US INDUSTRIES INC /DE
EXHIBIT 10.33
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>5
<FILENAME>a2067415zex-10_33.txt
<DESCRIPTION>EXHIBIT 10.33
<TEXT>

<Page>

                                                                  Exhibit 10.33



                                                               Execution Version



                       STOCK AND ASSET PURCHASE AGREEMENT

                                  dated as of

                               December 21, 2001

                                     among

                              JUSI HOLDINGS, INC.,

                              SPEAR & JACKSON PLC,

                               USI GLOBAL CORP.,

                                USI CANADA INC.,

                             U.S. INDUSTRIES, INC.

                                      and

                              ATT ACQUISITION CO.


                                       1
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                               TABLE OF CONTENTS

                             ----------------------
                                                                            PAGE
                                                                            ----
                                   ARTICLE 1
                                  DEFINITIONS

SECTION 1.01. Definitions....................................................2

                                   ARTICLE 2
                               PURCHASE AND SALE

SECTION 2.01. Purchase and Sale of Shares and Purchased Assets;
              Assumption of Assumed Liabilities.............................17
SECTION 2.02. Closing.......................................................18
SECTION 2.03. Closing Balance Sheet.........................................19
SECTION 2.04. Adjustment of Purchase Price..................................23
SECTION 2.05. Assignment of Contracts and Rights............................24

                                   ARTICLE 3
                   REPRESENTATIONS AND WARRANTIES OF SELLERS

SECTION 3.01. Corporate Existence and Power.................................24
SECTION 3.02. Corporate Authorization.......................................25
SECTION 3.03. Governmental Authorization....................................25
SECTION 3.04. Noncontravention..............................................25
SECTION 3.05. Capitalization................................................26
SECTION 3.06. Ownership of Shares; Title to Purchased Assets................26
SECTION 3.07. Sufficiency of Assets.........................................27
SECTION 3.08. Subsidiaries..................................................27
SECTION 3.09. Financial Statements..........................................27
SECTION 3.10. Absence of Certain Changes....................................28
SECTION 3.11. No Undisclosed Material Liabilities...........................30
SECTION 3.12. Material Contracts............................................30
SECTION 3.13. Litigation....................................................32
SECTION 3.14. Compliance with Laws and Court Orders.........................32
SECTION 3.15. Real Property.................................................32
SECTION 3.16. Intellectual Property.........................................33
SECTION 3.17. Finders' Fees.................................................34
SECTION 3.18. Employees.....................................................34
SECTION 3.19. Employee Benefit Plans........................................35
SECTION 3.20. Environmental Matters.........................................39
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                                                                            PAGE
                                                                            ----

SECTION 3.21. Labor Matters.................................................40
SECTION 3.22. Tax Matters...................................................41
SECTION 3.23. Intercompany Accounts; Affiliate Transactions.................43
SECTION 3.24. Insurance Coverage............................................43
SECTION 3.25. Product Warranties............................................44
SECTION 3.26. Product Liability Claims; Product Safety......................44
SECTION 3.27. Customers and Suppliers.......................................44
SECTION 3.28. Canadian Seller...............................................45
SECTION 3.29. Material Change...............................................45

                                   ARTICLE 4
                    REPRESENTATIONS AND WARRANTIES OF BUYER

SECTION 4.01. Corporate Existence and Power.................................45
SECTION 4.02. Corporate Authorization.......................................45
SECTION 4.03. Governmental Authorization....................................46
SECTION 4.04. Noncontravention..............................................46
SECTION 4.05. Financing.....................................................46
SECTION 4.06. Purchase for Investment.......................................47
SECTION 4.07. Litigation....................................................47
SECTION 4.08. Finders' Fees.................................................47
SECTION 4.09. Inspections; No Other Representations.........................47
SECTION 4.10. Investment Canada Act.........................................48
SECTION 4.11. Excise Tax Act................................................48
SECTION 4.12. Quebec Sales Tax Act..........................................48

                                   ARTICLE 5
                              COVENANTS OF SELLERS

SECTION 5.01. Conduct of the Company........................................48
SECTION 5.02. Access to Information.........................................49
SECTION 5.03. Resignations..................................................50
SECTION 5.04. Guaranty......................................................50
SECTION 5.05. Capital Expenditures..........................................50
SECTION 5.06. Settlement of Intercompany Accounts; Settlement of other
              Debt; Success Payments........................................51
SECTION 5.07. Harrisburg Ground Lease Estoppel and Landlord
              Recognition Agreement.........................................51


                                       ii
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                                                                            PAGE
                                                                            ----

                                   ARTICLE 6
                               COVENANTS OF BUYER

SECTION 6.01. Access........................................................52
SECTION 6.02. Trademarks; Tradenames........................................52
SECTION 6.03. Preservation of Records.......................................52

                                   ARTICLE 7
                         COVENANTS OF BUYER AND SELLERS

SECTION 7.01. Reasonable Best Efforts; Further Assurances...................53
SECTION 7.02. Certain Filings...............................................53
SECTION 7.03. Public Announcements..........................................53
SECTION 7.04. Notices of Certain Events.....................................54
SECTION 7.05. Treasury Matters..............................................54
SECTION 7.06. Consents......................................................55
SECTION 7.07. Pre-Closing Insurance.........................................55
SECTION 7.08. Confidentiality...............................................57
SECTION 7.09. Certain Post-Closing Assistance...............................58

                                   ARTICLE 8
                               EMPLOYEE BENEFITS

SECTION 8.01. Employee and Employee Benefit Matters.........................58

                                   ARTICLE 9
                             CONDITIONS TO CLOSING

SECTION 9.01. Conditions to Obligations of Buyer and Sellers................63
SECTION 9.02. Conditions to Obligation of Buyer.............................63
SECTION 9.03. Conditions to Obligation of Sellers...........................65

                                   ARTICLE 10
                           SURVIVAL; INDEMNIFICATION

SECTION 10.01. Survival.....................................................66
SECTION 10.02. Indemnification..............................................66
SECTION 10.03. Procedures...................................................80
SECTION 10.04. Calculation of Damages.......................................81
SECTION 10.05. Assignment of Claims.........................................82
SECTION 10.06. Exclusivity..................................................82
SECTION 10.07. Indemnity Payments to Be Adjustments to Purchase Price.......83


                                      iii
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                                                                            PAGE
                                                                            ----

                                   ARTICLE 11
                                   TERMINATION

SECTION 11.01. Grounds for Termination......................................83
SECTION 11.02. Effect of Termination........................................84

                                   ARTICLE 12
                                 MISCELLANEOUS

SECTION 12.01. Notices......................................................84
SECTION 12.02. Amendments and Waivers.......................................86
SECTION 12.03. Expenses.....................................................86
SECTION 12.04. Successors and Assigns.......................................86
SECTION 12.05. Governing Law................................................87
SECTION 12.06. Jurisdiction.................................................87
SECTION 12.07. WAIVER OF JURY TRIAL.........................................88
SECTION 12.08. Counterparts; Third Party Beneficiaries......................88
SECTION 12.09. Entire Agreement.............................................88
SECTION 12.10. Captions.....................................................89
SECTION 12.11. Disclosure Schedules.........................................89
SECTION 12.12. Tax Sharing..................................................89
SECTION 12.13. Bulk Sales Legislation.......................................89
SECTION 12.14. English Language.............................................89
SECTION 12.15. Severability.................................................89

Exhibit A        Form of Escrow Agreement
Exhibit B        Form of Note
Exhibit C        Section 1445(b)(2) Form
Exhibit D        Form of Landlord Estoppel Certificate
Exhibit E        Form of Recognition Agreement
Exhibit F        Form of Assignment and Assumption Agreement
Exhibit G        Form of Tax Sharing and Indemnification Agreement


                                       iv
<PAGE>

                       STOCK AND ASSET PURCHASE AGREEMENT

         AGREEMENT dated as of December 21, 2001 between JUSI Holdings, Inc., a
Delaware corporation ("US Seller"), Spear & Jackson plc, an English corporation
("True Temper Seller"), USI Global Corp., a Delaware corporation ("Global"), USI
Canada Inc., an Ontario corporation ("Canadian Seller" and together with US
Seller, True Temper Seller and Global, "Sellers"), U.S. Industries, Inc., a
Delaware corporation ("USI") and ATT Acquisition Co., a Delaware corporation
("Buyer").

                             W I T N E S S E T H :

         WHEREAS, USI conducts its business of manufacturing and distributing
non-powered lawn and garden tools through its indirect wholly owned
subsidiaries, Ames True Temper, Inc., a Delaware corporation ("ATT"), IXL
Manufacturing Company, Inc., a Missouri corporation ("IXL"), True Temper
Limited, an Irish corporation, ("True Temper Ireland"), and the Garant division
of Canadian Seller ("Garant");

         WHEREAS, US Seller owns all of the issued and outstanding shares of
capital stock of ATT and IXL;

         WHEREAS, True Temper Seller owns all of the issued and outstanding
shares of capital stock of True Temper Ireland;

         WHEREAS, Global owns one share of O. Ames Argentina, S.A., an
Argentinian corporation and a subsidiary of ATT ("Argentina");

         WHEREAS, on the terms and subject to conditions set forth herein, each
of US Seller, True Temper Seller and Global wishes to sell, assign, transfer and
convey and Buyer wishes to purchase, all of the outstanding shares of capital
stock of ATT, IXL, True Temper Ireland and one share of Argentina;

         WHEREAS, on the terms and subject to conditions set forth herein,
Canadian Seller wishes to sell, assign, transfer and convey, and Buyer wishes to
purchase and assume, all of the assets and the liabilities of Garant as set
forth herein.

         NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable

<PAGE>

consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

         SECTION 1.01. Definitions. (a) The following terms, as used herein,
have the following meanings:

         "Adjudicated Claim" means any Claim that is supported by a final and
non-appealable order of a court of competent jurisdiction or a binding decision
of an arbitration panel pursuant to Section 10.02(b)(10)(b) or other binding
arbitration process mutually agreed to by Sellers and Buyers.

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person; provided that none of the Transferred Companies shall be considered
an Affiliate of a Seller.

         "Agreement" means this Stock and Asset Purchase Agreement, together
with any and all schedules, exhibits and attachments hereto.

         "Ancillary Agreements" means all agreements, instruments or
certificates required to be executed pursuant to the provisions of this
Agreement.

         "Applicable Remedial Objectives" means remedial objectives, levels or
standards (including, by way of example and not limitation, allowable
concentrations, quantities or characteristics of contaminants in soil,
groundwater or other media) set forth in Environmental Laws, as same may be
amended, applicable to the Real Property at issue given its use at the time of
Closing. In the absence of clear remedial objectives, standards or levels with
regard to Pollution Conditions relating to the physical condition of any Real
Property, Applicable Remedial Objectives shall mean risk based clean up or
remedial standards or criteria based upon a cancer risk of 10-4 to 10-6 .
Disputes regarding Applicable Remedial Objectives shall be resolved by a Panel
pursuant to Section 10.02(b)(11)(B).

         "Assumed Liabilities" means all payment and performance obligations
(other than obligations arising from breaches or defaults of Canadian Seller
occurring prior to the Closing Date) under the Canadian Contracts and all debts,
obligations, contracts and liabilities of Garant or Canadian Seller (or any

                                       2

<PAGE>

predecessor of Garant or Canadian Seller or any prior owner of all or part of
its businesses and assets) of any kind, character or description (whether known
or unknown, accrued, absolute, contingent or otherwise) primarily relating to or
primarily arising out of the conduct of the Canadian Business or the ownership
or operation of real property used in the Canadian Business (currently or
previously), including, without limitation, those categories of debts,
obligations, contracts and liabilities described in clauses (i) through (vii)
set forth below:

                  (i) all liabilities set forth on the Preliminary Balance Sheet
         primarily relating to or primarily arising out of the Canadian Business
         or the Purchased Assets and all liabilities incurred thereafter to the
         extent not satisfied prior to the Closing Date;

                  (ii) all liabilities and obligations arising under any
         Canadian Contracts;

                  (iii) all Environmental Liabilities primarily relating to or
         primarily arising out of the Canadian Business or the Purchased Assets;

                  (iv) all liabilities and obligations arising out of any
         action, suit, investigation or proceeding primarily relating to or
         primarily arising out of the Canadian Business or the Purchased Assets
         before any court or arbitrator or any Governmental Authority;

                  (v) all liabilities and obligations relating to any products
         manufactured or sold on or prior to the Closing Date, including without
         limitation warranty obligations and product liabilities;

                  (vi) except as otherwise provided in Article 8, all
         liabilities or obligations relating to employee benefits or
         compensation arrangements or relating to the violation or alleged
         violation of any applicable employment law, regulation, policy,
         agreement, rule or order, including, without limitation, those related
         to wages, hours, health and safety, employment standards, pay equity,
         workers' compensation, notice of termination or pay in lieu thereof, or
         severance pay existing on or prior to the Closing Date with respect to
         any employee or former employee engaged primarily in the Canadian
         Business;

                  (vii) all liabilities and obligations relating to or arising
         out of the Purchased Assets; and

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<PAGE>

                  (vii) all Tax liabilities and obligations relating to the
         Canadian Business and the purchase and sale of the Purchased Assets
         apportioned to, assumed by or to be paid by Buyer under the Tax Sharing
         Agreement.

         "Balance Sheet Date" means September 29, 2001.

         "Barrier Cost Difference" means for any Pollution Condition the
difference between the Remedial Action Cost to remediate or otherwise correct
the Pollution Condition in accordance with applicable Environmental Laws, (i)
without the use of engineered barriers or institutional controls and (ii) with
the use of engineered barriers or institutional controls.

         "Business" means the business, as conducted by the Transferred
Companies on the Closing Date, of manufacturing and distributing non-powered
lawn and garden tools under various brand names, including the brand names Ames,
True Temper, Kodiak, Pony, Jackson, Woodings and IXL which include long handled
tools, wheelbarrows, snow tools, hose reels, pruning tools, lawn carts, striking
tools, decorative accessories and repair handles; provided, however, Business
shall not include the activities conducted by True Temper Seller or any of its
subsidiaries (other than True Temper Ireland).

         "Buyer Environmental Claim" means any Claim made by Buyer under Section
10.03 for indemnification with respect to Sellers' Environmental Indemnity.

         "Buyer Non-Environmental Claim" means any Claim made by Buyer under
Section 10.03 for indemnification under Section 10.02, with the exception of any
Buyer Environmental Claim.

         "Canadian Business" means the business, as conducted by Garant and/or
the Canadian Seller on the Closing Date, of manufacturing, assembling and
distributing non-powered lawn and garden tools under the brand name Garant which
include long handled tools, wheelbarrows, snow tools, striking tools and repair
handles.

         "Canadian Contracts" means any agreement, lease, license, commitment,
sale or purchase order, contract or other instrument to which Garant is a party
or to which Canadian Seller is a party on behalf of Garant or primarily related
to or arising in the conduct of the Canadian Business other than any agreement,
contract or other instrument referred to in Article 8.

         "Closing Date" means the date of the Closing.


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<PAGE>

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

         "Company" means each of ATT, IXL and True Temper Ireland; and
collectively, ATT, IXL and True Temper Ireland shall be referred to as the
"Companies".

         "Confidentiality Agreement" means the Confidentiality Agreement between
Wind Point Partners IV, LP and USI dated as of May 30, 2001.

         "Environmental Cap" means $6 million.

         "Environmental Laws" means any and all statutes, laws, regulations and
rules, including principles of common law, administrative and judicial orders
and other legal requirements, in each case as in effect on the date hereof, that
have as their principal purpose the protection of the environment or human
health and safety or that relate to the handling, storage, disposal, use or
exposure to Hazardous Substances.

         "Environmental Liabilities" means any Damages or obligations arising
out of the operation of the Transferred Companies, the Canadian Business (as
currently or previously conducted), the Purchased Assets, or the use or
ownership of the Real Property, to the extent based upon (i) a violation of or
liability under any Environmental Law, (ii) a failure to obtain, maintain, or
comply with any Environmental Permit, directive, order or notice of violation
under, or any requirement of, any Environmental Law, (iii) a Release of any
Hazardous Substance at, on or under any Real Property, Purchased Asset or any
environmental investigation, remediation, removal, clean-up or monitoring
required under Environmental Laws or required by a Governmental Authority at or
under any Real Property or Purchased Asset, or (iv) the use, generation,
storage, transportation, treatment, sale or other off-site disposal of Hazardous
Substances generated or otherwise used in connection with the Canadian Business
(as currently or previously conducted) or by any Transferred Company or Canadian
Seller (in connection with the Canadian Business or Purchased Assets).

         "Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of Governmental
Authorities relating to or required by Environmental Law and relating to the
Business.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and the rules and regulations promulgated thereunder.


                                       5
<PAGE>


         "Escrow Account" shall have the meaning set forth in the Escrow
Agreement.

         "Escrow Agent" means an agent to act as escrow agent to be selected by
Sellers, that is reasonably satisfactory to Buyer.

         "Escrow Agreement" means the agreement among Buyer, Sellers and Escrow
Agent substantially in the form attached as Exhibit A hereto.

         "Escrow Amount" means $4.5 million payable by Buyer on the Closing Date
pursuant to Section 2.02(b).

         "Excluded Assets" means:

                  (i) all the assets of Canadian Seller not primarily used in
         the Canadian Business, including without limitation, any such assets
         primarily used in its Jacuzzi division or its Progress division or in
         the conduct of its Jacuzzi or Progress businesses;

                  (ii) all of Garant's or Canadian Seller's cash and cash
         equivalents on hand and in banks to the extent not reflected on the
         Closing Working Capital Statement;

                  (iii) all insurance policies maintained by Canadian Seller
         other than those assumed pursuant to Article 8 that provide benefits to
         Employees of Garant or Canadian Seller;

                  (iv) the following marks and names: U.S. Industries Inc., USI
         or any derivative thereof;

                  (v) to the extent attributable to any time or period ending on
         or prior to the Closing Date, the right to receive any workers'
         compensation rebate, surplus or credit and any refund of Tax paid by
         Garant or Canadian Seller, including, without limitation, income tax,
         provincial sales tax and goods and services tax;

                  (vi) all books, records, files and papers, whether in hard
         copy or computer format, prepared in connection with this Agreement or
         the transactions contemplated hereby and all minute books and corporate
         records of Canadian Seller and its Affiliates other than those
         primarily used in the Canadian Business;


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<PAGE>


                  (vii) all rights of Canadian Seller arising under this
         Agreement, the Escrow Agreement, the Tax Sharing Agreement, the
         Assignment and Assignment Agreement or the transactions contemplated
         hereby or thereby; and

                  (viii) any Purchased Assets sold or otherwise disposed of in
         the ordinary course of business during the period from the date hereof
         until the Closing Date.

         "Excluded Liabilities" means:

                  (i) any Tax liability or obligation of Canadian Seller except
         Tax liabilities and obligations relating to the Canadian Business and
         the purchase and sale of the Purchased Assets apportioned to, assumed
         by or to be paid by Buyer under the Tax Sharing Agreement;

                  (ii) any liability or obligation relating to employee benefits
         or compensation arrangements or relating to the violation or alleged
         violation of any applicable employment law, regulation, policy,
         agreement, rule or order, including, without limitation, those related
         to wages, hours, health and safety, employment standards, pay equity,
         workers' compensation or notice of termination or pay in lieu thereof,
         or severance pay existing on or prior to the Closing Date with respect
         to any employee or former employee (A) primarily engaged in the
         Canadian Business, to the extent provided in Article 8 or (B) of
         Canadian Seller who is not nor ever has been primarily engaged in the
         Canadian Business;

                  (iii) any liability of Canadian Seller that primarily relates
         to its Jacuzzi or Progress divisions; and

                  (iv) any liability or obligation relating to, or arising out
         of, an Excluded Asset.

         "Federal Tax" means any Tax imposed under Subtitle A of the Code with
respect to which any Company or any Subsidiary has filed or will file a Tax
Return.

         "Foreign Antitrust Laws" means all non-U.S. statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines and other
laws that are designed or intended to regulate competition or investment or to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade.


                                       7

<PAGE>


         "GAAP" means U.S. generally accepted accounting principles.

         "Governmental Authority" means any national, federal, regional, state,
provincial, municipal, other governmental or regulatory authority,
administrative body or government, department, board, body, tribunal,
instrumentality or commission.

         "Hazardous Substance" means any material, pollutant, contaminant or any
toxic, radioactive or otherwise hazardous substance or petroleum, as such terms
are regulated by, defined in, or identified pursuant to, any Environmental Law.

         "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

         "Intellectual Property Right" means any trademark, service mark, trade
name, mask work, invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the foregoing) or
any other similar type of proprietary intellectual property right.

         "Knowledge of Sellers" or words of similar import shall mean knowledge
possessed by John M. Stoner, David C. Avery, William J. Grambo, Judy A.
Schuchart, Joseph Wersosky, Christopher L. Ebling, James E. McCallister, Jean
Gaudreault and Domhnall Mac Domhnaill, Dave Nelson, Gary Beebe, Dean Cross,
Kevin Kelley, Rick Lavender, Dave Randolph, Steve Kujovsky, Brian Imel, Jeff
Foster and Rob Mayhew.

         "Knowledge of Buyer" or words of similar import shall mean knowledge
possessed by Richard Kracum, Michael Solot and Tamara Polewik.

         "Known Conditions" means those risks identified as "Known Conditions"
in Schedule 10.02(b)(7). All Remedial Actions for Known Conditions shall be
conducted pursuant to the requirements of Section 10.02(b)(9) hereof.

         "Lenders" means Foothill Capital Corporation, AbleCo Finance LLC and
any other lenders under the Credit Facility, together with their respective
successors, assigns and participants.

         "Lien" means, with respect to any property or asset, any claim,
restriction, mortgage, lien, pledge, charge, security interest or encumbrance,
including any lien for Taxes, in respect of such property or asset.


                                       8

<PAGE>


         "Material Adverse Effect" means a material adverse effect on the
business, results of operations or financial condition of the Transferred
Companies, taken as whole, except any such effect resulting from or arising in
connection with (i) this Agreement or the transactions contemplated hereby or
(ii) changes in economic or political conditions generally.

         "Parent Group" means Sellers and USI, collectively.

         "Payment Default" means the failure by Sellers to pay the amount of any
Undisputed Claim or Adjudicated Claim within 15 days following Buyer's written
notice to Sellers requesting payment therefore.

         "1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

         "Permitted Liens" means (i) Liens reflected or reserved against in the
Preliminary Balance Sheet (including in the notes thereto), (ii) except for
those matters set forth in Schedule 3.15(d), Liens reflected in any title
abstracts and/or surveys with respect to the Real Properties that are listed on
Schedule 3.15(c), copies of which have been previously provided to Buyer, (iii)
Liens, easements, servitudes, rights-of-way, covenants, restrictions,
encumbrances and other exceptions to title, including, without limitation,
survey matters, that do not secure any monetary obligation (except as provided
below) and do not materially detract from the value of the property subject
thereto or materially interfere with the manner in which it is currently being
used by the applicable Transferred Company, (iv) mechanics', materialmen's,
laborers', repairmen's, and similar Liens not yet due and payable or being
contested in good faith (and for which adequate accruals or reserves have been
established on the Closing Balance Sheet), (v) taxes, general and special
assessments not yet due and payable without penalty or interest or being
contested in good faith (and for which adequate accruals or reserves have been
established on the Closing Balance Sheet) and (vi) Liens that will serve as
collateral for the Financing.

         "Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

         "Post-Closing Environmental Liabilities" means any Environmental
Liabilities to the extent arising out of conditions that come into existence at
any time on or after the Closing Date.

         "Potential Known Conditions" means those risks identified as "Potential
Known Conditions" in Schedule 10.02(b)(7). Potential Known Conditions are


                                       9
<PAGE>

divided into "Group A", meaning matters with a relatively greater potential to
incur Remedial Action Costs, and Group B, meaning matters with a relatively
lesser potential to incur such obligations. All Remedial Actions for Potential
Know Conditions shall be conducted pursuant to the requirements of Section
10.02(b)(9) hereof.

