dumping, deposit or discharge of a Hazardous Material.

      "SEC'  means the United States Securities and  Exchange
Commission.

      "Seller Benefit Plan" means with respect to any Seller,
each  Benefit  Plan  that is currently or  in  the  past  was
sponsored  or  maintained  or required  to  be  sponsored  or
maintained  by such Seller or to which such Seller  makes  or
has  in  the past made, or has or has had in the past or  may
have  in  the  future  an obligation to  make,  contributions
providing  for  employee benefits or  for  the  remuneration,
direct  or  indirect,  of  the employees,  former  employees,
officers,  contingent  workers or  leased  employees  of  the
business or the dependents of any of them.

      "Seller  Holding Company" means Susquehanna Pfaltzgraff
Co.,  a corporation organized under the laws of the State  of
Delaware, of which Parent is a wholly-owned Subsidiary.

      "Seller  Indemnified Parties" means  Parent,  InvestCo,
Outlet,   each  of  their  respective  Affiliates,  and   the
respective  stockholders, agents, representatives, successors
and assigns of any of the foregoing.

     "Seller Inventory" means the finished goods inventory of
Parent, Manufacturing and Outlet.

      "Seller  Receivables" means the accounts receivable  of
Sellers relating exclusively to the Business.

     "Seller Subsidiaries" means InvestCo and Outlet.

      "Sellers' Knowledge" means all facts actually known, or
with reasonable investigation would have been known, by those
individuals listed on Schedule 1.1(f) on the date hereof.

     "Site" means the Flemington Store, DC East and DC West.

      "Store"  means  a Pfaltzgraff retail  store,  the  Real
Property Lease for which is acquired hereunder.

      "Store  Closing Costs" means, with respect to a  Store,
all (a) payments required to be made to the applicable lessor
or   any  lender  of  such  lessor  in  connection  with  the
termination  of  the Real Property Lease  therefor,  and  (b)
expenses  actually incurred to return the physical  structure
of  the  Store to the condition required by the terms of  the
Real Property Lease therefor.

      "Taxes" means all taxes, assessments, charges,  duties,
fees,   levies  or  other  governmental  charges   (including
interest,   penalties  or  additions  associated  therewith),
including  income, franchise, capital stock,  real  property,
personal   property,   tangible,   withholding,   employment,
payroll,    social   security,   unemployment   compensation,
disability,  transfer,  sales, use, excise,  gross  receipts,
value-added  and all other taxes of any kind imposed  by  any
Governmental  Entity,  whether  disputed  or  not,  and   any
charges, interest or penalties imposed or that may be imposed
thereon by any Governmental Entity.

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

     "Trademarks" means the trade marks, trade names, service
marks  and logos listed on Schedule 5.11(a)(i) and all  other
trade  marks, trade names, service marks and logos  owned  by
any Seller.

      "Transition Services Agreement" means a mutually agreed
upon written Transition Services Agreement to be entered into
by and among Parent and Buyer as of the Closing Date.

1.2  Other Definitions

     In addition to the terms defined in Section 1.1, certain
other  terms  are  defined elsewhere in this Agreement,  and,
whenever  such terms are used in this Agreement,  they  shall
have  their  respective defined meanings, unless the  context
expressly  or  by  necessary implication otherwise  requires.
The  definitions  of terms of general applicability  are  set
forth in the sections listed below.

      Term                                     Section

      Acquisition                              Recitals
      Agreement                                Preamble
      Assets                                        2.2
      Assignment and Assumption Agreements   4.2(a)(ii)
      Assignment of Copyrights                4.2(a)(v)
      Assignment of Trademarks               4.2(a)(iv)
      Assignments and Assumption of Leases  4.2(a)(iii)
      Assignments of Domain Names             4.2(a)(x)
      Assumed Contracts                          2.2(g)
      Assumed Liabilities                           2.4
      Auditor Costs                              3.6(e)
      Bills of Sale                           4.2(a)(i)
      Borrowing Contracts                   5.10(a)(iv)
      Buyer                                    Preamble
      Buyer Closing Certificate             4.2(b)(vii)
      Buyer Licenses                                9.8
      Buyer Losses                                 11.1
      Candidate Employees                        7.3(a)
      Claim Notice                                 11.3
      Claimant                                 13.10(a)
      Claims Period                                11.5
      Closing                                       4.1
      Closing Statement                          3.6(b)
      Closing Date                                  4.1
      Closing Statement Dispute Notice           3.6(c)
      Closing Statement Disputed Matters         3.6(c)
      CMP                                      13.10(a)
      COBRA                                      8.3(f)
      Confidentiality Agreement                     7.4
      Covered Stores                             3.7(b)
      Design Licenses                           5.11(e)
      Excluded Assets                               2.3
      Excluded Liabilities                          2.5
      Final Statement                            3.6(f)
      Indemnity Cap                             11.6(a)
      InvestCo                                 Preamble
      Holdback                                   3.2(b)
      Licensed I.P. Rights                  5.11(a)(ii)
      Lifetime                                 Preamble
      Manufacturing                            Preamble
      Mediation Notice                         13.10(a)
      New Parent                                 7.1(f)
      Outlet                                   Preamble
      Owned I.P. Rights                      5.11(a)(i)
      Parent                                   Preamble
      Parties                                  Preamble
      Party                                    Preamble
      Per-Store Holdback                         3.2(b)
      Personal Property Leases                   2.2(d)
      Purchase Price                                3.1
      Real Property Leases                       2.2(e)
      Respondent                               13.10(a)
      Seller                                   Preamble
      Sellers                                  Preamble
      Seller Closing Certificate             4.2(a)(vi)
      Seller Losses                                11.2
      Seller Real Property Lease
         Consent Certificate                        9.6
      Seller Stationery                          7.1(d)
      Software                                  5.11(c)
      Store Closing List                         3.7(a)
      Technology                                5.11(d)
      Third Party Action                        11.4(a)
      Third Party Action Notice                 11.4(a)
      Threshold Amount                          11.6(c)
      Transferred Employees                      7.3(a)
      WARN Act                                   8.3(e)
      WARN Liabilities                           8.3(e)

1.3  Construction.

      Unless  the context of this Agreement otherwise clearly
requires,  (a) references to the plural include the singular,
and   references   to  the  singular  include   the   plural,
(b)  references  to  any gender include  the  other  genders,
(c)  the words "include," "includes" and "including"  do  not
limit the preceding terms or words and shall be deemed to  be
followed  by  the words "without limitation", (d)  the  terms
"hereof",  "herein", "hereunder", "hereto" and similar  terms
in  this Agreement refer to this Agreement as a whole and not
to  any particular provision of this Agreement, (e) the terms
"day"  and  "days,"  if not capitalized, mean  and  refer  to
calendar day(s) and (f) the terms "year" and "years" mean and
refer  to  calendar  year(s).   Unless  otherwise  set  forth
herein,   references  in  this  Agreement  to  any  document,
instrument    or   agreement   (including   this   Agreement)
(A)  includes  and incorporates all exhibits,  schedules  and
other   attachments  thereto,  (B)  includes  all  documents,
instruments  or agreements issued or executed in  replacement
thereof and (C) means such document, instrument or agreement,
or  replacement or predecessor thereto, as amended,  modified
or  supplemented  from time to time in  accordance  with  its
terms and in effect at any given time.  All Article, Section,
Exhibit  and  Schedule  references herein  are  to  Articles,
Sections,  Exhibits and Schedules of this  Agreement,  unless
otherwise specified.

ARTICLE 2:  PURCHASE AND SALE OF ASSETS

2.1  Agreement to Purchase and Sell.

       (a)   Subject  to  the  terms,  conditions  and  other
provisions  of this Agreement, at the Closing and  except  as
otherwise  specifically provided in this Article  2,  Sellers
will grant, sell, assign, transfer and deliver to Buyers, and
Buyers  will  purchase and acquire from Sellers,  all  right,
title and interest of Sellers in and to all of the Assets (as
hereinafter defined), free and clear of all Liens except  for
Permitted   Liens,  and  Buyers  will  assume   the   Assumed
Liabilities.

      (b)   Notwithstanding anything herein to the  contrary,
(i)  the particular Assets being purchased and the particular
Assumed Liabilities being assumed by each Buyer shall be  set
forth  with  reasonable specificity at  the  Closing  in  the
Conveyance  Documents; (ii) if, in the case of any particular
Asset, no Buyer is identified in the Conveyance Documents  as
the  purchaser of such Asset, Acquisition Sub shall be deemed
to  be the purchaser of such Asset; and (iii) if, in the case
of  any  particular Assumed Liability, no Buyer is identified
in   the   Conveyance  Documents  as  assuming  such  Assumed
Liability,  Acquisition Sub shall be deemed  to  assume  such
Assumed Liability.

2.2  Assets.

     Except as otherwise expressly set forth in Section  2.3,
the  term  "Assets" shall mean and shall consist of  all  the
assets,  properties and rights of Sellers used, or  held  for
use, primarily in the Business as of the Closing, including:

     (a)   all  rights in the Business Intellectual  Property
relating to the Business;

       (b)   all  furnishings,  furniture,  supplies,  tools,
machinery and equipment and other personal property and fixed
assets  that  are  owned  by Sellers  and  are  used  in  the
Business, other than the Excluded Assets, including the items
set forth on Schedule 2.2(b);

     (c)  the Contracts set forth on Schedule 2.2(c);

      (d)   the  leases  of personal property  set  forth  on
Schedule 2.2(d) (the "Personal Property Leases");

      (e)   the leases of real property set forth on Schedule
2.2(e) (the "Real Property Leases");

     (f)  the Design Licenses;

      (g)   any Contract made or entered into after the  date
hereof by Seller with respect to the Business in the ordinary
course  of  business  consistent with past  practice  not  in
violation  of  this  Agreement (the  Contracts  described  in
clauses (c), (d), (e), (f) and (g) being hereinafter referred
to as the "Assumed Contracts");

     (h)  all Seller Receivables;

       (i)   all  prepaid  expenses,  advances,  credits  and
deposits of Sellers;

     (j)  all Seller Inventory;

     (k)  all goodwill of the Business; and

      (l)  a copy of all books of account and other financial
records,  files,  documents, instruments, books  and  records
relating principally to the Business.

2.3  Excluded Assets.

     Notwithstanding anything to the contrary  set  forth  in
this  Agreement,  the Assets will not include  the  following
assets,  properties and rights of the Sellers  (collectively,
the "Excluded Assets"):

      (a)   all  ownership and other rights with  respect  to
Seller Benefit Plans;

     (b)  all Licenses;

     (c)  the charter documents of each Seller and the minute
books, stock ledgers, tax returns, books of account and other
constituent records relating to the organization, maintenance
and existence of each Seller as a corporation;

      (d)   the rights that accrue to each Seller under  this
Agreement  and  any other agreements between any  Seller  and
Buyer to be delivered pursuant to this Agreement;

     (e)  all insurance policies of Sellers;

     (f)  all cash and cash equivalents of Sellers;

       (g)   all  rights  arising  from  or  related  to  the
litigation listed on Schedule 2.3(g);

     (h)  the assets listed on Schedule 2.3(h);

      (i)   all  rights in or to any and all  real  property,
subject to the DC Leases and the Flemington Lease;

      (j)  all rights in or to any assets used exclusively in
the Manufacturing Business; and

      (k)   historical archives and historical items relating
to  the  Business that are neither used in nor useful in  the
conduct of the Business as currently conducted by Sellers.

2.4  Assumption of Assumed Liabilities.

     Subject to Section 2.1(b), in connection with the
purchase by Buyers of the Assets, at the Closing, effective
as of the Closing, Buyers shall assume and thereafter pay,
perform and discharge solely the following debts, obligations
and liabilities relating to the Business and the Assets, and
no others (collectively, the "Assumed Liabilities"):

      (a)   subject  to  Section 3.7 and 2.5(h),  all  debts,
liabilities  and  obligations of Sellers  under  the  Assumed
Contracts  to  be  paid, performed or discharged  by  Sellers
after the Closing;

     (b)  all debts, liabilities and obligations attributable
to or arising out of the ownership or operation of any Assets
or the Business after the Closing; and

     (c)  the debts, obligations and liabilities set forth on
Schedule 2.4(b).

2.5  Excluded Liabilities.

     Anything  herein  to  the contrary notwithstanding,  the
Assumed  Liabilities will not include, and in no  event  will
Buyer  assume, agree to pay, discharge or satisfy  any  debt,
liability  or  obligation under this Agreement  or  otherwise
have   any   responsibility  for,  any  debt,  liability   or
obligation  of  Sellers of any kind, whether known,  unknown,
contingent or otherwise other than those expressly set  forth
in  Section  2.4  (collectively, the "Excluded Liabilities").
Without  limiting the generality of the foregoing,  the  term
"Excluded  Liabilities" shall expressly  include  all  debts,
liabilities or obligations of Sellers of any kind:

      (a)   for  any Taxes of any Seller or any affiliate  of
such  Seller, including any sales, use or similar taxes  that
any  Seller  or  any affiliate of any Seller is  required  to
collect  or remit to any taxing authority, but not  including
any transfer taxes payable in accordance with Section 7.6;

     (b)  pertaining to any Excluded Asset;

     (c)  relating to, resulting from, or arising out of, any
non-Business operation of Sellers or any former operation  of
the  Business that has been discontinued or disposed of prior
to the Closing;

     (d)  pursuant to the Borrowing Contracts;

      (e)  arising out of or related to (i) any Benefit Plan,
(ii) any employee of any Seller or former employee who is not
a Transferred Employee, and (iii) any Transferred Employee to
the  extent attributable to events or circumstances occurring
or existing on or prior to the Closing.

      (f)   under the Assumed Contracts arising prior to  the
Closing;

      (g)   except  as  explicitly provided in  Section  2.4,
attributable to or arising out of the ownership or operations
of any Assets or the Business prior to the Closing; and

      (h)  arising under or relating to Environmental Laws or
Hazardous Materials relating to the operation of the Business
by Sellers prior to the Closing.

ARTICLE 3:  PURCHASE PRICE AND METHOD OF PAYMENT

3.1  Purchase Price.

      The  aggregate  amount to be paid for the  Assets  (the
"Purchase   Price")  will  be  Thirty-Four  Million   Dollars
($34,000,000), subject to adjustment pursuant to Section 3.6.
In  addition  to the foregoing payment, as consideration  for
the  grant,  sale, assignment, transfer and delivery  of  the
Assets,   Buyers  shall  assume  and  discharge  the  Assumed
Liabilities.

3.2  Payment of Purchase Price; Holdback.

      (a)   On the Closing Date, Buyer shall pay the Purchase
Price,  less the Holdback, if any, to Parent by wire transfer
of   immediately   available   funds   in   accordance   with
instructions  to  be provided to Buyers  by  Parent.   Buyers
shall retain the Holdback for distribution in accordance with
Sections 3.2(c) and (d).

      (b)   The  "Per-Store Holdback" shall be Three  Hundred
Thousand  Dollars  ($300,000).  The "Holdback"  shall  be  an
amount  equal  to (i) the Per-Store Holdback,  multiplied  by
(ii) the number of Key Stores, if any, for which all consents
necessary  to  assign  the Real Property  Lease  therefor  to
Buyers have not been obtained on or before the Closing Date.

      (c)   For  each  Key Store for which (i)  all  consents
necessary  to  assign the Real Property Lease  for  such  Key
Store to Buyers are obtained after the Closing Date but prior
to  the date on which such Real Property Lease expires or  is
terminated  by the applicable lessor in accordance  with  the
terms  thereof, and (ii) such Real Property Lease is assigned
to  Buyers  hereunder, Buyers shall promptly  pay  an  amount
equal  to the Per-Store Holdback from the Holdback to  Parent
by wire transfer of immediately available funds in accordance
with instructions to be provided to Buyers by Parent.

     (d)  For each Key Store for which all consents necessary
to  assign  the  Real Property Lease for such  Key  Store  to
Buyers are not obtained prior to the date on which such  Real
Property  Lease  expires or is terminated by  the  applicable
lessor in accordance with the terms thereof, an amount  equal
to the Per-Store Holdback shall be deducted from the Holdback
and  shall immediately revert to Buyers, and no Seller  shall
be entitled to be paid such Per-Store Holdback.

3.3  Allocation of Certain Items.

     With  respect to certain expenses incurred with  respect
to the Assets in the operation of the Business, the following
allocations  will  be  made between  Buyers  and  Sellers  at
Closing  by  appropriate  cash  payments  of  the  applicable
amounts from Buyers to Sellers and/or from Sellers to Buyers,
as the case may be:

      (a)   Rent.   Monthly rent and any additional  rent  or
charges  (including  common  area maintenance  charges)  with
respect  to  the  Leased Real Property  will  be  apportioned
between Buyers and Sellers based on the number of days in the
lease month before and after the Closing Date.

      (b)   Taxes.   Ad valorem property taxes for  the  2005
calendar year will be apportioned between Buyers and  Sellers
based  upon  the number of days in the taxable period  before
and  after the Closing Date and the amounts set forth in  the
current tax bills.  If current tax bills are not available at
the  time  of Closing, such taxes initially shall be prorated
on  the basis of tax bills for the prior calendar year.  Once
current   tax  bills  for  the  2005  calendar  year   become
available,  the Parties shall promptly adjust the  prorations
in accordance with such current tax bills.

       (c)    Utilities.   Utilities  (including   telephone,
electricity, gas, garbage and waste removal), water and sewer
charges  will  be apportioned based upon the number  of  days
occurring  before  and  after the  Closing  Date  during  the
billing  period  for each such charge, and Sellers  shall  be
credited  with  any deposits transferred to  the  account  of
Buyers;  provided, however, that at Buyers' election any  one
or  more of such utility accounts shall be closed as  of  the
Closing  Date,  in which event Sellers shall  be  liable  and
responsible  for all charges for service through the  Closing
Date  and shall be entitled to all deposits theretofore  made
by  Sellers with respect to such utility, and Buyers shall be
responsible for reopening and reinstituting such  service  in
Buyers'  name and shall be responsible for any fees, charges,
and  deposits  required in connection with such new  account.
If  current  utility bills are not available at the  time  of
Closing,  such utilities initially shall be prorated  on  the
basis  of  utility bills for the prior month, and  Buyer  and
Parent  shall  mutually  agree on a  reconciliation  of  such
proration  to  the actual utility bills promptly  after  such
bills become available after the Closing.

      (d)  All payments required under this Section 3.3 shall
be  made  within  ten  (10) Business  Days  after  a  written
statement  therefor, accompanied by supporting documentation,
has been submitted by Sellers to Buyers, or vice versa.

     (e)  This Section 3.3 shall survive the Closing.

3.4  Payments.

     All payments required under this Article 3 shall be made
in  Dollars  in  cash  by  the wire transfer  of  immediately
available  funds  to  such  bank  account(s)  as   shall   be
reasonably designated at least three (3) Business Days  prior
to   the   applicable  payment  date  in   writing   by   the
recipient(s).