         "Pre-Closing Environmental Liabilities" means any Environmental
Liabilities to the extent arising out of conditions existing at any time prior
to the Closing Date.

         "Preliminary Balance Sheet" means the audited pro forma combined
balance sheet of the Transferred Companies as of September 29, 2001 (with a
report thereon dated September 30, 2001).

         "Purchased Assets" means any assets, properties and business, of every
kind and description, owned, held or used primarily in the conduct of the
Canadian Business by Garant or Canadian Seller as the same shall exist on the
Closing Date, including, but not limited to, all right, title and interest of
Garant or Canadian Seller in, to and under the following Purchased Assets to the
extent owned, held or used primarily in the conduct of Canadian Business:

         (a) all raw materials, work-in-process, finished goods, supplies,
components and other inventories;

         (b) all rights under all Canadian Contracts;

         (c) all accounts, notes and other receivables except to the extent set
forth in Section 7.05;

         (d) all transferable licenses, permits or other governmental
authorizations;

         (e) all bank accounts;

         (f) all books, records, files and papers, whether in hard copy or
computer format;

         (g) all goodwill associated with the Canadian Business or the Purchased
Assets;

         (h) all rights (including, but not limited to, leasehold rights) to the
Real Property of Garant or Canadian Seller; and


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<PAGE>


         (i) all Intellectual Property Rights of Garant or Canadian Seller;
provided, however, that an Excluded Asset shall not be a Purchased Asset.

         "Real Properties" means the Leased Properties and the Owned Properties.

         "Reference Working Capital Statement" means the working capital
statement setting forth a calculation of Working Capital as of the close of
business (New York City time) on September 29, 2001, set forth in Schedule
3.09(b).

         "Remedial Action" means any procedure, instrument, method, approach or
technique employed, considered or implemented in order to investigate, control,
treat, abate, mitigate, clean up, remedy, remove, reduce or otherwise address
any Hazardous Substance or combination of Hazardous Substances and/or to address
a non-compliance with any requirement of Environmental Law or requirement of a
Governmental Authority pursuant to Environmental Laws (a "Compliance Matter"),
including, by way of example and not limitation, risk assessments, remedial
investigations, deed restrictions, physical removal of soil, water or other
media, natural attenuation, bioremediation, thermal desorption, institutional
controls, engineering controls, recycling, soil vapor extraction, permit
application preparation, asbestos sampling and preparation and implementation of
employee notification or training programs.

         "Remedial Action Cost" means any charge, cost, fee, expense, fine or
penalty ("Cost") arising out of or associated in any way with any Remedial
Action relating to, or with the satisfaction or payment of any Environmental
Liability, including, by way of example and not limitation, (i) Costs associated
with the design, purchase, licensing or installation of equipment and
appurtenances which is required or reasonably necessary to conduct any Remedial
Action, including but not limited to monitoring wells, pump and treat systems,
etc., (ii) Costs of conducting risk assessments or similar investigations, (iii)
Costs for achieving coverage under the AIG Policy (as defined in Section
10.02(b)(5) hereof), including but not limited to payment of deductibles,
Insurance Copayments (as defined in Section 10.02(b)(5) hereof), (iv) Costs
incurred in arranging for or obtaining coverage under the AIG Policy and Costs
relating to securing or obtaining reimbursement or other recovery of charges or
other Costs from Huffy or any other third party, (v) oversight or program fees,
fines or other Costs imposed by any Governmental Authority, inclusive of
application and labor charges associated with the entry of any Real Property or
Pollution Condition (as defined in Section 10.02(b)(9)) in any voluntary cleanup
program, (vi) Costs to conduct, implement or oversee any of the Phase II Studies
(as defined in Section 10.02(b)(6) hereof), Field Work (as defined in Section
10.02(b)(9)), Work Plans, or any other environmental investigations or studies
necessary or required for


                                       11
<PAGE>

either Party to meet its obligations under Section 10.02(b), whether as a "Lead
Party" or "Observing Party," as such terms are defined in Section 10.02(b)(6)
hereof, (vii) Costs incurred in connection with any negotiations with any
Governmental Authority or to address any Compliance Matter pursuant to Section
10.02(b)(7), (viii) any allocated share of Dispute Resolution Consultant or
Panel costs and expenses (as described in Section 10.02(b)(11)), (ix) natural
resource damages, (x) Costs in the defense of any Third Party Claim, (xi) all
Costs incurred in the physical removal, treatment, or other manner of cleanup or
other Remedial Action of soil, air, water, groundwater, surface water, building
material or other media, including, by way of example, implementation of
institutional controls, or (xii) Costs imposed in addressing any other
Environmental Liability, including but not limited to all consulting,
engineering, expert or legal Costs incurred in connection with subsections (i)
through (xii) above.

         "Release" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration of Hazardous Substances not permitted by prevailing and
applicable Environmental Laws, into air, soil, water, groundwater or other
media.

         "Seller Group" means, with respect to federal income Taxes, the
affiliated group of corporations (as defined in Section 1504(a) of the Code) of
which the US Seller is a member and, with respect to state income or franchise
Taxes, the consolidated, combined or unitary group of which the US Seller, the
Companies or the Subsidiaries or any of their Affiliates is a member prior to
the Closing.

         "Senior Debt Liens" means the liens in respect of the ownership
interests in or the assets of the Transferred Companies created under any of the
"Collateral Documents", as defined and referred to in the Amendment,
Restatement, General Provisions and Intercreditor Agreement dated as of August
15, 2001 among USI, USI Global Corp., USI American Holdings, Inc., USI Atlantic
Corp., Rexair Holding, Inc., Rexair, Inc., the other subsidiaries of USI party
thereto, Wilmington Trust Company and David A. Vanaskey, as Collateral Trustees
(the "Collateral Trustees"), Bank of America, N.A., as Debt Coordinator, USI
Agent, Rexair Agent and Rexair Collateral Agent (each as defined therein) and
the lenders party thereto, as amended from time to time ("Master Agreement"),
for the benefit of the secured parties named therein, including without
limitation the Amended and Restated Pledge and Security Agreement dated as of
August 15, 2001 among USI and its subsidiaries party thereto and the Collateral
Trustees and the Amended and Restated Collateral Trust Agreement dated as of
August 15, 2001 among USI and its subsidiaries party thereto and the Collateral
Trustees, in each case as amended from time to time.


                                       12

<PAGE>


         "Shares" means the shares of the capital stock of the Companies set
forth next to the names of the Companies on Schedule 2.01(a).

         "Subsidiary" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by a Company; provided, however, that Elgin Handles, Ltd.,
an Ontario corporation, shall not be a Subsidiary.

         "Tax" or "Taxes" means any tax, duty, fee, assessment, dues or charge
of any nature whatsoever imposed by any government or taxing authority, domestic
or foreign, including, without limitation, any gross or net income, gross or net
receipts, capital gains, minimum, sales, use, ad valorem, value added, stamp,
transfer, capital, gift, inheritance, franchise, withholding, payroll,
employment, employment insurance, social insurance, excise, occupation, employer
health, premium or property tax together with any interest, fine, penalty,
addition to tax, duty, fee, assessment, dues or charge or additional amount
imposed with respect thereto, and shall include any liability pursuant to
Treasury Regulation ss. 1.1502-6 or any similar provision of state, local or
foreign law or any tax sharing or contribution agreement and any transferee or
successor liability in respect of any such tax, duty, fee, assessment, dues or
charge or additional amount.

         "Transferred Company" means each of the Companies, the Subsidiaries and
Garant; and the Companies, the Subsidiaries and Garant are referred to as the
"Transferred Companies". Notwithstanding anything herein to the contrary, the
term "Transferred Company" or "Transferred Companies" shall also include, where
appropriate, Canadian Seller, with respect to Garant, in those instances in
which Canadian Seller is bound by, or subject to, any contract, agreement,
instrument or other document for or on behalf of Garant and the Canadian
Business.

         "Undisputed Claim" means any Claim made by Buyer under Section 10.03
for which Sellers and Buyer agree that Buyer is entitled to indemnification
under Section 10.02.

         "Unknown Conditions" means (i) Pre-Closing Environmental Liabilities
undisclosed to Sellers or Buyer at the time of the Closing and not intended to
be investigated pursuant to the Phase II Studies (as defined in Section
10.02(b)(6)), and (ii) demands from Governmental Authorities made following the
Closing with regard to compliance of the Transferred Companies with
Environmental Law. All Remedial Action for Unknown Conditions shall be performed
in accordance with the requirements of Section 10.02(b)(9) hereof.


                                       13
<PAGE>

         "Working Capital" means, at any time, on a pro forma combined basis,
the excess of current assets of the Transferred Companies, taken as a whole, at
such time over current liabilities of the Transferred Companies, taken as a
whole, at such time.

         "Work Plans" means any written plan or proposal for the design or
implementation of any Remedial Action. (b) Each of the following terms is
defined in the Section set forth opposite such term:

<Table>
<Caption>

         Term                                                            Section

<S>                                                                     <C>
         AbleCo                                                           4.05
         Administrative Costs                                             7.07
         AIG                                                            10.02(b)
         AIG Policy                                                     10.02(b)
         Alternate Firm                                                   2.03
         ATT                                                            Preamble
         Argentina                                                      Recitals
         Assignment Expenses                                             12.04
         Assignment Liabilities                                          12.04
         Auditor                                                          2.03
         Benefit Arrangement                                              3.19
         Buyer                                                          Preamble
         Buyer's Environmental Indemnity                                10.02(b)
         Buyer Transferee                                                12.04
         Canadian Seller                                                Preamble
         Carlisle Lease                                                  10.02
         Claim                                                           10.03
         Closing                                                          2.02
         Closing Balance Sheet                                            2.03
         Closing Working Capital                                          2.03
         Closing Working Capital Statement                                2.03
         COBRA                                                            8.01
         Company Intellectual Property Rights                             3.16
         Company Securities                                               3.05
         Company-Specific Plans                                           8.01
         Contracts                                                        3.12
         Conveyance                                                      12.04
         Covered Employee                                                 8.01
         Credit Facility                                                  4.05
         Credit Support Documents                                         7.05
         Damages                                                         10.02


                                       14
<PAGE>

<Caption>

         Term                                                            Section

<S>                                                                     <C>
         Deductibles                                                    10.02(b)
         Determination Date                                               2.03
         Dispute Letter Report                                          10.02(b)
         Dispute Resolution Consultant                                  10.02(b)
         DOJ                                                              7.02
         DOL                                                              3.03
         Employee                                                         3.19
         Employee Benefit Plans                                           3.19
         Environmental Claim                                             10.02
         Environmental Indemnity Expiration Date                        10.02(b)
         Environmental Indemnity Termination Date                       10.02(b)
         E&Y                                                              2.03
         ERISA Affiliate                                                  3.19
         Estimated Closing Balance Sheet                                  2.03
         Estimated Closing Working Capital                                2.03
         Estimation Date                                                  2.03
         FASB Reports                                                     3.19
         Field Work                                                     10.02(b)
         Field Work Dispute                                             10.02(b)
         Final Working Capital                                            2.04
         Financing                                                        4.05
         Financing Agreements                                             4.05
         Foothill                                                         4.05
         Foreign Employee Benefit Plan                                    3.19
         FTC                                                              7.02
         Garant                                                         Recitals
         Global                                                         Preamble
         Guarantor                                                        5.03
         Guaranty                                                         5.03
         Historic Policies                                              10.02(b)
         Huffy                                                          10.02(b)
         Huffy Contract                                                 10.02(b)
         Huffy Indemnity                                                10.02(b)
         Indemnified Party                                               10.03
         Indemnifying Party                                              10.03
         Insurance Copayments                                           10.02(b)
         IRS                                                              3.03
         Item 1 Litigation                                               10.02
         IXL                                                            Recitals
         Lead Party                                                     10.02(b)
         Leases                                                           3.15
         Leased Property                                                  3.15


                                       15

<PAGE>

<Caption>

         Term                                                            Section

<S>                                                                       <C>
         Master Trusts                                                    3.19
         Material Contracts                                               3.12
         NFA                                                            10.02(b)
         New 401(k) Trust                                                 8.01
         New Pension Trusts                                               8.01
         Non-Reimbursable Amount                                        10.02(b)
         Objection Notice                                                 2.03
         Obligations                                                      5.03
         Observing Party                                                10.02(b)
         Open Escrow Items                                              10.02(b)
         Owned Properties                                                 3.15
         Panel                                                          10.02(b)
         Party                                                          10.02(b)
         Payment Disputes                                               10.02(b)
         Pension Plans                                                    3.19
         Phase II Studies                                               10.02(b)
         Potential Contributor                                           10.05
         Pollution Condition                                            10.02(b)
         Pre-Closing Buyer Insurance Payments                             7.07
         Pre-Closing Insurance                                            7.07
         Pre-Closing Insurance Claims                                     7.07
         Pre-Closing Sellers Insurance Payments                           7.07
         Pre-Closing WV Workers Compensation Liability                    7.07
         Products                                                         3.25
         Product Liability Claim                                          3.26
         Purchase Price                                                   2.01
         Risk Based Closure                                             10.02(b)
         Reasonable participation                                       10.02(b)
         Reference Working Capital Statement                            2.03(b)
         Risk Based Closure                                             10.02(b)
         Schedules                                                       12.11
         SDCA                                                             3.22
         Seller Names                                                     6.02
         Sellers                                                        Preamble
         Sellers' Assignment Conflict                                    12.04
         Sellers' Environmental Claims                                  10.02(b)
         Sellers' Environmental Indemnity                               10.02(b)
         Sellers' Environmental Payments                                10.02(b)
         Sellers' Escrow Account Reimbursements                         10.02(b)
         Senior Debt Commitment Letter                                    4.05
         SOWs                                                           10.02(b)
         Subsidiary Securities                                            3.08


                                       16
<PAGE>

<Caption>

         Term                                                            Section

         Supplemental Reimbursements                                      7.07
         Target Working Capital                                           2.03
         Tax Return                                                       3.22
         Tax Sharing Agreement                                            9.02
         TCA                                                              3.22
         Third Party Claim                                               10.03
         Title IV Plan                                                    3.19
         Transfer 401(k) Plan                                             8.01
         Transfer Pension Plans                                           8.01
         Transfer Plans                                                   8.01
         True Temper Ireland                                            Recitals
         True Temper Seller                                             Preamble
         Unrelated Accounting Firm                                        2.03
         USI                                                            Preamble
         US Seller                                                      Preamble
         VCP                                                            10.02(b)
         WARN                                                             3.19
         Warranty Breach                                                 10.02
         Welfare Plans                                                    3.19
         Work Plan Dispute                                              10.02(b)
         Work Plan Dispute Review                                       10.02(b)
         Working Capital Accounting Principles                            2.03
</Table>


                                    ARTICLE 2
                                PURCHASE AND SALE

         SECTION 2.01. Purchase and Sale of Shares and Purchased Assets;
Assumption of Assumed Liabilities. (a) Upon the terms and subject to the
conditions of this Agreement, each of US Seller, True Temper Seller and Global
agrees to sell, assign, transfer and convey, and Buyer agrees to purchase from
US Seller, True Temper Seller and Global all right, title and interest in and to
the Shares set forth on Schedule 2.01(a) at the Closing, in each case free and
clear of all Liens.

         (b) Except as otherwise provided below, upon the terms and subject to
the conditions of this Agreement, Buyer agrees to purchase from Canadian Seller,
and Canadian Seller agrees to sell, convey, transfer, assign and deliver to
Buyer at the Closing, free and clear of all Liens, other than Permitted Liens,
all of Canadian Seller's right, title and interest in, to and under the
Purchased Assets; provided, however, that Purchased Assets shall not include any
Excluded Asset. Upon the terms and subject to the conditions of this Agreement,
Buyer agrees, effective at


                                       17

<PAGE>

the time of the Closing, to assume and to subsequently pay, honor, satisfy,
perform and fully discharge all Assumed Liabilities when due and payable in
accordance with and subject to the terms and conditions of the relevant
governing agreements, commitments and instruments. Buyer expressly understands
and agrees that the Excluded Assets shall remain the property of the Canadian
Seller and that Buyer shall not have any rights with respect thereto. Canadian
Seller agrees to retain the Excluded Liabilities; provided, however, that
Excluded Liabilities shall not include any Assumed Liabilities. Notwithstanding
the foregoing, and for greater certainty, the Assumed Liabilities shall not
include any Tax liability or obligation of the Canadian Seller.

         (c) The purchase price for the Shares and the Purchased Assets (the
"Purchase Price") is $165 million in cash. The Purchase Price shall be paid as
provided in Section 2.02 and shall be subject to adjustment as provided in
Sections 2.03(a) and 2.04.

         (d) The Purchase Price shall be allocated in accordance with Schedule
2.01(d), as adjusted pursuant to Section 2.04(c). Sellers and Buyer agree to (i)
be bound, and to cause its Affiliates to be bound, by the allocations on
Schedule 2.01(d), as adjusted pursuant to Section 2.04(c); provided that,
allocation and price adjustment among Purchased Assets and Assumed Liabilities
shall be in compliance with the applicable law, and (ii) act, and to cause its
Affiliates to act, in accordance with the allocations set forth in Schedule
2.01(d), as adjusted pursuant to Section 2.04(c), in the preparation, filing and
audit of any Tax Return (including, without limitation, the filing of any forms,
information returns, reports or statements with its U.S. or Canadian income Tax
Return, its Irish or UK corporation Tax Returns and any other Tax Return for the
taxable year that includes the date of the Closing) and for all other tax and
accounting purposes.

         SECTION 2.02. Closing. The closing (the "Closing") of the purchase and
sale of the Shares and Purchased Assets hereunder shall take place at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, as
soon as reasonably practicable, but in no event later than two (2) business
days, after satisfaction or waiver of the conditions set forth in Article 9
(other than the conditions that by their terms shall be or must necessarily be
satisfied at the Closing). The parties acknowledge that their current intention
is for the Closing to occur on December 27, 2001. At the Closing:

         (a) Buyer shall deliver to US Seller, who shall receive funds on behalf
of Sellers, the Purchase Price minus the Escrow Amount in immediately available
funds by wire transfer to an account of US Seller with a bank designated by US
Seller, by notice to Buyer, which notice shall be delivered not later than one
business day prior to the Closing Date.


                                       18
<PAGE>

         (b) Buyer shall deliver to Escrow Agent the Escrow Amount in
immediately available funds by wire transfer for deposit pursuant to the Escrow
Agreement.

         (c) US Seller shall deliver to Buyer certificates for the Shares duly
endorsed or accompanied by stock powers duly endorsed in blank, with any
required transfer stamps affixed thereto, or by other transfer forms, as
applicable; provided, however, that the Share of Argentina shall be transferred
and delivered as soon as reasonably practicable after compliance with all legal
requirements in order to permit such transfer and delivery under Argentinian
law.

         (d) Each of Buyer and Sellers shall execute and deliver, or cause to be
executed and delivered, any and all contracts, agreements, instruments,
certificates and other documents required to be delivered, or caused to be
delivered, thereby under Article 9 hereof.

         (e) In the event that at the Closing Sellers are in breach of the last
sentence of Section 3.15(a) with respect to a Real Property that is to serve as
collateral for the Credit Facility and such breach has directly resulted in a
reduction in the availability of funds from the Lenders on the Closing Date,
then Buyer's sole remedy under this Agreement shall be to hold back, from the
Purchase Price payable at Closing, an amount equal to the amount Buyer would
have been able to borrow under such Credit Facility but for such breach minus
the amount actually available to Buyer in light of such breach. In the event
Sellers have not obtained the Landlord Estoppel in accordance with Section 5.07
and as a result the Lenders do not include the lease referred to in Section 5.07
as collateral under the Credit Facility, Buyer's sole remedy under this
Agreement shall be to hold back, from the Purchase Price payable at Closing, the
lesser of (A) an amount equal to the amount Buyer would have been able to borrow
under such Credit Facility but for such failure to obtain the Landlord Estoppel
minus the amount actually available to Buyer in light of such breach and (B)
$1.125 million. In either such event, at the Closing, ATT and IXL shall instead
issue a note or notes in principle amounts requested by Sellers in the form of
the note attached hereto as Exhibit B equal in the aggregate to the amount or
amounts so held back, and the note(s) together with the cash portion of the
Purchase Price shall constitute valid delivery of the full Purchase Price. The
issuance of such note shall not reduce the Working Capital of the Transferred
Companies or be a breach of any representation or warranty of Sellers.

         SECTION 2.03. Closing Balance Sheet. (a) No later than two (2) days
prior to the Closing Date, US Seller shall deliver to Buyer an unaudited pro
forma combined balance sheet of the Transferred Companies (the "Estimated
Closing


                                       19
<PAGE>

Balance Sheet"), and a statement of the estimated Working Capital of the
Transferred Companies, taken as a whole ("Estimated Closing Working Capital"),
as of November 24, 2001 (the "Estimation Date"). The Purchase Price payable at
the Closing shall be (i) increased, if Estimated Closing Working Capital exceeds
Target Working Capital, by an amount equal to such excess, or (ii) decreased, if
Target Working Capital exceeds Estimated Closing Working Capital, by an amount
equal to such excess. "Target Working Capital" means $132.7 million.

         (b) As promptly as practicable, but not later than seventy-five (75)
days after the Closing Date, US Seller shall cause to be prepared and delivered
to Buyer a pro forma combined balance sheet of the Transferred Companies (the
"Closing Balance Sheet"), and a statement ("Closing Working Capital Statement")
setting forth a calculation of Working Capital of the Transferred Companies,
taken as a whole ("Closing Working Capital"), as of the close of business (New
York City time) on the day immediately preceding the Closing Date (the
"Determination Date"), together with a report of Ernst & Young LLP ("E&Y")
prepared in accordance with generally accepted auditing standards in the U.S.
certifying that the Closing Balance Sheet and Closing Working Capital Statement
was prepared in accordance with GAAP, with such exceptions as are described in
Schedule 3.09(b) applied on a basis consistent with the Preliminary Balance
Sheet; provided, however, that should E&Y be unable or unwilling to provide such
report, US Seller shall promptly engage another independent public accounting
firm of national reputation (the "Alternate Firm") to provide such report. E&Y
or the Alternate Firm, as the case may be, shall hereinafter be referred to as
the "Auditor". Sellers shall be responsible for the fees and expenses of the
Auditor. The Closing Balance Sheet delivered pursuant to this Section 2.03 shall
be prepared in accordance with GAAP, with such exceptions as are described in
Schedule 3.09(b) applied on a basis consistent with the Preliminary Balance
Sheet, and the Closing Working Capital Statement shall be prepared in accordance
with the working capital accounting principles set forth in Schedule 2.03(b)
(the "Working Capital Accounting Principles"), applied on a basis consistent
with the Reference Working Capital Statement.

         (c) If Buyer disagrees with the calculation of Closing Working Capital
delivered pursuant to Section 2.03(b) or disputes that the Closing Working
Capital Statement was prepared in accordance with Section 2.03(b), Buyer may,
within thirty (30) days after delivery of the Closing Balance Sheet and the
Closing Working Capital Statement, deliver a notice to US Seller (the "Objection
Notice"), which shall set forth in reasonable detail the items on the Closing
Working Capital Statement that Buyer disagrees with and Buyer's alternative
calculation of such items and shall include any request for further information
that is reasonably related to Buyer's review and verification of the disputed
items on


                                       20
<PAGE>

the Closing Working Capital Statement. Within seven (7) days after US Seller or
its Affiliates or advisors furnishes such further information reasonably
requested in the Objection Notice, Buyer shall deliver a final supplement to the
Objection Notice. The Objection Notice, as so supplemented, shall specify those
items or amounts included in the Closing Working Capital Statement with which
Buyer disagrees, and Buyer and Sellers shall be deemed to have agreed with all
other items and amounts included in the Closing Working Capital Statement or
otherwise bearing on the calculation of Closing Working Capital delivered
pursuant to Section 2.03(b).