3.5  Tax Allocation.

     Lifetime  shall prepare and deliver, within  sixty  (60)
days after the Final Statement has been finally determined in
accordance   with   Section  3.6,   a   proposed   allocation
(consistent with the provisions of Section 1060 of the  Code)
among the Assets (as determined for purposes of Section 1060)
provided   by   Buyers.   If  Sellers  disagree   with   such
allocation,  then  Sellers shall,  within  thirty  (30)  days
following  receipt of such allocation from Lifetime,  provide
Lifetime   with  a  written  notice  disputing  the  proposed
allocation.   If Sellers deliver a Closing Statement  Dispute
Notice to Lifetime, Sellers shall include with such notice  a
proposed  allocation  of the Purchase  Price  and  any  other
capitalized costs or amounts among the Assets, and Buyers and
Lifetime shall resolve any disagreement with respect to  such
proposed allocation under the procedures set forth in Section
3.6(d).    If  Sellers  disagree  with  Lifetime's   proposed
allocation  and  do  not provide a Closing Statement  Dispute
Notice,  Sellers and Lifetime shall resolve such disagreement
under  the  procedures set forth in Section 3.6(d).   Once  a
proposed   allocation  has  become  final  or  been  resolved
pursuant to the proceeding provisions, the Parties agree that
(a)  they  shall,  and, in the case of Sellers,  shall  cause
Seller Holding Company to, take no position for Tax purposes,
including   on  an  Internal  Revenue  Service   Form   8594,
inconsistent with such allocation, except as may be  required
to  reflect any adjustments to the Purchase Price as provided
for  herein; and (b) Lifetime shall prepare and file Internal
Revenue  Service  Forms 8594 reflecting such allocation  (for
avoidance  of  doubt,  Lifetime  shall  prepare  and  file  a
separate Internal Revenue Service Form 8594 for each Seller).
All  costs  and expenses of the Neutral Auditor in connection
with  this Section 3.5 shall be borne one-half by Buyers  and
one-half by Parent.

3.6  Working Capital Adjustment.

      (a)  On dates to be selected by Parent (of which Parent
shall provide prior notice to Lifetime), which shall be prior
to  the Closing Date, Sellers shall take a physical inventory
of  the  Seller Inventory.  In connection therewith,  Sellers
shall  permit  Buyers  to reasonably  observe  such  physical
inventory.  Sellers shall conduct such physical inventory  at
a  time  and in a manner so as to not interfere with Sellers'
operation of the Business.

     (b)  On or before the thirtieth (30th) day following the
Closing Date, Parent shall prepare and deliver to Buyer (i) a
statement,  as  of 11:59 p.m. on the day before  the  Closing
Date  (the  "Closing  Statement"), which  shall  reflect  Net
Working Capital  (using the value of the Seller Inventory  as
determined  in  accordance with Section 3.6(a))  and  (ii)  a
balance  sheet of the Business as of the Closing Date setting
forth  the  assets being purchased and the liabilities  being
assumed  by  Buyers hereunder, in the case  of  each  of  the
foregoing  clauses (i) and (ii), as determined in  accordance
with  GAAP  and  by applying the same accounting  principles,
policies  and  practices  that were  used  in  preparing  the
balance  sheet  included in the Annual Financial  Statements.
For  avoidance  of doubt, the Parties acknowledge  and  agree
that for the purpose of computing Net Working Capital and any
Closing  Statement  Disputed Matters, Sellers'  LIFO  reserve
shall  be equal to the LIFO reserve set forth on the  Interim
Financial Statements.

     (c)  If Buyers determine that there are any inaccuracies
in  the  Closing Statement, Buyers shall deliver to Parent  a
written notice (a "Closing Statement Dispute Notice") setting
forth  such  alleged  inaccuracies  (the  "Closing  Statement
Disputed   Matters")   no  later  than   5:00   p.m.,   York,
Pennsylvania  time on the thirtieth (30th) day after  receipt
of  the  Closing  Statement from Parent.  If  Buyers  do  not
deliver a Closing Statement Dispute Notice to Parent by  such
date  and  time, Buyers shall be deemed to have accepted  the
Closing Statement as prepared by Parent.

      (d)  Buyers and Parent shall endeavor in good faith  to
resolve  the  Closing Statement Disputed  Matters  by  mutual
agreement.  If, within thirty (30) Business Days after Buyers
deliver a Closing Statement Dispute Notice to Parent:

          (i)  Buyers and Parent are able to reach a mutually
               satisfactory   resolution   of   the   Closing
               Statement  Disputed Matters, then the  Closing
               Statement  shall  be revised to  reflect  such
               resolution, and such Closing Statement will be
               final,  binding and conclusive (but only  with
               respect  to  those Closing Statement  Disputed
               Matters  as  to which Buyers and  Parent  have
               reached    such    a   mutually   satisfactory
               resolution); or

          (ii) Buyers  and  Parent  are  unable  to  reach  a
               mutually   satisfactory  resolution   of   the
               Closing   Statement  Disputed  Matters,   then
               Buyers  and  Parent shall promptly submit  any
               remaining  Closing Statement Disputed  Matters
               to a Neutral Auditor.  Buyers and Parent shall
               supply  to  the  Neutral  Auditor  only   such
               supporting  documentation and  information  as
               the  Neutral Auditor may request.  The Neutral
               Auditor  will deliver to Buyers and  Parent  a
               written  determination (such determination  to
               include   a  work  sheet  setting  forth   all
               material calculations used in arriving at such
               determination  and to be based solely  on  the
               information provided to the Neutral Auditor by
               Buyers  and  Parent) of the Closing  Statement
               Disputed  Matters within thirty (30)  days  of
               receipt of such disputed items.

     (e)  All decisions of the Neutral Auditor shall be final
and  nonappealable,  and  the  Closing  Statement  shall   be
revised,  if necessary, to reflect the determination  of  the
Auditor.  All costs and expenses of the Neutral Auditor  (the
"Auditor  Costs") shall be borne one-half by Buyers and  one-
half by Parent.

      (f)   The  final Closing Statement, as  such  has  been
agreed  upon  by  Buyers and Parent,  or  as  such  has  been
determined  by  the Neutral Auditor pursuant hereto,  as  the
case may be, will constitute the "Final Statement".

      (g)   If (i) the Final Net Working Capital is less than
the Benchmark Working Capital, Parent shall pay the amount of
such deficiency to Buyers within ten (10) Business Days after
the  Final  Statement is determined; or (ii)  the  Final  Net
Working Capital exceeds the Benchmark Working Capital, Buyers
shall pay the amount of such excess to Parent within ten (10)
Business Days after the Final Statement is determined.

3.7  Non-Continuing Stores.

      (a)   Buyers shall deliver a written notice (the "Store
Closing  List") to Parent prior to November 30, 2005  setting
forth  a  list of the Stores that Buyers desire to close,  if
any.

     (b)  The Store Closing Costs arising from the closing of
the  Stores  (x)  closed on or before the Closing  Date  with
Lifetime's  consent, (y) closed after the  Closing  Date  but
prior  to  the  date the Store Closing List is  delivered  to
Parent   and  (z)  set  forth  on  the  Store  Closing   List
(collectively,  the  "Covered  Stores")  shall  be  paid   as
follows:

          (i)  Parent  shall  pay the first Two Million  Five
               Hundred Thousand Dollars ($2,500,000) of  such
               Store Closing Costs;

          (ii) if  the aggregate amount of such Store Closing
               Costs   exceeds  Two  Million   Five   Hundred
               Thousand  Dollars ($2,500,000),  Buyers  shall
               then  pay  the Store Closing Costs  in  excess
               thereof,  up to a total excess amount  of  Two
               Million    Five   Hundred   Thousand   Dollars
               ($2,500,000); and

          (iii)      if  the  aggregate amount of such  Store
               Closing  Costs  exceeds Five  Million  Dollars
               ($5,000,000), Buyers and Parent shall each pay
               one-half of the Store Closing Costs in  excess
               of Five Million Dollars ($5,000,000).

      (c)   No  Seller  shall be responsible  for  any  Store
Closing  Costs arising from the closing of any Store that  is
not a Covered Store.

3.8  Certain Payments Related to Assumed Contracts.

      If  any amount is required to be paid to a third Person
under any Assumed Contract (other than a Real Property Lease)
on account of any consent required for the assignment of such
Assumed  Contract to Buyer, Buyers shall pay such  amount  to
such third Person, or if such amount is paid by a Seller with
the  Acquisition  Sub's prior written  consent,  then  Buyers
shall  promptly reimburse such Seller for the full amount  of
the payment.

ARTICLE 4:  THE CLOSING

4.1  Closing.

     The  closing  of the transactions contemplated  by  this
Agreement  (the  "Closing")  shall  take  place  as  soon  as
reasonably  practicable, but in any event no later  than  the
fifth (5th) Business Day, following the day upon which all of
the  conditions  to  Closing have been  satisfied  or  waived
(other  than those conditions which by their terms cannot  be
satisfied  until the Closing but subject to the  satisfaction
of  such conditions) or such other date as is mutually agreed
upon  in  writing by the Parties (the "Closing  Date").   The
Closing  shall  take place at the offices of Venable  LLP  in
Baltimore,  Maryland.   Solely for financial  and  accounting
purposes, the Closing shall be deemed to have occurred as  of
12:01 a.m. York, Pennsylvania time on the Closing Date.

4.2  Closing Deliveries.

     At the Closing:

     (a)  Sellers shall deliver (executed as applicable) to
Buyers:

          (i)  Bills  of  Sale substantially in the  form  of
               Exhibit   4.2(a)(i),   transferring   to   the
               applicable  Buyer all of each Seller's  right,
               title  and  interest in and to  such  Seller's
               Assets   in  accordance  with  Section  2.1(b)
               (other than any Real Property Leases, Personal
               Property  Leases, Copyrights  and  Trademarks)
               (collectively, the "Bills of Sale");

          (ii) Assignment     and    Assumption    Agreements
               substantially   in   the   form   of   Exhibit
               4.2(a)(ii),  with  respect  to  each  Seller's
               liabilities    included   in    the    Assumed
               Liabilities (collectively, the "Assignment and
               Assumption Agreements");

          (iii)      Assignments  and  Assumption  of  Leases
               substantially   in   the   form   of   Exhibit
               4.2(a)(iii),  with  respect  to  the  Personal
               Property  Leases  and  Real  Property   Leases
               (collectively, the "Assignments and Assumption
               of  Leases") (which Assignments and Assumption
               of  Lease  shall provide (x) an  indemnity  of
               Buyers  from Parent for all liabilities  under
               the applicable Personal Property Lease or Real
               Property  Lease  arising on or  prior  to  the
               Closing, and (y) an indemnity of Sellers  from
               Buyers and Lifetime for all liabilities  under
               the applicable Personal Property Lease or Real
               Property Lease arising after the Closing);

          (iv) an  Assignment of Trademarks substantially  in
               the    form   of   Exhibit   4.2(a)(iv)   (the
               "Assignment of Trademarks");

          (v)  an  Assignment of Copyrights substantially  in
               the form of Exhibit 4.2(a)(v) (the "Assignment
               of Copyrights");

          (vi) a  certificate  of  an authorized  officer  of
               Parent as to the Sellers' compliance with  the
               conditions  set forth in Section 9.1  and  9.2
               (the "Seller Closing Certificate");

          (vii)     the Transition Services Agreement;

          (viii)    the Product Supply Agreement;

          (ix) each of the DC Leases and the Flemington Lease
               duly executed;

          (x)  Assignments  of Domain Names substantially  in
               the    form   of   Exhibit   4.2(a)(x)    (the
               "Assignments of Domain Names");

          (xi) the  Seller Real Property Consent Certificate;
               and

          (xii)      such  other  documents as  are  required
               under  this Agreement or reasonably  requested
               by Buyers.

     (b)  Buyers shall deliver (executed as applicable) to
Sellers:

          (i)  the Purchase Price, less the Holdback, if any;

          (ii) the Bills of Sale;

          (iii)     the Assignment and Assumption Agreements;

          (iv) the Assignments and Assumption of Leases;

          (v)  the Assignment of Trademarks;

          (vi) the Assignment of Copyrights;

          (vii)     a certificate of an authorized officer of
               Lifetime  as  to Lifetime's and  each  Buyer's
               compliance  with the conditions set  forth  in
               Section  10.1  and  10.2 (the  "Buyer  Closing
               Certificate");

          (viii)    the Transition Services Agreement;

          (ix) the Product Supply Agreement;

          (x)  each  of  the  DC  Leases and  the  Flemington
               Lease;

          (xi) all  documents reasonably necessary  to  cause
               the  registration of the Domain  Names  to  be
               transferred to Buyer; and

          (xii)      such  other  documents as  are  required
               under  this Agreement or reasonably  requested
               by Sellers.

4.3  Nonassignability of Contracts.

      (a)  Notwithstanding anything to the contrary contained
in  this  Agreement,  to  the extent that  the  grant,  sale,
assignment,  transfer or delivery to Buyers, of any  Contract
that  would be an Assumed Contract, or any claim or right  or
any  benefit arising thereunder or resulting therefrom  would
require any authorizations, approvals, consents or waivers of
a   Governmental  Entity  or  other  third  party,  and  such
authorizations, approvals, consents or waivers shall not have
been  obtained  prior  to  the  Closing,  the  Closing  shall
proceed,  without  the grant, sale, assignment,  transfer  or
delivery  of  such  Contract, and this  Agreement  shall  not
constitute a grant, sale, assignment, transfer or delivery of
such Contract or an attempt thereof.

      (b)   If the Closing proceeds without the grant,  sale,
transfer,  assignment or delivery of any Contract that  would
be  an  Assumed  Contract, then following  the  Closing,  the
parties shall use their commercially reasonable efforts,  and
cooperate   with   each  other,  to  obtain   promptly   such
authorizations, approvals, consents or waivers.  Pending such
authorization, approval, consent or waiver, Sellers shall use
commercially  reasonable  efforts,  and  the  Parties   shall
cooperate   with  each  other  in  any  mutually   agreeable,
reasonable  and lawful arrangements designed  to  provide  to
Buyers  all  of the benefits of use of such Contract  and  to
Sellers the benefits, including any indemnities, that Sellers
would  have obtained had the Contract been conveyed to Buyers
at the Closing.

     (c)  To the extent that the applicable Buyer is provided
all of the material benefits pursuant to this Section 4.3  of
any  Contract,  the applicable Buyer shall  perform  for  the
benefit of the other Persons that are parties thereto all  of
the   obligations  of  Sellers  thereunder  and  any  related
liabilities  that,  but  for the lack  of  an  authorization,
approval,  consent  or waiver to assign such  liabilities  to
such Buyer, would be Assumed Liabilities.

     (d)  Once authorization, approval, consent or waiver for
the grant, sale, assignment, transfer or delivery of any such
Contract   not   granted,  sold,  assigned,  transferred   or
delivered at the Closing is obtained, such Contract shall  be
deemed  to  have  been  granted,  assigned,  transferred  and
delivered  to the applicable Buyer at no additional  cost  to
such  Buyer.  To the extent that any such Contract cannot  be
transferred  or  the material benefits of any  such  Contract
cannot  be  provided  to the applicable Buyer  following  the
Closing  pursuant  to this Section 4.3, then  the  applicable
Buyer   and   Seller  shall  enter  into  such   arrangements
(including  subleasing, sublicensing  or  subcontracting)  to
provide  to  the Parties the material economic  (taking  into
account  Tax  costs and benefits) and operational equivalent,
of obtaining such authorization, approval, consent or waiver,
and  also  to  provide for the performance by  Buyer  of  the
obligations thereunder.  Sellers shall hold in trust for, and
pay  to  the applicable Buyer promptly upon receipt  thereof,
all  income, proceeds and other monies received by any Seller
in  connection with its use of any Contract (net of any Taxes
and  any  other costs imposed upon such Seller) in connection
with the arrangements under this Section 4.3.

ARTICLE 5:  REPRESENTATIONS AND WARRANTIES OF SELLERS

     Sellers,  jointly  and severally, hereby  represent  and
warrant to each Buyer and Lifetime as follows:

5.1  Organization.

     Each  Seller  is  a corporation duly organized,  validly
existing and in good standing under the laws of the state  in
which  it is incorporated, and each Seller has full corporate
power and authority to carry on the Business to the extent it
is  now being conducted by such Seller.  Each Seller is  duly
qualified or licensed to do business and is in good  standing
in  each  jurisdiction in which the failure to so qualify  or
become  licensed  would have a Material Adverse  Effect  with
respect  to  the  Business.  Parent  has  furnished  or  made
available to Buyer true and complete copies of each  Seller's
articles  of  incorporation and bylaws, each  as  amended  to
date.   In  each case, such organizational documents  are  in
full  force and effect, and no Seller is in violation of  any
provision of its articles of incorporation or bylaws.

5.2  Authority; Non-Contravention.

     Each Seller has the right, power and capacity to execute
and  deliver  this Agreement and any other agreement  entered
into  in  connection with this Agreement and to  perform  its
obligations  under  this Agreement and  any  other  agreement
entered into in connection with this Agreement to which it is
a  party  and  to  consummate  the transactions  contemplated
hereby  and  thereby.   The execution and  delivery  of  this
Agreement  and any other agreement entered into in connection
with  this  Agreement by any Seller and  the  performance  by
Sellers   of  their  respective  obligations  hereunder   and
thereunder and the consummation of the transactions  provided
for  herein and therein have been duly and validly authorized
and   approved  by  all  necessary  corporate  action.   This
Agreement has been, and any other agreement entered  into  in
connection  with  this Agreement will be as  of  the  Closing
Date,  duly executed and delivered by each Seller and  do  or
will,  as  the case may be, constitute the valid and  binding
agreements of each Seller, enforceable against each Seller in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and  other
similar  laws  affecting  the  enforceability  of  creditors'
rights  generally,  general  equitable  principles  and   the
discretion of courts in granting equitable remedies.  Subject
to  receipt  of  the  consents  and  approvals  described  in
Schedule  5.3,  neither the execution and  delivery  of  this
Agreement by Sellers nor the consummation of the transactions
contemplated hereby does or would, after the giving of notice
or the lapse of time or both, (i) conflict with, result in  a
breach  of,  constitute  a  default  under,  or  violate  the
articles  of incorporation or the bylaws of any Seller,  (ii)
conflict  with, result in a breach of, constitute  a  default
under,  or  violate any Law applicable to any  Seller,  (iii)
conflict  with, result in a breach of, constitute  a  default
under, result in the acceleration of, create in any party the
right  to  accelerate, amend, modify,  cancel  or  refuse  to
perform  under, or require any notice under any  Contract  or
other arrangement, including any express or implied warranty,
to  which any Seller is a party or by which it is bound or to
which  any  of its assets is subject, or (iv) result  in  the
creation of, or give any party the right to create, any Lien,
other  than Permitted Liens, or other rights upon any  right,
property or Asset of any Seller.