         (d) Buyer and US Seller shall, during the fifteen (15) days following
delivery of the Objection Notice or any final supplement thereto, use their
respective commercially reasonable efforts to reach agreement on the disputed
items and amounts in order to agree on a calculation of Closing Working Capital.
If, during such period, Buyer and US Seller are unable to reach such agreement,
any unresolved disputed items and amounts shall be promptly referred to
PricewaterhouseCoopers (the "Unrelated Accounting Firm"). The Unrelated
Accounting Firm shall be directed to render, as promptly as practicable, a
written report that addresses only the unresolved disputed items and amounts
specified in the Objection Notice, as supplemented. Each of US Seller and Buyer
shall use their respective commercially reasonable efforts to agree on the
procedures to be followed by the Unrelated Accounting Firm (including procedures
with regard to presentation of evidence) within thirty (30) days following
referral of the unresolved disputed items and amounts to the Unrelated
Accounting Firm. If US Seller and Buyer are unable to agree upon such procedures
at the end of the such thirty (30) day period, the Unrelated Accounting Firm
shall establish such procedures giving due regard to the mutual intention of US
Seller and Buyer to resolve the disputed items and amounts as quickly,
efficiently and inexpensively as possible, which procedures may be, but not need
be, procedures proposed by either US Seller or Buyer. Each of US Seller and
Buyer shall then submit evidence in support of its position on each item and
amount in dispute. In resolving each item or amount in dispute, the Unrelated
Accounting Firm's decision will be strictly limited to the selection of either
US Seller's position or Buyer's position on such disputed item or amount.

         Without limiting the generality of the foregoing, the parties
acknowledge that the Purchase Price adjustment contemplated by Section 2.04 is
intended to reflect the change in Working Capital from the Estimation Date to
the Determination Date, and the parties further acknowledge that such change can
only be measured if the calculation of Working Capital is performed in the same
way, using the same methods, as of all relevant dates. The scope of the disputes
to be resolved by the Unrelated Accounting Firm is limited, therefore, to
whether the Closing Working Capital Statement was prepared in accordance with
Section


                                       21

<PAGE>

2.03(b). The Unrelated Accounting Firm may not make any other determination,
including any determination as to whether GAAP or the Working Capital Accounting
Principles were followed in the preparation of the Preliminary Balance Sheet or
the Reference Working Capital Statement. The parties acknowledge that Buyer has
had opportunity to examine and challenge the Preliminary Balance Sheet and the
Reference Working Capital Statement and the parties agree that the items and
amounts on the Preliminary Balance Sheet and the Reference Working Capital
Statement shall not be subject to modification in the calculation of Closing
Working Capital other than for changes in the value of such items and amounts or
change in circumstances or events occurring between the Balance Sheet Date and
the Estimation Date and between the Estimation Date and the Determination Date.
The Closing Working Capital Statement and the Closing Balance Sheet will be
prepared not taking into account any changes in circumstances or events
occurring after the opening of business on the Closing Date. Upon final
resolution of all disputed issues, the Unrelated Accounting Firm shall issue a
report showing the calculation of the Closing Working Capital of the Transferred
Companies, taken as a whole, based on the Closing Balance Sheet. The resolution
of the disputed items and amounts by the Unrelated Accounting Firm shall be
final and binding on the parties.

         Sellers shall bear a percentage of the fees and expenses of the
Unrelated Accounting Firm that equals (i) the difference between US Seller's
calculation of Closing Working Capital delivered pursuant to Section 2.03(b) and
Final Working Capital divided by (ii) the total difference between US Seller's
calculation of Closing Working Capital delivered pursuant to Section 2.03(b) and
Buyer's calculation of Closing Working Capital delivered pursuant to Section
2.03(c). Buyer shall bear a percentage of the fees and expenses of the Unrelated
Accounting Firm that equals (i) the difference between Buyer's calculation of
Closing Working Capital delivered pursuant to Section 2.03(c) and Final Working
Capital divided by (ii) the total difference between US Seller's calculation of
Closing Working Capital delivered pursuant to Section 2.03(b) and Buyer's
calculation of Closing Working Capital delivered pursuant to Section 2.03(c).

         (e) Buyer and Sellers agree that they will, and agree to cause their
respective independent accountants and the Transferred Companies to, cooperate
and assist in the calculation of Closing Working Capital and the preparation of
the Closing Balance Sheet and in the conduct of the audits and reviews referred
to in this Section 2.03, including without limitation, making available to the
extent necessary books, records, work papers and personnel, including the
execution of customary release or indemnification letters required by the
Auditor or taking of physical inventory.


                                       22
<PAGE>

         SECTION 2.04. Adjustment of Purchase Price. (a) If Estimated Closing
Working Capital exceeds Final Working Capital, US Seller, on behalf of Sellers,
shall pay to Buyer, as an adjustment to and refund of the Purchase Price, in the
manner and with interest as provided in Section 2.04(b), the amount of such
excess. If Final Working Capital exceeds Estimated Closing Working Capital,
Buyer shall pay to US Seller, who shall receive funds on behalf of Sellers, as
an adjustment to the Purchase Price, in the manner and with interest as provided
in Section 2.04(b), the amount of such excess. "Final Working Capital" means
Closing Working Capital (i) as shown in US Seller's calculation in the Closing
Working Capital Statement delivered pursuant to Section 2.03(b), if no Objection
Notice is delivered pursuant to Section 2.03(c); or (ii) if such Objection
Notice is delivered, as agreed by Buyer and US Seller pursuant to Section
2.03(d) or, in the absence of such agreement, as shown in the Unrelated
Accounting Firm's calculation delivered pursuant to Section 2.03(d); provided
that in no event shall Final Working Capital be more than US Seller's
calculation of Closing Working Capital delivered pursuant to Section 2.03(b) or
less than Buyer's calculation of Closing Working Capital delivered pursuant to
Section 2.03(c).

         (b) Any payment pursuant to Section 2.04(a) shall be made at a mutually
convenient time and place within ten (10) days after the Final Working Capital
has been determined by delivery by Buyer or US Seller, on behalf of Sellers, as
the case may be, of a certified or official bank check payable in immediately
available funds to the other party or by causing such payments to be credited to
such account of such other party as may be designated by such other party. The
amount of any payment to be made pursuant to this Section 2.04 shall bear
interest from and including the Closing Date to but excluding the date of
payment at a rate per annum equal to the rate of interest publicly announced by
Bank of America in San Francisco from time to time as its "reference rate"
during the period from the Closing Date to the date of payment. Such interest
shall be payable at the same time as the payment to which it relates and shall
be calculated daily on the basis of a year of 365 days and the actual number of
days elapsed.

         (c) If an adjustment is made with respect to the Purchase Price
pursuant to this Section, the allocations in Schedule 2.01(d) shall be adjusted
in accordance with the Code and any state, local or foreign tax law and as
mutually agreed by Buyer and US Seller. In the event that an agreement is not
reached within 20 days after the determination of Final Working Capital, any
disputed items shall be referred to the Unrelated Accounting Firm to resolve the
disputed items. Upon resolution of the disputed items, the allocation reflected
on the Schedule 2.01(d) shall be adjusted to reflect such resolution. The costs,
fees and expenses of resolving the allocation disputes by the Unrelated
Accounting Firm shall be borne equally by Buyer on the one hand and Sellers on
the other. Buyer and Sellers


                                       23
<PAGE>

agree to file any additional information return required to be filed pursuant to
the Code or any state, local or foreign tax law.

         SECTION 2.05. Assignment of Contracts and Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any right thereunder if an
attempted assignment, without the consent of a third party, would constitute a
breach or in any way adversely affect the rights of Buyer or Canadian Seller
thereunder. Until the Closing Date, Canadian Seller will use its commercially
reasonable efforts (but without the payment of any funds or monies therefore) to
obtain all of the consents listed on Schedule 2.05 and after the Closing Date,
Canadian Seller will cooperate with Buyer with respect thereto. If any such
consent is not obtained, Canadian Seller and Buyer will cooperate in a mutually
agreeable arrangement under which Buyer would obtain the benefits and assume the
obligations thereunder in accordance with this Agreement; provided, however,
that if such arrangement does not provide Buyer with the benefits, in all
material respects, it would have been entitled to under such contract had it
been freely assignable, Canadian Seller shall pay to Buyer an amount equal to
the detriment thereof. Buyer and Canadian Seller agree, by way of example, that
an arrangement that would be a mutually agreeable arrangement includes one in
which Canadian Seller agrees to pay over or otherwise provide Buyer with
benefits Canadian Seller derives under such contract and in which Buyer agrees
to reimburse Canadian Seller for liabilities and obligations it would have been
liable for had such contract been validly assigned to Buyer.

                                    ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLERS

         Each Seller jointly and severally represents and warrants to Buyer as
of the date hereof that:

         SECTION 3.01. Corporate Existence and Power. Each Seller and Company
(i) is a corporation validly incorporated and validly existing under the laws of
its jurisdiction of incorporation and (ii) has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
have, or would not reasonably be expected to have, a Material Adverse Effect.
Each of US Seller, ATT and IXL is in good standing under the laws of its
jurisdiction of organization. Each Seller and each Company is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction where such


                                       24
<PAGE>

qualification is necessary, except for those jurisdictions where failure to be
so qualified would not have, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. To the Knowledge of
Sellers, Schedule 3.01 sets forth all states in which a Company is qualified to
do business as a foreign corporation. Sellers have, prior to the execution of
this Agreement, made available to Buyer true and complete copies of the
certificate of incorporation and by-laws (or other comparable corporate charter
documents) of each of the Transferred Companies as in effect on the date hereof.

         SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by each member of the Parent Group of this Agreement and the
Ancillary Agreements to which it is or will be a party and the consummation of
the transactions contemplated hereby or thereby by each member of the Parent
Group are within the corporate powers of such member of the Parent Group and
have been or, in the case of the Ancillary Agreements, will be duly authorized
by all necessary corporate action on the part of such member of the Parent
Group. This Agreement has been duly and validly executed and delivered by each
member of the Parent Group and constitutes a valid and binding agreement of such
member of the Parent Group and each Ancillary Agreement to which each is, or
will be, a party, has been, or will, upon execution and delivery by such member
of the Parent Group, have been, duly and validly executed and delivered by such
member of the Parent Group and constitutes, or will upon execution and delivery
by such member of the Parent Group, constitute a valid and binding obligation of
such member of the Parent Group.

         SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by each member of the Parent Group of this Agreement and the
Ancillary Agreements to which it is or will be a party and the consummation of
the transactions contemplated hereby and thereby require no material action by
or in respect of, or material filing with, any Governmental Authority other than
(i) compliance with any applicable requirements of the HSR Act and requirements
of any Foreign Antitrust Laws; (ii) filings with the Pension Benefit Guaranty
Corporation, the Internal Revenue Service ("IRS"), the Department of Labor
("DOL"), any applicable provincial Department or Ministry of Labour and any
other similar Governmental Authority with respect to the transfer of assets and
liabilities of Employee Benefit Plans or Foreign Employee Benefit Plans pursuant
to this Agreement; (iii) filings with the Public Registry of Commerce of the
City of Buenos Aires and (iv) any such action or filing as to which the failure
to make or obtain would not have, or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

         SECTION 3.04. Noncontravention. The execution, delivery and performance
by each member of the Parent Group of this Agreement and the


                                       25
<PAGE>

Ancillary Agreements to which it is or will be a party and the consummation of
the transactions contemplated hereby and thereby by each member of the Parent
Group do not and will not (i) violate the certificate of incorporation or bylaws
of such member of the Parent Group, (ii) assuming compliance with the matters
referred to in Section 3.03, violate any applicable law, rule, regulation,
judgment, injunction, order or decree, except for any such violations which
would not have, or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, (iii) except as disclosed in Schedule
3.04 or as to matters which would not have, or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, require
any consent or other action by any Person under, constitute a default under, or
give rise to any right of termination, cancellation or acceleration of any right
or obligation of any Transferred Company or to a loss of any benefit to which
such Transferred Company is entitled under any provision of any agreement or
other instrument binding upon such Transferred Company or (iv) result in the
creation or imposition of any Lien on any asset of any Transferred Company,
except for any Permitted Liens.

         SECTION 3.05. Capitalization. (a) The authorized, issued and
outstanding capital stock of each Company on the date hereof is set forth in
Schedule 3.05.

         (b) All outstanding shares of capital stock of each Company have been
duly authorized and validly issued and are fully paid and non-assessable. Except
as set forth in this Section 3.05 or on Schedule 3.05, there are no outstanding
(i) shares of capital stock or equity securities of the Companies, (ii)
securities of any Company convertible into or exchangeable for shares of capital
stock or equity securities of such Company or (iii) options or other rights to
acquire from any Company, or other obligation of such Company to issue, any
capital stock, equity securities or securities convertible into or exchangeable
for capital stock or equity securities of such Company (the items in clauses
3.05(b)(i), 3.05(b)(ii) and 3.05(b)(iii) being referred to collectively as the
"Company Securities"). There are no outstanding obligations of any Company to
repurchase, redeem or otherwise acquire any Company Securities.

         SECTION 3.06. Ownership of Shares; Title to Purchased Assets. (a) US
Seller, True Temper Seller or Global is the record and beneficial owner of the
Shares set forth on Schedule 2.01(a), free and clear of any Lien and will
transfer and deliver to Buyer at the Closing (or with respect to the Share of
Argentina at such time as is mutually agreeable after such transfer is permitted
under Argentinian law) valid title to the Shares as set forth on Schedule
2.01(a), free and clear of any Lien other than those created by Buyer or an
Affiliate of Buyer.


                                       26
<PAGE>

         (b) Subject to Section 2.05, upon consummation of the transactions
contemplated hereby, Buyer will have acquired good and marketable title in and
to, or a valid leasehold interest in, each of the Purchased Assets, free and
clear of all Liens, except for Permitted Liens.

         SECTION 3.07. Sufficiency of Assets. The property and assets of the
Companies, the Subsidiaries and the Purchased Assets constitute all of the
rights, privileges, property and other assets owned by USI and its direct or
indirect subsidiaries which are used or held for use primarily in the Business
and are adequate to conduct the Business as currently conducted.

         SECTION 3.08. Subsidiaries. (a) Each Subsidiary is validly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, consents
and approvals the absence of which would not have, or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
All Subsidiaries and their respective jurisdictions of incorporation are
identified on Schedule 3.08.

         (b) The outstanding capital stock or other equity securities of each
Subsidiary (other than one share of Argentina) is owned by a Company, directly
or indirectly, free and clear of any Lien. There are no outstanding (i)
securities of any Company or any Subsidiary convertible into or exchangeable for
shares of capital stock or equity securities of any Subsidiary or (ii) options
or other rights to acquire from any Company or any Subsidiary, or other
obligation of any Company or any Subsidiary to issue, any capital stock, equity
securities or securities convertible into or exchangeable for capital stock or
equity securities of any Subsidiary (the items in clauses 3.08(b)(i) and
3.08(b)(ii) being referred to collectively as the "Subsidiary Securities").
There are no outstanding obligations of any Company or any Subsidiary to
repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

         SECTION 3.09. Financial Statements. (a) The unaudited condensed pro
forma combined balance sheets of the Transferred Companies as of October 2, 1999
and September 30, 2000 and the related unaudited pro forma combined statement of
operations, changes in invested capital, and cash flows for the years then
ended, true and correct copies of which are attached hereto on Schedule 3.09(a),
present fairly, in all material respects, the combined financial position of the
Transferred Companies at October 2, 1999 and September 30, 2000 and the combined
results of their operations and their cash flows for the years then ended, in
conformity with GAAP, with footnotes omitted and with such other exceptions as
are described in Schedule 3.09(a).


                                       27
<PAGE>

         (b) The Preliminary Balance Sheet and the related audited pro forma
combined statement of operations, changes in invested capital, and cash flows
for the year ended September 29, 2001, true and correct copies of which are
attached hereto on Schedule 3.09(b), present fairly, in all material respects,
the combined financial position of the Transferred Companies at September 29,
2001 and the combined results of their operations and their cash flows for the
years then ended, in conformity with GAAP, with such exceptions as are described
in Schedule 3.09(b).

         SECTION 3.10. Absence of Certain Changes. Except as disclosed in
Schedule 3.10, since the Balance Sheet Date, each of the Transferred Companies
has conducted business in the ordinary course consistent with past practices.
Without limiting the generality of the foregoing, since the Balance Sheet Date,
there has not been:

                  (a) any change in business, operations or assets of or events
         relating to any of the Transferred Companies which has had or would
         reasonably be expected to have a Material Adverse Effect;

                  (b) any material change in any method of accounting or
         accounting practice by any of the Transferred Companies except for any
         such change required by reason of a concurrent change in GAAP;

                  (c) any (i) grant of any severance or termination pay to any
         director, officer or Employee of any Transferred Company, or (ii)
         increase in compensation or other benefits payable to any Employee of
         any Transferred Company pursuant to any severance or retirement plans
         or policies thereof, in each case of (i) and (ii) other than (A) in the
         ordinary course of business consistent with past practices, including
         without limitation (x) normal merit increases for salaried employees or
         (y) increases or grants required by contracts including, without
         limitation, collective bargaining agreements, if any, disclosed in
         Schedule 3.10, 3.12 or 3.19 or required by applicable law, and (B)
         increases, agreements and bonuses disclosed in Schedule 3.12 or 3.19;

                  (d) any amendment of any term of any outstanding security of
         any of the Companies, Canadian Seller (with respect to Garant) or any
         Subsidiary;

                  (e) other than pursuant to the Collateral Documents, any
         incurrence, assumption or guarantee by any of the Transferred Companies
         of any indebtedness other than in the ordinary course of business


                                       28


<PAGE>

         consistent with past practices and not in excess of $100,000 for each
         such event;

                  (f) any making of any loan, advance or capital contributions
         to or investment in any Person (including any intercompany
         transactions) by any of the Transferred Companies other than loans,
         advances or capital contributions to or investments made in the
         ordinary course of business consistent with past practices and in any
         event each such event not in excess of $100,000;

                  (g) other than in respect of the indebtedness under the Master
         Agreement or Collateral Documents or in compliance with this Agreement,
         any purchase, cancellation, prepayment or complete or partial discharge
         in advance of a scheduled payment date with respect to, or waiver of
         any right of any of the Transferred Companies under, any indebtedness
         or owing to any of the Transferred Companies, other than a purchase,
         cancellation, prepayment or discharge or waiver, not in excess of
         $100,000 per event;

                  (h) other than as a result of the transactions contemplated by
         this Agreement, any write-off or write-down of or any determination to
         write off or write down any of the assets or properties of any of the
         Transferred Companies in an aggregate amount exceeding $100,000;

                  (i) other than as a result of the transactions contemplated by
         this Agreement, any acceleration, termination, modification or
         cancellation of any contract by any Transferred Company for an amount
         greater than $100,000;

                  (j) any sale, lease, transfer or assignment of any material
         assets (other than inventory in the ordinary course of business) of any
         Transferred Company or any Subsidiary other than in the ordinary course
         of business;

                  (k) any action taken by any Transferred Company or Subsidiary
         prohibited by Section 5.01; or

                  (l) except as permitted by Section 5.01, any declaration,
         setting aside or payment of any dividend or other distribution with
         respect to any shares of capital stock of any of the Companies or any
         Subsidiary, or any repurchase, redemption or other acquisition by any
         of the Companies or any Subsidiary of any outstanding shares of capital
         stock or other securities of any of the Companies or any Subsidiary.


                                       29
<PAGE>

         Notwithstanding the foregoing, the parties acknowledge that with
respect to capital expenditures, so long as the provisions of Section 5.05 are
complied with, Sellers shall be deemed to be in compliance with this Section.


         SECTION 3.11. No Undisclosed Material Liabilities. There are no
liabilities of the Transferred Companies of any kind, other than:

                  (a) liabilities provided for in the Preliminary Balance Sheet
         (including to the extent reserved therefor therein) or disclosed in the
         notes thereto;

                  (b) liabilities not required under GAAP, with such exceptions
         as are described in Schedule 3.09(b), to be shown on the Preliminary
         Balance Sheet; provided that any such liabilities, individually or in
         the aggregate, shall not be material to the Transferred Companies taken
         as a whole;

                  (c) liabilities disclosed in, related to or arising under any
         agreements, instruments or other matters disclosed in this Agreement or
         any Schedule hereto including in Schedule 3.11 and liabilities and
         obligations not required to be so disclosed because of their failure to
         meet the materiality or minimum dollar thresholds set forth in the
         relevant Section;

                  (d) liabilities incurred in the ordinary course of business
         since the Balance Sheet Date; provided that any such liabilities,
         individually or in the aggregate, shall not be material to the
         Transferred Companies taken as a whole;

                  (e) Excluded Liabilities; and

                  (f) other undisclosed liabilities which, are not material to
         the Transferred Companies, taken as a whole.

         SECTION 3.12. Material Contracts. Schedule 3.12 sets forth a true and
complete list of all agreements and contracts of the Transferred Companies
(collectively "Contracts") of the following types (such Contracts are
collectively, the "Material Contracts") which are in effect on the date hereof:

         (a) all patent, trademark, servicemark, tradename, copyright, royalty,
license and inventor Contracts that involve an annual payment or receipt by a
Transferred Company to or from another party of more than $25,000 for any one
Contract;


                                       30
<PAGE>

         (b) all Contracts for the purchase or sale of any materials, supplies,
equipment, merchandise, services or other assets that involve an annual payment
by or to a Transferred Company of more than $100,000 for any one Contract;

         (c) all leases for personal property under which a Transferred Company
is either lessor or lessee that involve annual payments or receipts of more than
$100,000 for any one lease;

         (d) all Contracts, mortgages, indentures, notes, installment
obligations and other instruments relating to indebtedness to which a
Transferred Company is a party or by which it or its properties are bound,
except any such agreement (A) with annual payments by a Transferred Company not
exceeding $100,000, (B) which may be prepaid with not more than 60 days notice
without the payment of a penalty or (C) entered into subsequent to the date of
this Agreement as permitted by Section 5.01;

         (e) all distributor, representative and agency Contracts that involve
an annual payment by a Transferred Company of more than $100,000 for any one
Contract;

         (f) all government Contracts that involve an annual payment to or by a
Transferred Company of more than $100,000 for any one Contract;

         (g) all material Contracts with any current or former officer, director
or employee of any Transferred Company;

         (h) all Contracts under which any Transferred Company has agreed to
indemnify or guarantee the obligations of any Person (except Contracts with
customers of the Transferred Companies entered into in the ordinary course of
business) or to share tax liability with any Person with liability which would
reasonably be likely to exceed $100,000 for any one Contact;

         (i) all Contracts limiting the freedom of any Transferred Company to
engage in any line of business or in any geographic area;

         (j) all Contracts relating to the acquisition by any Transferred
Company of any operating business entered into since January 1, 1999 or the
shares or other equity interests of any Person involving payments of more than
$100,000 for any one Contract;

         (k) any partnership, joint venture or other similar agreement or
arrangement;


                                       31
<PAGE>

         (l) except as disclosed in Schedule 3.15(b), all other agreements which
are material to the operation of the Business taken as a whole;

         (m) all Contracts granting rights of first refusal with respect to the
capital stock of the Companies;

         (n) except as disclosed in Schedule 3.19 or 3.21, all employment,
consulting, termination, or severance agreements, collective bargaining
agreements, labor contracts or pension, profit-sharing, incentive compensation,
deferred compensation, stock purchase, stock option, stock appreciation right,
group insurance, termination pay, severance pay, joint defense or retirement
plans or agreements of any Transferred Company; and

         (o) except as disclosed in Schedule 3.15(c), all Contracts granting a
material Lien on a material asset of the Transferred Companies.

         Sellers have made available to Buyer complete and correct copies of all
items listed on Schedule 3.12. Except as disclosed in Schedule 3.12, no
Transferred Company is in default under the terms of any item listed on Schedule
3.12 which default has had, or would reasonably be expected to have, a Material
Adverse Effect. Each of the Contracts listed in Schedule 3.12 is valid and in
full force and effect with respect to the Transferred Company party thereto, and
to the Knowledge of Sellers, no party has notified any Transferred Company in
writing of its intention to cease to perform any material services required to
be performed by it or withhold any material payment required to be made by it
thereunder.

         SECTION 3.13. Litigation. Except as disclosed on Schedule 3.13, there
is no action, suit, investigation or proceeding pending against, or to the
Knowledge of Sellers, threatened against or affecting, the Transferred Companies
or any of their respective properties before any court or arbitrator or any
Governmental Authority which would reasonably be expected to result in a
liability in excess of $50,000.

         SECTION 3.14. Compliance with Laws and Court Orders. No Transferred
Company is in violation of any applicable law, rule, regulation, judgment,
injunction, order or decree, except for violations that have not had or would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

         SECTION 3.15. Real Property.


                                       32
<PAGE>

         (a) Schedule 3.15(a) sets forth all of the real properties owned in fee
simple by any of the Transferred Companies (the "Owned Properties"). Except as
set forth on Schedule 3.15(a), each Transferred Company has good, valid and
marketable fee simple title (subject to Permitted Liens, Liens listed in
Schedule 3.15(d) and Senior Debt Liens) to each of the Owned Properties listed
next to its name on Schedule 3.15(a), except for properties listed on Schedule
5.01. On the Closing Date, none of the Owned Properties will be subject to a
Lien other than Permitted Liens.

         (b) Schedule 3.15(b) sets forth a true, accurate and complete list of
all of the real property leases ("Leases") in effect as of the date hereof under
which any Transferred Company is a lessee (collectively, the "Leased
Properties"). Sellers have made available to Buyer true, correct and complete
copies of all such Leases, including all amendments, modifications and renewals
thereof. All such Leases are valid, binding and enforceable in accordance with
their terms, and are in full force and effect as of the date hereof with respect
to the Transferred Company party thereto. There are no existing defaults by any
Transferred Company beyond any applicable grace periods under such Leases,
except for defaults which would not have, or would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, and no
Transferred Company has received any notice of default, except for defaults
which would not have, or would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. Except as set forth in Schedule
3.15(b), the consummation of the transactions contemplated by this Agreement
will not constitute a default, or give rise to a right of termination,
cancellation or acceleration of any right under, any of the material Leases.

         (c) Except as otherwise set forth in Schedule 3.15(c), Sellers have not
received any written notice (i) of any contemplated or pending change in the
zoning classification or permitted use of any Real Property; (ii) of any special
assessments payable after the date hereof with respect to any Real Property; or
(iii) of any default under any easement, covenant, document or agreement
included in the Permitted Liens, except for defaults which would not have, or
would not reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the value of the Real Property subject thereto or the
manner in which such Real Property is currently being used by the applicable
Transferred Company.

         SECTION 3.16. Intellectual Property. (a) Schedule 3.16 contains a true,
accurate and complete list of all material registered and unregistered
Intellectual Property Rights owned or licensed and used or held for use by the
Transferred Companies or used in connection with and necessary in the conduct of
the Business ("Company Intellectual Property Rights").


                                       33
<PAGE>

         (b) Schedule 3.16 sets forth a true, accurate and complete list of all
material licenses, sublicenses and other agreements as to which a Transferred
Company is a party and pursuant to which any Person is authorized to use any
Company Intellectual Property Right.

         (c) Except as otherwise indicated in Schedule 3.16, and except for
licenses granted in the ordinary course of business, the Transferred Companies
exclusively own all right, title and interest in and to, and exclusively hold
full legal, equitable and beneficial ownership of, the Company Intellectual
Property Rights identified on Schedule 3.16 (including without limitation the
exclusive right to use, sell, transfer, assign and license same without payment
to any third parties), free and clear of all Liens other than Liens set forth in
Schedule 3.16.

         (d) No Company Intellectual Property Right is subject to any
outstanding judgment, injunction, order, decree or agreement restricting the use
thereof by the Transferred Companies or restricting the licensing thereof by the
Transferred Companies to any Person, except for judgments, injunctions, orders,
decrees or agreements which would not have, or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.

         SECTION 3.17. Finders' Fees. Except for Deutsche Banc Alex Brown and
Credit Suisse First Boston whose fees will be paid by Sellers, and Hilco
Appraisal Services LLC, Cushman & Wakefield and Arthur Andersen whose fees will
be the responsibility of Buyer there is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Sellers or the Transferred Companies who might be entitled to any fee or
commission from the Transferred Companies in connection with the transactions
contemplated by this Agreement.

         SECTION 3.18. Employees. (a) All employees of Sellers or their
subsidiaries who are engaged primarily in the Business are employed by the
Transferred Companies.

         (b) As of the date hereof, Schedule 3.18(b) sets forth the names and
titles of all current directors and all current officers of the Companies whose
annual base salary exceeds $90,000 (other than those directors and officers who
will resign from their positions at the Closing pursuant to Section 5.03). As of
the date hereof, to the Knowledge of Sellers, Sellers have not received any
written notice from any current employee of the Companies that he or she will or
may cease voluntarily to remain an employee of any such Company or from any
current employee of Garant or of Canadian Seller who is primarily engaged in the
Canadian Business that he or she will refuse an offer of employment from Buyer
on terms described in Article 8, in either case upon or as a result of the


                                       34
<PAGE>

consummation of the transactions contemplated by this Agreement (other than
those directors and officers who will resign from their positions at the Closing
pursuant to Section 5.03).

         SECTION 3.19. Employee Benefit Plans.

         (a) Definitions.

                  (i) The term "Employees" shall mean all current and former
         employees of the Transferred Companies, as well as those employees of
         Canadian Seller employed primarily in connection with the Canadian
         Business, including any such employees on approved leaves of absence
         (whether family leave, maternity or parental leave, or workers'
         compensation, disability, medical leave or otherwise) and the term
         "Employee" shall mean any of the Employees.

                  (ii) The term "Employee Benefit Plans" shall mean each and all
         "employee benefit plans" as defined in Section 3(3) of ERISA, excluding
         any Foreign Employee Benefit Plans (as defined below), maintained or
         contributed to by a Company or US Seller, or any Person whose employees
         are treated as employed by a single employer which includes a Company
         or US Seller under Section 4001 of ERISA or Section 414 of the Code (an
         "ERISA Affiliate"), or any predecessor or in which a Company or US
         Seller or ERISA Affiliate or any predecessor participates or
         participated and which provides benefits to Employees or with respect
         to which the Transferred Companies or Buyer may have any liability,
         which shall include (a) any such plans that are "employee welfare
         benefit plans", as defined in Section 3(1) of ERISA, including, but not
         limited to, retiree medical and life insurance plans ("Welfare Plans")
         and (b) any such plans that are "employee pension benefit plans" as
         defined in Section 3(2) of ERISA or to which any of the Transferred
         Companies contribute or may become liable to contribute ("Pension
         Plans").

                  (iii) The term "Benefit Arrangements" shall mean any life,
         medical and health insurance (or other commitment providing for
         insurance coverage including, without limitation, any self-insured
         arrangements), post-retirement insurance and hospitalization, savings,
         bonus, stock option, stock purchase, stock appreciation right, deferred
         compensation, incentive compensation, holiday, vacation, termination,
         retirement, severance pay, sick pay, sick leave, disability, tuition
         refund, service award, company car, scholarship, relocation, patent
         award, fringe benefit contract, plan, arrangement or agreement,
         collective bargaining agreements, individual employment, consulting or
         termination contract,


                                       35

<PAGE>


         plan, agreement or arrangement or severance contract, plan, arrangement
         or agreement and any other policies or practices of the Transferred
         Companies providing employee or executive compensation or benefits to
         Employees, other than Employee Benefit Plans and Foreign Employee
         Benefit Plans.

         (b) Schedule 3.19 lists all material Employee Benefit Plans and all
material Foreign Employee Benefit Plans and all material Benefit Arrangements.
Such Schedule 3.19 also indicates whether any Pension Plans listed thereon
participate in trusts sponsored by entities other than the Companies or the
Subsidiaries for investment of plan assets (the "Master Trusts"). With respect
to each of the material Employee Benefit Plans and material Benefit
Arrangements, Sellers have delivered or made available to Buyer, as applicable,
copies of any: (i) plans or programs and related trust documents and amendments
thereto; (ii) the most recent summary plan descriptions and the most recent
annual report (Form 5500 Series); (iii) the most recent actuarial valuation; and
(iv) the most recent determination letter received from the IRS (or in the case
of any Retirement Benefits Scheme, the Inland Revenue approval letter). All such
reports (Form 5500 Series) with respect to each Employee Benefit Plans have been
properly filed in all material respects including the payment in full of any
late fees, interest and penalties, if and to the extent applicable.

         (c) Except as shown on Schedule 3.19, (i) each Transferred Company is
in compliance in all material respects with the terms of each Employee Benefit
Plan or Benefit Arrangement as applicable and each Employee Benefit Plan or
Benefit Arrangement has been maintained in all material respects in accordance
with the requirements prescribed by all applicable statutes, orders or
governmental rules or regulations including, without limitation, ERISA and the
Code where applicable; (ii) each Pension Plan intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS
with respect to such qualification; its related trust has been determined to be
exempt from taxation under Section 501(a) of the Code; and nothing has occurred
since the date of such letter that would adversely affect such qualification or
exemption; and (iii) there are no material actions or proceedings (other than
routine claims for benefits) pending or, to the Knowledge of Sellers,
threatened, with respect to any such Employee Benefit Plan or Benefit
Arrangement or against the assets of any such Employee Benefit Plan or any
fiduciary to any such Employee Benefit Plan or Benefit Arrangement with respect
to such plans or arrangements.

         (d) With respect to any Employee Benefit Plan or Benefit Arrangement,
where applicable, (i) there has been no non-exempt "prohibited transaction"
(including without limitation as a result of any of the transactions
contemplated hereby) within the meaning of Section 4975(c) of the Code or
Section 406 of


                                       36
<PAGE>

ERISA involving the assets of any Employee Benefit Plan or Benefit Arrangement;
and (ii) except as shown on Schedule 3.19, none of the Companies, the
Subsidiaries nor US Seller nor any ERISA Affiliate is or was during the
preceding six years obligated to contribute to any multiemployer plan which
would give rise to any obligation by a Transferred Company and none of the
Transferred Companies or US Seller has assumed any obligation of any predecessor
of a Transferred Company or a Seller with respect to any multiemployer plan
covering Employees.

         (e) Except as shown on Schedule 3.19 or as required by Section 4980B of
the Code, no Employee Benefit Plan or Benefit Arrangement provides medical or
death benefits with respect to Employees beyond their retirement or other
termination of employment. Any continuation coverage provided under any Welfare
Plans is in material compliance with Section 4980B of the Code and is at the
expense of the participant or beneficiary. Copies of the most recent reports
(the "FASB Reports") regarding post-retirement benefits under Employee Benefit
Plans prepared in accordance with the applicable Financial Accounting Standards
Board Statement have been made available to Buyer. Except as shown on Schedule
3.19, there has been no significant adverse change in the Employee Benefit Plans
covered by any such FASB Report since the date of such report, and such FASB
Reports accurately reflect the assets and liabilities as of the date issued of
such Employee Benefit Plans.

         (f) No material accumulated funding deficiency or unpaid required
installments within the meaning of Section 412 of the Code exists with respect
to any Employee Benefit Plan that is subject to Title IV of ERISA (a "Title IV
Plan"). With respect to each Title IV Plan, there has not occurred any
reportable event within the meaning of Section 4043 of ERISA or the regulations
thereunder. The Pension Benefit Guaranty Corporation has not instituted or, to
the Knowledge of Sellers, threatened a proceeding to terminate any Title IV
Plan.

         (g) With respect to the merger or spin-off of any Employee Benefit
Plans or any assets thereunder occurring prior to the Closing Date, all
applicable IRS forms have been timely filed by the relevant Company or
Subsidiary or Seller and any and all rules set forth in ERISA or the Code or the
regulations thereunder providing for the protection of participants in such
Employee Benefit Plans have been followed in all material respects, including,
but not limited to, the rule providing that each participant of any such plan
will be entitled to a benefit after the merger or spin-off equal to or exceeding
the benefit before such merger or spin-off and, in the case of a merger or
spin-off between two defined contribution Employee Benefit Plans, the rule
providing that each participant shall have an account balance after the merger
at least equal to their account balance before such merger or spin-off.


                                       37
<PAGE>

         (h) No Employee Benefit Plan or Benefit Arrangement or any other
agreement, program, policy or other arrangement by or to which any Company, any
Subsidiary or US Seller is a party, is bound or is otherwise liable, by its
terms or in effect could reasonably be expected to require any payment or
transfer of money, property or other consideration on account of or in
connection with the transactions contemplated by this Agreement which payment
would constitute an "excess parachute payment" within the meaning of Section
280G of the Code.

         (i) Each Foreign Employee Benefit Plan (as defined below) has been
maintained in substantial compliance with its terms and with the requirements of
any and all applicable laws and has been maintained, where required, in good
standing with applicable regulatory entities. Except as properly reported in the
books and records of the Transferred Companies or as indicated on Schedule 3.19,
none of the Transferred Companies has incurred any obligations in connection
with the termination of or withdrawal from any Foreign Employee Benefit Plan, or
have any unfunded liability with respect to benefits under any such Foreign
Employee Benefit Plan. "Foreign Employee Benefit Plan" means (A) any plan, fund
or other similar program established or maintained outside the United States of
America by a Transferred Company primarily for the benefit of Employees residing
outside of the United States of America which plan, fund or other similar
program provides retirement income for such Employees, results in a deferral of
income for such Employees in contemplation of retirement or provides payments to
be made to such Employees upon termination of employment, and which plan is not
subject to ERISA or the Code, and (B) any plan, fund or other similar program
established or maintained outside the United States of America by a Company, a
Subsidiary or a Seller primarily for the benefit of Employees residing outside
of the United States of America which plan, fund or similar program is not
described in clause 3.19(i)(i)(A) above including, but not limited to, any plan,
fund or other similar program established or maintained outside the United
States of America by a Company, a Subsidiary or a Seller providing benefits
comparable to those provided under Welfare Plans. The trustees (if any) of the
True Temper Employee Benefits Plan and the True Temper Pension Plan for
Executives have legal title to and control of all of the assets and investments
of such of those Plans of which they are trustees, and there are no charges or
encumbrances over any of the assets and investments of those Plans, in each case
other than entitlements of members thereunder pursuant to the 1990 Pensions Act
and any other applicable law. With respect to all of the Employees and directors
of True Temper Ireland: (i) there are not in existence any service agreements to
which True Temper Ireland is a party which cannot be terminated with "just
cause" by 3 months notice or less (where not reduced in writing) by reasonable
notice without giving rise to any claim for damages or compensation (other than
the statutory redundancy payment or statutory compensation for unfair
dismissals); and (ii) no liability has been


                                       38
<PAGE>

incurred which has not been paid or otherwise satisfied by True Temper Ireland
for breach of any contract of service, for redundancy payments or compensation
for wrongful or unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any such person and no gratuitous payment has
been promised which has not been paid or otherwise satisfied by True Temper
Ireland in connection with the termination or proposed termination of the
employment of any such person.

         SECTION 3.20. Environmental Matters. Except as disclosed on Schedule
3.20:

                  (a) no written notice, request for information, order,
         complaint or penalty has been received by a Seller, or a Company or a
         Subsidiary and to the Knowledge of Sellers, there are no judicial,
         administrative or other actions, suits or proceedings pending or
         threatened which allege a violation of or a liability under any
         Environmental Law, in each case relating to any Company or Subsidiary,
         the Purchased Assets or the Canadian Business, and arising out of any
         Environmental Law or relating to any Hazardous Substances;

                  (b) each Transferred Company is in material compliance with
         applicable Environmental Laws;

                  (c) each Transferred Company has and Canadian Seller has
         obtained or caused to be obtained with respect to the Canadian
         Business, all material Environmental Permits necessary for the
         operation of the Transferred Companies and of the Purchased Assets or
         the Real Property of the Canadian Business, as the case may be, to
         comply with all applicable Environmental Laws; each Transferred Company
         is in material compliance with the terms of its respective
         Environmental Permits and to the Knowledge of Sellers there are no
         proceedings pending or threatened to revoke such Environmental Permits;
         and

                  (d) none of the Companies, the Subsidiaries, Sellers (with
         respect to the Canadian Business in case of Canadian Seller) has filed
         any notice with any Governmental Authority under any Environmental Law
         reporting a Release or threatened Release of any Hazardous Substance
         where such notice has not been resolved to the satisfaction of the
         applicable Governmental Authority.

                  (e) To the Knowledge of Sellers, no Hazardous Substances have
         been Released or are otherwise present on, in, or under the Real
         Property in quantities or concentrations that are not in compliance
         with applicable


                                       39

<PAGE>

         Environmental Permits, exceed remedial action levels or otherwise must
         be reported to a Governmental Authority under applicable Environmental
         Laws.

                  (f) To the Knowledge of Sellers, there are no underground
         storage tanks present on, in or under any of the Real Property.

         Except as set forth in this Section 3.20, no other representations or
warranties are made in or relating to this Agreement with respect to any matters
arising under or relating to any Environmental Law or any Hazardous Substance.

         SECTION 3.21. Labor Matters. (a) Except as set forth on Schedule
3.21(a), there are no collective bargaining agreements in effect relating to the
Employees of any Transferred Company or any other contract or commitment to any
labor union or association representing any Employee of any Transferred Company,
nor does any labor union or collective bargaining agent represent any Employee
of any Transferred Company. To the Knowledge of Sellers, except as set forth on
Schedule 3.21(a), (i) there is no organizational effort currently being made or
threatened to organize employees of any Transferred Company, nor was there any
within the past two years, (ii) there has been no strike, slow-down, work
stoppage, arbitration or other material work-related dispute involving any
Transferred Company, and no such action is now pending or threatened, and (iii)
no proceeding against any Transferred Company or controversy or dispute between
any Transferred Company and any Employee has been threatened in writing, or has
been initiated or filed and is still pending relating to the alleged violation
of any legal requirement pertaining to labor relations or employment matters,
including any charge, complaint or petition filed by an Employee or labor
organization or labor union with the National Labor Relations Board, the Equal
Employment Opportunity Commission, DOL or any comparable Governmental Authority.
Each Transferred Company is in compliance in all material respects with the
terms of, and is not currently in default in any material respect under, any
collective bargaining agreement or other labor union contract or agreement
covering any Employees.

         (b) Except as set forth on Schedule 3.21(b), no Company or Subsidiary
has incurred any liability or obligation under the Worker Adjustment and
Retraining Notification Act ("WARN") or similar state or foreign laws, including
with respect to the provision of any notice of any plant closing or mass layoff
taking place up to and including the Closing Date, which remains unpaid or
unsatisfied or which has not been accrued. Except as set forth on Schedule
3.21(b), no Company or Subsidiary has laid off more than 10% of its Employees at
any single site of employment in any 90-day period during the last 12 months.


                                       40
<PAGE>

         SECTION 3.22. Tax Matters. (a) Except as set forth in the Preliminary
Balance Sheet (including the notes thereto) or on Schedule 3.22, (i) each
Company, each Subsidiary and each Seller have filed (or caused to be filed) in a
timely manner, all material federal, state, local and foreign returns, reports,
statements and forms required to be filed under the Code or applicable state,
local or foreign tax laws (the "Tax Returns") and such Tax Returns are true,
complete and correct in all material respects; (ii) each Company and each
Subsidiary (and Canadian Seller with respect to the Purchased Assets) have
timely paid (or the Seller Group of which such entity is or was a member has
paid) all Taxes that have been incurred or are due; (iii) there is no
outstanding agreement, waiver or consent providing for an extension of the
statutory period of limitations with respect to any Taxes or Tax Returns of any
Company or any Subsidiary and no power of attorney granted by any Company or any
Subsidiary or any Seller Group with respect to any tax matter is currently in
force; (iv) no tax liens or charges (except for liens for Taxes not yet due)
have been filed and there is no action, suit, proceeding, investigation, audit,
claim, dispute or appeal now existing or pending against any Company or any
Subsidiary (or Canadian Seller) with respect to any Tax; (v) each Company and
each Subsidiary (and Canadian Seller with respect to the Purchased Assets) has
complied with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes and is not liable for any Taxes for failure to comply
with such laws, rules and regulations, (vi) no Company or Subsidiary is a party
to or is otherwise bound by any agreement or understanding providing for the
allocation, sharing, assumption or indemnification of Taxes or has any
obligation or liability under any such agreement or understanding to which it
was once a party or otherwise bound; (vii) no Company or Subsidiary is required
to include in income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in accounting method initiated by such Company or
such Subsidiary and to the Knowledge of Sellers, the IRS has not proposed any
such adjustment or change in accounting method; (viii) no Company or Subsidiary
has filed with respect to any item a disclosure statement pursuant to Section
6662 of the Code or any comparable disclosure with respect to foreign, state
and/or local tax statutes for any tax year; (ix) no Company or Subsidiary has
filed any agreement or consent under Section 341(f) of the Code; (x) no property
of any Transferred Company organized in the United States is "tax-exempt use
property" within the meaning of Section 168(h) of the Code nor property that
Buyer will be required to treat as being owned by another person pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of 1986; (xi) no
property of any Transferred Company directly or indirectly secures any debt, the
interest on which is tax-exempt under Section 103(a) of the Code; (xii) the
shares of True Temper Ireland do not derive the greater part of their value from
Irish land or fixtures, Irish mineral rights or Irish off-shore exploration
rights, and such shares were not acquired by Sellers, or any prior holder, in
exchange for shares,


                                       41
<PAGE>

debentures or other securities the greater part of the value of which was so
derived; (xiii) True Temper Ireland has not, prior to Closing, claimed, received
or enjoyed any exemption, reduction or relief from Irish Tax that is or may be
subject to recapture or clawback either as a result of Closing or as a result of
any event, occurrence or transaction that may occur subsequent to Closing in the
ordinary course of business of True Temper Ireland; (xiv) the manufacturing
activities carried on by True Temper Ireland commenced prior to July 22, 1998;
and (xv) the goods produced by True Temper Ireland fall within the definition of
goods regarded as manufactured as set forth in Section 443 of the Taxes
Consolidation Act, 1997 (Ireland) (the "TCA"); (xvi) True Temper Ireland has
not, prior to Closing, made any claim for rollover relief under section 597, 605
or 620 of the TCA in respect of which Irish Tax will be deferred until after
Closing; and (xvii) True Temper Ireland has not, prior to Closing, claimed,
received or enjoyed any exemption, reduction or relief in relation to:

         (1)      Irish Stamp Duty that may be subject to clawback following
                  Closing under section 79 or section 80 of the Stamp Duties
                  Consolidation Act, 1999 (Ireland), as amended (the "SDCA");

         (2)      Irish Companies Capital Duty that may be subject to clawback
                  following Closing under section 119 of the SDCA; or

         (3)      Irish Capital Gains Tax Group Relief that may be subject to
                  clawback under section 623 of the Taxes Consolidation Act,
                  1999 (Ireland), as amended.

Schedule 3.22 contains a list of any tax audits of USI that were proposed,
initiated or concluded by the IRS or any other foreign or domestic tax authority
with respect to Taxes of any Transferred Company within three years of the date
of this Agreement. US Seller is not a "foreign person" within the meaning of
Section 1445(b)(2) of the Code and will furnish an affidavit of this status
substantially in the form of Exhibit C.

         (b) Each Company and each Subsidiary (and Canadian Seller with respect
to the Canadian Business and the Purchased Assets) has timely withheld and paid
over to the appropriate authorities all Taxes required by law to have been
withheld and paid in connection with amounts paid or owing to any officer,
shareholder, director, current or former Employee, independent contractor,
creditors, partner, shareholder, member or other interest holder or any other
resident or non-resident third party or affiliated corporation third party, and
has collected or withheld and paid over (and up to and including the Closing
Date, will have timely collected or withheld and paid over) to the proper
authority


                                       42
<PAGE>

required to be so collected or withheld and paid over for all periods up to and
including the Closing Date under all applicable laws.