5.3  No Consents.

     Except  as  otherwise  set forth  on  Schedule  5.3,  no
material  permit, consent, approval, novation,  authorization
or  other order of or filing with any Governmental Entity  or
any   other  Person  is  required  in  connection  with   the
execution,  delivery and consummation of this  Agreement  and
any  other  agreement  entered into in connection  with  this
Agreement and the actions of Sellers contemplated hereby.

5.4  Tax Matters.

     All  Taxes  of  Sellers not otherwise assumed  by  Buyer
under this Agreement have been or will be paid by Sellers and
will  not result in the imposition of any Lien on any of  the
Assets.

5.5  Financial Statements; Accounts Receivable; Inventory.

      (a)  A copy of the Financial Statements is attached  as
Schedule 5.5(a).  Each of the balance sheets included in such
Financial   Statements  (including  the  related  notes   and
schedules)  fairly  presents in  all  material  respects  the
financial position of Sellers as of the date of such  balance
sheet,  and  each of the statements of income and cash  flows
included in such Financial Statements (including any  related
notes and schedules) fairly presents in all material respects
the  results of operations and changes in cash flows, as  the
case  may  be,  of  the Business for the  periods  set  forth
therein, in each case in accordance with GAAP (except for the
omission  of  footnotes  and, in  the  case  of  the  Interim
Financial  Statements, normal year-end  adjustments).   Since
December 31, 2004, there has been no material change  in  any
of  the  accounting policies, practices or procedures of  the
Business.

      (b)   The  Seller Receivables reflected on the  Interim
Financial Statements represent bona fide claims of  a  Seller
against  debtors  for  sales  of  products,  performance   of
services  or  other  charges arising on or  before  the  date
hereof.  The reserves relating to the Seller Receivables that
are  set  forth  on  the  Interim  Financial  Statements  are
adequate   and  calculated  consistent  with  past  practice.
Subject to such reserves, none of the Seller Receivables  are
subject to any defense or right of setoff.

      (c)   No  Seller is in possession of any inventory  not
owned by such Seller, except for goods a Seller has agreed to
sell  but has not yet shipped  Schedule 5.5(c) sets  forth  a
true  and complete list of all inventory to which any  Seller
has  taken title, but not taken physical delivery.  The  LIFO
reserve that is set forth on the Interim Financial Statements
is adequate and calculated consistent with past practice.

      (d)   Except  as  set  forth on  Schedule  5.5(d),  all
products  included in any Seller Inventory (i) are free  from
manufacturing  and  design  defects,  (ii)  contain  adequate
consumer  warnings  and instructions, and (iii)  to  Sellers'
Knowledge,  do  not contain any materials or  chemicals  that
would  require consumer warnings under the Safe Drinking  and
Toxic  Enforcement  Act of 1986 of the  State  of  California
(also known as Proposition 65).

5.6  Absence of Undisclosed Liabilities.

     All  liabilities and obligations relating to any of  the
Sellers,  any of the Assets or the Business, whether accrued,
absolute,  contingent  or otherwise,  and  whether  known  or
unknown,  that  are required under GAAP to  be  reflected  or
reserved against in the Financial Statements or disclosed  in
the  accompanying  notes thereto are so  reflected,  reserved
against  or  disclosed, except for liabilities or obligations
(a)  incurred after March 31, 2004 in the ordinary course  of
business  consistent  with  past  practice,  (b)  under  this
Agreement or in connection with the transactions contemplated
hereby,  and  (c)  which would not have  a  Material  Adverse
Effect with respect to the Business.

5.7  Legal Proceedings.

     Except as set forth in Schedule 5.7, there are no suits,
actions,  claims,  arbitration proceedings or  investigations
pending   or,  to  Sellers'  Knowledge,  threatened  against,
relating  to  or  involving any of the Sellers,  any  of  the
Assets  or the Business.  There are no actual or, to Sellers'
Knowledge,  threatened  actions, suits,  claims,  arbitration
proceedings  or  investigations  which  present  a  claim  to
restrain  or  prohibit the transactions contemplated  herein.
There   are  no  judgments,  orders,  injunctions,   decrees,
stipulations  or  awards  (whether  rendered  by   a   court,
administrative  agency,  or  by arbitration,  pursuant  to  a
grievance  or  other procedure) against or  relating  to  the
Assets or the Business before any Governmental Entity,  which
if  determined adversely, are reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect on any
of the Sellers, any of the Assets or the Business.

5.8  Compliance with Laws; Licenses.

      (a)   Except  as  set  forth on  Schedule  5.8(a),  the
Sellers,  the Assets and the Business are in compliance  with
all  Laws,  except where the failure to so comply  would  not
have  a Material Adverse Effect with respect to the Business,
and  has  obtained and maintained all Licenses applicable  to
the  conduct of the Business, except where the failure to  do
so  would not have a Material Adverse Effect with respect  to
the  Business.  No Seller has received notification that  has
not  lapsed,  been withdrawn or abandoned by any Governmental
Entity (i) asserting a material violation by the Business  of
any such Law, (ii) threatening to revoke any material License
of  the  Business, or (iii) materially restricting or in  any
material way limiting the operations of the Business.

      (b)   Schedule 5.8(b) lists all Licenses  held  by  any
Seller and required for the operation of the Business.

5.9  Title to Assets.

     Sellers  are the sole and exclusive legal and  equitable
owners of all right, title and interest in, and have good and
marketable title to, possess valid rights under a license to,
or  a  valid leasehold interest in, all of the Assets  (real,
personal and fixed, tangible and intangible), free and  clear
of  any  and all Liens, other than Permitted Liens.  Sellers'
interest in each Real Property Lease is subject to no  Liens,
other than Permitted Liens.

5.10 Contracts.

      (a)   Schedule  5.10(a) lists the  following  Contracts
relating  to  the Business, to which, as of the date  hereof,
any Seller is a party:

          (i)  each  Contract (or group of related Contracts)
               relating  to  the Business for  the  lease  of
               personal  property  to  or  from  any   Person
               providing  for  lease payments  in  excess  of
               Fifty Thousand Dollars ($50,000) per annum  or
               in  excess of Fifty Thousand Dollars ($50,000)
               in the aggregate;

          (ii) each  Contract (or group of related Contracts)
               relating  to the Business for the purchase  of
               supplies, or other personal property,  or  for
               the  furnishing  or receipt of  services,  the
               performance  of which (A) will extend  over  a
               period  of  more  than two (2)  years  or  (B)
               involves  consideration  in  excess  of  Fifty
               Thousand  Dollars ($50,000) per  annum  or  in
               excess of Fifty Thousand Dollars ($50,000)  in
               the aggregate;

          (iii)      each  Contract relating to the  Business
               concerning  a  partnership  or  joint  venture
               involving a share of profits, losses, costs or
               liabilities by a Seller with any other Person;

          (iv) each  Contract (or group of related Contracts)
               relating to the Business under which a  Seller
               has  created, incurred, assumed or  guaranteed
               any  indebtedness for borrowed money,  or  any
               capitalized  lease obligation, or under  which
               it  has  granted a Lien on any of the  Assets,
               including any letter of credit established  by
               a  Seller  for the benefit of any of  Sellers'
               suppliers  (the  Contracts described  in  this
               Section  5.10(a)(iv) being herein  called  the
               "Borrowing Contracts");

          (v)  each Contract relating to the Business binding
               a  Seller with respect to non-solicitation  or
               non-competition;

          (vi) each  Contract relating to the Business  under
               which  a  Seller  has agreed  to  sell  Seller
               Inventory  to  a customer of the Business  for
               consideration  in  excess  of  Fifty  Thousand
               Dollars ($50,000);

          (vii)      each Contract pursuant to which a Seller
               has  agreed  to sell any of its  assets  to  a
               third  Person (A) outside the ordinary  course
               of the Business, (B) within one (1) year prior
               to the Closing Date, and (C) for consideration
               in excess of Fifty Thousand Dollars ($50,000);

          (viii)    each Contract relating to the Business in
               which  a  Seller  has made product  warranties
               other  than  in  the ordinary  course  of  the
               Business;

          (ix) each  written  individual employment  Contract
               between any Employee and any Seller;

          (x)  each Contract relating to the Business between
               a distributor or sales agent and any Seller;

          (xi) each  other  Contract  (or  group  of  related
               Contracts)  relating to the Business  that  is
               not terminable at will by a Seller prior to or
               after  the Closing without prior notice and/or
               without   payment  of  any  amount  or   other
               penalty, pursuant to which a Seller is or  may
               become  subject  to  any  obligation  or   any
               liability in excess of Fifty Thousand  Dollars
               ($50,000),   or  the  performance   of   which
               involves  consideration  in  excess  of  Fifty
               Thousand Dollars ($50,000).

      (b)   Parent has made a complete copy of each  Contract
listed on Schedule 5.10(a) available to Buyers.  With respect
to  each  such Contract:  (i) each such Contract is  in  full
force  and  effect  and  a binding obligation  of  a  Seller,
enforceable in accordance with its terms with respect to such
Seller, and to Sellers' Knowledge, the other party or parties
thereto,   subject  to  applicable  bankruptcy,   insolvency,
reorganization, moratorium and other similar  laws  affecting
the  enforceability  of creditors' rights generally,  general
equitable principles and the discretion of courts in granting
equitable  remedies,  and (ii) no  Seller  is  in  breach  or
default  and no event has occurred that with notice or  lapse
of  time  would constitute a breach or default by any  Seller
or,  to  Sellers' Knowledge, permit termination, modification
or  acceleration by any other party under such Contract,  and
to Sellers' Knowledge, no other party is in breach or default
by the other party and no event has occurred that with notice
or  lapse  of  time would constitute a breach or default,  or
permit  termination, modification or acceleration by a Seller
under such Contract.

     (c)  Schedule 5.10(c) sets forth, as of the date hereof,
each open purchase order for Seller Inventory, including  the
type, volume and dollar amount thereof.

5.11 Intellectual Property.

               (a)    (i)    Schedule  5.11(a)(i)  lists  all
               trademarks,   trade  names,   service   marks,
               copyrights,   and   Internet   domain    names
               registered  (or  for which  applications  have
               been filed) in the name of (or in the case  of
               applications,  submitted  by)  a  Seller  (or,
               where  record  title  has  not  been  updated,
               assigned  to  a  Seller) and relating  to  the
               Business,   and   all  material   unregistered
               trademarks,  trade  names, service  marks  and
               copyrights relating to the Business for  which
               no   Seller   has  submitted  an   application
               (collectively, the "Owned I.P. Rights").

          (ii)       Schedule  5.11(a)(ii) list all  patents,
               trademarks,   trade  names,   service   marks,
               copyrights  and  applications  therefore,  and
               Internet  domain names licensed  to  a  Seller
               relating  to  the Business (collectively,  the
               "Licensed I.P. Rights").

          (iii)     No Seller owns any Patents.

      (b)  The Owned I.P. Rights are owned by Sellers free of
any  Liens other than Permitted Liens, are not subject to any
license  other than the Design Licenses (defined below),  and
are  not  subject  to  any  other arrangement  requiring  any
payment  to any Person or the obligation to grant  rights  to
any  Person in exchange.  To Sellers' Knowledge, the Licensed
I.P.  Rights  are  free  and clear of any  Liens  other  than
Permitted Liens, royalties or other obligations.  There is no
pending  or, to Sellers' Knowledge, threatened proceeding  in
which the validity or enforceability of the Owned I.P. Rights
or title thereto is being questioned.  To Sellers' Knowledge,
there  is  no pending or threatened proceeding in  which  the
validity  or  enforceability of the Licensed I.P.  Rights  or
title  thereto  is being questioned.  To Sellers'  Knowledge,
none  of the Owned I.P. Rights infringe any valid trademarks,
trade  names,  service marks, copyrights or  Internet  domain
names  of  a  third Person.  The Owned I.P. Rights,  together
with  the  Licensed I.P. Rights, constitute all  intellectual
property necessary for the operation of the Business.

      (c)  Sellers own, or possess valid rights under license
to,  all computer software programs that are material to  the
conduct  of  the Business including (i) any and all  material
software   implementations   of   algorithms,   models    and
methodologies,  whether in source code (where  available)  or
object   code,  (ii)  material  databases  and  compilations,
including  any and all data and collections of data,  whether
machine  readable or otherwise, (iii) material  descriptions,
flow-charts  and  other work product used  to  design,  plan,
organize  and develop any of the foregoing, (iv) the material
technology supporting any Internet site(s) operated by or  on
behalf of Sellers and relating primarily to the Business, (v)
all  Worldwide  Web  addresses and  URLs  for  such  Internet
site(s),  and  (vi)  all  material  documentation,  including
training   materials,  relating  to  any  of  the  foregoing,
(collectively, the "Software").  Schedule 5.11(c) contains  a
complete  and  accurate  list  and  description  of  all  the
Software (other than computer software generally available to
the public and having a cost of less than $1,000 per unit  of
license (e.g., seat, user, server or site)).  Except  as  set
forth  on Schedule 5.11(c), there are no infringement  suits,
actions  or  proceedings pending or, to  Sellers'  Knowledge,
threatened against any Seller with respect to the Software.

      (d)   Sellers own, or possess valid license rights  to,
all   material  know-how  used  in  the  Business,  including
operating  procedures and business plans  (collectively,  the
"Technology").   Except  as set forth  on  Schedule  5.11(d),
there  are  no  infringement suits,  actions  or  proceedings
pending  or,  to Sellers' Knowledge, threatened  against  any
Seller with respect to the Technology.

      (e)   Schedule 5.11(e) sets forth a true  and  complete
list of all agreements in which any Seller has granted rights
to  a  third Person to use any design included in  the  Owned
I.P. Rights (the "Design Licenses").

5.12 Employees.

     Schedule 5.12 contains a true and complete list  of  all
of  the Employees (whether full-time, part-time or otherwise)
as  of  the  date  hereof, specifying their position,  annual
salary  or  hourly  wage, 2004 bonus  (if  any)  and  current
accrued vacation.

5.13 Labor and Employment Matters.

      (a)   The  Employees  are not represented  by  a  labor
organization or group that was either certified by any  labor
relations   board,   including  the  NLRB,   or   any   other
Governmental Entity, or voluntarily recognized by any  Seller
as  the  exclusive bargaining representative  of  a  unit  of
employees,   and  to  Sellers'  Knowledge,  no  Employee   is
represented  by  any other labor union or  organization.   No
Seller  is  a party to or has any obligation under any  union
contract,  or any obligation (other than obligations  imposed
by  Law)  to  recognize  or  deal with  any  labor  union  or
organization,  and there are no such contracts pertaining  to
or  which determine the terms or conditions of employment  of
any Employee.

      (b)   To  Sellers'  Knowledge,  (i)  no  representation
election  petition or application for certification has  been
filed by the employees of the Business or is pending with the
NLRB  or  any  other  Governmental  Entity  relating  to  the
Business, and (B) no overt union organizing campaign or other
overt  attempt  to  organize  or  establish  a  labor  union,
employee   organization  or  labor  organization   or   group
involving  employees of the Business is  in  progress  or  is
threatened.

      (c)  No labor dispute, walk out, strike, slowdown, hand
billing, picketing, work stoppage (sympathetic or otherwise),
or other "concerted action" organized by the employees of the
Business  is in progress or, to Sellers' Knowledge, has  been
threatened.

      (d)   Except  for the severance plans and policies  set
forth  in  Schedule 5.20, all Employees may be terminated  at
any  time with or without cause and without any severance  or
other liability.

      (e)  Except as set forth on Schedule 5.7 and/or 5.8(a),
each  of the Sellers have complied with each, and is  not  in
violation  in  any material respect of any, Law  relating  to
anti-discrimination  and equal employment  opportunities  and
there are, and have been, no material violations of any other
Law  respecting the hiring, hours, wages, occupational safety
and health, employment, promotion, termination or benefits of
any Employee or other person.

      (f)   All  personnel  of  Sellers  have  been  properly
characterized for United States federal income  tax  purposes
as employees or independent contractors, as applicable.

5.14 Absence of Certain Changes.

     Since  December 31, 2004, there has not been any  change
with  respect to the Business that has had a Material Adverse
Effect on the Business.

5.15 Brokers.

     Except  as  indicated on Schedule 5.15, Seller  has  not
dealt  with any broker, finder or agent with respect to  this
Agreement or any of the transactions contemplated hereby  and
all such fees, commissions or other amounts due to any Person
set  forth on Schedule 5.15 shall be for the account  of  the
Sellers.

5.16 Insurance.

     Schedule 5.16 sets forth a correct and complete list  of
all  current insurance policies and coverages relating to the
Business for which any Seller is an insured party.  All  such
policies  are  in full force and effect and all premiums  due
and payable in respect thereof have been paid.  Schedule 5.16
also sets forth a list of all pending claims with respect  to
such   policies.   No  Seller  has  received  a   notice   of
cancellation  of  any such policy or of any material  changes
that  are  required  in  the conduct of  the  Business  as  a
condition  to the continuation of coverage under, or  renewal
of,  any  such policy.  To Sellers' Knowledge,  there  is  no
existing default or event which, with the giving of notice or
lapse  of time or both, would constitute a default under  any
such policy or entitle any insurer to terminate or cancel any
such policy with respect to the Business.  No Seller has  any
Knowledge of any threatened termination of any such policy.

5.17 Environmental Matters.

      (a)   Except  as set forth in Schedule 5.17(a)  (i)  no
Seller has received any notice, notification, demand, request
for information, citation, summons, complaint, order or other
communication regarding any actual or alleged violation of or
liability  under any Environmental Law with  respect  to  the
Assets, the Business or any of the Leased Real Property, (ii)
no  investigation, claim, suit, proceeding or review  arising
under any Environmental Law with respect to any of the Leased
Real  Property,  the  Business or the Assets  is  pending  or
threatened against any Seller, and (iii) no penalty  or  fine
has  been  assessed against any Seller with  respect  to  any
matters  relating to or arising out of any violation  of  any
Environmental  Law with respect to the Leased Real  Property,
the Business or the Assets.

      (b)  Except as set forth on Schedule 5.17(b), no Seller
has  Released  any  Hazardous Materials at  the  Leased  Real
Property.

      (c)   There  have been no environmental investigations,
studies,  audits, tests, reviews or other analyses  conducted
by,  on  behalf  of,  or which are in the possession  of  the
Sellers (or any representatives thereof) with respect to  any
Leased  Real  Property which have not been delivered  to  the
Buyer prior to execution of this Agreement.

      (d)   The  Sellers  have obtained  and  hold,  and,  to
Sellers' Knowledge, are in compliance with all provisions of,
all Environmental Permits required to be obtained and held by
Sellers  in  connection with the Sites  or  the  Business  as
conducted at the Sites.

     (e)  To Sellers' Knowledge, while Sellers have owned the
Sites,  no  Seller  has  transported  or  arranged  for   the
treatment, storage, handling, disposal, or transportation  of
any  Hazardous  Material to any off-Site  location  from  the
Sites which has resulted, or could result, in a liability  to
any Seller under Environmental Laws.

      (f)   No  Site is a current, or to Sellers'  Knowledge,
proposed, Environmental Clean-up Site.

     (g)  To Sellers' Knowledge, there are no (i) underground
storage  tanks,  active  or abandoned,  (ii)  polychlorinated
biphenyl   containing  equipment,  (iii)   friable   asbestos
containing materials, or (iv) toxic mold at any Site.

      (h)   This Section 5.17 contains the sole and exclusive
representations and warranties of the Sellers with respect to
any matters arising under any Environmental Law.

5.18 Real Property.

     (a)   The  Real  Property Leases and the  real  property
demised  by  the DC Leases and the Flemington Lease  are  the
only  real  property  interests used in  connection  with  or
otherwise necessary to the Business.  A Seller is the current
tenant  under  each Real Property Lease.  The  Real  Property
Leases are subject to no Liens except Permitted Liens.

     (b)  True and correct copies of the Real Property Leases
(and  all  modifications and extensions  thereof)  have  been
delivered to Buyers by Sellers.

     (b)  To Sellers' Knowledge:

          (i)  a  Seller has a valid and subsisting leasehold
               estate in and the right to quiet enjoyment  to
               each  parcel of Leased Real Property  for  the
               full  term  of  the applicable  Real  Property
               Lease;

          (ii) the Real Property Leases are in full force and
               effect and are enforceable in accordance  with
               their terms; and

          (iii)      there  is  not any existing  default  or
               event  of default and no circumstance  exists,
               which,  with notice, the passage of  time,  or
               both,  could  constitute a default  under  any
               Real Property Lease.

     (c)   A  Seller  is  in possession of  the  Leased  Real
Property.

     (d)   The full security deposit required under each Real
Property  Lease is being held by or on behalf of  the  lessor
thereunder, and no penalties are accrued and unpaid under any
Real Property Lease.

     (e)  No landlord or tenant under any Real Property Lease
has exercised any option or right to cancel or terminate such
Real  Property Lease or shorten or lengthen the term thereof,
lease  additional premises, reduce or relocate  the  premises
demised by such Real Property Lease or purchase any property.
No Seller is a party to any oral lease of real property.

5.19 Related Party Transactions; Foreign Corrupt Practices
Act.

     (a)  Except as set forth on Schedule 5.19(a):

          (i)  no  officer  or  director  of  any  Seller  is
               currently indebted to any Seller, nor  is  any
               Seller indebted (or committed to make loans or
               extend  or  guarantee credit) to any  of  such
               individuals;

          (ii) to  Sellers' Knowledge, as of the date hereof,
               no  officer or director of any Seller has  any
               direct  or indirect ownership interest in  any
               firm or corporation with which any Seller  has
               a  material  business relationship;  provided,
               however, that the foregoing representation  in
               this  Section 5.19(a)(ii) shall not  apply  in
               cases where an officer or director of a Seller
               owns  stock in an amount less than 5%  of  the
               outstanding capital stock of a publicly traded
               company; and

          (iii)      (A)  there are no agreements related  to
               the Business among any of the Sellers or among
               any Seller and the Seller Holding Company, (B)
               no  Seller is currently indebted (or committed
               to  make  loans or extend or guarantee credit)
               to  any  other  Seller or the  Seller  Holding
               Company, and (C) the Seller Holding Company is
               not  currently indebted (or committed to  make
               loans  or extend or guarantee credit)  to  any
               Seller.

      (b)   No  Seller has, to obtain or retain any business,
directly or indirectly offered, paid or promised to  pay,  or
authorized the payment of, any money or other thing of  value
in  excess  of Five Hundred Dollars ($500) to any  Person  in
violation of the United States Foreign Corrupt Practices  Act
then in effect.

5.20 Employee Plans.

     Schedule 5.20 lists each Benefit Plan that is sponsored,
maintained or contributed to or required to be contributed to
by  any  Seller  for  the benefit of any Employee  or  former
Employee of any Seller and each Seller Benefit Plan.

5.21 Product Warranty

     Schedule  5.21 sets forth the form of Parent's  standard
product  warranty provided to retail consumers in  connection
the sale of Parent's products to such consumers.

5.22 Sufficiency of Assets

      Except  as  set forth on Schedule 5.22, the Assets  (i)
except for the Excluded Assets, constitute all of the assets,
tangible and intangible, of any nature whatsoever, which  are
used  to  operate  and  conduct the Business  in  the  manner
presently  operated  and  conducted  by  Sellers,  and   (ii)
correspond to the Financial Statements.

5.23 Disclosure

     No representation or warranty or other statement made by
any  Seller  in  this Agreement, the Ancillary Agreements  or
otherwise  in  connection with the transactions  contemplated
hereby  contains  any untrue statement or omits  to  state  a
material fact necessary to make any of them, in light of  the
circumstances in which it was made, not misleading.

ARTICLE 6:  REPRESENTATIONS AND WARRANTIES OF BUYERS AND
            LIFETIME

     Buyers  and  Lifetime,  jointly  and  severally,  hereby
represent and warrant to each Seller as follows:

6.1  Organization.

     (a)  Each Buyer is a duly organized and validly existing
corporation, in good standing under the laws of the State  of
Delaware  and has full corporate power and authority  to  own
and/or  lease all of its properties and assets, and to  carry
on its business as now being conducted.

      (b)   Lifetime is a duly organized and validly existing
corporation, in good standing under the laws of the State  of
Delaware  and has full corporate power and authority  to  own
and/or  lease all of its properties and assets, and to  carry
on its business as now being conducted.

6.2  No Violation.

     Subject   to  receipt  of  the  consents  and  approvals
described in Schedule 6.6, none of the execution and delivery
of  this  Agreement by Buyers, the execution and delivery  of
this  Agreement  by  Lifetime, or  the  consummation  of  the
transactions  contemplated hereby does or  would,  after  the
giving  of notice or the lapse of time or both, (i)  conflict
with,  result in a breach of, constitute a default under,  or
violate the articles of incorporation or the bylaws of Buyers
or  Lifetime,  (ii) conflict with, result  in  a  breach  of,
constitute a default under, or violate any Law applicable  to
Buyers  or  Lifetime, or (iii) conflict  with,  result  in  a
breach  of,  constitute  a  default  under,  result  in   the
acceleration of, create in any party the right to accelerate,
terminate, amend, modify, cancel or refuse to perform  under,
or   require   any  notice  under  any  Contract   or   other
arrangement,  including any express or implied  warranty,  to
which  Buyers or Lifetime is a party or by which it is  bound
or to which any of its assets is subject; except, in the case
of  clause  (iii) above, for such conflicts  that  would  not
adversely  affect  the  ability  of  Buyers  or  Lifetime  to
complete its obligations hereunder.

6.3  Enforceable Agreement.

     Each of each Buyer and Lifetime has the right, power and
capacity to execute and deliver this Agreement and any  other
agreement entered into in connection with this Agreement  and
to perform its obligations under this Agreement and any other
agreement  entered into in connection with this Agreement  to
which  it  is  a party to and to consummate the  transactions
contemplated hereby and thereby.  The execution and  delivery
of  this  Agreement and any other agreement entered  into  in
connection  with this Agreement by Buyer and the  performance
by Buyers of its obligations hereunder and thereunder and the
consummation  of  the transactions provided  for  herein  and
therein  have  been  duly  and  validly  authorized  by   all
necessary  corporate  action on  the  part  of  Buyers.   The
execution  and  delivery  of this  Agreement  and  any  other
agreement  entered into in connection with this Agreement  by
Lifetime  and the performance by Lifetime of its  obligations
hereunder  and  thereunder  and  the  consummation   of   the
transactions provided for herein and therein have  been  duly
and  validly authorized by all necessary corporate action  on
the  part  of  Lifetime.   Upon  execution  and  delivery  by
Sellers,  this  Agreement, and each other  agreement  entered
into  in  connection with this Agreement will be, as  of  the
Closing  Date, duly executed and delivered by  each  of  each
Buyer and Lifetime, and will be the legal, valid, and binding
agreement of each of each Buyer and Lifetime, enforceable  in
accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and  other
similar  laws  affecting  the  enforceability  of  creditors'
rights  generally,  general  equitable  principles  and   the
discretion of courts in granting equitable remedies.

6.4  No Brokers.

     Except  as indicated on Schedule 6.4, neither Buyer  nor
Lifetime  has any liability, directly or indirectly,  to  pay
any  fees, commissions or other amounts to any broker, finder
or  agent  with  respect  to this Agreement  or  any  of  the
transactions   contemplated  hereby  and   all   such   fees,
commissions or other amounts due to any Person set  forth  on
Schedule 6.4 shall be for the account of Buyers.

6.5  Litigation and Regulatory Proceedings.

     There   is   no  claim,  action,  suit,  proceeding   or
governmental  investigation pending or, to the  knowledge  of
Buyers or Lifetime, threatened against Buyers or Lifetime, by
or before any Governmental Entity or by any third party which
challenges the validity of this Agreement or which  would  be
reasonably likely to adversely affect or restrict the ability
of   Buyers   or  Lifetime  to  consummate  the  transactions
contemplated by this Agreement.

6.6  Consents and Approvals.

     Except  for  the approval of the Bank of New York,  Inc.
(as  Agent  for the lenders under Lifetime's credit facility)
and  the  required regulatory approvals set forth on Schedule
6.6,  no  consents, approvals, filings or registrations  with
any  third party or any public body, agency or authority  are
required  by  Buyers  or  Lifetime  in  connection  with  the
consummation  of  the  transactions  contemplated   by   this
Agreement by Lifetime and Buyers.

6.7  Funds.

      At the Closing, Buyers will have the funds necessary to
consummate  the  Acquisition and pay the  Purchase  Price  in
accordance with the terms of this Agreement.

6.8  Independent Review.

     Buyers and Lifetime have conducted their own independent
review  and analysis of the Business and its condition,  cash
flow  and  prospects, the Assets and the Assumed Liabilities,
and  acknowledge that Buyers and Lifetime have been  provided
access to the properties, premises and records of Sellers for
this  purpose.   In  entering  this  Agreement,  Buyers   and
Lifetime have relied exclusively upon their own investigation
and analysis and the representations and warranties contained
herein, in the Ancillary Agreements, the Seller Real Property
Lease   Consent   Certificate,   and   the   Seller   Closing
Certificate, and therefore Buyers and Lifetime:

      (a)  acknowledge that they have had the opportunity  to
visit   Sellers  and  meet  with  their  officers  and  other
representatives  to discuss the Business and  its  condition,
cash   flow  and  prospects,  the  Assets  and  the   Assumed
Liabilities;

      (b)   acknowledge  that they have undertaken  such  due
diligence  (including  a review of the  assets,  liabilities,
books,  records and contracts of the Business) as  they  have
deemed adequate;

     (c)  agree, to the fullest extent permitted by Law, that
except  with  respect to the representations  and  warranties
contained  herein,  in the Ancillary Agreements,  the  Seller
Real  Property  Lease  Consent Certificate,  and  the  Seller
Closing  Certificate,  no Seller nor any  of  its  directors,
officers,  employees, Affiliates, agents  or  representatives
shall  have  any  liability or responsibility  whatsoever  to
Buyer  or  Lifetime on any basis (including  in  contract  or
tort,  under  federal or state securities laws or  otherwise)
based  upon  any information provided or made  available,  or
statements made, to Buyer or Lifetime prior to the  execution
of this Agreement;

      (d)   represent that, as of the date hereof, to Buyers'
Knowledge, there is no condition or event that constitutes or
may  constitute a breach by any Seller of the representations
and warranties set forth in Article 5; and

      (e)   acknowledge that, except for the  representations
and  warranties made expressly by Sellers in this  Agreement,
the  Ancillary  Agreements, the Seller  Real  Property  Lease
Consent  Certificate, and the Seller Closing Certificate,  no
Seller  nor  any  of  their directors,  officers,  employees,
Affiliates,   agents   or  representatives   has   made   any
representation or warranty, either express or implied, as  to
the  accuracy  or  completeness of  any  of  the  information
provided  or  made  available to  Buyer,  Lifetime  or  their
respective  agents or representatives prior to the  execution
of this Agreement.

ARTICLE 7:  COVENANTS OF THE PARTIES

7.1  Further Assurances; Post-Closing Cooperation.

      (a)  From and after the Closing Date, from time to time
and  without  further consideration, each Party will  execute
and deliver such instruments and take such other commercially
reasonable action reasonably requested by one or more of  the
other   Parties   in   order  to  effect   the   transactions
contemplated by this Agreement.

      (b)  Following the Closing, each Party will afford each
other  Party, its counsel and its accountants, during  normal
business  hours, reasonable access to the books, records  and
other  data relating solely to the Business in its possession
and  the right to make copies and extracts therefrom, to  the
extent  that  such access may be reasonably required  by  the
requesting  Party in connection with (i) the  preparation  of
Tax  Returns,  (ii) compliance with the requirements  of  any
Governmental  Entity, (iii) any actual  or  threatened  legal
action,  or (iv) for any other legitimate or proper  business
purpose.

      (c)   Following  the Closing, Buyer will  preserve  and
maintain  all books, records and other data included  in  the
Assets  for such period that Sellers would have been required
to  have  preserved  and maintained such books,  records  and
other  data  under  applicable Laws, and Sellers  shall  have
access  to  such books, records and other data in  accordance
with Section 7.1(b).

      (d)  Buyer hereby grants to Seller Holding Company  and
the  Susquehanna Pfaltzgraff Foundation and their  respective
successors, assigns and Affiliates a non-transferrable,  non-
exclusive,  royalty-free license, for a  period  of  six  (6)
months  after the Closing Date or until the Seller Stationery
(as defined below) is exhausted, whichever is shorter, to use
the   word  "Pfaltzgraff,"  derivations  thereof,   and   any
Trademark  (i) as a part of the legal name and any fictitious
names or other similar trade names of such entities, and (ii)
on  stationery, form documents, packaging and  other  printed
materials  of Sellers in existence on the Closing  Date  (the
"Seller  Stationery").  For avoidance of doubt,  the  Parties
agree that nothing herein, and no rights obtained by Buyer or
Lifetime pursuant hereto, shall limit the right of members of
the  Appell  family to use the "Pfaltzgraff"  name  for  non-
commercial purposes.

      (e)   Anything  herein to the contrary notwithstanding,
until  August 31, 2006, Parent shall (i) maintain a net worth
of  at  least the amount of the Indemnity Cap, (ii) (A)  own,
free and clear of any and all Liens, liquid assets and/or (B)
have  entered  into  and  be a party  to  a  valid  agreement
enforceable  by Parent with an entity affiliated with  Parent
pursuant  to which such entity will provide to Parent  within
three (3) Business Days of a request by Parent liquid assets,
which  liquid assets in the aggregate shall be sufficient  to
permit  Parent  to  satisfy Sellers' obligations  to  provide
indemnification under this Agreement.

      (f)   The Parties agree that, prior to the first  (1st)
anniversary of the Closing Date, Parent may transfer  all  or
part  of its assets to an entity controlled by a majority  of
the  same Persons that control Seller Holding Company on  the
date  hereof (the "New Parent") if, prior to the date of such
transfer,  New  Parent delivers to Buyer a  written  document
executed  on behalf of New Parent that (i) notifies Buyer  of
the   anticipated  effective  date  of  such  transfer;  (ii)
certifies that the assets to be transferred to New Parent  in
such    transfer   are   sufficient   to   satisfy   Sellers'
indemnification  obligations hereunder, if the  assets  being
transferred  to  New  Parent are not all  of  the  assets  of
Parent; and (iii) sets forth New Parent's agreement to assume
all  of  Sellers' obligations under this Agreement, effective
as of the effective time of such transfer.

7.2  Conduct of Business.

     Except with the prior written consent of Lifetime (which
consent  shall  not be unreasonably withheld or  delayed)  or
except  as  otherwise expressly permitted  pursuant  to  this
Agreement, from the date hereof and through the Closing, with
respect to the Business:

     (a)  Sellers shall:

          (i)  maintain  their corporate existence and  carry
               on  the  Business  in the ordinary  course  in
               substantially  the same manner  as  heretofore
               conducted and in any event in accordance  with
               all applicable Laws;

          (ii) use   commercially   reasonable   efforts   to
               preserve intact its business organization;

          (iii)      use  commercially reasonable efforts  to
               keep available the services of its Employees;

          (iv) use   commercially   reasonable   efforts   to
               preserve   its   current  relationships   with
               customers,  suppliers, and other Persons  with
               whom it has business relations with respect to
               the Business;

          (v)  operate  and maintain the Leased Real Property
               in the ordinary course of business;

          (vi) perform  all  covenants and obligations  under
               each   Real   Property  Lease,   License   and
               Permitted Lien;

          (vii)     promptly give Buyer a copy of each notice
               received or sent under a Real Property  Lease;
               and

          (viii)     maintain  their  books  and  records  in
               accordance with past practices.