         (c) Except for the group of which each Company and each Subsidiary (and
the Canadian Seller with respect to the Canadian Business and the Purchased
Assets) are now presently members, none of the Companies, the Subsidiaries or
the Canadian Seller has ever been a member of an affiliated group of
corporations within the meaning of Section 1504 of the Code (or any similar
provision of state, local, or foreign law). None of the Companies, the
Subsidiaries or the Canadian Seller has any liability for the Taxes of any other
Person under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as transferees or successor, by contract.

         SECTION 3.23. Intercompany Accounts; Affiliate Transactions. Schedule
3.23 contains a complete and accurate list of all intercompany balances as of
the Balance Sheet Date between any of the Transferred Companies, on the one
hand, and Sellers or any of their subsidiaries other than the Transferred
Companies, on the other hand. Since the Balance Sheet Date, other than as set
forth on Schedule 3.23, there has not been any accrual of liability by any
Transferred Company to Sellers or any of their Affiliates or other transactions
between any Transferred Company, on the one hand, and Sellers and any of their
Affiliates, on the other hand, except in the ordinary course of business of any
such Transferred Company consistent with past practice.

         SECTION 3.24. Insurance Coverage. (a) Sellers have made available to
Buyer a complete and accurate list of, and true and complete copies of, all
material insurance policies and fidelity bonds relating to the assets, business,
operations, employees, officers or directors of the Transferred Companies in
effect on the date hereof. There are no material claims by Sellers or the
Transferred Companies pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds or in respect of which such underwriters have reserved their
rights.

         (b) Each insurance policy described in the first sentence of paragraph
3.24(a) above is valid and binding and in full force and effect with respect to
the Transferred Company party thereto, no premiums due thereunder have not been
paid and no Seller or Transferred Company has received any notice of
cancellation or termination in respect of any such policy or to Knowledge of
Sellers is in default thereunder. Since January 1, 1999, no Seller (with respect
to the Business) or Transferred Company has been denied insurance coverage for
which is has applied (or withdrawn such an application for insurance in
anticipation of being denied coverage).


                                       43
<PAGE>

         SECTION 3.25. Product Warranties. Except as set forth on Schedule 3.25,
to the Knowledge of Sellers, all products designed, manufactured, sold,
serviced, leased or distributed by any of the Transferred Companies since
October 1, 1999 (the "Products") are in material compliance with all express and
implied warranties of such Transferred Company, and no material warranty
liability exists for replacement thereof, recall or other damages in connection
with such sales or deliveries. Except as set forth on Schedule 3.25, to the
Knowledge of Sellers, there are no threatened material claims made for any
product returns, recalls, warranty obligations or product services relating to
any of the Products (including, without limitation, information products) or
services any of the Companies.

         SECTION 3.26. Product Liability Claims; Product Safety. (a) Schedule
3.26(a) sets forth a complete and accurate summary of the amount of Product
Liability Claims paid by any Transferred Company or their insurance carrier each
year since May 31, 1995, the amount of Product Liability Claim outstanding on
the date hereof and each Product Liability Claim incurred by any Transferred
Company that involve a claim of more than $25,000 since May 31, 1995. "Product
Liability Claim" means any claim arising out of any injury to individuals or
property as a result of ownership or use of any product sold by a Transferred
Company. To the Knowledge of Sellers, none of the Transferred Companies or
Sellers (with respect to the Business) have received written notice of any
non-compliance with any applicable regulatory codes.

         (b) Except as set forth in Schedule 3.26(b), since July 1, 1998, none
of the Transferred Companies have been required to file, nor have any of them
filed, a notification or other report with the United States Consumer Product
Safety Commission or any other governmental agency concerning actual or
potential hazards with respect to any Product.

         SECTION 3.27. Customers and Suppliers. (a) Schedule 3.27(a) sets forth
a list of the ten largest customers of the Transferred Companies, taken as a
whole, by revenue for the fiscal year ending on September 29, 2001. Except as
set forth on Schedule 3.27(a), to the Knowledge of Sellers, since the Balance
Sheet Date until the date hereof, no customer listed in Schedule 3.27(a) has:


                  (i) ceased or threatened to cease, purchasing from any of the
         Transferred Companies;

                  (ii) materially reduced its purchases from any of the
         Transferred Companies; or

                  (iii) materially and adversely changed the terms and
         conditions on which it is prepared to purchase from the Transferred
         Companies.


                                       44
<PAGE>

         (b) Except as set forth on Schedule 3.27(b), to the Knowledge of
Sellers, since the Balance Sheet Date until the date hereof, no material
supplier has materially and adversely changed the terms and conditions on which
it is prepared to supply to the Transferred Companies.

         SECTION 3.28. Canadian Seller. (a) Canadian Seller is not a
non-resident of Canada under the Income Tax Act (Canada).

         (b) Canadian Seller is registered for purposes of Part IX of the Excise
Tax Act (Canada). The Purchased Assets are all or substantially all of the
property that can reasonably be regarded as necessary to carry on the Canadian
Business as a business.

         SECTION 3.29. Material Change. Except as set forth on Schedule 3.29,
since January 1, 2001, the Transferred Companies have not (a) sold, transferred,
assigned or disposed of assets (other than inventory in the ordinary course of
business) in an amount that is material to the Transferred Companies, taken as a
whole, or any Real Property, (b) vacated any plants, (c) relocated a material
amount of machinery or equipment or (d) discontinued any line of business
material to the Transferred Companies, taken as a whole.


                                    ARTICLE 4
                    REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Sellers as of the date hereof that:

         SECTION 4.01. Corporate Existence and Power. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.

         SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby or thereby are within the
corporate powers of Buyer and have been or will be, in the case of Ancillary
Agreements, duly authorized by all necessary corporate action on the part of
Buyer. This Agreement has been duly and validly executed and delivered by Buyer
and constitutes a valid and binding agreement of Buyer and each Ancillary
Agreement to which Buyer is, or will be, a party has been, or will, upon
execution


                                       45
<PAGE>

and delivery by Buyer, have been, duly and validly executed and delivered by
Buyer and constitutes, or will upon execution and delivery by Buyer, constitute
a valid and binding obligation of Buyer.

         SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby require no
material action by or in respect of, or material filing with, any Governmental
Authority other than (i) compliance with any applicable requirements of the HSR
Act and requirements of any Foreign Antitrust Laws and (ii) filings with the
Pension Benefit Guaranty Corporation, IRS, DOL and any other similar
Governmental Authority with respect to the transfer of assets and liabilities of
Employee Benefit Plans or Foreign Employee Benefit Plans pursuant to this
Agreement.

         SECTION 4.04. Noncontravention. The execution, delivery and performance
by Buyer of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby do not and will not (i) violate
the certificate of incorporation or bylaws of such Buyer or (ii) assuming
compliance with the matters referred to in Section 4.03, violate any applicable
law, rule, regulation, judgment, injunction, order or decree.

         SECTION 4.05. Financing. Buyer has received and furnished copies to US
Seller commitment letters from Foothill Capital Corporation ("Foothill") and
AbleCo Finance LLC ("AbleCo") dated as of December 21, 2001 pursuant to which
Foothill and AbleCo have committed ("Senior Debt Commitment Letter"), subject to
the terms and conditions thereof, to enter into a credit agreement with Buyer
(the "Credit Facility"), from Massachusetts Mutual Life Insurance Company
("MassMutual") dated as of December 11, 2001 pursuant to which MassMutual has
agreed, subject to the terms and conditions thereof, to purchase subordinated
notes and from the Northwestern Mutual Life Insurance Company ("Northwestern")
dated as of December 14, 2001 pursuant to which Northwestern has agreed, subject
to the terms and conditions thereof, to purchase subordinated notes
(collectively, the "Financing Agreements", and the financing to be provided
thereunder or under any alternative arrangements made by Buyer is referred to
herein as the "Financing"). The aggregate proceeds of the Financing will be in
an amount sufficient to pay the Purchase Price, all fees, costs and expenses and
any other amounts to be paid by Buyer hereunder. As of the date hereof, to the
Knowledge of Buyer, no facts or circumstances exist that are reasonably likely
to result in any of the conditions set forth in the Financing Agreements not
being satisfied. Buyer will have at the Closing, the financial capacity to
perform all of the obligations under this Agreement and the closing documents to
be executed hereunder.


                                       46
<PAGE>

         SECTION 4.06. Purchase for Investment. Buyer is purchasing the
applicable Shares for investment for its own account and not with a view to, or
for sale in connection with, any distribution thereof and will not sell such
Shares in violation of applicable federal, state or foreign securities laws.
Buyer (either alone or together with its advisors) has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Shares and is capable of bearing
the economic risks of such investment.

         SECTION 4.07. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the Knowledge of Buyer threatened in writing
against, or affecting Buyer before any court or arbitrator or any Governmental
Authority which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement.

         SECTION 4.08. Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Buyer who might be entitled to any fee or commission from Sellers
or any of their Affiliates upon consummation of the transactions contemplated by
this Agreement.

         SECTION 4.09. Inspections; No Other Representations. Buyer is an
informed and sophisticated purchaser, and has engaged expert advisors,
experienced in the evaluation and purchase of companies such as the Transferred
Companies, as contemplated hereunder. Buyer acknowledges that Sellers have given
Buyer reasonable access to the key employees, documents and facilities of the
Transferred Companies and based on such access, Buyer has undertaken its own due
diligence investigation reasonably necessary to enable it to make an informed
and intelligent decision with respect to the execution, delivery and performance
of this Agreement. Buyer will undertake prior to Closing such further
investigation and request such additional documents and information as it deems
necessary. Buyer agrees to accept the Shares of the Companies and the
Subsidiaries and the Purchased Assets without reliance upon any express or
implied representations or warranties of any nature made by or on behalf of or
imputed to Sellers, except as expressly set forth in this Agreement. Without
limiting the generality of the foregoing, Buyer acknowledges that Sellers make
no representation or warranty with respect to (i) any projections, estimates or
budgets delivered to or made available to Buyer of future revenues, future
results of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Transferred Companies or
the future business and operations of the Transferred Companies, (ii) accuracy
of any information developed by Sellers' consultants as set forth in those
environmental reports relating to certain Real Property or (iii) any other
information or


                                       47
<PAGE>

documents made available to Buyer or its counsel, accountants or advisors with
respect to the Transferred Companies or their respective businesses or
operations. Sellers hereby expressly agree that Buyer's agreements and
acknowledgments set forth herein shall in no way limit the nature, extent or
enforceability of, as the case may be, any representation, warranty, agreement,
covenant or obligation made by, or to be performed by, Sellers or the Guarantor
under this Agreement.

         SECTION 4.10. Investment Canada Act. Buyer is a WTO investor within the
meaning of the Investment Canada Act.

         SECTION 4.11. Excise Tax Act. Buyer is, or will at the Closing be,
registered for purposes of Part IX of the Excise Tax Act (Canada) and, to the
Knowledge of Buyer, is acquiring under this Agreement ownership, possession or
use of all or substantially all of the property that can reasonably be regarded
as being necessary for Buyer to be capable of carrying on the Canadian Business
as a business.

         SECTION 4.12. Quebec Sales Tax Act. Buyer is, or will at the Closing
Date be, registered for purposes of the Quebec Sales Tax Act and, to the
Knowledge of Buyer, is acquiring under this Agreement ownership, possession or
use of all or substantially all of the property that can reasonably be regarded
as being necessary for Buyer to be capable of carrying on the Canadian Business
as a business.

                                    ARTICLE 5
                              COVENANTS OF SELLERS

         Sellers agree that:

         SECTION 5.01. Conduct of the Company. From the date hereof until the
Closing Date, except as contemplated by this Agreement, Sellers shall cause each
Transferred Company to conduct its business in the ordinary course consistent
with past practice and to use its commercially reasonable efforts to preserve
intact such Transferred Company's business organizations and relationships with
third parties and to keep available the services of such Transferred Company's
present officers and employees and continue all sales, marketing and promotional
activities relating to the business and operations of the Transferred Companies
(in each case other than as a result of action of Buyer or its Affiliates);
provided, however, upon written notice to Buyer setting forth in reasonable
detail the amount and nature of any payment that the Transferred Companies shall
be permitted to make dividend payments (including cash or assets) and to repay,


                                       48
<PAGE>

prepay or otherwise settle payables, receivables or other accounts due to or
from any Seller or its Affiliates, it being understood that any payment so made
but not disclosed on Schedule 5.01 shall be appropriately reflected on the
Closing Balance Sheet. Without limiting the generality of the foregoing, from
the date hereof until the Closing Date, except as disclosed on Schedule 5.01,
Sellers will not permit any Transferred Company to:

                  (a) adopt or propose any change in its certificate of
         incorporation or bylaws;

                  (b) merge or consolidate with any other Person or acquire a
         material amount of assets from any other Person;

                  (c) sell, lease, license or otherwise dispose of any material
         assets or property except (i) pursuant to existing contracts or
         commitments or (ii) otherwise in the ordinary course consistent with
         past practice;

                  (d) other than pursuant to or in connection with the
         Collateral Documents or the Master Agreement, incur or guarantee any
         obligation, liability or forgive or cancel any debt or claim or waive
         any right of value;

                  (e) authorize, issue or sell any securities, capital stock,
         stock options or warrants to acquire stock or other equity or debt
         interests, redeem or otherwise acquire any of the Shares or any other
         equity securities of the Transferred Companies; or

                  (f) agree or commit to do any of the foregoing.

         SECTION 5.02. Access to Information. From the date hereof until the
Closing Date, Sellers will (i) give, and will cause each Transferred Company to
give, Buyer, its counsel, financial advisors, auditors and other authorized
representatives reasonable access to the offices, properties, books and records
of the Transferred Companies, (ii) furnish, and will cause each Transferred
Company to furnish, to Buyer, its counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information relating to such Transferred Company as such Persons may reasonably
request and (iii) instruct the employees, counsel and financial advisors of
Sellers, the Companies or the Subsidiaries to cooperate with Buyer in its
reasonable investigation of the Transferred Companies. Any investigation
pursuant to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of Sellers or the Transferred
Companies. Notwithstanding the foregoing, Buyer shall not have access to
personnel records of Sellers, the Companies or the Subsidiaries relating to
individual performance or evaluation records, medical


                                       49
<PAGE>

histories or other information which in Sellers' good faith opinion is sensitive
or the disclosure of which could subject any Seller, any Company or any
Subsidiary to risk of liability.

         SECTION 5.03. Resignations. US Seller will deliver to Buyer the
resignations of all officers and directors of the Transferred Companies who will
be officers, directors or employees of Sellers or any of their Affiliates after
the Closing Date from their positions with the Transferred Companies at or prior
to the Closing Date.

         SECTION 5.04. Guaranty. (a) In consideration of the transactions
contemplated by this Agreement, USI (the "Guarantor") hereby unconditionally
guaranties to Buyer (the "Guaranty") that Guarantor will duly and punctually pay
and/or perform, as the case may be, all obligations, liabilities and
undertakings of Sellers under this Agreement, including, without limitation, all
obligations, liabilities and undertakings of Sellers under Article 10 of this
Agreement and under the Tax Sharing Agreement (collectively, the "Obligations").

         (b) This Guaranty is an absolute, unconditional and continuing Guaranty
by the Guarantor of the Obligations in accordance with their terms, and not of
their collectibility only. Enforcement of the liabilities and obligations of the
Guarantor hereunder is in no way conditioned upon any requirement that Buyer
first attempts to collect or take any action against Sellers, or any other
person primarily or secondarily liable with respect to the Obligations, or
resort to any security or other means of obtaining payment of any of the
Obligations which the Buyer may now have or may acquire after the date hereof or
upon any other contingency whatsoever; provided, however, that nothing herein
shall adversely affect Guarantor's rights to assert any defense available to
Sellers under this Agreement or at law. Upon any default by Sellers in the full
and punctual payment and/or performance of any or all of the Obligations in
accordance with their terms, the liabilities and obligations of the Guarantor
hereunder shall, at the option of Buyer, become forthwith due and payable to
Buyer, without demand or notice of any nature, all of which are hereby expressly
waived by the Guarantor. Payments by the Guarantor hereunder may be required by
Buyer on any number of occasions until such time as the Obligations are paid or
satisfied, as the case may be, in full in accordance with their terms.

         SECTION 5.05. Capital Expenditures. Between the Balance Sheet Date and
the Closing Date, Sellers agree to cause the Transferred Companies to make, to
commit or to incur capital expenditures of at least $2 million. In the event the
Transferred Companies do not make, commit or incur at least $2 million of
capital expenditures between the Balance Sheet Date and the Closing Date,
Sellers and Buyer agree that Buyer's sole and exclusive remedy relating solely
to Sellers' and


                                       50
<PAGE>

the Transferred Companies' failure to fulfill their respective obligations under
this Section 5.05 and to no other obligation contained in this Agreement shall
be a reduction in the Purchase Price in an amount equal to the difference
between $2 million and the aggregate amount so expended, committed or incurred
and Buyer shall have no other remedy under Article 9 or 10 or otherwise.

         SECTION 5.06. Settlement of Intercompany Accounts; Settlement of other
Debt; Success Payments. (a) All Intercompany Accounts between Sellers or their
Affiliates, on the one hand, and the Transferred Companies, on the other hand,
as of the Closing shall be settled, forgiven or paid in full on or prior to the
Closing. "Intercompany Accounts" means all accounts, payables, receivables,
accruals, liabilities or assets that are due to or owing from Sellers or their
Affiliates, on the one hand, and the Transferred Companies, on the other hand.


         (b) Sellers agree to cause the Transferred Companies to settle and pay
in full all indebtedness for borrowed money on or prior to the Closing.

         (c) Sellers shall be responsible for obligations and liabilities due to
any Employee of the Transferred Companies that is primarily conditioned on the
successful completion of the transactions contemplated hereby or payments
primarily conditioned on any Employee of the Transferred Companies remaining
employed by a Transferred Company through the successful completion of the
transactions contemplated hereby and none of the Transferred Companies shall be
liable for such payments; provided, however, that, subject to indemnification
obligations set forth in 10.02(a), Buyer or the Transferred Companies, and not
Sellers, shall be liable for any severance or termination obligations or
liabilities and any obligations or liabilities under employment agreements.


         SECTION 5.07. Harrisburg Ground Lease Estoppel and Landlord Recognition
Agreement. Sellers shall use reasonable best efforts to obtain, prior to the
Closing, an estoppel from the landlord in the form attached hereto as Exhibit D
(the "Landlord Estoppel"), pursuant to Article 20 of that certain Ground Lease
dated March 16, 1999 between True Temper Hardware Company, an Ohio corporation,
as landlord, and TTHA Corp, as tenant, with respect to the property known as
1500 South Cameron Street, Harrisburg, Pennsylvania (the "Harrisburg Ground
Lease"). Seller shall also use reasonable best efforts (without the payment of
any funds or monies) to obtain, prior to the Closing, a recognition agreement
from the landlord in the form attached hereto as Exhibit E with respect to the
Harrisburg Ground Lease.


                                       51
<PAGE>

                                    ARTICLE 6
                               COVENANTS OF BUYER

         Buyer agrees that:

         SECTION 6.01. Access. Buyer will and will cause each Transferred
Company, on and after the Closing Date, to afford reasonably promptly to Sellers
and their agents reasonable access to their properties, books, records,
employees and auditors to the extent reasonably necessary to permit Sellers to
determine any matter relating to its rights and obligations hereunder or to any
period ending on or before the Closing Date; provided that any such access by
Sellers shall not unreasonably interfere with the conduct of the business of
Buyer or the Transferred Companies. To the extent the provisions of this Section
6.01 conflict with those in Section 10.02(b), the provisions of Section 10.02(b)
shall govern.

         SECTION 6.02. Trademarks; Tradenames. After the Closing, Buyer shall
not, and shall not permit their Affiliates to, use the names "USI" or "U.S.
Industries, Inc." or any derivative thereof (the "Seller Names"). Buyer and the
Transferred Companies shall promptly, but no later than three month after the
Closing Date, destroy all business cards, signs, displays and other materials
that contain the Seller Names. Notwithstanding the foregoing, for a period of
six months after the Closing Date, the Transferred Companies may continue to use
the Seller Names on any inventory, stationery, promotional materials or manuals
in possession of a Transferred Company prior to the Closing Date so long as
Buyer and the Transferred Companies destroy all remaining materials at the end
of such period.

         SECTION 6.03. Preservation of Records. Buyer agrees, at its own
expense, that it (a) shall preserve and keep the records of the Transferred
Companies for periods prior to the Closing Date for a period of seven years from
the Closing, or for any longer periods as may be required by any Governmental
Authority or ongoing litigation and (b) shall make such records reasonably
available at reasonable times upon reasonable notice to Sellers, at Sellers'
cost and expense, as may be reasonably requested. In the event Buyer wishes to
destroy such records after the time specified above, Buyer shall first give
sixty (60) days' prior written notice to US Seller and US Seller shall have the
right at its option and expense, upon prior written notice given to Buyer within
that sixty (60) days period, to take possession of the records within ninety
(90) days after the date US Seller receives such notice.


                                       52
<PAGE>

                                    ARTICLE 7
                         COVENANTS OF BUYER AND SELLERS

         Buyer and Sellers agree that:

         SECTION 7.01. Reasonable Best Efforts; Further Assurances. Subject to
the terms and conditions of this Agreement, Buyer and Sellers will use their
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement.
Sellers and Buyer agree, and Sellers, prior to the Closing, and Buyer, after the
Closing, agree to cause the Transferred Companies to execute and deliver such
other documents, certificates, agreements and other writings (including, prior
to Closing, such affidavits of title and possession, gap undertakings and
similar documents, in form and substance reasonably acceptable to Sellers, as
may be reasonably requested by Buyer's title insurance company) and to take such
other actions as may be necessary or desirable in order to consummate or
implement expeditiously the transactions contemplated by this Agreement. Sellers
and Buyer agree to use reasonable best efforts to consummate or implement
expeditiously the transactions contemplated by this Agreement.

         SECTION 7.02. Certain Filings. Sellers and Buyer shall cooperate with
one another in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions contemplated
by this Agreement.

         SECTION 7.03. Public Announcements. Until six months after the Closing,
the parties agree to consult with each other before issuing any press release or
making any public statement with respect to this Agreement or the transactions
contemplated hereby and, except for any press releases and public announcements
the making of which may be required by applicable law or any listing agreement
with any national securities exchange, will not issue any such press release or
make any such public statement prior to such consultation. If Buyer or a Seller
or other affiliated entity of such parties, is so required to issue a press
release or otherwise make a public statement it shall inform and provide draft
copies to the other party hereto for review and comment prior to issuing it.
Buyer agrees that Sellers may deliver a copy of this Agreement or the Tax
Sharing Agreement to the holders of the Senior Debt Liens and any other persons
reasonably requested by such holders.


                                       53

<PAGE>


         SECTION 7.04. Notices of Certain Events. From the date hereof until the
Closing Date, Sellers and Buyer shall promptly notify the other of:

                  (a) any notice or other communication from any Person alleging
         that the consent of such Person is or may be required in connection
         with the transactions contemplated by this Agreement;

                  (b) any notice or other communication from any Governmental
         Authority in connection with the transactions contemplated by this
         Agreement; and

                  (c) any actions, suits, claims, investigations or proceedings
         commenced or threatened in writing relating to Sellers, Buyer or the
         Transferred Companies that, if pending or threatened in writing on the
         date of this Agreement, would have been required to have been disclosed
         pursuant to Section 3.13 or 4.07.

         SECTION 7.05. Treasury Matters. (a) Sellers shall continue to cause the
funding of the Transferred Companies' checks, in accordance with past practices,
which are presented for payment through the Determination Date. Sellers shall
have no obligation to fund checks, wire transfers or other transfer orders which
are presented for payment on and after the Closing Date, provided that such
payable has been properly recorded on the Closing Balance Sheet in accordance
with the Accounting Principles. Buyer shall so long as permitted by the banks at
which such bank accounts are located assume all of the bank accounts of Garant
or Canadian Seller to the extent relating to the Canadian Business as provided
in Section 2.01(b) on the Closing Date and be prepared to fund the
above-mentioned checks, wire transfers or other transfer orders which are
presented for payment on and after the Closing Date. Amounts received in the
lockbox and depository accounts of Sellers through the Determination Date shall
be retained by Sellers notwithstanding that, consistent with past practices,
such collections may not be credited to Sellers or their Affiliates until after
the Closing Date; provided that such amounts retained by Sellers shall not be
included in the Closing Balance Sheet.

         (b) Certain of the Transferred Companies are party to or financially
supported by certain letters of credit, guarantees and a lease in respect of
which Sellers or their Affiliates are subject to continuing obligations set
forth in Schedule 7.05 (the "Credit Support Documents"). Buyer shall use its
reasonable best efforts to cause the obligations of the Transferred Companies
which are secured by the Credit Support Documents to be secured or discharged in
such a manner that Sellers or their Affiliates will not be required to make any
payments relating to the periods after the Closing under the Credit Support


                                       54
<PAGE>

Documents in relation thereto. Should any such payments be required of and paid
by a Seller after the Closing, Buyer shall reimburse such Seller immediately
upon demand. The Transferred Companies shall not incur any new obligations
secured or supported by the Credit Support Documents after the Closing and Buyer
shall cause the Transferred Companies not to incur any such obligations.

         (c) Buyer shall promptly deliver to Sellers a copy of any communication
(or a summary of any oral communication) to or from Buyer or the Transferred
Companies or their Affiliates that relate to the Credit Support Documents
(including the Carlisle Lease). If such communication is from Buyer, a
Transferred Company or an Affiliate, Buyer shall deliver a draft of such
communication to Sellers prior to sending such communication in order to permit
Sellers the opportunity to comment thereon. Buyer shall deliver to Sellers no
later than 90 days after each fiscal year end of ATT an audited combined balance
sheet of the Transferred Companies. Buyer shall also promptly deliver to Sellers
any other document requested by Sellers that reasonably relate to the Credit
Support Documents (including the Carlisle Lease).

         SECTION 7.06. Consents. Until the Closing Date, each of the parties
hereto will use its commercially reasonable efforts (but without the payment of
any funds or monies therefore) to obtain consents of all Persons and
Governmental Authorities necessary to the consummation of the transactions
contemplated by this Agreement.

         SECTION 7.07. Pre-Closing Insurance. (a) Post-Closing Insurance. At the
Closing, Buyer shall have in place, at Buyer's sole discretion, policies or
programs that insure the assets and the business of the Transferred Companies
against any loss or damage, including without limitation, any arrangements
required by the State of West Virginia with respect to workers' compensation,
for all periods on and after the Closing, it being understood that such policies
or programs may include, in Buyer's sole discretion, self insurance or other
similar arrangements.

         (b) Cooperation. Sellers, Transferred Companies and Buyer agree to
cooperate with each other to make the benefits of the insurance and self
insurance policies or programs listed in Schedule 7.07(b), or any successor
policies or programs, to the extent they relate to any period prior to the
Closing (the "Pre- Closing Insurance"), available to Buyer (subject in all
events to the terms and conditions of such Pre-Closing Insurance and the
determinations of the insurer thereunder). Sellers shall not be liable, and
Buyer shall hold Sellers harmless, in connection with any adverse determination
by an insurer in respect of any Pre- Closing Insurance Claims; provided,
however, that the foregoing limitations on Sellers' liability shall in no way be
construed to limit or adversely affect Sellers' obligations to Buyer under this
Section 7.07 or Sellers' and Buyer's agreements


                                       55
<PAGE>

under this Section 7.07 including, without limitation, the provisions of Section
7.07(f) hereof which limit Buyer's financial obligations under this Section 7.07
to an aggregate maximum $4.4 million plus Administrative Costs.

         (c) Administrative Costs. Buyer shall reimburse Sellers for the amount
of any applicable administrative or processing fees or other costs and expenses
paid by Sellers to a third party relating to Pre-Closing Insurance Claims and
the processing thereof ("Administrative Costs"), promptly upon receipt of
reasonable documentation or invoices relating thereto. In the alternative, upon
delivery to Buyer of such reasonable documentation or invoices, Sellers shall be
permitted to deduct such Administrative Costs from the amounts payable to Buyer
under Section 7.07(d).

         (d) Processing of Claims; Reimbursement of Pre-Closing Insurance
Claims. Sellers or its agents shall, after the Closing, process claims and other
settlement charges other than Administrative Costs (defined below) relating to
the Pre-Closing Insurance ("Pre-Closing Insurance Claims") in the ordinary
course of business in accordance with the provisions of Pre-Closing Insurance.
In the event that (i) the Sellers receive any proceeds from Pre-Closing
Insurance and (ii) a claim has been paid by Buyer to a third party, then Sellers
shall, subject to Section 7.07(c) hereof, promptly after receipt of reasonable
documentation of such payment, pay or reimburse Buyer, with respect to the
amount so paid by Buyer, the amount of proceeds received by Sellers.

         (e) Reimbursement of Sellers. Buyer and Sellers acknowledge that at the
Closing, Sellers will maintain the Pre-Closing Insurance and any required
letters of credit supporting such Pre-Closing Insurance. In addition, Buyer and
Sellers acknowledge that in order to permit ATT to be a Qualified Self Insurer
under the laws of the State of West Virginia, USI has guaranteed a letter of
credit issued for the benefit of the State of West Virginia for liabilities
arising out of the business of the Transferred Companies relating to workers
compensation in the State of West Virginia as to periods prior to the Closing
(the "Pre-Closing WV Workers Compensation Liability"). As a result, USI may make
payments in respect of all such foregoing liabilities ("Pre-Closing Sellers
Insurance Payments"). Buyer agrees that in the event USI or its Affiliates make
any Pre- Closing Sellers Insurance Payments, Buyer shall reimburse USI, up to a
maximum of $4.4 million, within 10 days of demand accompanied by reasonable
documentation of such payment, for any and all such payments (net of the amount
of any Supplemental Reimbursement due and owing to Buyer under Section 7.07(f)).
Regardless of whether any amounts in excess of such $4.4 million are paid by
Sellers or its Affiliates, Buyer shall have no obligation to reimburse Sellers
for Pre-Closing Sellers Insurance Payments in excess of $4.4 million. Buyer
agrees that Sellers shall have the sole right to control all actions taken in


                                       56
<PAGE>

respect of and to defend against any Pre-Closing Insurance Claim or Pre-Closing
WV Workers Compensation Liability.

         (f) Reimbursement of Buyer. Buyer and Sellers acknowledge that at the
Closing Buyer will remain liable for the Pre-Closing WV Workers Compensation
Liability and underlying liability for claims covered by the Pre-Closing
Insurance. Buyer may only make payments in respect of such foregoing liabilities
if Sellers approve such payments in advance and in writing or if Sellers have
failed to pay any such liability or claim for a period of 30 days after written
notice from Buyer to Sellers following a final determination that Buyer or
Sellers are liable for such liability or claim requesting that Sellers make such
payment ("Pre-Closing Buyer Insurance Payments"). Sellers agree that in the
event that Buyer makes such Pre-Closing Buyer Insurance Payments, such payments
shall be deemed a reimbursement of Sellers under Section 7.07(e).
Notwithstanding anything to the contrary contained herein, in the event the
Pre-Closing Buyer Insurance Payments plus all reimbursements paid to Sellers
under Section 7.07(e) minus all reimbursements by Seller to Buyer under this
subsection exceed $4.4 million, Sellers shall reimburse Buyer, within 10 days of
demand accompanied by reasonable documentation of such payment, the amount of
such excess ("Supplemental Reimbursements").

         (g) Access. Buyer will and will cause each Transferred Company, on and
after the Closing Date, to afford USI and Sellers and their agents reasonable
access to their properties, books, records, employees and auditors to the extent
reasonably necessary to permit Sellers to comply with this Section. Sellers will
afford Buyer and its agents reasonable access to their properties, books,
records, employees and auditors to the extent reasonably necessary to permit
Buyer to comply with this Section.

         SECTION 7.08. Confidentiality. After the Closing, Buyer and Sellers
will hold, and will use their respective reasonable best efforts to cause their
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, all confidential documents and information
provided to them pursuant to this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis, (ii) in the public domain through no fault of such party or (iii) later
lawfully acquired from sources other than the party giving access under this
Agreement. Notwithstanding the foregoing, Buyer, the Transferred Companies and
Seller may disclose confidential information if compelled to do so by judicial
or administrative process or by law; provided that, in the event that a party is
so compelled, such party shall provide the other with prompt notice of such
request or requirement in order to enable the other parties to seek an
appropriate protective order or other


                                       57
<PAGE>


remedy. After the Closing, Buyer will cause the Transferred Companies to comply
with this Section.

         SECTION 7.09. Certain Post-Closing Assistance. Buyer agrees to cause,
after Closing, the appropriate personnel of the Transferred Companies at no cost
or expense to Sellers, to prepare all customary accounting, tax, environmental,
employment, benefits-related and similar reports for the Transferred Companies
for periods up to the Closing Date which are reasonably requested by Sellers.
Sellers agree to provide Buyer, at no cost or expense to Buyer, with information
in the possession and control of Sellers in respect of accounting, tax,
environmental, employment, benefits-related and similar reports for Transferred
Companies after the Closing Date to the extent reasonably requested by Buyer.


                                   ARTICLE 8
                               EMPLOYEE BENEFITS

         SECTION 8.01. Employee and Employee Benefit Matters.

         (a) Employment of Employees at Closing. On or prior to the Closing
Date, Buyer agrees that (i) Buyer or its Affiliate will offer to employ those
Employees employed, immediately prior to the Closing Date, by Garant or by
Canadian Seller employed primarily in connection with the Canadian Business; and
(ii) the Companies and their Subsidiaries will not terminate any Employees
solely as a result of the consummation of the transactions contemplated by this
Agreement and will at the Closing continue to compensate any such Employees who
continue in their employment, in either case, with respect to Employees not
covered by a collective bargaining agreement at substantially equivalent
compensation and benefit levels and, with respect to those Employees covered by
a collective bargaining agreement, at the same wages and on the same terms and
conditions of employment in effect as of the Closing Date. Additionally, Buyer
agrees to continue the Employee Benefit Plans, Foreign Employee Benefit Plans
and Benefit Arrangements and, in the case of those covered by a collective
bargaining agreement, such Employee Benefit Plans, Foreign Employee Benefit
Plans and Benefit Arrangements shall be continued pursuant to such collective
bargaining agreement, as any of the same may be amended from time to time;
provided, however, that Buyer shall not continue any stock option plan
maintained by the Companies and their Subsidiaries or Sellers granting options
to any Employees for the purchase of any Shares or shares of common stock of
Sellers and shall not be required to make any matching contribution in stock
under any 401(k) Plan or allow the continued investment of 401(k) Plan assets in
shares of common stock of Sellers beyond such period as may be reasonably
necessary to


                                       58
<PAGE>

permit 401(k) Plan participants to effect an orderly disposition of such common
stock, except to the extent fiduciary requirements under ERISA or other
applicable law would require otherwise. With respect to current Employees, Buyer
hereby agrees to indemnify Sellers from any and all termination or severance
liability incurred with respect to terminations on or subsequent to the Closing
Date except liability incurred with respect to all statutory notice and
severance pay and common law damages for wrongful dismissal to Employees of
Canadian Seller who are offered employment by Buyer or its Affiliate in
accordance with this Section 8.01(a) and who do not accept employment with Buyer
or its Affiliates. Sellers hereby agree to indemnify Buyer from any and all
termination or severance liability (1) incurred with respect to Employees of
Canadian Seller who are offered employment by Buyer or its Affiliate in
accordance with this Section 8.01(a) and who do not accept employment with Buyer
or its Affiliate or (2) incurred prior to the Closing Date which liability has
not been properly accrued prior to the Closing Date (including, without
limitation, any liability related to or arising out of WARN, the continuation
coverage rules of Section 4980B of the Code and part 6 of Subtitle B of Title I
of ERISA ("COBRA"), and any similar state, local or foreign laws with respect to
the Employees) excluding any liability associated with Buyer or its Affiliates
not meeting their obligations hereunder or Buyer not offering substantially
similar employment to Employees and, as a result, Employees claiming wrongful
dismissal damages from Seller or Buyer or any of their respective Affiliates.

         (b) Assumption of Plans. With respect to each Employee Benefit Plan,
Foreign Employee Benefit Plan or Benefit Arrangement maintained exclusively for
the benefit of Employees ("Company-Specific Plans"), Buyer agrees that the
Companies and Subsidiaries will retain or assume sponsorship of such plans on
and after the Closing Date (but only, in connection with any Foreign Employee
Benefit Plan or Benefit Arrangement maintained primarily for employees based in
Canada and administered or provided through a third party, to the extent that
the arrangements with such third party permit such sponsorship; provided, that
Buyer and Sellers agree to use their reasonable best efforts to cause such
arrangements to be modified as and if necessary to permit such sponsorship). The
Companies and Subsidiaries will retain or assume, and will hold Sellers harmless
for, all liabilities arising out of or under the Company-Specific Plans.

         (c) Transfer of Assets of 401(k) Plan. After the Closing Date, Sellers
shall cause the assets related to the Employees participating in the USI
Retirement Savings and Investment Plan (the "Transfer 401(k) Plan") held in
Master Trusts to be transferred to a successor trust or trusts or other funding
medium established by Buyer (the "New 401(k) Trust"). Buyer will use reasonable
best efforts to establish the New 401(k) Trust and to deliver to Sellers the
opinion or letter referred to in clause 8.01(c)(ii) below within 30 days of the
Closing Date and


                                       59
<PAGE>

Sellers shall use reasonable best efforts to deliver to Buyer the opinion
referred to in clause 8.01(c)(iii) below. Such transfer shall occur as soon as
reasonably practicable following receipt by US Seller of (i) notification from
Buyer that the applicable New 401(k) Trust has been established, (ii) an opinion
from counsel to Buyer that the forms of the documents constituting such New
401(k) Trust are in substantial compliance with the requirements for
qualification and exemption from United States federal income taxation under
Sections 401(a) and 501(a) respectively, of the Code and a representation from
Buyer that the New 401(k) Trust will be timely submitted to the IRS for a
favorable determination letter and that Buyer will make such plan amendments as
are requested by the IRS, and (iii) a similar opinion from counsel to US Seller
or letter with respect to the applicable Transfer 401(k) Plan, and (iv) at least
thirty (30) days have elapsed after the filing of any required Form 5310 with
respect to the transfer of assets of the Transfer 401(k) Plan. Subject to
Section 401(a)(12) of the Code, the amount of assets transferred from any trust
in which a Transfer 401(k) Plan is invested prior to the Closing Date shall be
equal to the fair market value of the assets related to the plan on the date of
transfer. Sellers shall use their best efforts to transfer amounts pursuant to
this Section 8.01(c), in cash, unless Buyer and Sellers otherwise agree except
with respect to assets held in any fund invested solely in USI common stock,
which such assets will be transferred in-kind.

         (d) Transfer of Assets of Defined Benefit Plan. After the Closing Date,
Seller shall cause the assets and liabilities related to the Employees
participating in the Lawn and Garden Pension Plan (the "Transfer Pension Plan"),
as calculated below, held in Master Trusts to be transferred to a successor
trust or trusts or other funding medium established by Buyer (the "New Pension
Trusts"). Buyer will use reasonable best efforts to establish the New Pension
Trusts and to deliver to Seller the opinion or letter referred to in clause (ii)
below within 30 days of the Closing Date. The amount of such transfer shall be
calculated in accordance with section 1.414(1)-1(n)(1) of the Treasury
Regulations applying the following PBGC assumptions used for plans terminating
as of the Closing Date:

         o        PBGC interest rates used to value annuities specified in Table
                  I of Appendix B of Part 4044 of the PBGC regulations
                  promulgated under ERISA;

         o        1983 Group Annuity Mortality Table;

         o        Expense load in accordance with Appendix C of Part 4044 of the
                  PBGC regulations promulgated under ERISA;

         o        Expected retirement ages as specified in Appendix D of Part
                  4044 of the PBGC regulations promulgated under ERISA; and


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<PAGE>

         o        No other demographic assumption shall be used.

The amount of assets to be transferred shall be calculated as of the Closing
Date, based on employee data as of December 31, 2000, aged to the Closing Date
and credited with actual trust earnings from the Closing Date to the actual
transfer date, adjusted for applicable benefit payments and plan expenses in
accordance with past practices, with such assets to be invested in accordance
with past practice and the fiduciary requirements of ERISA prior to the
transfer. Such transfer shall occur as soon as reasonably practicable following
receipt by Seller of (i) notification from Buyer that the applicable New Pension
Trust has been established, (ii) an opinion from counsel to Buyer that the forms
of the documents constituting such New Pension Trust are in substantial
compliance with the requirements for qualification and exemption from United
States federal income taxation under Section 401(a) and 501(a) respectively, of
the Code and a representation from Buyer that the New Pension Trust will be
timely submitted to the IRS for a favorable determination letter and that Buyer
will make such plan amendments as are requested by the IRS, and (iii) a similar
opinion from counsel to Seller or letter with respect to the Transfer Pension
Plans, and (iv) at least thirty (30) days have elapsed after the filing of any
required Form 5310 with respect to the transfer of assets of the Transfer
Pension Plan. Seller shall use its best efforts to transfer amounts pursuant to
this Section 8.01(d) in cash, unless Buyer and Seller otherwise agree.

         (e) Interim Administration of Transfer Plans. Prior to the transfer of
the assets of the Transfer 401(k) Plan and Transfer Pension Plan (together,
"Transfer Plans") to the New 401(k) Trust and New Pension Trusts pursuant to
Section 8.01(c) and 8.01(d), Sellers shall continue the administration of the
Employee Benefit Plans and Benefit Arrangements in accordance with past
practice. For purposes of the preceding sentence, "administration of the
Employee Benefit Plans and Benefit Arrangements" shall include all actions
required on a routine basis for the proper maintenance of Employee Benefit Plans
and Benefit Arrangements including the Transfer Plans, the New 401(k) Trust, the
New Pension Trust and the Company-Specific Plans until the assets are
transferred to the New Pension Trust or other trust established by Buyer,
including, but not limited to, transfer to the applicable trusts of any
employer, employee contributions, and loan repayments previously funded by Buyer
funds, and the payment of all benefits or other distributions to participants
required by the provisions of such plans. As consideration for Sellers'
obligation to continue the administration of such plans, Buyer agrees to
reimburse Sellers, upon the delivery of proper invoices identifying the charges
associated with the applicable plan and services provided, for pro rata
out-of-pocket expenses incurred by Sellers in administration of the plans
including, but not limited to, the routine fees charged by the Transfer Plans'
or Company-Specific Plans' trustees, actuaries or third-


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<PAGE>

party administrators in accordance with past practice. If the transfer to the
New 401(k) Trust and New Pension Trusts has still not occurred by the end of the
60 day period following the Closing Date, Buyer shall continue to reimburse
Sellers for the applicable portion of all fees incurred by Sellers in the
administration of the plans and, if the transfer has not occurred because of the
failure of Buyer to satisfy the requirements of Sections 8.01(c) or (d) above,
Buyer shall in addition pay Sellers $10,000 for each month, pro-rated by
calendar days, after the date of the expiration of the 60 day period until the
transfer to the New 401(k) Trust and New Pension Trusts has occurred, but in no
event shall such administration continue by Sellers beyond 90 days after the
Closing Date, unless the transfer has not occurred through the failure of
Sellers to satisfy its responsibilities under Section 8.01(c) or 8.01(d) or
Sellers' counsel under Section 8.01(c)(iii) or 8.01(d)(iii) of this Agreement.
In such event, Sellers shall satisfy only its fiduciary obligations and Buyer
shall be responsible for all obligations and other expenses applicable to such
matters.

         (f) Sellers and Buyer agree to provide each other with such records and
information as the other may reasonably request in order to carry out its
respective obligations under this Section 8.01. During the period following the
Closing and prior to the transfer of Assets of the Transfer Plans to the New
401(k) Trust and New Pension Trusts pursuant to Section 8.01(c) and 8.01(d),
Sellers shall promptly forward to Buyer any correspondence or written
communications received from IRS, the Pension Benefit Guarantee Corporation or
DOL with respect to any Transfer Plan.

         (g) Notwithstanding anything contained in this Agreement, Buyer shall
continue the administration of the medical benefit coverage currently provided
by ATT to employees of Sellers, USI and its Affiliates who are not Employees
(the "Covered Employees") in accordance with past practice until ninety (90)
days after the Closing Date. As consideration for Buyer's obligation to continue
the administration of such coverage, Sellers agree to reimburse Buyer, upon the
delivery of proper invoices identifying the charges associated with the benefits
and services provided, for all benefits paid by Buyer (whether or not
attributable to claims incurred after the Closing Date) with respect to the
Covered Employees (and for which Buyer was not previously reimbursed), and for
out-of-pocket expenses incurred by Buyer in the administration of such coverage
(including the pro rata share of any stop-loss, excess or similar insurance
maintained in connection with such coverage).


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<PAGE>


                                    ARTICLE 9
                              CONDITIONS TO CLOSING

         SECTION 9.01. Conditions to Obligations of Buyer and Sellers. The
obligations of Buyer and Sellers to consummate the Closing are subject to the
satisfaction of the following conditions:

                  (a) Any applicable waiting period under the HSR Act or any
         Foreign Antitrust Laws relating to the transactions contemplated hereby
         shall have expired or been terminated.

                  (b) No provision of any applicable law or regulation and no
         judgment, injunction, order or decree shall prohibit the consummation
         of the Closing.

                  (c) Each of US Seller and Buyer shall have received evidence
         reasonably satisfactory to it that Senior Debt Liens listed on Schedule
         9.01(c) (other than on the shares or assets of Elgin Handles Limited)
         and in Section A of Schedule 3.15(d) will be released by the holders
         thereof upon payment of the Purchase Price by Buyer (which evidence of
         release may be filed with the appropriate recording offices after
         Closing), and that the other documents listed in Section B of Schedule
         3.15(d) have been duly recorded or delivered for recording in the
         applicable real estate records.

         SECTION 9.02. Conditions to Obligation of Buyer. The obligation of
Buyer to consummate the Closing is subject to the satisfaction of the following
further conditions:

         (a) (i) Sellers shall have performed in all material respects all of
their obligations hereunder required to be performed by them on or prior to the
Closing Date, and (ii) the representations and warranties of Sellers, contained
in this Agreement and in any certificate or other writing delivered by Sellers
pursuant hereto shall be true, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, at and as
of the Closing Date, as if made at and as of such date, with only such
exceptions (A) as, individually or in the aggregate, would not have or would not
reasonably be expected to have a Material Adverse Effect or (B) as are results
of any action permitted by Section 5.01, and Sellers shall have delivered a
certificate as to the truth of the matters referred in this Section 9.02(a)
signed by the vice president of each of Sellers.

         (b) Buyer shall have received an opinion of (i) Davis Polk & Wardwell,


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<PAGE>

special counsel to Sellers, dated the Closing Date substantially to the effect
specified in clause (i) of the first sentence of Section 3.01 and Section 3.02,
as applicable, with respect to USI, Global, US Seller and ATT, (ii) Fraser
Milner Casgrain LLP special counsel to Sellers, dated the Closing Date
substantially to the effect specified in clause (i) of the first sentence of
Section 3.01 and Section 3.02 with respect to Canadian Seller, (iii) Masons
Solicitors, special counsel to Sellers, dated the Closing Date substantially to
the effect specified in clause (i) of the first sentence of Section 3.01 and
Section 3.02 with respect to True Temper Ireland and (iv) Slaughter and May,
special counsel to Sellers, dated the Closing Date substantially to the effect
specified in clause (i) of the first sentence of Section 3.01 with respect to
True Temper Seller, in each case with such exceptions are reasonably acceptable
to Buyer. In rendering such opinion, such counsel may rely upon certificates of
public officers, as to matters governed by the laws of jurisdictions other than
New York (with respect to Davis Polk & Wardwell), Canada (with respect to Fraser
Milner Casgrain LLP), Ireland (with respect to Masons Solicitors) and England
(with respect to Slaughter and May) or the federal laws of the United States of
America, upon opinions of counsel reasonably satisfactory to Buyer, and, as to
matters of fact, upon certificates of officers of Sellers and the Transferred
Companies, copies of which certificates shall be contemporaneously delivered to
Buyer; and each counsel to Sellers may assume that the laws of Illinois are
substantially similar to the jurisdiction in which such law firm is located.
Persons providing debt or equity financing to Buyer in connection with the
transaction contemplated by this Agreement shall be entitled to rely on the
opinion or opinions of legal counsel of Sellers delivered pursuant to this
paragraph 9.02(b) as if such opinion or opinions had been addressed to such
Persons.