     (b)  Sellers shall not:

          (i)  sell,  transfer  or otherwise dispose  of  any
               Asset,  other  than the sale of Assets  (other
               than  Real  Property Leases) in  the  ordinary
               course of business;

          (ii) create,   incur  or  assume  any  indebtedness
               secured  by any Asset, other than indebtedness
               that  will  be  satisfied at or prior  to  the
               Closing;

          (iii)      grant, create, incur or suffer to  exist
               any  Lien, other than Permitted Liens, on  any
               Asset  (other than Real Property Leases)  that
               did not exist on the date hereof;

          (iv) incur  any  liability or obligation (absolute,
               accrued or contingent) related to the Business
               or  the  Assets, except in the ordinary course
               of business consistent with past practice;

          (v)  increase  the rate of compensation of  any  of
               the  Employees,  or pay or agree  to  pay  any
               bonus  to, or provide any new employee benefit
               or  incentive to, any of the Employees, except
               for  increases,  payments,  contributions  and
               bonuses (A) that are regularly scheduled as  a
               result   of   the   normal   progression   and
               advancement  of  Employees  in  the   ordinary
               course and consistent with past practices, (B)
               the  amounts  of which have been  specifically
               disclosed  to,  and approved  in  advance  by,
               Buyer,  or (C) that are set forth on  Schedule
               7.2(b)(v);

          (vi) enter  into  or  modify  (except  as  may   be
               required   by  applicable  Law)  any  pension,
               retirement,  stock  option,  stock   purchase,
               stock   appreciation  right,  savings,  profit
               sharing,  deferred  compensation,  consulting,
               bonus,   group  insurance  or  other  employee
               benefit,  incentive or welfare contract,  plan
               or arrangement, or any trust agreement related
               thereto,  in respect of any of the  Employees,
               except  in  the  ordinary course  of  business
               consistent with past practice;

          (vii)      enter into, modify or amend, cancel,  or
               waive   any  right  under  (A)   any  Contract
               relating to the employment or severance of  an
               Employee,  except  in the ordinary  course  of
               business  consistent with  past  practice;  or
               (B) any Assumed Contract;

          (viii)      incur   any  commitments  for   capital
               expenditures  relating  to  the  Business   in
               excess   of   One  Hundred  Thousand   Dollars
               ($100,000);

          (ix) exercise  any right or option under  any  Real
               Property Lease;

          (x)  adopt   or  propose  any  amendment   to   the
               organizational  documents of any  Seller  that
               could be expected to delay the consummation of
               the transactions contemplated hereby;

          (xi) take  any  action or engage in any transaction
               that  is  material to, or outside the ordinary
               course of, the Business;

          (xii)      make  any filings or registrations  with
               any   Governmental  Entity,   except   routine
               filings and registrations made in the ordinary
               course  of  the Business consistent with  past
               practice;

          (xiii)     be  party  to  any merger,  acquisition,
               consolidation, recapitalization,  liquidation,
               dissolution  or similar transaction  involving
               the Business;

          (xiv)       make  any  changes  in  its  accounting
               methods, principles or practices;

          (xv) make  any  Tax election, change its method  of
               Tax accounting or settle any claim relating to
               Taxes;

          (xvi)      take  any action or omit to do  any  act
               which  action  or omission will  cause  it  to
               breach   any  obligation  contained  in   this
               Agreement  or  cause  any  representation   or
               warranty of Seller not to be true and  correct
               as of the Closing Date;

          (xvii)     demolish or materially alter any  Leased
               Real Property; or

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

7.3  Employees.

      (a)   As  soon  as practicable after the  date  hereof,
Sellers  shall  provide Buyers with a list, as  of  the  date
hereof,  Schedule 7.3(a), containing the name,  position  and
base salary of each Employee, noting whether such Employee is
not  actively employed (e.g., Employees on vacation or  leave
of  absence,  including maternity, family and medical  leave,
sick, military (whether qualified or otherwise) or short-term
disability leave).  With respect to the Employees:

          (i)  At  least five (5) Business Days prior to  the
               Closing Date, Buyers shall provide Parent with
               a list of Employees to whom neither Buyer will
               offer employment (the "Declined Employees");

          (ii) At  least five (5) Business Days prior to  the
               Closing Date, Buyers shall provide Parent with
               a list of Employees to whom a Buyer will offer
               employment (the "Definite Employees"), and the
               applicable  Buyer  shall offer  employment  to
               such  Definite Employees effective as  of  the
               Closing Date; and

          (iii)      Employees  who  are  not  identified  as
               either    Declined   Employees   or   Definite
               Employees   are  herein  called  "Transitional
               Employees."  Either Buyer may offer employment
               to  such  Transitional Employees, if  any,  as
               Buyers,   in  their  sole  discretion,   shall
               determine  at any time on or before  July  29,
               2005  (the  "Offer  Completion  Date").    The
               Definite   Employees  and   the   Transitional
               Employees   to  whom  Buyers  make  employment
               offers prior to the Offer Completion Date  are
               herein   collectively  called  the  "Candidate
               Employees".

          (iv) As of the Closing Date, the number of salaried
               Candidate Employees, including Store managers,
               offered   employment  by  Buyers  collectively
               shall  not  be  less  than One  Hundred  Fifty
               (150).

          (v)  Notwithstanding   anything   herein   to   the
               contrary,  Buyers  shall be  responsible,  and
               shall  reimburse Sellers, for  all  costs  and
               liabilities associated with the employment  by
               Sellers of the Transitional Employees incurred
               by any Seller between the Closing Date and the
               Offer Completion Date; provided, however, that
               Buyers shall not be responsible for any of the
               costs  of providing health benefits under  the
               Seller   Benefit  Plans  to  the  Transitional
               Employees during such period of time.

          (vi) Prior  to  the  Closing  Date,  Sellers  shall
               provide Buyers and Lifetime reasonable  access
               to the Employees, and, to the extent permitted
               by  applicable law, such information regarding
               such  Employees as is contained  in  personnel
               records, for purposes of permitting Buyers  to
               determine which Employees to offer to  employ.
               Each Buyer's offers to the Candidate Employees
               shall be on terms and conditions that are,  in
               the aggregate, no less favorable than those to
               which  the  Candidate Employees are  currently
               subject,    including,   without   limitation,
               salary,   incentive   compensation,   employee
               benefit  plans and benefit arrangements  that,
               in  the aggregate, are at least comparable  to
               such   employee  benefit  plans  and   benefit
               arrangements as are currently provided to  the
               Candidate Employees, but without regard to (A)
               defined benefit pension benefits and (B) post-
               retirement  welfare  benefits.   Buyers  shall
               maintain the foregoing comparable benefits for
               the  Transferred Employees (as defined  below)
               until the earlier of (X) the date that is  one
               (1)  year after the Closing Date and  (Y)  the
               date on which such Transferred Employee ceases
               to  be  employed by a Buyer or any  affiliate,
               successor  or  assignee of a  Buyer.   Buyer's
               offers  of  employment to Candidate  Employees
               shall be made as soon as practicable following
               the  date hereof; provided, however, that  all
               such  offers of employment shall  be  made  no
               later  than (x) the Closing Date, in the  case
               of  each Definite Employee, and (y) the  Offer
               Completion   Date,  in  the   case   of   each
               Transitional Employee to whom any Buyer  makes
               an   employment  offer  pursuant  to   Section
               7.3(a)(iii).

          (vii)     Those Candidate Employees who accept such
               offers  of employment, and commence employment
               with a Buyer effective on or after the Closing
               Date  (or,  if applicable, upon expiration  of
               any  leave  or  period of  absence)  shall  be
               referred to herein as "Transferred Employees."

      (b)  Without limiting the generality of Section 7.3(a),
each  Buyer  agrees  that (i) such Buyer  shall  provide  the
applicable Transferred Employees and their beneficiaries with
coverage  under a "group health plan" (as defined in  Section
4980B(g)(2)  of  the Code); (ii) such Buyer  will  cause  the
benefit   plans  applicable  to  the  applicable  Transferred
Employees to recognize previous service with Sellers for  the
purpose of determining eligibility and vesting for succeeding
benefits;  (iii) such Buyer will cause its group health  plan
to recognize all deductibles and coinsurance payments accrued
by  the applicable Transferred Employees prior to the Closing
Date  and  to  waive, to the extent waived under  the  Seller
Benefit Plans, any preexisting condition limitations for  the
Transferred Employees; (iv) for the remainder of the calendar
year in which the Closing occurs and for the succeeding year,
the  vacation  and  holiday plan offered to  the  Transferred
Employees  shall  be equal to and be in  place  of  what  the
applicable  Seller  would have provided to  such  Transferred
Employees had they remained employees of such Seller; and (v)
such  Buyer shall maintain for at least one (1) year starting
on   the   Closing  Date  the  same  severance   arrangements
applicable to the Transferred Employees that were  in  effect
immediately  before  the Closing Date, and  Buyer  shall  pay
severance  benefits  to Transferred Employees  in  accordance
with the terms of such severance arrangements.

      (c)   Buyers assume no liability with respect  to,  and
receive no right or interest in, any Seller Benefit Plan.  At
the  close  of  Business on the effective date of  employment
with  a  Buyer  (the "Commencement Date"),  each  Transferred
Employee  shall  cease participation in  all  Seller  Benefit
Plans,  except  with respect to benefits accrued  as  of,  or
claims  incurred  on or prior to, such date.   Sellers  shall
provide  each  Transferred Employee with the following:   (i)
full vesting of any award or benefit under any Seller Benefit
Plan  where such vesting was otherwise conditioned  upon  the
future  performance of services with Seller, including  under
any  Benefit Plan that is intended to be tax-qualified  under
section  401(a)  of  the  Code and  under  any  related  non-
qualified plan; and (ii) payment, prior to the Closing  Date,
of  any  annual  bonus  award that such Transferred  Employee
would have earned under Sellers' bonus program for the fiscal
year  in  which  the  Closing Date occurs,  assuming  maximum
performance was achieved, but prorated to reflect the portion
of  the  year  actually  worked for a  Seller.   Buyers  will
provide   Sellers  with  such  information  as  is   required
concerning  Transferred Employees in order to enable  Sellers
to determine whether, and if so, when, a Transferred Employee
will  be  entitled to any benefits under any  Seller  Benefit
Plan.

      (d)  Sellers shall assume and be responsible for claims
for   workers  compensation  or  for  the  type  of  benefits
described in Section 3(1) of ERISA (whether or not covered by
ERISA) that are incurred by a Transferred Employee and  their
beneficiaries and dependents on or prior to such  Transferred
Employee's Commencement Date.  The applicable Buyer shall  be
responsible  for disability benefits and workers compensation
benefits for each Transferred Employee employed by such Buyer
for   claims   incurred  after  such  Transferred  Employee's
Commencement   Date.   For  purposes  of  the  foregoing,   a
medical/dental  claim shall be considered incurred  when  the
medical  services  are  rendered  or  medical  supplies   are
provided,  and  not when the condition arose;  provided  that
claims  relating to a hospital confinement that commences  on
or  prior  to a Transferred Employee's Commencement Date  but
continues thereafter shall be treated as incurred on or prior
to   such   Commencement  Date.   A  disability  or   workers
compensation claim shall be considered incurred on  or  prior
to a Commencement Date if the injury or condition giving rise
to the claim occurs on or prior to such Commencement Date.

      (e)   The Sellers will not, at any time with the ninety
(90) day period ending on the Closing Date:  (i) effectuate a
"plant  closing" or "mass layoff" (as such terms are  defined
in the Worker Adjustment and Retraining Notification Act (the
"WARN  Act"))  without complying fully with  the  notice  and
other  requirements of the WARN Act; or (ii)  effectuate  any
similar  action  without complying fully with any  applicable
Law  or local Law requiring notice to employees in the  event
of  a plant closing or layoff.  All communications of Sellers
to employees with respect to WARN Act or similar matters will
be  subject to approval by Buyers (which approval will not be
unreasonably  withheld  or delayed).   In  addition,  Sellers
hereby  agree to indemnify Lifetime and Buyers and to  defend
and  hold  Lifetime and Buyers harmless from and against  any
and  all  claims, losses, damages, expenses, obligations  and
liabilities  (including costs of collection, attorney's  fees
and  other  costs  of  defense)  ("WARN  Liabilities")  which
Lifetime or Buyers may incur in connection with any  suit  or
claim  or violation brought against Lifetime or Buyers  under
the  WARN Act or any similar Law or local Law, which  relates
to any action taken by, or any failure to act by, any Seller.
Each  Buyer hereby agrees to indemnify Sellers and to  defend
and  hold Sellers harmless from and against any and all  WARN
Liabilities  which Sellers may incur in connection  with  any
suit  or claim or violation brought against any Seller  under
the  WARN Act or any similar Law, which relates to any action
taken by, or any failure to act by, such Buyer following  the
Closing.

     (f)  Sellers shall be responsible for satisfying any and
all   obligations  and  liabilities  under  the  continuation
coverage  provisions  of  the  Consolidated  Omnibus   Budget
Reconciliation  Act  of  1985,  as  amended  ("COBRA"),   and
applicable state Law to provide continuation coverage  to  or
with  respect to all employees or former employees of Sellers
and their beneficiaries as a result of any "qualifying event"
occurring  prior  to  the Closing  or  as  a  result  of  the
transactions contemplated by this Agreement.

      (g)   Nothing in this Section 7.3, express or  implied,
shall   confer  upon  any  Transferred  Employee,  or   legal
representative  or  beneficiary  thereof,   any   rights   or
remedies,  including  any  right to employment  or  continued
employment  for  any  specified period,  or  compensation  or
benefits  of  any  nature  or  kind  whatsoever  under   this
Agreement.  Except as set forth in this Section 7.3,  nothing
herein  shall be construed to prevent Buyers from terminating
or modifying to any extent or in any respect any benefit plan
that the Buyers may establish or maintain.

      (h)  Each Buyer will credit each applicable Transferred
Employee  with such number of unused vacation days and  other
paid  time off accrued by such Transferred Employee prior  to
the  Closing  Date  in  accordance  with  Sellers'  personnel
policies applicable to such Transferred Employees on the date
hereof.

7.4  Access to Operations.

     Buyers  and  Lifetime may, prior to  the  Closing  Date,
directly  or  through their representatives,  review,  during
normal  business  hours and upon reasonable prior  notice  to
Parent,  the  premises  and  books  and  records  of  Sellers
relating to the Business to the extent it deems necessary  or
advisable to familiarize itself with such premises and  other
matters.  Any information obtained by Buyer, Lifetime or  any
of  their representatives pursuant to this Agreement shall be
subject  to  the provisions of the Confidentiality  Agreement
(the  "Confidentiality Agreement"), dated February 10,  2005,
by  and  between  Lifetime and Seller Holding Company,  which
agreement remains in full force and effect.

7.5  Commercially Reasonable Efforts.

       (a)    The  Parties  shall  cooperate  and  use  their
respective commercially reasonable efforts to take, or  cause
to be taken, all appropriate action, and to make, or cause to
be  made,  all  filings necessary, proper or advisable  under
applicable   Laws  to  consummate  and  make  effective   the
transactions contemplated by this Agreement, including  their
respective  commercially reasonable efforts to obtain,  prior
to   the   Closing  Date,  all  consents  and  approvals   of
Governmental  Entities as are necessary for  consummation  of
the  transactions  contemplated  by  this  Agreement  and  to
fulfill the conditions to Closing.

      (b)   Each  Party  shall have the right  to  review  in
advance  and  to  consult with any other  Party,  subject  to
applicable Laws relating to the exchange of information, with
respect  to all material information submitted to  any  third
party  or  any  Governmental Entity in  connection  with  the
transactions  contemplated by this Agreement.  In  exercising
the  foregoing right, the Parties agree to act reasonably and
as  promptly as practicable.  Each Party agrees that it  will
consult  with  the other Parties hereto with respect  to  the
obtaining of all material consents, registrations, approvals,
permits   and   authorizations  of  all  third  parties   and
Governmental  Entities necessary or advisable  to  consummate
the  transactions  contemplated by this Agreement,  and  each
Party  will keep the other Parties apprised of the status  of
material  matters relating to completion of the  transactions
contemplated hereby.

     (c)  In the event any claim, action, suit, investigation
or  other  proceeding  by any Governmental  Entity  or  other
Person  is commenced that questions the validity or  legality
of  the transactions contemplated hereby or seeks damages  in
connection therewith, the Parties agree to cooperate and  use
all  commercially reasonable efforts to defend  against  such
claim,  action, suit, investigation or other proceeding  and,
if an injunction or other order is issued in any such action,
suit  or other proceeding, to use all commercially reasonable
efforts to have such injunction or other order lifted, and to
cooperate  reasonably regarding any other impediment  to  the
consummation of the transactions contemplated hereby.

7.6  Transfer Taxes.

     All   national,  federal,  state,  provincial  or  local
transfer taxes in any country, including excise, sales,  use,
value  added,  real  property transfer,  stamp,  documentary,
filing,  recordation, notarial and other  similar  taxes  and
fees  that  may  be imposed or assessed as a  result  of  the
transactions  contemplated by this Agreement,  together  with
any interest, additions or penalties with respect thereto and
any  interest in respect of such additions or penalties shall
be   paid  by  Buyers.   Sellers  shall  be  responsible  for
preparing all Tax Returns or other filings in connection with
transfer  taxes described in this Section 7.6.  Buyers  shall
provide   Sellers  with  such  cooperation  as  Sellers   may
reasonably   request  in  connection  with  the  preparation,
execution and filing of such Tax Returns or other filings.

7.7  Publicity.

     Except  as  otherwise  required by  Law  as  advised  by
counsel, none of the Parties shall issue any press release or
make any other public statement, in each case relating to  or
connected  with  or  arising out of  this  Agreement  or  the
matters contained herein, without obtaining the prior written
approval of Sellers and Buyers to the contents and the manner
of presentation and publication thereof, which approval shall
not be unreasonably withheld or delayed.

7.8  Expenses.

     Except  as  otherwise set forth in this  Agreement,  the
Parties shall pay all of their own expenses relating  to  the
transactions  contemplated by this Agreement, including,  the
fees  and  expenses  of  their own  agents,  representatives,
financial advisors, accountants, appraisers and counsel.

7.9  Bulk Sales.

     Sellers  and  Buyers  hereby waive compliance  with  the
provisions  of  the  "bulk sales"  or  similar  Laws  of  any
jurisdiction,  to  the extent applicable to the  transactions
contemplated hereby.

7.10 Applications for Buyer Licenses.

     As  promptly as practicable after the execution of  this
Agreement,  each of Buyer and Lifetime shall, as  applicable,
file with the relevant Governmental Entities all applications
necessary  to  obtain  the  Buyer  Licenses.   Sellers   will
cooperate  with  Buyer and Lifetime as reasonably  necessary,
upon  Lifetime's  request and at Lifetime's expense,  in  the
preparation and filing of such applications.

7.11 DC Leases and Flemington Lease.

      Sellers shall cause the owners of DC East, DC West  and
the facility to be demised by the Flemington Lease to execute
and  deliver  the DC Leases and the Flemington Lease  at  the
Closing.    Seller's   shall  pay  any  and   all   brokerage
commissions  and fees and any transfer taxes due and  payable
in connection with the same.

7.12 Cooperation by Sellers.

     Sellers  will  cooperate with Buyers in connection  with
the  obligations  of  Lifetime  to  file  with  the  SEC  the
financial  statements  and  pro forma  financial  information
required  to  be included by it in its periodic  reports  and
other   filings  (i.e.,  Forms  8-K,  10-K   and   10-Q   and
registration  statements filed under the  Securities  Act  of
1933)  by  (i)  making available to Buyers and  Lifetime  the
relevant   financial   statements  and  records,   documents,
representations  and  information  of  Sellers  and  such  of
Sellers'   employees  as  have  knowledge  thereof   as   may
reasonably    be   requested   by   Buyers   and    Lifetime;
(ii)  instructing the independent accountants of  Sellers  to
provide  at the request of Lifetime, such opinions,  consents
and comfort letters with respect to such financial statements
and  pro forma financial information that may be required  or
reasonably  necessary; and (iii) providing to the independent
accountants   of  Sellers  such  information,   records   and
representations  as  they may request  for  purposes  of  the
foregoing.   All fees and expenses, including  the  fees  and
expenses  of independent accountants, in connection with  any
of  the  foregoing shall be paid by Buyers, or if paid  by  a
Seller, then Buyers shall promptly reimburse such Seller  for
the full amount of the payment.