         (c) Sellers shall have executed and delivered an Escrow Agreement in
the form attached hereto as Exhibit A.

         (d) Canadian Seller shall have executed and delivered an Assignment and
Assumption Agreement in the form attached hereto as Exhibit F and all other
agreements, instruments, certificates and other documents necessary to sell,
transfer, assign and convey the Purchased Assets to Buyer and for Buyer to
assume all Assumed Liabilities reasonably requested Buyer, including a deed of
sale or transfer/deed of land with limited warranties (in customary form) with
respect to the Owned Property included in the Purchased Assets.

         (e) Sellers shall have executed and delivered the tax sharing and
indemnification agreement in the form attached hereto as Exhibit G (the "Tax
Sharing Agreement").

         (f) Foothill and/or AbleCo shall have provided financing to Buyer


                                       64
<PAGE>

pursuant to the Senior Debt Commitment Letter.

         (g) Buyer shall have received all documents regarding the existence of
Sellers, USI, the Companies and the Subsidiaries and the authority of such
parties to execute, deliver and perform the Agreement, all in form and substance
reasonably satisfactory to Buyer.

         SECTION 9.03. Conditions to Obligation of Sellers. The obligation of
Sellers to consummate the Closing is subject to the satisfaction of the
following further conditions:

         (a) (i) Buyer shall have performed in all material respects all of its
obligations hereunder required to be performed by them at or prior to the
Closing Date and (ii) the representations and warranties of Buyer contained in
this Agreement and in any certificate or other writing delivered by Buyer
pursuant hereto shall be true, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, in all
material respects at and as of the Closing Date, as if made at and as of such
date and Buyer shall have delivered a certificate as to the truth of the matters
referred to in this Section 9.03(a) signed by the vice president of Buyer.

         (b) Sellers shall have received an opinion of Katten Muchin Zavis,
special counsel to Buyer, dated the Closing Date substantially to the effect
specified in Sections 4.01 and 4.02, with such exceptions are reasonably
acceptable to Sellers. In rendering such opinion, such counsel may rely upon
certificates of public officers, as to matters governed by the laws of
jurisdictions other than Illinois or the federal laws of the United States of
America, upon opinions of counsel reasonably satisfactory to Sellers, and, as to
matters of fact, upon certificates of officers of Buyer, copies of which
certificates shall be contemporaneously delivered to Sellers.

         (c) Buyer shall have executed and delivered an Escrow Agreement in the
form attached hereto as Exhibit A.

         (d) Buyer shall have executed and delivered an Assignment and
Assumption Agreement in the form attached hereto as Exhibit F and all other
agreements, instruments, certificates and other documents necessary to sell,
transfer, assign and convey the Purchased Assets to Buyer and for Buyer to
assume all and Assumed Liabilities, reasonably requested by Sellers.

         (e) Buyer shall have executed and delivered the Tax Sharing Agreement.

         (f) Sellers shall have received all documents regarding the existence
of


                                       65
<PAGE>

Buyer and the authority of such parties to execute, deliver and perform the
Agreement, all in form and substance reasonably satisfactory to Sellers.

         (g) Buyer shall have executed and delivered an effective, irrevocable
election under Section 338(h)(10) of the Code in form and substance satisfactory
to Seller.


                                   ARTICLE 10
                            SURVIVAL; INDEMNIFICATION

         SECTION 10.01. Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive the
Closing until 18 months after the Closing Date; provided that (i) the
representations and warranties contained in Sections 3.05, 3.06 and 4.09 shall
survive indefinitely, (ii) the representations and warranties contained in
Section 3.13 and 3.22 shall survive until their applicable statutes of
limitations has expired and (iii) the representations and warranties contained
in Section 3.20 shall survive until the Closing Date. The covenants and
agreements of the parties hereto contained in this Agreement shall survive the
Closing until such time as such covenants or agreement shall terminate or
otherwise expire in accordance with their respective terms. Notwithstanding the
preceding sentence, any covenant, agreement, representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence
with respect to the specific claim, if notice of the inaccuracy or breach
thereof giving rise to such right of indemnity with an reasonably detailed
description thereof shall have been given to the party against whom such
indemnity may be sought prior to such time.

         SECTION 10.02. Indemnification. (a) Subject to the other provisions of
this Article 10, Sellers jointly and severally hereby indemnify Buyer and its
Affiliates, officers, directors, employees and agents against and agree to hold
each of them harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation or
remediation, reasonable consulting or engineering fees in connection with any
investigation or remediation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("Damages") incurred or suffered
by Buyer or any of its Affiliates arising out of (i) any misrepresentation or
breach of warranty (each such misrepresentation and breach of warranty a
"Warranty Breach"), (ii) breach of covenant or agreement made or to be performed
by Sellers pursuant to this Agreement, (iii) any Excluded Liability (except for
any Tax Liabilities which


                                       66
<PAGE>

will be governed by the Tax Sharing Agreement) or (iv) Item 1 set forth on
Schedule 3.13 (the "Item 1 Litigation"); provided that with respect to
indemnification by Sellers for any Warranty Breach (other than with respect to
Sections 3.05, 3.06 and 3.22) pursuant to this Section, (A) Sellers shall not be
liable unless the aggregate amount of Damages with respect to such Warranty
Breaches exceeds 1% of the Purchase Price and then only to the extent of such
excess, (B) Sellers shall not be liable for any single claim which results in
Damages of $7,500 or less (and such claims shall not be aggregated for purposes
of clause 10.02(a)(A)) and (C) Sellers' maximum liability for all such Warranty
Breaches shall not exceed 25% of the Purchase Price. Section 10.02(b) shall
govern all indemnification claims for all environmental matters. With respect to
Sections 3.05 and 3.06 hereof, Sellers shall indemnify Buyer for all Damages
with respect to such Warranty Breaches; provided that, Sellers' maximum
aggregate liability for such Warranty Breaches shall not exceed the Purchase
Price. For the purpose of determining whether any Warranty Breach has occurred
with respect to a claim for indemnification or for the purposes of measuring
Damages with respect to any Warranty Breach of Sellers' representations and
warranties contained in Article 3, such representations and warranties other
than those set forth in Sections 3.27 and 3.29 shall be deemed to have been made
without any materiality or Material Adverse Effect qualifications or dollar
thresholds contained therein.

         (b) (1) General. Sellers jointly and severally hereby indemnify and
defend Buyer and its Affiliates, their directors, officers, employees and agents
and their respective successors and assigns (the "Sellers' Environmental
Indemnity") from and against all Pre-Closing Environmental Liabilities and
Remedial Action Costs incurred or suffered by Buyer or its Affiliates solely to
the extent of Sellers' obligations set forth pursuant to this Section 10.02(b).
Buyer and its Affiliates, and after the Closing the Transferred Companies,
jointly and severally hereby defend and indemnify Sellers and their Affiliates,
their directors, officers, employees and agents and their respective successors
and assigns (the "Buyer's Environmental Indemnity") from and against all
Post-Closing Environmental Liabilities and Remedial Action Costs incurred or
suffered by Sellers and their Affiliates as well as any Environmental
Liabilities not specifically accepted by Sellers under Sellers' Environmental
Indemnity including but not limited to Buyer's obligations set forth pursuant to
Sections 10.02(b). Sellers' Environmental Indemnity and Buyer's Environmental
Indemnity shall be subject to the terms, conditions, rights and limitations set
in forth in Sections 10.02(b)(2)-10.02(b)(12) below.

         (2) Sellers' Environmental Indemnity; Environmental Cap and Survival.
Notwithstanding any obligations accepted or agreed to by Sellers pursuant to the
provisions of this Section 10.02(b), Sellers' Environmental Indemnity shall
expire


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<PAGE>

upon the earlier to occur of the ninth anniversary following the Closing Date,
subject to the last sentence of Section 10.01 (the "Environmental Indemnity
Expiration Date") or the Environmental Indemnity Termination Date.
"Environmental Indemnity Termination Date" means the date on which the Sellers'
Environmental Payments in the aggregate equal the Environmental Cap. "Sellers'
Environmental Payments" means payments in respect of the Sellers' Environmental
Indemnity, whether any such payment is made by Sellers directly or made from the
Escrow Account, whether to Buyer, a Seller or a third party in payment of
Pre-Closing Environmental Liabilities and/or Remedial Action Costs; provided,
however, that any Sellers' Escrow Account Reimbursements shall not be included
in Sellers' Environmental Payments. In no event shall Sellers be liable for any
Sellers' Environmental Payments in excess of $6 million. Under no circumstance
shall Sellers have any obligation or liability regarding Pre-Closing
Environmental Liabilities to Buyer, its Affiliates, their directors, officers,
employees and agents and their successors, assigns or transferees, except as set
forth in this Section 10.02(b). Sellers shall provide Buyer with a semi-annual
accounting of all Seller Environmental Claims which have accrued against the
Environmental Cap and shall provide written notice to Buyer in the event the
Environmental Cap has been attained prior to the Environmental Indemnity
Expiration Date. Unless explicitly provided otherwise herein, all Remedial
Action Costs and other Costs incurred by Sellers in meeting their obligations
under this Section 10.02(b) (i) shall accumulate toward the Environmental Cap
and (ii) to the extent funds are available, shall be paid or reimbursed to
Sellers in accordance with, and from the Escrow Account established pursuant to,
the Escrow Agreement attached hereto as Exhibit A. Any objections of Buyer to
release of funds from the Escrow Account that cannot be resolved pursuant to the
terms of the Escrow Agreement ("Payment Dispute") shall be submitted to the
Panel and resolved pursuant to the terms of Section 10.02(b)(10) hereof.

         (3) Direct Payment of Buyer Environmental Claims. Buyer Environmental
Claims shall be paid by Sellers to Buyer in accordance with the terms and
conditions of Article 10; provided, however, that if Sellers commit a Payment
Default, Buyer shall be permitted, but not required, to obtain, in accordance
with the terms and conditions of Article 10, reimbursement of any Buyer
Environmental Claim and to submit Buyer Payment Request (as defined in the
Escrow Agreement) in respect of a matter that has not otherwise been resolved or
satisfied prior to the time of such Payment Default directly from the Escrow
Account. Notwithstanding the foregoing, Sellers shall be permitted to draw
against the Escrow Account as reimbursement for all payments made by Sellers to
Buyer in respect of Buyer Environmental Claims and the actual amount so drawn by
Sellers as reimbursement for payments made by Sellers to Buyer in respect of
Buyer Environmental Claims shall be referred to herein as the "Sellers' Escrow
Account Reimbursements"; provided, however, that Sellers shall not be


                                       68
<PAGE>

permitted to seek or obtain Sellers' Escrow Account Reimbursements for the
initial $1,500,000 of Buyer Environmental Claims paid by Sellers to Buyer (the
"Non-Reimbursable Amount").

         (4) Contingent Claim Notices; Disputed Amounts. Buyer and Sellers agree
that if the sum of (i) the Sellers' Environmental Payments, plus (ii) the
aggregate amount of all Contingent Notice Claims (as defined in the Escrow
Agreement) that relate to Seller's Environmental Indemnity, plus (iii) all
Disputed Amounts (as defined in the Escrow Agreement) that relate to Seller's
Environmental Indemnity (the amounts referred to in the foregoing clauses (ii)
and (iii) being referred to herein collectively as "Open Escrow Items") equals
or exceeds the Environmental Cap, Sellers shall cease to have obligations under
this Section 10.02(b) unless and until the aggregate amount of Open Escrow Items
are reduced or eliminated (but unpaid) such that the sum of Sellers'
Environmental Payments plus the aggregate total of Open Escrow Items is less
than the Environmental Cap.

         (5) Environmental Insurance Policy. At or prior to Closing, Sellers and
Buyer shall purchase the Environmental Pollution Legal Liability Select
insurance policy from AIG that is quoted in the proposal from AIG as set forth
as Schedule 10.02(b)(5) hereto (the "AIG Policy"). The AIG Policy is being
purchased, to the extent allowed under that Policy, to cover Pre-Closing
Environmental Liabilities. Payment of the premium for the AIG Policy shall be
divided equally between Sellers and Buyer, and said payment shall be made so
that at Closing, Sellers will provide evidence of AIG's binding of said policy.
Sellers' 50% share of the premium payment obligation shall not be construed as a
Remedial Action Cost and shall not accrue against the Environmental Cap. USI
shall be the "first named insured" on the AIG Policy and Buyer, Ames True
Temper, Inc., True Temper Ireland and Sellers will be "named insureds". Upon the
earlier to occur of the Environmental Indemnity Expiration Date and the
Environmental Indemnity Termination Date, Sellers will direct AIG to list Buyer
as the first named insured and USI, Sellers, True Temper Ireland and Ames True
Temper, Inc. as named insureds. Buyer, or at Buyer's request Sellers, shall
request AIG to list successors and assigns to the Transferred Companies and the
Real Property as named insureds. Regarding any claim to be submitted by Sellers
to AIG, (i) Sellers shall provide Buyer with prior notice of the submittal; (ii)
Buyer shall have the right to approve the claim submittal and all other
correspondence and submittals to AIG regarding the claim, which approval shall
not be unreasonably withheld or delayed; (iii) Sellers shall provide Buyer with
the opportunity to be present during all meetings and telephone calls with AIG
regarding the claim; and (iv) Sellers shall not settle or compromise a claim
actually or potentially covered by the AIG Policy without the approval of Buyer,
which approval shall not be unreasonably withheld or delayed.


                                       69
<PAGE>

The AIG Policy includes certain deductibles to be incurred prior to coverage
being provided (the "Deductibles"). Also, for certain claims or losses, the AIG
Policy imposes a cost sharing provision and will reimburse the insureds for only
50% of otherwise covered costs ("Insurance Copayments"). Sellers and Buyer will
share equally all Insurance Copayments and Deductibles for claims or losses
which the Parties are seeking coverage under the AIG Policy, however Sellers'
share of Insurance Copayments shall accumulate toward the Environmental Cap and
be reimbursed to Sellers from the Escrow Account.

         (6) Conduct of Phase II Environmental Investigations. As soon as
reasonably possible following Closing, weather permitting, Sellers and Buyer
will arrange to have certain intrusive investigations conducted at twelve of the
Real Properties (the "Phase II Studies"). Schedule 10.02(b)(6) contains a list
of the Real Properties that will be the subject of Phase II Studies, the scopes
of work (the "SOWs") that will comprise the Phase II Studies and designation of
Sellers or Buyer as the party responsible for performing each of the
investigations (the "Lead Party"). The Lead Party in all cases will be obligated
to ensure that the SOWs are properly and fully performed and that its designated
contractor or consultant prepares a report of its findings, final copies of
which will be promptly provided to the other Party. In all cases, the Lead Party
will cooperate with and allow the other Party (the "Observing Party" and each of
the Lead Party and Observing Party, a "Party") to observe and reasonably
participate in its conduct of the Phase II Studies. "Reasonable participation"
shall be broadly construed and shall include, by way of example and not
limitation, being given reasonably advance notice of dates for conduct of the
investigations, obtaining "split samples" where such samples are to be taken as
part of the SOWs and participating in conferences with site contacts. The Work
Plans and conduct of Phase II Studies will be subject to the approval of the
Observing Party, which approval shall not be unreasonably withheld or delayed.
Disputes regarding approval of the Observing Party shall be resolved pursuant to
Section 10.02(b)(10). The Observing Party will participate, at its sole option,
in any Phase II Study for which it is not the Lead Party. However, in each case
where it chooses to participate as an Observing Party, written notice of that
election shall be provided to the Lead Party reasonably in advance of the
performance of any work at the Real Property in question.

         The Lead Party and Observing Party, in each instance, shall be fully
responsible for the costs incurred in the conduct of the work they have been
assigned under this subsection (b)(6) and under subsection (b)(7) below;
however, Sellers' Costs shall accumulate toward the Environmental Cap and be
reimbursed to Sellers from the Escrow Account.


                                       70
<PAGE>


         In the event the sample results or other findings generated by the
Phase II Studies disclose the presence of Hazardous Substances in excess of
Applicable Remedial Objectives, Sellers and Buyer shall follow the requirements
and standards set forth in Section 10.02(b)(9).

         Disputes that may arise between the Parties as they relate to
implementation of the SOWs will be addressed pursuant to the dispute resolution
procedures set forth in Section 10.02(b)(10) hereof.

         (7) Indemnification For Known, Potential Known and Unknown Conditions.
Schedule 10.02(b)(7) contains a summary of the environmental risks for matters
that relate to the condition of the Real Property at issue (Part I of the
Schedule) and that pertain to the Transferred Companies' Compliance with
Environmental Law (Part II of the Schedule) and that are considered Known
Conditions, Group A and B Potential Known Conditions and Unknown Conditions. The
subject Schedule sets forth the extent to which Sellers and Buyer have financial
responsibility for the matters contained therein and whether Sellers or Buyer
will be the Lead Party or the Observing Party for purposes of addressing each
risk. Sellers' Environmental Indemnity for Schedule 10.02(b)(7) Part II, Unknown
Conditions shall only apply to Pre-Closing Environmental Liabilities which are
(i) unknown to Buyer at the time of Closing and (ii) arise as a result of Third
Party Claims including but not limited to Claims of Governmental Authorities.

         Further, in order to resolve Pre-Closing Environmental Liabilities
arising under Part II of Schedule 10.02(b)(7), the Lead Party shall use
reasonable efforts to have employees of the Transferred Companies conduct the
Remedial Actions, provided, however, that the Lead Party shall comply with all
requirements of this Section 10.02(b). Notwithstanding the assignment of
responsibility set forth in Schedule 10.02(b)(7), Sellers shall be the Lead
Party for all Unknown Conditions (i) for which either Party seeks
indemnification under the Huffy Indemnity (see subsection (b)(8) below) until
the earlier to occur of the Environmental Indemnity Expiration Date and the
Environmental Indemnity Termination Date subject to the approval of Buyer, which
approval shall not be unreasonably withheld or delayed; (ii) which arise
subsequent to the transfer by Buyer of its interest in the operation or Real
Property and where Buyer has assigned its rights and obligations as a Lead Party
to another person; or (iii) is a Pre-Closing Environmental Liability of a type
or nature which was "unknown" at the time of Closing but which arises out of a
Pollution Condition for which Sellers' are the Lead Party for a Known Conditions
and Potential Known Conditions matter. The terms Lead Party and Observing Party
shall have the same connotation, rights and obligations as set forth in Section
10.02(b)(6). Except as agreed otherwise by the Parties, the Lead Party shall be
obligated to undertake all Remedial Actions reasonably necessary to


                                       71
<PAGE>

address any Pre-Closing Environmental Liability (i) listed as a Known Condition,
(ii) identified through conduct of the Phase II Studies, or (iii) which arise as
Unknown Conditions. All such Remedial Action, to the extent practicable, shall
be consistent with the requirements of (A) the AIG Policy, (B) the Huffy
Indemnity, and (C) the requirements of Section 10.02(b)(9). Notwithstanding
anything to the contrary set forth in this Agreement, Sellers shall have no
obligation to provide Buyer with Sellers' Environmental Indemnity for any
Unknown Conditions unless Buyer provides Sellers with written notice of the
claim, pursuant to Section 10.03 hereof, within thirty (30) days following the
disclosure of such Unknown Condition to Buyer. If the Unknown Condition requires
or warrants Remedial Action in less than thirty days, Buyer will provide Sellers
with notice reasonably in advance of the required date of response.

         Sellers and Buyer further covenant and agree that reimbursement or
payment of Remedial Action Costs incurred in addressing any Pre-Closing
Environmental Liability by Sellers or Buyer, regardless of its classification as
a Known Condition, Potential Known Condition or Unknown Condition, shall follow
the following procedure: First, the Parties will seek indemnification from Huffy
Corp. ("Huffy") and its affiliates (as set forth in Section 10.02(b)(8)) if the
Real Property was originally conveyed to Ames True Temper, Inc. from Huffy;
next, the Parties will seek coverage under the AIG Policy, except for matters or
conditions expressly excluded under the AIG Policy; and finally, where, after
reasonable efforts, the Huffy Indemnity and AIG Policy fail to provide defense
and indemnity adequate to address a Pre-Closing Environmental Liability in
satisfaction of 10.02(b)(9), Sellers' Environmental Indemnity shall apply.
Sellers and Buyer will take all reasonable steps to avoid invalidation of and to
maximize coverages available under the AIG Policy and Huffy Indemnity; provided,
however, that steps taken to secure coverage from the Huffy Indemnity or the AIG
Policy shall not (A) delay, limit or interfere with the performance of Remedial
Actions required pursuant to Section 10.02(b)(9) hereof, or (B) fail to satisfy
the requirements of Section 10.02(b)(9) hereof.

         (8) Huffy Asset Purchase Agreement and Other Insurance. Sellers and
Buyer acknowledge and agree that certain of the Real Property was conveyed to
Ames True Temper, Inc. from Huffy as part of that certain asset purchase
agreement dated February 11, 1999 (the "Huffy Contract"). Buyer has reviewed the
Huffy Contract and acknowledges that certain Pre-Closing Environmental
Liabilities are currently subject to or may in the future be subject to an
environmental indemnification from Huffy, as set forth in Article X of that
Contract (the "Huffy Indemnity"). In order to avail themselves of the potential
benefits of the Huffy Indemnity, Sellers and Buyer will take all reasonable
steps to maintain and comply with its requirements. By way of example and not
limitation, the Parties will abide by the "non-acceleration" provision of the
Huffy Indemnity.


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<PAGE>

Further, for so long as Sellers' Environmental Indemnity is in effect, all
demands for indemnification of any Pre-Closing Environmental Liability
potentially available pursuant to the Huffy Indemnity will be made, upon
Buyer's approval, to Huffy by Sellers. Buyer's approval of such notice shall not
be unreasonably withheld or delayed. In the event Huffy provides or by court
order is required to provide reimbursement for Remedial Action Costs incurred by
Sellers or Buyer, said reimbursement will be distributed pursuant to the percent
payment obligations set forth in Schedule 10.02(b)(7) hereof. Any costs incurred
by Sellers in securing such reimbursement or in obtaining reimbursement or
recovery from third parties (including the Historic Policies, described below)
under any legal theory shall be accumulated against the Environmental Cap as
Remedial Action Costs, however any costs recovered and attributed to Sellers
will replenish the Environmental Cap (to the extent Sellers have already
expended those Remedial Action Costs).

         Sellers and Buyer shall also work cooperatively, following Closing, to
locate policies of insurance ("Historic Policies") that were carried by the
Companies and their predecessors prior to Closing that may provide coverage for
Pre-Closing Environmental Liabilities. Sellers shall make all reasonable efforts
to enforce potential coverage under the Historic Policies but shall have no
obligation to bring an action to enforce such coverage. Any monies recovered
under such policies shall be credited 50% each to Sellers and Buyer, net any
legal, consultant or expert fees.

         (9) Cooperation, Applicable Remedial Objectives and "No Further Action"
Letters, and Completion of Remedial Action.