ARTICLE 8:  CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES

     The  obligations  of  each Party to  this  Agreement  to
effect  the transactions contemplated hereby shall be subject
to  the  satisfaction on or prior to the Closing Date of  the
following conditions, unless waived by each Buyer and by each
Seller:

8.1  Government Approvals.

     All  approvals of, or declarations or filings  with,  or
expiration  of  waiting periods imposed by, any  Governmental
Entity  necessary  for the consummation of  the  transactions
contemplated  by  this  Agreement  shall  have  been   filed,
occurred or been obtained.

8.2  Legal Action.

     No  temporary restraining order, preliminary  injunction
or   permanent  injunction  or  other  order  preventing  the
consummation  of the transactions contemplated  hereby  shall
have been issued by any federal or state court and remain  in
effect.

ARTICLE 9:  CONDITIONS TO THE OBLIGATIONS OF BUYERS AND
            LIFETIME

     The  obligations of Buyers and Lifetime  to  effect  the
transactions   contemplated  hereby  are   subject   to   the
satisfaction on or prior to the Closing Date of the following
conditions, unless waived by Buyers and Lifetime:

9.1  Representations and Warranties of Sellers.

     The  representations and warranties of Sellers set forth
in  this  Agreement shall be true and correct in all material
respects  (except that those representations  and  warranties
that are limited by materiality shall be true and correct  in
all  respects) as of the date of this Agreement and as of the
Closing Date as if made at and as of the Closing Date (except
where  such representations or warranties are made  expressly
as of a specific date, and then as of such date).

9.2  Performance of Obligations of Sellers.

     Sellers  shall  have performed in all material  respects
all  obligations  required to be performed by  each  of  them
under this Agreement on or prior to the Closing Date.

9.3  Seller Closing Certificate.

     An  authorized officer of Parent shall have executed and
delivered to Buyer the Seller Closing Certificate.

9.4  Ancillary Agreements

     Parent  shall have executed and delivered the Transition
Services Agreement and the Product Supply Agreement.   Outlet
shall have executed and delivered the Flemington Lease.  Each
of  Seller Holding Company and Parent shall have executed and
delivered  the DC Leases, as applicable.  There shall  be  no
default by lessor under any DC Lease or the Flemington  Lease
(whether or not it is executed or delivered by Buyers).

9.5  Corporate Authorization.

     Buyer  shall  have  received copies  of  the  board  and
stockholder   resolutions  of  each  Seller  approving   this
Agreement and the transactions contemplated hereby, certified
by appropriate officer of each Seller.

9.6  Required Consents.

     Sellers  shall have notified the lessor under each  Real
Property  lease  of  the proposed assignment  by  the  lessee
thereunder to Retail Sub of such Real Property Lease pursuant
to  this  Agreement and shall have requested such  lessor  to
consent  to  such  assignment and not less  than  twenty-five
percent  (25%)  of  all of the lessors of  all  Real  Propety
Leases  shall  have  advised Sellers that such  lessors  will
consent  to  such  assignment and not more  than  twenty-five
percent  (25%) of all of the lessors under all Real  Property
Leases  shall  have given Sellers any reason to believe  that
such  lessors will not consent to such assignment and  Parent
shall  have delivered to Buyers a certificate to such  effect
(the  "Seller Real Property Lease Consent Certificate").   In
addition, Sellers shall have obtained all consents listed  on
Schedule 9.6, which shall be in form and substance reasonably
acceptable to Buyer.

9.7  FIRPTA Certificates.

     Each of Parent, Investco and Outlet shall have delivered
to Buyers a certificate in the form attached as Schedule 9.7.

9.8  Licenses.

      Buyers  or Lifetime, as applicable, shall have  applied
for or obtained all material Licenses that (a) are reasonably
necessary for the operation of the Business, and (b)  can  be
obtained  prior  to  the Closing pursuant to  applicable  Law
(collectively, the "Buyer Licenses"); and with respect to any
such License for which any Buyer or Lifetime has applied, but
which  has  not  yet  been granted as  of  the  Closing,  the
Governmental  Entity  with authority to  grant  such  License
shall  not  have  issued  any order or  notice  stating  such
Governmental Entity's intent to deny such application.

9.9  No Actions or Orders.

     No  claim,  action,  litigation,  arbitration  or  other
proceeding shall be pending or threatened before any court or
other Governmental Entity or before any other Person, and  no
judgment  or order thereof shall be in effect that would  (i)
prevent  consummation of any of the transactions contemplated
by  this  Agreement or any of the Ancillary Agreements,  (ii)
affect  adversely the right of Buyers to own  the  Assets  or
(iii) restrain or prohibit Buyers' ownership or operation (or
that  of  any  of  their Affiliates) of all or  any  material
portion  of the Business or the Assets, or compel  Buyers  or
any of their Affiliates to dispose of or hold separate all or
any  material portion of the Business or Assets or all or any
material  portion of the business and assets  of  Buyers  and
their Affiliates.  No Law shall have been enacted or shall be
deemed  applicable to the transactions contemplated  by  this
Agreement or any of the Ancillary Agreements which has any of
the  effects  set forth in the foregoing clauses (i)  through
(iii).

9.10 Purchase Order Update.

      Sellers  shall  have delivered to  Lifetime  a  revised
version  of Schedule 5.10(c), updated as of the date that  is
two (2) Business Days prior to the Closing Date.

9.11 No Liens.

     Buyer shall have received evidence in form and substance
satisfactory  to  Buyer that all Liens other  than  Permitted
Liens with respect to the Assets have been released.

ARTICLE 10: CONDITIONS TO THE OBLIGATIONS OF SELLERS

     The  obligations  of Sellers to effect the  transactions
contemplated  hereby are subject to the  satisfaction  on  or
prior to the Closing Date of the following conditions, unless
waived by all Sellers:

10.1 Representations and Warranties of Buyer and Lifetime.

     The representations and warranties of Buyer and Lifetime
set  forth in this Agreement shall be true and correct in all
material  respects  (except  that those  representations  and
warranties that are limited by materiality shall be true  and
correct in all respects) as of the date of this Agreement and
as  of  the Closing Date as if made at and as of the  Closing
Date  (except  where such representations or  warranties  are
made  expressly  as of a specific date and then  as  of  such
date).

10.2 Performance of Obligations of Buyer  and Lifetime.

     Each  of Buyer and Lifetime shall have performed in  all
material respects all obligations required to be performed by
it under this Agreement on or prior to the Closing Date.

10.3 Buyer Closing Certificate.

     An authorized officer of Buyer and an authorized officer
of  Lifetime shall have executed and delivered to Sellers the
Buyer Closing Certificate.

10.4 Ancillary Agreements.

     Buyer  shall have executed and delivered the  Transition
Services  Agreement,  the Product Supply  Agreement,  the  DC
Leases and the Flemington Lease.

10.5 Corporate Authorization.

     Parent shall have received copies of the resolutions  of
each  Buyer and of Lifetime approving this Agreement and  the
transactions  contemplated hereby, certified  by  appropriate
officers of Buyers and Lifetime, as applicable.

ARTICLE 11: INDEMNIFICATION

11.1 Indemnification Obligations of Sellers

     Each  Seller  shall  jointly  and  severally  indemnify,
defend and hold harmless the Buyer Indemnified Parties  from,
against  and  in respect of any and all claims,  liabilities,
obligations,  losses,  costs,  expenses,  penalties,   fines,
judgments and damages (at equity or law), whenever arising or
incurred  (including reasonable attorneys' fees and expenses)
arising out of or relating to:

      (a)  any breach or inaccuracy of any representation  or
warranty  made by Sellers in this Agreement or any Conveyance
Document,  or by Parent in the Seller Closing Certificate  or
the Seller Real Property Lease Consent Certificate;

       (b)    any  breach  of  any  covenant,  agreement   or
undertaking  made  by  any Seller in this  Agreement  or  any
Conveyance Document; and

     (c)  the Excluded Liabilities.

     The  claims,  liabilities, obligations,  losses,  costs,
expenses,  penalties, fines, judgments  and  damages  of  the
Buyer  Indemnified Parties described in this Section 11.1  as
to  which  the  Buyer  Indemnified Parties  are  entitled  to
indemnification are hereinafter collectively referred  to  as
"Buyer Losses."

11.2 Indemnification Obligations of Buyer.

     Each  of  each  Buyer  and  Lifetime  will  jointly  and
severally  indemnify,  defend and hold  harmless  the  Seller
Indemnified Parties from, against and in respect of  any  and
all   claims,   liabilities,  obligations,   losses,   costs,
expenses, penalties, fines, judgments and damages (at  equity
or  law),  whenever arising or incurred (including reasonable
attorneys' fees and expenses) arising out of or relating to:

     (a)  the Assumed Liabilities;

      (b)  any breach or inaccuracy of any representation  or
warranty  made by any Buyer or Lifetime in this Agreement  or
any  Conveyance Document, or by Lifetime in the Buyer Closing
Certificate;

       (c)    any  breach  of  any  covenant,  agreement   or
undertaking  made by any Buyer or Lifetime in this  Agreement
or any Conveyance Document; and

      (d)   any  obligations or liabilities arising from  and
after  the  Closing  Date as a result of the  operations  and
activities of the Business conducted by any Buyer (or any  of
their Affiliates) from and after the Closing Date.

     The  claims,  liabilities, obligations,  losses,  costs,
expenses,  penalties, fines, judgments  and  damages  of  the
Seller Indemnified Parties described in this Section 11.2  as
to  which  the  Seller Indemnified Parties  are  entitled  to
indemnification are hereinafter collectively referred  to  as
"Seller Losses."

11.3 Notice of Claims.

     The  Indemnified Party shall notify Parent or Buyer,  as
the case may be, in writing promptly after becoming aware  of
any  Damages which an Indemnified Party shall have determined
has  given  rise  to  a claim by such Indemnified  Party  for
indemnification under this Article 11.  Such  written  notice
(a  "Claim Notice") shall include an estimate of the Damages,
if  known,  the method of computation thereof and a reference
to  the  specific provisions of this Agreement in respect  of
which  indemnification  is sought.  As  soon  as  practicable
after  the  date of such Claim Notice, the Indemnified  Party
shall  provide  the Indemnifying Party or his or  her  agents
access  to  all requested books and records in the possession
or  control  of the Indemnified Party which the  Indemnifying
Party reasonably determines to be related to such claim.   If
the  Indemnifying  Party expressly notifies  the  Indemnified
Party  that  it  does not dispute the claim or the  estimated
amount  of  Damages  described  in  such  Claim  Notice,  the
estimated  Damages in the amount specified in the Indemnified
Party's  Claim Notice will be conclusively deemed a liability
of  the  Indemnifying Party and the Indemnifying Party  shall
pay  the  amount  of  such Damages to the Indemnified  Party.
Otherwise, the dispute shall be resolved, and the amount,  if
any,  of  Damages payable by the Indemnifying  Party  to  the
Indemnified  Party  shall be determined, in  accordance  with
Section 13.10 below.  The provisions of this Section 11.3  do
not apply to Third Party Actions.

11.4 Procedure for Third Party Claims.

      (a)   If  any  third Person shall commence  an  action,
claim,   proceeding,   arbitration  or   suit   against   any
Indemnified Party with respect to any matter (a "Third  Party
Action")  which  may give rise to a claim for indemnification
under  this  Article  11,  then the Indemnified  Party  shall
notify  Parent  or  Buyer, as the case  may  be,  in  writing
promptly  after  becoming aware of such  Third  Party  Action
(such  notice being hereinafter called a "Third Party  Action
Notice"),  which  notice  shall  include  a  description  (in
reasonable detail) of the Third Party Action, an estimate  of
the  Damages, if known, the method of computation thereof and
a  reference to the specific provisions of this Agreement  in
respect  of which indemnification is sought. The Indemnifying
Party  will have twenty (20) days from receipt of such  Third
Party  Action  Notice to determine whether  or  not  (i)  the
Indemnifying Party will, at its sole cost and expense, defend
against  such Third Party Action and/or (ii) the Indemnifying
Party is disputing the claim for indemnity hereunder.

      (b)   If, by 5:00 p.m., York, Pennsylvania time on  the
last  day of the twenty (20) day period set forth in  Section
4(a),  the  Indemnifying Party (i) does not  respond  to  the
Third  Party Action Notice, (ii) responds to the Third  Party
Action Notice, but disputes the claim for indemnity hereunder
and  elects  not to assume the defense, or (iii) responds  to
the  Third Party Action Notice and does not dispute the claim
for  indemnity  but  elects not to assume  the  defense,  the
Indemnified Party shall have the right to defend against  any
such  Third  Party  Action by appropriate proceedings  or  to
settle  or pay any such Third Party Action for such an amount
as  the  Indemnified Party shall deem reasonably  appropriate
and  the  Indemnifying Party shall promptly pay  all  Damages
actually resulting from the final determination of the  Third
Party  Action  in  accordance with  subparagraph  (e)  below;
provided that in the case of clause (ii) of this subparagraph
(b),  any right of the Indemnified Party to recover from  the
Indemnifying  Party  shall depend on the  resolution  of  the
dispute  as  to  the  right of indemnity in  accordance  with
Section 13.10 hereof.

      (c)   If  the Indemnifying Party disputes the right  to
indemnity, but nevertheless elects to defend against any such
Third  Party  Action or settle or pay any  such  Third  Party
Action,  any  right of the Indemnified Party to recover  from
the  Indemnifying Party shall depend on the resolution of the
dispute  as  to  the  right of indemnity in  accordance  with
Section 13.10 hereof.

     (d)  Notwithstanding anything herein to the contrary, if
the Indemnifying Party notifies the Indemnified Party that it
will defend against or settle any Third Party Action:

          (i)  such  defense or settlement shall  be  at  the
               sole  cost  and  expense of  the  Indemnifying
               Party,  except for costs and expenses  of  the
               Indemnified Party's counsel, if any,  pursuant
               to items (v) and (vi) below;

          (ii) the  Indemnifying Party and its counsel  shall
               conduct  such  defense or  settlement  at  all
               times in good faith;

          (iii)      the  Indemnifying Party and its  counsel
               shall,  at  the  reasonable  request  of   the
               Indemnified Party, provide periodic updates to
               the  Indemnified Party in order  to  keep  the
               Indemnified  Party fully informed  as  to  its
               conduct  of  such  defense or settlement,  and
               shall  not  compromise or  settle  such  Third
               Party Action without the prior written consent
               of   the   Indemnified  Party   (not   to   be
               unreasonably withheld or delayed) unless  such
               settlement or compromise does not subject  the
               Indemnified Party to any monetary liability or
               injunction  or  other  equitable  relief,  and
               includes a complete release of the Indemnified
               Party from all liability with respect to  such
               Third Party Action;

          (iv) the   Indemnified   Party   shall   reasonably
               cooperate   with   the   Indemnifying   Party,
               including making available to the Indemnifying
               Party,  all  relevant witnesses and  pertinent
               documents   and  information  and  appropriate
               personnel;

          (v)  the  Indemnified Party may elect to employ its
               own counsel and participate in such defense or
               settlement  at  the Indemnified  Party's  sole
               cost  and  expense, but the  control  of  such
               defense and the settlement shall rest with the
               Indemnifying Party;

          (vi) notwithstanding   the   Indemnifying   Party's
               election to defend against or settle the Third
               Party Action, the Indemnified Party may,  upon
               written  notice  to  the  Indemnifying  Party,
               elect to employ its own counsel (who shall  be
               reasonably   acceptable  to  the  Indemnifying
               Party)  if  the Indemnifying Party is  also  a
               Person against whom the Third Party Action  is
               made   and  the  Indemnified  Party  has  been
               advised by counsel that (x) representation  of
               both  parties  by  the same counsel  would  be
               inappropriate  under applicable  standards  of
               professional  conduct or (y)  the  Indemnified
               Party has available to it one or more defenses
               or  counterclaims that are inconsistent  with,
               different from, or in addition to one or  more
               of   those  that  may  be  available  to   the
               Indemnifying Party with respect to such  Third
               Party Action; and

          (vii)      in  no event shall the Indemnified Party
               consent to the entry of any judgment or  enter
               into any settlement with respect to such Third
               Party Action without the prior written consent
               of the Indemnifying Party (which consent shall
               not be unreasonably withheld or delayed).

      (e)   Subject  to the other provisions of this  Section
11.4, if the Indemnifying Party:

          (i)  does  not  respond  to a  Third  Party  Action
               Notice  by 5:00 p.m., York, Pennsylvania  time
               on  the last day of the twenty (20) day period
               set forth in Section 11.4(a);

          (ii) does  not  elect to defend against  any  Third
               Party Action for which it does not dispute the
               Indemnified Party's right to indemnity;

          (iii)      does  not  elect to defend  against  any
               Third  Party Action for which it disputes  the
               Indemnified  Party's right to  indemnity,  and
               such  dispute is resolved, in accordance  with
               Section  13.10,  in  a  manner  affirming  the
               Indemnified Party's right to indemnity;

          (iv) elects  to  defend  against  any  Third  Party
               Action  for  which  it does  not  dispute  the
               Indemnified   Party's   right   to   indemnity
               hereunder; or

          (v)  elects  to  defend  against  any  Third  Party
               Action for which it does dispute the right  to
               indemnity,  to  the  extent  the  dispute   is
               resolved in a manner affirming the Indemnified
               Party's right to indemnity; then:

           the  Damages resulting from the settlement or  the
final,  non-appealable  adjudication  of  such  Third   Party
Action,  or  that portion thereof as to which the defense  is
unsuccessful,  shall  promptly be paid  by  the  Indemnifying
Party to the Indemnified Party.

11.5 Claims Period.

      The period during which a claim for indemnification may
be asserted under this Agreement by an Indemnified Party (the
"Claims  Period") shall begin on the Closing Date  and  shall
terminate  on  August  31, 2006; and provided  further,  that
notwithstanding the foregoing, the Claims Period during which
a  claim for indemnification may be asserted with respect  to
Section  5.4  shall  begin  on the  Closing  Date  and  shall
terminate  thirty  (30)  days after  the  expiration  of  the
statute  of  limitations applicable thereto.  Notwithstanding
the foregoing, if, prior to the close of business on the last
day  of  the Claims Period, an Indemnifying Party shall  have
been properly notified of a claim for indemnity hereunder and
such  claim shall not have been finally resolved or  disposed
of  at  such  date, such claim shall continue to survive  and
shall remain a basis for indemnity hereunder until such claim
is  finally  resolved or disposed of in accordance  with  the
terms hereof.

11.6 Limitations.

      Notwithstanding  anything to  the  contrary  set  forth
herein:

      (a)   the total amount of Damages for which all Sellers
shall  be  collectively responsible pursuant  to  claims  for
indemnification  asserted  under Section  11.1(a)  shall  not
exceed,   in   the   aggregate,  Seventeen  Million   Dollars
($17,000,000) (the "Indemnity Cap");

      (b)   the total amount of Damages for which all  Buyers
and  Lifetime shall be collectively responsible  pursuant  to
claims  for  indemnification asserted under  Section  11.2(b)
shall not exceed, in the aggregate, the Indemnity Cap;

      (c)   the Buyer Indemnified Parties shall have no right
of  indemnification  hereunder unless the  amount  for  which
indemnification  would otherwise be payable with  respect  to
Buyer  Losses  exceeds, in the aggregate, Two  Hundred  Fifty
Thousand Dollars ($250,000) (the "Threshold Amount") and,  in
such  event, such right of indemnification shall be only  for
Buyer  Losses which, in the aggregate, are in excess  of  the
Threshold Amount; and

      (d)  the Seller Indemnified Parties shall have no right
of  indemnification  hereunder unless the  amount  for  which
indemnification  would otherwise be payable with  respect  to
Seller Losses exceeds, in the aggregate, the Threshold Amount
and,  in  such event, such right of indemnification shall  be
only for Seller Losses which, in the aggregate, are in excess
of the Threshold Amount.

11.7 Investigations.

      No Party shall be entitled to indemnification hereunder
for  the  breach  or  inaccuracy  of  any  representation  or
warranty  if  such Party has knowledge of such breach  at  or
prior to the Closing.

11.8 Offset for Insurance Recoveries and Tax Benefits.

      (a)   All  claims  for Buyer Losses  or  Seller  Losses
hereunder  shall  be  made  net  of  any  insurance  proceeds
actually  recovered  by the Indemnified Party  claiming  such
indemnification.   Each  Indemnified Party  shall  diligently
pursue  and  seek  to  recover any  such  insurance  proceeds
available under insurance policies under the control of  such
Indemnified Party.

      (b)   The  amount of any Buyer Losses or Seller  Losses
hereunder shall be net of any foreign, federal, or  state  or
local  income  Tax  benefit actually realized  or  the  then-
present  value (based on a discount rate of 5%) of  any  such
income Tax benefit reasonably expected to be realized by  the
Indemnified  Party  by reason of the facts and  circumstances
giving rise to the indemnification.

11.9 Consequential Damages.

     Except as provided in Section 11.7 hereof, no event will
any  Party  be liable hereunder for any special,  incidental,
indirect  or  consequential damages of any  kind  or  nature,
regardless  of the form of action through which such  damages
are  sought.  In no event will any Party be liable  hereunder
for  lost  profits resulting from an alleged breach  of  this
Agreement,  even if under applicable Law, such  lost  profits
would not be considered consequential or special damages.

11.10     Exclusive Remedy.

     Except as set forth in Section 7.6 and Section 12.2, and
excluding fraud, the indemnification rights provided in  this
Article  11  shall be the exclusive remedy of the Indemnified
Parties  and their successors and assigns arising out  of  or
relating to this Agreement, the Conveyance Documents and  the
transactions  contemplated  hereby  and  thereby;   provided,
however,   that   the  foregoing  shall  not   prohibit   any
Indemnified  Party from seeking specific performance  of  its
rights under this Agreement.

11.11     Parent Agency.

     Upon  the  execution of this Agreement by  each  of  the
Seller Subsidiaries, and without any further act of by any of
them, Parent shall be, and hereby is, appointed as agent  and
attorney-in-fact   for  each  of  the   Seller   Subsidiaries
effective  upon  the  Closing Date, and each  of  the  Seller
Subsidiaries hereby authorizes Parent to take such action  on
behalf  of  any  or all of them as Parent  may  in  its  sole
discretion deem appropriate in respect of this Agreement  and
the  transactions  contemplated hereby, and  to  receive  all
notices  or  documents given or to be given to  any  of  them
pursuant hereto.

11.12     Tax Treatment of Indemnity Payments.

   Buyers and Sellers agree to treat, and Sellers agree to
cause Seller Holding Company to treat, to the extent
permitted under applicable law, indemnification payments
hereunder as adjustments to the Purchase Price for tax
purposes.

ARTICLE 12: TERMINATION

12.1 Termination.

     This Agreement may be terminated prior to the Closing:

     (a)  by mutual written consent of Buyers and Sellers;

     (b)  by Buyers:

          (i)  if  there  has  been a material  breach  by  a
               Seller   of  any  representation  or  warranty
               contained  herein  or in the  due  and  timely
               performance  of  any  covenant  or   agreement
               contained  herein  and  Buyers  have  notified
               Parent  of  such  breach in  writing  and  the
               breach  has not been cured within twenty  (20)
               Business Days after the notice of the  breach;
               or

          (ii) if  the Closing shall not have occurred on  or
               before  December  31, 2005 by  reason  of  the
               failure  of  any  condition  precedent   under
               Section  8.1  or  Section  8.2  (unless   such
               failure was within the control of Buyers); or

     (c)  by a Seller:

          (i)  if there has been a material breach by a Buyer
               of  any  representation or warranty  contained
               herein or in the due and timely performance of
               any covenant or agreement contained herein and
               Seller  has notified Buyers of such breach  in
               writing  and  the breach has  not  been  cured
               within  twenty  (20) Business Days  after  the
               notice of the breach; or

          (ii) if  the Closing shall not have occurred on  or
               before  December  31, 2005 by  reason  of  the
               failure  of  any  condition  precedent   under
               Section  8.1  or  Section  8.2  (unless   such
               failure was within the control of a Seller).

12.2 Effect of Termination.

     In  the  event  of  termination of this Agreement,  this
Agreement shall forthwith become void and there shall  be  no
liability or obligation on the part of the Parties  or  their
respective  officers or directors except for  obligations  of
Buyer   under  the  Confidentiality  Agreement,  which  shall
survive  termination.  Notwithstanding the foregoing, nothing
contained  herein shall relieve any Party from liability  for
any material breach of any covenant, agreement or undertaking
in  this Agreement occurring prior to the termination of this
Agreement.

ARTICLE 13: MISCELLANEOUS

13.1 Entire Understanding.

     This  Agreement  (including the Schedules  and  Exhibits
hereto),   the  Confidentiality  Agreement  and   the   other
agreements  and  instruments, the execution and  delivery  of
which   are  provided  for  herein,  constitute  the   entire
agreement  and  understanding  of  the  Parties  hereto  with
respect  to  the  subject matter hereof,  and  terminate  and
supersede   any   and  all  prior  correspondence,   offering
materials, agreements, arrangements and understandings,  oral
or  written, among the Parties concerning the subject  matter
hereof and thereof.

13.2 Waiver and Amendment.

     No  waiver,  amendment, modification or  change  of  any
provision  of  this Agreement shall be effective  unless  and
until  made in writing and signed by the Parties.  No waiver,
forbearance or failure by any Party of its rights to  enforce
any provision of this Agreement shall constitute a waiver  or
estoppel of such Party's right to enforce any other provision
of  this  Agreement or a continuing waiver by such  Party  of
compliance with any provision.

13.3 Headings.

     The  headings  herein are for convenience only,  do  not
constitute a part of this Agreement, and shall not be  deemed
to limit or affect any of the provisions hereof.

13.4 Counterparts.

     This  Agreement may be executed by facsimile and in  two
or  more  counterparts, each of which shall be deemed  to  be
original, but all of which together shall constitute one  and
the same instrument.

13.5 Interpretation.

     The  provisions  of this Agreement are  intended  to  be
interpreted  and  construed in a manner so as  to  make  such
provisions valid, binding and enforceable.  In the event that
any provision of this Agreement is determined to be partially
or  wholly  invalid,  illegal  or  unenforceable,  then  such
provision shall be deemed to be modified or restricted to the
extent  necessary to make such provision valid,  binding  and
enforceable,  or,  if such provision cannot  be  modified  or
restricted  in  a manner so as to make such provision  valid,
binding and enforceable, then such provision shall be  deemed
to  be  excised from this Agreement and the validity, binding
effect and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired in any manner.

13.6 Notices.

     All  notices, requests, demands and other communications
under  this Agreement shall be in writing and shall be deemed
to  have  been delivered and received (a) three (3)  business
days  after  having been mailed in a general or  branch  post
office  and  enclosed in a registered or certified  post-paid
envelope; or (b) if personally delivered, or if delivered  by
overnight mail or courier service, when actually received  by
the Party to whom the notice is sent (or upon confirmation of
such receipt received by sending Party); in each case, to the
address of the respective Party stated below or to such other
changed  addresses as such Party may have fixed by notice  as
provided herein:

     If to any Seller:   The Pfaltzgraff Co.
                         140 East Market Street
                         York, Pennsylvania  17401
                         United States of America
                         Fax:  +1 (717) 771-1440
                         Attn:  Craig W. Bremer, Esq.

     with a copy to:     Venable LLP
                         1800 Mercantile Bank & Trust Building
                         Two Hopkins Plaza
                         Baltimore, MD  21201
                         United States of America
                         Fax:  +1 (410) 244-7742
                         Attn:  Michael J. Baader, Esq.

     If to a Buyer or
     Lifetime:           Lifetime Brands, Inc.
                         1 Merrick Ave.
                         Westbury, NY 11590
                         Fax:  (516) 683-6006
                         Attn: Ronald Shiftan, Vice Chairman

     with a copy to:     Samuel B. Fortenbaugh III, Esq.
                         1211 Avenue of the Americas, 27th Floor
                         New York, NY 10036
                         Fax: (212) 596-3391

13.7 Assignment; Successors in Interest.

     No  assignment or transfer by any Party of such  Party's
rights  and  obligations under this Agreement  will  be  made
except with the prior written consent of the other Parties to
this  Agreement;  provided  that Buyers  shall,  without  the
obligation to obtain the prior written consent of  any  other
Party to this Agreement, be entitled to assign this Agreement
or  all or any part of its rights or obligations hereunder to
one (1) or more wholly-owned subsidiaries of a Buyer, but any
such assignment shall not relieve the assigning Buyer of  any
of  its obligations or duties hereunder.  This Agreement will
be  binding upon and will inure to the benefit of the Parties
and their successors and permitted assigns, and any reference
to  a  Party  will  also be a reference  to  a  successor  or
permitted assign.

13.8 Construction.

     The Parties have participated jointly in the negotiation
and drafting of this Agreement.  In the event an ambiguity or
question  of intent or interpretation arises, this  Agreement
shall  be construed as if drafted jointly by the Parties  and
no  presumption  or burden of proof shall arise  favoring  or
disfavoring any Party by virtue of the authorship of  any  of
the provisions of this Agreement.

13.9 Controlling Law.

     This  Agreement  will be governed by and  construed  and
enforced  in  accordance  with  the  internal  laws  of   the
Commonwealth of Pennsylvania without regard to choice of  law
principles.

13.10     Dispute Resolution; Jurisdiction; Specific
Performance.

     (a)  If a dispute arises out of this Agreement or any of
the  other  agreements  and instruments,  the  execution  and
delivery of which are provided for herein, or a breach of any
of  the  foregoing,  and  if the dispute  cannot  be  settled
through  negotiation, the Parties agree first to try in  good
faith   to   settle  the  dispute  by  mediation   in   York,
Pennsylvania   administered  by  the   American   Arbitration
Association  under its Commercial Mediation  Procedures  (the
"CMP")   before  resorting  to  another  dispute   resolution
procedure.    Promptly  upon  written  notice  (a  "Mediation
Notice")  from one Party (the "Claimant") to the other  Party
(the  "Respondent")  of  the Claimant's  desire  to  initiate
mediation, the Claimant and Respondent shall jointly select a
single mediator who shall have the authority to conduct  such
mediation.   If  the Claimant and Respondent  are  unable  to
agree  within  ten (10) days after delivery  of  a  Mediation
Notice  to  Respondent, the mediator shall be selected  by  a
judge  sitting on the Court of Common Pleas for York  County,
Pennsylvania.   Notwithstanding anything in the  CMP  to  the
contrary,  the  expenses  of the  mediation  shall  be  borne
equally  by the parties to the mediation, provided,  however,
that  each party shall pay for and bear the cost of  its  own
experts, evidence and legal counsel.

     (b)  Each of the Parties hereby irrevocable consents and
agrees  that all Legal Disputes that are not resolved through
mediation  in  accordance  with  Section  13.10(a)  shall  be
brought  only to the exclusive jurisdiction of the courts  of
the  Commonwealth  of  Pennsylvania  or  the  federal  courts
located  in  the Commonwealth of Pennsylvania.   The  Parties
agree  that,  after  a Legal Dispute is  before  a  court  as
specified in this Section 13.10(b) and during the pendency of
such  Legal Dispute before such court, all actions, suits  or
proceedings with respect to such Legal Dispute or  any  other
Legal  Dispute,  including any counterclaim,  cross-claim  or
interpleader, shall be subject to the exclusive  jurisdiction
of such court.  Each of the Parties hereby waives, and agrees
not  to assert, as a defense in any legal dispute, that  such
Party  is  not subject thereto or that such action,  suit  or
proceeding may not be brought or is not maintainable in  such
court or that such Party's property is exempt or immune  from
execution, that the action, suit or proceeding is brought  in
an  inconvenient forum or that the venue of the action,  suit
or  proceeding  described  in this Section  13.10  after  the
expiration of any period permitted for appeal and subject  to
any  stay  during  appeal  shall be  conclusive  and  may  be
enforced in other jurisdictions by suit on the judgment or in
any other manner provided by applicable laws.

      (c)  The Parties agree that the remedies at law of  any
Party  for  any actual or threatened breach of this Agreement
would be inadequate and that the Parties shall be entitled to
specific performance of this Agreement, including entry of an
ex  parte,  temporary restraining order in state  or  federal
court,  preliminary and permanent injunctive  relief  against
activities  in  violation of any of  the  covenants  in  this
Agreement,  or  both, in addition to any  damages  and  legal
expenses which a Party may be legally entitled to recover.

13.11     No Third Party Beneficiaries.

     Except  as  specifically provided herein, this Agreement
shall  not confer any rights of remedies on any Person  other
than   the  Parties  and  their  respective  successors   and
permitted assigns; provided, however, that the provisions  in
Article 11 above concerning indemnification are intended  for
the  benefit  of  the  Persons specified  therein  and  their
respective legal representatives.

13.12     Lifetime Guarantee of Buyer Obligations.

     Lifetime  agrees to take all action necessary  to  cause
Buyers  to  perform  all of their agreements,  covenants  and
obligations  under this Agreement.  Lifetime  unconditionally
guarantees  to  Sellers the full and complete performance  by
Buyers   solely  of  their  pre-Closing  and   Closing   Date
obligations  under  this Agreement.  Lifetime  hereby  waives
diligence, presentment, demand of performance, filing of  any
claim,  any  right  to require any proceeding  first  against
Buyers,  protest,  notice  and  all  demands  whatsoever   in
connection with the performance of its obligations set  forth
in this Section 13.12.

   The remainder of this page is left blank intentionally.
               Signatures follow on next page.
     IN  WITNESS WHEREOF, the Parties have each executed  and
delivered  this Asset Purchase Agreement as of  the  day  and
year first above written.

                       PFZ ACQUISITION CORP.

                       By:
                       Name:
                       Title:

                       PFZ OUTLET RETAIL, INC.

                       By:
                       Name:
                       Title:

                       LIFETIME BRANDS, INC.

                       By:
                       Name:
                       Title:

              Signatures continue on next page

                       THE PFALTZGRAFF CO.

                       By:
                       Name:
                       Title:

                       PFALTZGRAFF INVESTMENT CO.

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF OUTLET CO.

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF MANUFACTURING CO.

                       By:
                       Name:
                       Title:

                          BILL OF SALE

      THIS BILL OF SALE (this "Bill of Sale") is made and entered
into  effective  as  of  _________  ___,  2005,  by  and  between
______________________________,   a   ____________    corporation
("Buyer"),  and  ______________________________,  a  ____________
corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware.  All capitalized terms used
and  not  otherwise  defined  herein  will  have  the  respective
meanings ascribed to such terms in the Purchase Agreement.

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement,  Seller  hereby  sells, transfers,  assigns,  conveys,
grants  and  delivers to Buyer, effective as of the  Closing  (as
defined in the Purchase Agreement), all of Seller's right,  title
and  interest in and to all of the assets, properties and  rights
of  Seller  used,  or  held for use primarily  in  the  Business,
including, without limitation, the assets described on Schedule A
annexed hereto and incorporated herein by this reference.

      Nothing  in this Bill of Sale shall be deemed to supersede,
enlarge   or  modify  any  of  the  provisions  of  the  Purchase
Agreement,  all  of which survive the execution and  delivery  of
this Bill of Sale as provided and subject to the limitations  set
forth  in the Purchase Agreement.  If any conflict exists between
the  terms  of  this Bill of Sale and the terms of  the  Purchase
Agreement,  the terms of the Purchase Agreement shall govern  and
control.

      The  Seller  agrees that from time to time at  the  Buyer's
request,  the  Seller  will  execute  and  deliver  such  further
instruments  of  conveyance  and transfer  and  take  such  other
actions  as may be reasonably required to carry out the  purposes
of this Bill of Sale

      This  Bill  of Sale shall be governed by and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

       This  Bill  of  Sale  may  be  executed  in  two  or  more
counterparts, each of which shall be deemed an original, and  all
of which shall together constitute one and the same instrument.

     The remainder of this page is left blank intentionally.
                 Signatures follow on next page.
     IN WITNESS WHEREOF, Seller and Buyer have executed this Bill
of Sale as of the date first set forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
                         TO BILL OF SALE

                      [insert description]

               ASSIGNMENT AND ASSUMPTION AGREEMENT

     THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment")
is  made and entered into effective as of _________ ___, 2005, by
and   between   ______________________________,  a   ____________
corporation  ("Buyer"),  and  ______________________________,   a
____________ corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware.  All capitalized terms used
and  not  otherwise  defined  herein  will  have  the  respective
meanings ascribed to such terms in the Purchase Agreement.

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement:

      1.    Effective  as of the Closing, Seller hereby  assigns,
transfers coveys and delegates to Buyer and Buyer hereby  assumes
and  agrees  to pay, perform, discharge or otherwise  satisfy  in
accordance  with  their  respective terms,  all  of  the  Assumed
Liabilities  associated with the Assets  conveyed  to  the  Buyer
pursuant  to the to that certain Bill of Sale, dated  as  of  the
date  hereof,  by  Seller.   Except for the  Assumed  Liabilities
assumed herein, Buyer does not assume, agree to pay or satisfy or
have  any responsibility or obligation whatsoever for any  debts,
liabilities or obligations of Seller.

       2.    Nothing  in  this  Assignment  shall  be  deemed  to
supersede,  enlarge  or  modify any  of  the  provisions  of  the
Purchase Agreement, all of which shall survive the execution  and
delivery  of this Assignment as provided in, and subject  to  the
limitations  set  forth  in,  the  Purchase  Agreement.   If  any
conflict  exists  between the terms of this  Assignment  and  the
terms  of  the  Purchase  Agreement, the terms  of  the  Purchase
Agreement shall govern and control.

      This  Assignment  shall be governed  by  and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

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

     The remainder of this page is left blank intentionally.
                 Signatures follow on next page.
      IN  WITNESS  WHEREOF, Seller and Buyer have  executed  this
Assignment  and  Assumption Agreement as of the  date  first  set
forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
             TO ASSIGNMENT AND ASSUMPTION AGREEMENT

                      [insert description]

               ASSIGNMENT AND ASSUMPTION OF LEASES

     THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment")
is  made and entered into effective as of _________ ___, 2005, by
and   between   ______________________________,  a   ____________
corporation  ("Buyer"),  and  ______________________________,   a
____________ corporation ("Seller").

      WHEREAS, Buyer and Seller are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made  and  entered
into  as of the 17th day of June, 2005, by and among, (a) on  one
hand, THE PFALTZGRAFF CO., a corporation organized under the laws
of    the   Commonwealth   of   Pennsylvania,   THE   PFALTZGRAFF
MANUFACTURING CO., a corporation organized under the laws of  the
Commonwealth  of  Pennsylvania,  PFALTZGRAFF  INVESTMENT  CO.,  a
corporation  organized under the laws of the State  of  Delaware,
and THE PFALTZGRAFF OUTLET CO., a corporation organized under the
laws  of  the  State  of Maryland; and (b)  on  the  other  hand,
LIFETIME BRANDS, INC., a corporation organized under the laws  of
Delaware,  PFZ  ACQUISITION CORP., a corporation organized  under
the  laws of Delaware, and PFZ OUTLET RETAIL, INC., a corporation
organized under the laws of Delaware; and

      WHEREAS,  Seller  is a party to those leases  described  on
Schedule  A  annexed  hereto  and  incorporated  herein  by  this
reference (the "Transferred Leases").

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt,  adequacy  and legal sufficiency  of  which  are  hereby
acknowledged, and as contemplated by Section 2.1 of the  Purchase
Agreement:

      1.    Seller hereby assigns, transfers and sets  over  unto
Buyer,  effective  as of the Effective Time (as  defined  in  the
Purchase Agreement), all of Seller's right, title and interest in
and  to (i) the Transferred Leases and (ii) all security deposits
heretofore made by Seller pursuant to the Transferred Leases.

      2.    Buyer  hereby  accepts the foregoing  assignment  and
agrees  to  perform  all  of  the terms  and  conditions  of  the
Transferred  Leases to be performed on the part  of  Seller,  and
assumes  all  of the liabilities and obligations of Seller  under
the  Transferred  Leases  arising or accruing  at  or  after  the
Effective Time.

      This  Assignment  shall be governed  by  and  construed  in
accordance  with  the  laws of the Commonwealth  of  Pennsylvania
without regard to the principles of conflicts of laws thereunder.

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

      Nothing  in  this Assignment shall be deemed to  supersede,
enlarge   or  modify  any  of  the  provisions  of  the  Purchase
Agreement, all of which shall survive the execution and  delivery
of this Assignment as provided in, and subject to the limitations
set  forth  in,  the Purchase Agreement.  If any conflict  exists
between  the  terms  of  this Assignment and  the  terms  of  the
Purchase  Agreement,  the terms of the Purchase  Agreement  shall
govern and control.
     IN WITNESS WHEREOF, Seller and Buyer have executed this
Assignment and Assumption of Leases as of the date first set
forth hereinabove.

                       [SELLER]:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______  day  of  _____________,  2005,   before   me,
______________________________,        personally        appeared
_________________,  _______________ of _____________,  personally
known  to  me  (or  proved  to me on the  basis  of  satisfactory
evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed  the  same
in  his/her authorized capacity and that by his/her signature  on
the  instrument  the person, or the entity upon behalf  of  which
he/she acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

[BUYER]:

By:
Name:
Title:

                           SCHEDULE A
             TO ASSIGNMENT AND ASSUMPTION OF LEASES

                      [insert description]

                      ASSIGNMENT OF TRADEMARKS

      THIS ASSIGNMENT OF TRADEMARKS (this "Assignment of Trademarks")
is  made  as  of the ______ day of ___________, 2005, THE PFALTZGRAFF
CO.,  a  corporation organized under the laws of the Commonwealth  of
Pennsylvania  ("Parent"),  THE  PFALTZGRAFF  MANUFACTURING   CO.,   a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania   ("Manufacturing"),  PFALTZGRAFF  INVESTMENT   CO.,   a
corporation  organized  under  the laws  of  the  State  of  Delaware
("Investco"), and THE PFALTZGRAFF OUTLET CO., a corporation organized
under  the  laws  of  the  State of Maryland (together  with  Parent,
Manufacturing  and  Investco, collectively the "Assignors"),  to  PFZ
ACQUISITION  CORP., a corporation organized under  the  laws  of  the
State of Delaware ("Assignee").

     WHEREAS, Assignee and Assignors are parties to an Asset Purchase
Agreement (the "Agreement"), dated as of June 17, 2005, by and among,
on one hand, Assignors, and on the other hand, LIFETIME BRANDS, INC.,
a  corporation  organized  under the laws  of  Delaware,  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware, and
Assignee; and

      WHEREAS, in accordance with the Agreement, Assignors desire  to
transfer  and assign to Assignee, and Assignee desires to accept  the
transfer  and  assignment of, all of Assignors' respective  worldwide
right, title and interest in and to all of Assignors' Trademarks  (as
defined   in   the  Agreement),  including  without  limitation   the
Trademarks  listed  in  Schedule A annexed  hereto  and  incorporated
herein by this reference.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein  and in the Agreement and other good  and  valuable
consideration,  the  receipt  and sufficiency  of  which  are  hereby
acknowledged,  Assignors hereby transfer and assign to Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignors' worldwide right, title and interest in, to and  under  the
Trademarks,  ,  and  all rights to sue for past infringement  of  any
Trademark, the same to be held and enjoyed by the said Assignee,  its
successors  and assigns from and after the date hereof as  fully  and
entirely  as  the same would have been held and enjoyed by  the  said
Assignors had this Assignment not been made.

      Except  to the extent that federal law preempts state law  with
respect  to the matters covered hereby, this Assignment of Trademarks
shall be governed by and construed in accordance with the laws of the
Commonwealth  of  Pennsylvania without regard to  the  principles  of
conflicts of laws thereunder.

      This  Assignment of Trademarks may be executed in two  or  more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      Nothing  in  this Assignment of Trademarks shall be  deemed  to
supersede,  enlarge or modify any of the provisions of  the  Purchase
Agreement,  all of which shall survive the execution and delivery  of
this  Assignment  of Trademarks as provided in, and  subject  to  the
limitations  set forth in, the Purchase Agreement.  If  any  conflict
exists  between  the terms of this Assignment of Trademarks  and  the
terms  of the Purchase Agreement, the terms of the Purchase Agreement
shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
      IN  WITNESS WHEREOF, each Assignor and the Assignee has  caused
its  duly  authorized officer to execute this Assignment as  of  date
first set forth hereinabove.

                       THE PFALTZGRAFF CO.:

                       By:
                       Name:
                       Title:

                       PFALTZGRAFF INVESTMENT CO.:

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF OUTLET CO.:

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF MANUFACTURING CO.:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________,   _______________   of   The   Pfaltzgraff    Co.,
_________________,  _______________ of The Pfaltzgraff  Manufacturing
Co., _________________, _______________ of Pfaltzgraff Investment Co.
and _________________, _______________ of The Pfaltzgraff Outlet Co.,
each  personally  known  to me (or proved  to  me  on  the  basis  of
satisfactory  evidence) to be the person whose name is subscribed  to
the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity and that by his/her signature  on
the  instrument the person, or the entity upon behalf of which he/she
acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

PFZ ACQUISITION CORP.:

By:
Name:
Title:

                           SCHEDULE A
                   TO ASSIGNMENT OF TRADEMARKS

Registered Trademarks

Trademark               U.S. Registration No.      Registration Date

Pending Trademark Applications

Trademark               U.S. Serial No.            Application Date

                      ASSIGNMENT OF COPYRIGHTS

      THIS ASSIGNMENT OF COPYRIGHTS (this "Assignment of Copyrights")
is made as of the ______ day of ___________, 2005, by THE PFALTZGRAFF
CO.,  a  corporation organized under the laws of the Commonwealth  of
Pennsylvania  ("Parent"),  THE  PFALTZGRAFF  MANUFACTURING   CO.,   a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania   ("Manufacturing"),  PFALTZGRAFF  INVESTMENT   CO.,   a
corporation  organized  under  the laws  of  the  State  of  Delaware
("Investco"), and THE PFALTZGRAFF OUTLET CO., a corporation organized
under  the  laws  of  the  State of Maryland (together  with  Parent,
Manufacturing  and  Investco, collectively the "Assignors"),  to  PFZ
ACQUISITION  CORP., a corporation organized under  the  laws  of  the
State of Delaware ("Assignee").

     WHEREAS, Assignee and Assignors are parties to an Asset Purchase
Agreement (the "Agreement"), dated as of June 17, 2005, by and among,
on one hand, Assignors, and on the other hand, LIFETIME BRANDS, INC.,
a  corporation  organized  under the laws  of  Delaware,  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware, and
Assignee; and

      WHEREAS, in accordance with the Agreement, Assignors desire  to
transfer  and assign to Assignee, and Assignee desires to accept  the
transfer  and  assignment of, all of Assignors' respective  worldwide
right, title and interest in and to all of Assignors' Copyrights  (as
defined   in   the  Agreement),  including  without  limitation   the
Copyrights  listed  in  Schedule A annexed  hereto  and  incorporated
herein by this reference.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein  and in the Agreement and other good  and  valuable
consideration,  the  receipt  and sufficiency  of  which  are  hereby
acknowledged,  Assignors hereby transfer and assign to Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignors' worldwide right, title and interest in, to and  under  the
Copyrights,  and  all  rights to sue for  past  infringement  of  any
Copyright, the same to be held and enjoyed by the said Assignee,  its
successors  and assigns from and after the date hereof as  fully  and
entirely  as  the same would have been held and enjoyed by  the  said
Assignors had this Assignment not been made.

      Except  to the extent that federal law preempts state law  with
respect  to the matters covered hereby, this Assignment of Copyrights
shall be governed by and construed in accordance with the laws of the
Commonwealth  of  Pennsylvania without regard to  the  principles  of
conflicts of laws thereunder.

      This  Assignment of Copyrights may be executed in two  or  more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      Nothing  in  this Assignment of Copyrights shall be  deemed  to
supersede,  enlarge or modify any of the provisions of  the  Purchase
Agreement,  all of which shall survive the execution and delivery  of
this  Assignment  of Copyrights as provided in, and  subject  to  the
limitations  set forth in, the Purchase Agreement.  If  any  conflict
exists  between  the terms of this Assignment of Copyrights  and  the
terms  of the Purchase Agreement, the terms of the Purchase Agreement
shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
      IN  WITNESS WHEREOF, each Assignor and the Assignee has  caused
its  duly  authorized officer to execute this Assignment as  of  date
first set forth hereinabove.

                       THE PFALTZGRAFF CO.:

                       By:
                       Name:
                       Title:

                       PFALTZGRAFF INVESTMENT CO.:

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF OUTLET CO.:

                       By:
                       Name:
                       Title:

                       THE PFALTZGRAFF MANUFACTURING CO.:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________,   _______________   of   The   Pfaltzgraff    Co.,
_________________,  _______________ of The Pfaltzgraff  Manufacturing
Co., _________________, _______________ of Pfaltzgraff Investment Co.
and _________________, _______________ of The Pfaltzgraff Outlet Co.,
each  personally  known  to me (or proved  to  me  on  the  basis  of
satisfactory  evidence) to be the person whose name is subscribed  to
the within instrument and acknowledged to me that he/she executed the
same in his/her authorized capacity and that by his/her signature  on
the  instrument the person, or the entity upon behalf of which he/she
acted, executed the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

PFZ ACQUISITION CORP.:

By:
Name:
Title:

                           SCHEDULE A
                   TO ASSIGNMENT OF COPYRIGHTS

Registered Copyrights

Copyright     Author(s)     U.S. Registration No.    Registration Date

Pending Copyright Applications

Copyright        Author(s)      Application No.     Application Date

                     ASSIGNMENT OF DOMAIN NAMES

     THIS  ASSIGNMENT OF DOMAIN NAMES (this "Assignment") is made  as
of   the   ______   day  of  ___________,  2005,   by   and   between
______________________________,    a     ____________     corporation
("Assignor"),  and  ______________________________,  a   ____________
corporation ("Assignee").

     WHEREAS, Assignee and Assignor are parties to that certain Asset
Purchase  Agreement (the "Purchase Agreement") made and entered  into
as  of the 17th day of June, 2005, by and among, (a) on one hand, THE
PFALTZGRAFF  CO.,  a  corporation organized under  the  laws  of  the
Commonwealth  of Pennsylvania, THE PFALTZGRAFF MANUFACTURING  CO.,  a
corporation   organized  under  the  laws  of  the  Commonwealth   of
Pennsylvania,  PFALTZGRAFF INVESTMENT CO.,  a  corporation  organized
under  the laws of the State of Delaware, and THE PFALTZGRAFF  OUTLET
CO., a corporation organized under the laws of the State of Maryland;
and  (b)  on  the  other hand, LIFETIME BRANDS, INC.,  a  corporation
organized  under  the  laws  of Delaware, PFZ  ACQUISITION  CORP.,  a
corporation  organized  under the laws of Delaware,  and  PFZ  OUTLET
RETAIL, INC., a corporation organized under the laws of Delaware; and

     WHEREAS,  Assignor is the owner of the registered  domain  names
listed  on Schedule A annexed hereto and incorporated herein by  this
reference (the "Domain Names") and the goodwill symbolized thereby.

     NOW, THEREFORE, for and in consideration of the mutual covenants
contained  herein and in the Purchase Agreement and  other  good  and
valuable  consideration,  the receipt and  sufficiency  of  which  is
hereby acknowledged:

     1.    Assignor  hereby transfers and assigns  to  Assignee,  and
Assignee  hereby  accepts  the transfer and  assignment  of,  all  of
Assignor's  worldwide right, title and interest in and to the  Domain
Names,  and  all rights to sue for past infringement  of  any  Domain
Name,  and for the use and benefit of Assignee's successors,  assigns
and legal representatives.

     2.   Assignor hereby agrees and promises that it, as well as its
successors  and  assigns,  will  execute  and  deliver  any  and  all
documents  and  information that are necessary for  the  Assignee  to
register the aforesaid Domain Names.

      3.    This  Assignment shall be governed by  and  construed  in
accordance with the laws of the Commonwealth of Pennsylvania  without
regard to the principles of conflicts of laws thereunder.

       4.     This  Assignment  may  be  executed  in  two  or   more
counterparts, each of which shall be deemed an original, and  all  of
which shall together constitute one and the same instrument.

      5.    Nothing in this Assignment shall be deemed to  supersede,
enlarge  or  modify any of the provisions of the Purchase  Agreement,
all  of  which  shall  survive the execution  and  delivery  of  this
Assignment as provided in, and subject to the limitations  set  forth
in, the Purchase Agreement.  If any conflict exists between the terms
of this Assignment and the terms of the Purchase Agreement, the terms
of the Purchase Agreement shall govern and control.

 The remainder of this page is left blank intentionally. Signatures
                        follow on next page.
     IN  WITNESS  WHEREOF, the Assignor and the  Assignee  have  each
caused its duly authorized officer to execute this Assignment  as  of
date first set forth hereinabove.

                       [ASSIGNOR]:

                       By:
                       Name:
                       Title:

Commonwealth of Pennsylvania  )
                              )    ss.:
County of York                )

On   this   ______   day   of   _____________,   2005,   before   me,
______________________________,          personally          appeared
_________________, _______________ of _____________, personally known
to  me (or proved to me on the basis of satisfactory evidence) to  be
the  person  whose  name is subscribed to the within  instrument  and
acknowledged  to  me  that  he/she  executed  the  same  in   his/her
authorized  capacity and that by his/her signature on the  instrument
the person, or the entity upon behalf of which he/she acted, executed
the instrument.

WITNESS my hand and official seal.
__________________________________________
                              Notary Public

Accepted:

[ASSIGNEE].:

By:
Name:
Title:

                             SCHEDULE A
                    TO ASSIGNMENT OF DOMAIN NAMES

                           [to be listed]

                       SCHEDULE 1.1(d)
                     NET WORKING CAPITAL

"Net Working Capital" means the following, as set forth on a
consolidated balance sheet of Parent:

     (a)  The sum of:

          (i)  trade accounts receivable, less reserves for
               bad debts, returns and allowances,

          (ii) Seller Inventory, less a LIFO reserve,
               reserves for obsolescence, shrinkage and FIFO
               valuation, and a lower of cost or market
               adjustment, and

          (iii)     other current assets;

     (b)  less:

          (i)  trade accounts payable, and

          (ii) accrued liabilities.

Notwithstanding anything herein to the contrary, Net Working
Capital shall not include any assets or liabilities
associated with the Designated Stores.

                       SCHEDULE 1.1(f)
                     SELLERS' KNOWLEDGE

Marsha Everton
Michael Sibol
Craig Bremer
                       SCHEDULE 1.1(g)
                      BUYERS' KNOWLEDGE

Ronald Shiftan
Robert McNally
Jeffrey Siegel

                        SCHEDULE 9.7

                CERTIFICATION PROVIDED UNDER
               TREASURY REGULATIONS  1.1445-2

     Section 1445 of the Internal Revenue Code provides that
a transferee of a U.S. real property interest must withhold
tax if the transferor is a foreign person.  For U.S. tax
purposes (including Section 1445), the owner of a
disregarded entity (which has legal title to a U.S. real
property interest under local law) will be the transferor of
the property and not the disregarded entity.  To inform the
transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by [INSERT NAME
OF TRANSFEROR - PARENT, INVESTCO, MANUFACTURING OR OUTLET,
AS APPROPRIATE], the undersigned hereby certifies the
following on behalf of [INSERT NAME OF TRANSFEROR]:

     1.  [INSERT NAME OF TRANSFEROR] is not a foreign
corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Internal Revenue
Code and Income tax Regulations);

     2.  [INSERT NAME OF TRANSFEROR] is not a disregarded
entity as defined in Treasury Regulations  1.1445-
2(b)(2)(iii);

     3.  [INSERT NAME OF TRANSFEROR]'s U.S. employer
identification number is ___________; and

     4.  [INSERT NAME OF TRANSFEROR]'s office address is
_______________________________________________________.

     [INSERT NAME OF TRANSFEROR] understands that this
certification may be disclosed to the Internal Revenue
Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment or both.

     Under penalties of perjury, I declare that I have
examined this certification and to the best of my knowledge
and belief it is true, correct and complete, and I further
declare that I have authority to sign this document on
behalf of [INSERT NAME OF TRANSFEROR].

                                        ___________________
                                        [NAME]
                                        [TITLE]
                                        [DATE]