         (A) Cooperation. To the extent that any Known Condition, Potential
Known Condition or Unknown Condition, including any results generated through
conduct of the Phase II Studies, requires reporting of any fact or data to any
Governmental Authority according to prevailing and applicable Environmental Law,
the Lead Party for such matter shall make the required report to the appropriate
authority(ies). The Lead Party shall provide the Observing Party with prior
notice of its intent to serve such notice and shall give the Observing Party
reasonable opportunity to review, comment on and approve any submissions
intended to be made by Lead Party to the Governmental Authority, including but
not limited to correspondence, sampling or Remedial Action plans, or responses
to any agency demands, notices of violation, etc., which approval shall not be
unreasonably withheld or delayed. Disputes regarding approval of submissions
shall be resolved pursuant to Section 10.02(b)(10). The Lead Party shall accept
any of the Observing Party's reasonably requested comments to said submissions.
The Lead Party shall also provide the Observing Party with the opportunity to be
present during meetings or telephone calls with said Authority, although the


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<PAGE>

Observing Party shall not intervene or obstruct the course of the Lead Party's
communications or negotiations with said Authority. Finally, the Lead Party will
provide the Observing Party with at least two weeks prior, written notice of its
intent to conduct any field activities (whether consisting of sampling, Remedial
Action or other efforts) at any Real Property or site for which either Party
seeks the protections provided pursuant to Section 10.02(b)(1) and whether
arising out of matters which are considered Known Conditions and Potential Known
Conditions or Unknown Conditions along with a plan detailing the work to be
performed (the "Field Work"). The Observing Party shall be entitled to
participate in any Field Work by observing Lead Party's activities and obtaining
split samples from the Lead Party and shall have the right to review, comment
upon and approve all Work Plans, which approval shall not be unreasonably
withheld or delayed. Disputes regarding approval of Work Plans shall be resolved
pursuant to Section 10.02(b)(10).

         (B) Applicable Remedial Objectives and "No Further Action" Letters. In
the event data or other facts disclosed to Sellers or Buyer as a result of the
investigation of matters which are Known Conditions and Potential Known
Conditions, or which come to the Parties' attention as Unknown Conditions,
constitute evidence of (1) Hazardous Substances in excess of Applicable Remedial
Objectives, or (2) non-compliance with applicable Environmental Laws (each
matter arising under (i) or (ii) being defined herein as a "Pollution
Condition"), the Lead Party (as established pursuant to Schedule 10.02(b)(7))
shall resolve the Pollution Condition in the following manner: (i) the Lead
Party shall provide notice to Huffy (where appropriate), AIG and any
Governmental Authority (in the event reporting is required pursuant to
applicable Environmental Law); (ii) if reporting to a Governmental Authority is
required or if a Governmental Authority has initiated the action that requires
that the Pollution Condition be addressed, the Lead Party will take all actions
reasonably necessary to obtain closure, sign-off, a "no further action letter"
or similar notice of completion from the Governmental Authority that has
retained jurisdiction over the Pollution Condition consistent with Applicable
Remedial Objectives (collectively, an "NFA"); (iii) if reporting to a
Governmental Authority is not required by Environmental Law or if, after six
months, said Authority fails to respond to the Lead Party's request to resolve
the Pollution Condition, the Lead Party, except as set forth below in this
Section 10.02 (b)(9)(B) and except for Compliance Matters, shall enter evidence
of the Pollution Condition (and the Real Property, if necessary to achieve
resolution) into the State/Province's voluntary cleanup (action) program ("VCP")
or similar agency process, and the Lead Party shall undertake all actions
reasonably necessary to obtain an NFA by the program in question, consistent
with Section 10.02(b)(9). (If the VCP is available, the Lead Party shall make
reasonable attempts to have both Buyer and Sellers named as "released" persons
by the Governmental Authority); and (iv) if reporting to a

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Governmental Authority and VCP are not applicable or available for the Pollution
Condition, or if both Parties agree in writing that the VCP, while available, is
not a satisfactory process for resolution of the Pollution Condition, the Lead
Party shall (a) develop and implement a Remedial Action program consistent with
Applicable Remedial Objectives and designed to attain the applicable NFA
criteria and/or bring the Pollution Condition into compliance with applicable
Environmental Law, or (b) if allowed under applicable Environmental Law, perform
a site specific risk assessment and conduct remediation ("Risk Based Closure")
to bring the area of concern within Applicable Remedial Objectives. The Lead
Party shall make best efforts to pursue Remedial Actions that are consistent
with the requirements of the AIG Policy and the Huffy Indemnity; provided,
however that such efforts shall not (A) delay, limit or interfere with the
performance of Remedial Actions required pursuant to Section 10.02(b)(9) or (B)
fail to satisfy the requirements of Section 10.02(b)(9). Notwithstanding
anything in the foregoing to the contrary, Buyer may, upon prior written notice
to Sellers, elect not to resolve a Pollution Condition or otherwise address a
Pre-Closing Environmental Liability, which election shall not waive any rights
the Parties have pursuant to this Section 10.02(b) regarding (1) performance of
other Remedial Actions and (ii) the later conduct of any Remedial Action the
Parties have elected not to conduct at a particular time. However, in the event
Buyer elects not to address a Pollution Condition or Pre-Closing Environmental
Liability as set forth in this subsection (b)(9)(B), Buyer shall be solely
responsible for all Remedial Action Costs arising out of or attributable to the
delay in addressing the Environmental Liability.

         The Lead Party shall be entitled to use any method of Remedial Action
to address any Pollution Condition provided the chosen Remedial Action is (1)
consistent with Applicable Remedial Objectives; (2) approved by a Governmental
Authority to obtain an NFA or equivalent; or (3) otherwise in compliance with
applicable Environmental Laws, where the Parties have agreed in writing to
remediate a Pollution Condition without the oversight of a Governmental
Authority; provided, however, that all Remedial Actions shall be consistent with
the use of the Real Property subject to the Remedial Action at the time of
Closing. Notwithstanding the foregoing, unless otherwise approved by the Buyer
(in Buyer's sole discretion), engineered barriers and/or institutional controls
(other than a deed restriction limiting use of the property to industrial
purposes) shall be used only if (1) the structure constituting an engineered
barrier exists at the time the Remedial Action is implemented (or with
reasonable repair or improvement would qualify as an engineered barrier) and/or
the institutional control satisfies the requirements of Environmental Laws
applicable at the time the Remedial Action is completed; (2) use of engineered
barriers or institutional controls will not unreasonably limit or restrict the
use, occupancy, or operation of the property for industrial purposes; and (3)
the Barrier Cost Difference is less


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<PAGE>


than $1,000,000.

         (C) Completion of Remedial Action. The Lead Party shall be deemed to
have completed its obligation to address any Known Conditions, Potential Known
Conditions or Unknown Condition upon receipt of an NFA or similar determination
by a Governmental Authority with jurisdiction for such matters or certification
from a Dispute Resolution Consultant, where no VCP or Authority has intervened,
that the Remedial Action is complete, provided, however, that conditions
discovered, subject to the limitations of subsection (b)(11) hereof, subsequent
to receipt of the NFA or similar determination by a Governmental Authority or
after completion of Remedial Action, but prior to the Environmental Indemnity
Termination Date, which create new liabilities or obligations relating to the
same Pollution Condition, shall be addressed under the same terms as the prior
Remedial Action, including without limitation, terms regarding payment, Lead
Party status and cooperation, unless otherwise agreed by the Parties.

         (10) Dispute Resolution. The Parties shall employ one of two methods of
dispute resolution, depending on whether (i) the conflict arises during and is
directly associated with the conduct of the Phase II Studies, any Field Work or
the design or implementation of any Work Plan or, (ii) if it is associated with
any interpretation of other provisions of this Section 10.02(b).

         (A) Field Work and Work Plan Disputes. The Parties shall follow the
procedure set forth in this subparagraph (A) to resolve any conflict regarding
the conduct of activities that occurs while Sellers and/or Buyer are actively
performing Phase II field activities or any Field Work (or have temporarily
halted such activities specifically to resolve a dispute) ("Field Work
Dispute"). The Parties shall also first attempt to resolve any dispute regarding
the design or implementation of any Work Plan ("Work Plan Dispute") pursuant to
this subsection (b)(10)(A).

         The Parties will use reasonable best efforts to identify an
environmental consultant, who has been jointly accepted by Sellers and Buyer to
resolve Field Work Disputes and Work Plan Disputes (the "Dispute Resolution
Consultant") no later than 10 business days after Closing. In the event the
Dispute Resolution Consultant leaves the employ of the firm he/she is listed
with at the time of this Agreement or decides to terminate services as Dispute
Resolution Consultant, or in the event the Parties desire to change the Dispute
Resolution Consultant, Sellers and Buyer upon prior, written consent shall
jointly select another Dispute Resolution Consultant. Unless otherwise agreed to
by the Parties in writing, the replacement Dispute Resolution Consultant shall
not have worked for any of Sellers, Buyer or their respective environmental
attorneys' law firms in the preceding twenty-four (24) month period.


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<PAGE>

         In the event Buyer or Sellers cannot resolve implementation of any
Field Work Dispute after reasonable attempts to do so, either Party, upon e-mail
or telefax notice to the other, shall serve notice of its resort to the Dispute
Resolution Consultant. The Dispute Resolution Consultant or his or her designee
shall respond to and resolve any Field Work Dispute. The Parties shall jointly
communicate the nature of the Field Work Dispute to the Dispute Resolution
Consultant by telephone, and the Field Work Dispute will be resolved as
expeditiously as practicable by the Dispute Resolution Consultant or designee.
The Parties agree to be bound by the decision(s) of the Dispute Resolution
Consultant or designee with regard to Field Work Disputes.

         In the event Buyer or Sellers cannot resolve any dispute regarding the
design or implementation of any Work Plan, following five (5) days written
notice to the other Party of its intent seek the review of the Dispute
Resolution Consultant, Sellers or Buyer (or both) may submit a written
description of any Work Plan Dispute to the Dispute Resolution Consultant, a
copy of which will be provided to the opposing Party. The opposing Party shall
have five (5) days to provide a written response to the Dispute Resolution
Consultant and the disputing Party. The decision of the Dispute Resolution
Consultant with regard to the Work Plan Disputes shall not be binding and either
Party may seek de novo review and decision from the Panel pursuant to Section
10.02(b)(10)(B) ("Work Plan Dispute Review").

         For both Field Work Disputes and Work Plan Disputes, the Dispute
Resolution Consultant shall prepare a letter ("Dispute Letter Report") to the
Parties summarizing each issue presented for resolution and his/her
determination or decision. Sellers and Buyer shall have five business days to
provide comments on each Dispute Letter Report to the Dispute Resolution
Consultant, who shall accept and revise the summary letter at his/her own
discretion. Costs and expenses of the Dispute Resolution Consultant shall be
divided equally between the Buyer and the Seller.

         (B) All Other Disputes. For all Work Plan Dispute Reviews, Payment
Disputes and/or if the Buyer or Sellers disagree regarding the obligations or
performance of either Party pursuant to this Section 10.02(b) (other than Field
Work Disputes), the decision of the Dispute Resolution Consultant pursuant to
Section 10.02(b)(9)(C), or the interpretation of the terms of the Section
10.02(b), the Party initiating the dispute shall provide written notice to the
other Party. Buyer and Sellers shall attempt to resolve the dispute through good
faith negotiations for a period of seven (7) business days. However, if the
dispute is not resolved by the Parties through such negotiations, then with five
(5) days prior, written notice to the opposing party, the dispute shall be
submitted to binding arbitration pursuant to the rules of the American
Arbitration Association.


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<PAGE>

The Arbitration shall be heard by a panel of arbitrators, consisting of at least
one attorney and one environmental consultant (the "Panel"). The Panel shall be
provided all written information available concerning the subject of the
dispute, except for the decision of the Dispute Resolution Consultant for any
Work Plan Dispute, and shall, within seven (7) days of a hearing, render a
decision on the issue in dispute, which shall be binding on the Parties. With
regard to disputes concerning Work Plans or Remedial Actions, the Panel's review
will be limited to whether the Work Plan or Remedial Action complies with the
requirements of Section 10.02(b). The Panel will be required to apply the law,
including, but not limited to, any Environmental Law, applicable to the Real
Property or site which is the nexus of the dispute. Also, hearings held with
regard to any such dispute shall be venued (i) in Chicago, Illinois in the event
Sellers provide notice of the dispute, (ii) New York, New York, in the event
Buyer provides notice of the dispute, or (iii) another location mutually agreed
to in writing by Sellers and Buyer. The non-prevailing party shall pay costs and
expenses of the Panel and the prevailing party, including without limitation
reasonable fees and expenses of attorneys.

         (11) Non-Acceleration. Each Party agrees that it will not, and agrees
to use its best efforts to ensure that its Affiliates, successors, transferees
and assigns do not, voluntarily or by discretionary action, accelerate the
timing, or increase the cost, of any of the obligations of the other party under
this Section 10.02(b).

         (12) Access. Until the Environmental Indemnity Expiration Date, Buyer
and Sellers shall, and after the Closing Date Buyer shall cause the Transferred
Companies to, afford the other party and its employees, advisors and consultants
reasonable access its files, documents and properties that reasonably relate to
the Sellers' Environmental Indemnity or the Buyer's Environmental Indemnity.

         (c) Subject to the other provisions of this Article 10, Buyer, and
after the Closing each Transferred Company, jointly and severally hereby
indemnifies Sellers and their Affiliates, officers, directors, employees and
agents against and agrees to hold each of them harmless from any and all Damages
incurred or suffered by Sellers or any of their Affiliates arising out of (i)
any Warranty Breach, (ii) breach of covenant or agreement made or to be
performed by Buyer pursuant to this Agreement, (iii) any Assumed Liability,
except for and to the extent of Sellers' indemnification obligations as provided
in Section 10.02(b) above or (iv) any Assignment Liabilities; provided that with
respect to indemnification by Buyer for any Warranty Breach (other than with
respect to Section 4.05 or 4.09) pursuant to this Section 10.02(c), (A) Buyer
shall not be liable unless the aggregate amount of Damages with respect to such
Warranty Breaches exceeds 1% of the Purchase Price and then only to the extent
of such excess, (B) Buyer shall not be liable for any single claim which results
in


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<PAGE>

Damages of $7,500 or less (and such claims shall not be aggregated for purposes
of clause (A)), and (C) Buyer's aggregate maximum liability for all such
Warranty Breaches shall not exceed 25% of the Purchase Price. With respect to
Sections 4.05 and 4.09 hereof, Buyer shall indemnify Sellers for all Damages
with respect to such Warranty Breaches; provided that, Buyer's maximum aggregate
liability for such Warranty Breaches shall not exceed the Purchase Price. For
the purpose of determining whether any Warranty Breach has occurred with respect
to a claim for indemnification or for the purposes of measuring Damages with
respect to any Warranty Breach of Buyer's representations and warranties
contained in Article 4, such representations and warranties shall be deemed to
have been made without any materiality or Material Adverse Effect qualifications
or dollar thresholds contained therein.

         (d) Buyer, the Transferred Companies and Sellers acknowledge that USI
is currently a lessee under the Industrial Building Lease dated January 13, 2000
between FR Development Services, Inc., as landlord, and USI, O. Ames Company and
True Temper Hardware Company, jointly and severally as Tenant, as amended by the
First Amendment to Lease dated as of November 30, 2000 between Garden Drive,
L.P., as successor landlord, and USI and ATT, collectively as Tenant, and
further amended by the Second Amendment to Lease dated as of April 25, 2001
between Garden Drive, L.P. and Morris Haimowitz, LLC, individually and jointly
as successor landlord, and USI and ATT, collectively as Tenant (the "Carlisle
Lease"). Notwithstanding anything in this Agreement, USI, Sellers and the
Transferred Companies may take actions necessary to remove USI as a lessee under
the Carlisle Lease (and Buyer shall cooperate in any such removal); however, if
USI remains a lessee or otherwise liable under the Carlisle Lease for any period
of time after the Closing, as between Buyer and the Transferred Companies, on
the one hand, and Sellers, on the other hand, Buyer and the Transferred
Companies shall be solely responsible for any payments under or Damages arising
out of or relating to the Carlisle Lease or the leasehold interest thereunder,
regardless of whether such Damages arise out of contractual, regulatory,
statutory or tort claims. Therefore, after the Closing, each of Buyer and the
Transferred Companies, jointly and severally agrees (i) to indemnify USI,
Sellers and their Affiliates against, and agrees to hold each of them harmless
from, any and all payments under or Damages arising out of or related to the
Carlisle Lease or the leasehold interest thereunder and (ii) that upon making
any payment under or with respect to any obligation under the Carlisle Lease,
USI shall be subrogated to the rights of the landlord under the Carlisle Lease
against ATT with respect to such obligation. In order to secure the indemnity
obligations of Buyer and each Transferred Company under clause (i) of the
immediately preceding sentence, ATT will grant to USI, on the Closing Date, a
mortgage on all of ATT's interest in the Carlisle Lease and shall enter into
such documents as shall be reasonably necessary to grant and perfect such
mortgage. USI hereby agrees that,


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<PAGE>

if requested by any financial institution providing the Financing to Buyer, USI
will enter into a subordination agreement satisfactory to such financial
institution pursuant to which USI will subordinate its mortgage on ATT's
interest in the Carlisle Lease to any mortgage thereon granted by ATT for the
benefit of such financial institution. This Section shall in no way constitute a
waiver or release of any liability or obligation of Sellers resulting from a
breach of the representations and warranties set forth in Section 3.15(b).

         (e) Notwithstanding any other provision of this Agreement, True Temper
Seller's aggregate liability under this Agreement (including under Section
10.02(b))and the Ancillary Agreements shall in no event exceed $3 million.

         SECTION 10.03. Procedures. (a) The party seeking indemnification under
Section 10.02 (the "Indemnified Party") agrees to give prompt written notice,
but no later than 7 days after receipt thereof, to the party against whom
indemnity is sought (the "Indemnifying Party") of the assertion of any claim, or
the commencement of any suit, action or proceeding ("Claim") in respect of which
indemnity may be sought under such Section and will provide the Indemnifying
Party such information with respect thereto that the Indemnifying Party may
reasonably request.

         (b) The Indemnifying Party shall be entitled to participate in the
defense of, investigation of, or corrective action required to be undertaken in
response to, any Claim asserted by a third party, including any Governmental
Authority ("Third Party Claim") and, subject to the limitations set forth in
this Section or Section 10.02(b), shall be entitled to control and appoint lead
counsel for such defense, in each case at its expense subject to the deductible
and maximum liability described in Section 10.02.

         (c) If the Indemnifying Party shall assume the control of the defense
of any Third Party Claim in accordance with the provisions of this Section or
Section 10.02(b), (i) the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party (which shall not be unreasonably withheld)
before entering into any settlement of such Third Party Claim if the settlement
does not release the Indemnified Party from all liabilities and obligations with
respect to such Third Party Claim or if the settlement imposes injunctive or
other equitable relief against the Indemnified Party and (ii) the Indemnified
Party shall be entitled to participate in the defense of such Third Party Claim
and to employ separate counsel of its choice for such purpose. The fees and
expenses of such separate counsel shall be paid by the Indemnified Party.

         (d) Each party shall cooperate, and cause their respective Affiliates
to cooperate, in the defense or prosecution of any Third Party Claim (including
any


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counterclaims filed by Sellers) and shall provide reasonable access upon
reasonable notice at reasonable times to properties and individuals as
reasonably requested and furnish or cause to be furnished records, information
and testimony, and attend such conferences, discovery proceedings, hearings,
trials or appeals, as may be reasonably requested in connection therewith. This
cooperation shall be provided without cost or expense of the other party other
than reimbursement of out-of-pocket travel or similar expenses subject to the
provisions of Section 10.02.

         (e) Each Indemnified Party shall use reasonable efforts to collect any
amounts available under insurance coverage, or from any other Person alleged to
be responsible, for any Damages payable under Section 10.02. Buyer acknowledges
that Sellers or their Affiliates shall not make indemnity payments under Section
10.02 with respect to any Damages for which indemnity is available under the
agreements listed in Schedule 10.03(e) until and unless Sellers, Buyer or their
Affiliates have used reasonable best efforts to collect any amount available
under such agreements from such indemnifying party.

         (f) In addition to the foregoing, with respect to the Item 1
Litigation, Sellers shall have the sole right to defend such litigation and to
control or appoint counsel for such defense. Buyer shall, and shall cause the
Transferred Companies to, use reasonable best efforts to assist and cooperate
with Sellers in the defense of Item 1 Litigation and to comply with requests of
Sellers that are reasonably related to the defense of Item 1 Litigation,
including assigning, or asserting on behalf Sellers, any claims against Huffy
under the Huffy Contract.

         (g) Certain Matters Regarding Escrow Account Payments. Payments are
permitted to be paid from the Escrow Account in accordance with the terms of the
Escrow Agreement as follows:

         (i) All Sellers' Environmental Payments less the Non-Reimbursable
Amount ("Sellers' Environmental Claims") are permitted to be paid from or
reimbursed to Sellers from the Escrow Account.

         (ii) Notwithstanding anything to the contrary contained in this
Agreement, in the event of a Payment Default, Buyer shall be permitted to obtain
reimbursement from the Escrow Account for any Claim in accordance with the terms
and conditions of this Article 10 and to submit a Buyer Payment Request, whether
a Buyer Environmental Claim or Buyer Non-Environmental Claim, that has not
otherwise been resolved or satisfied prior to the time of such Payment Default.

         SECTION 10.04. Calculation of Damages. (a) The amount of any Damages
payable under Section 10.02 by the Indemnifying Party shall be net of


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any (i) amounts recovered (net of reasonable costs of collection of such amounts
including, but not limited to, reasonable attorneys fees) under applicable
insurance policies, from any other third party with indemnification obligations
or from any other Person responsible therefor and (ii) the actual Tax benefit
realized by the Indemnified Party arising from the incurrence or payment of any
such Damages. If the Indemnified Party receives any amounts under applicable
insurance policies, from any other third party with indemnification obligations
or from any other Person alleged to be responsible for any Damages, subsequent
to an indemnification payment by the Indemnifying Party, then such Indemnified
Party shall promptly reimburse the Indemnifying Party for any payment made or
expense incurred by such Indemnifying Party in connection with providing such
indemnification payment up to the amount received by the Indemnified Party, net
of any expenses incurred by such Indemnified Party in collecting such amount.

         (b) The Indemnifying Party shall not be liable under Section 10.02 for
any (i) Damages relating to any matter that (A) with respect to Damages arising
from a Warranty Breach, is included in the Closing Working Capital Statement or
the Preliminary Balance Sheet to the extent set forth as a specific liability or
reserve or (B) the Indemnified Party had otherwise been adequately compensated
for pursuant to the Purchase Price adjustment under Section 2.04 or (ii)
consequential or punitive Damages.

         (c) Buyer and Sellers shall take and shall cause their respective
Affiliates (and as to Buyer, the Transferred Companies after the Closing) to
take all reasonable steps to mitigate and otherwise minimize their Damages to
the maximum extent reasonably possible upon and after becoming aware of any
event which would reasonably be expected to give rise to any Damages.

         SECTION 10.05. Assignment of Claims. If the Indemnified Party receives
any payment from an Indemnifying Party in respect of any Damages pursuant to
Section 10.02 and the Indemnified Party could have recovered all or a part of
such Damages from a third party (a "Potential Contributor") based on the
underlying Claim asserted against the Indemnifying Party, the Indemnified Party
shall assign such of its rights to proceed against the Potential Contributor as
are necessary to permit the Indemnifying Party to recover from the Potential
Contributor the amount of such payment.

         SECTION 10.06. Exclusivity. Except as specifically set forth in this
Agreement, Buyer waives any rights and claims it may have against Sellers,
whether in law or in equity, relating to the Transferred Companies or the
Shares, the Canadian Business, the Purchased Assets or the Excluded Liabilities
or the transactions contemplated hereby. The rights and claims waived by Buyer
include, without limitation, claims for contribution or other rights of recovery


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arising out of or relating to any environmental, health or safety statute, law,
regulation or rule, claims for breach of contract, breach of representation or
warranty, negligent misrepresentation and all other claims for breach of duty.
After the Closing, Article 10 and the Tax Sharing Agreement will provide the
exclusive remedy for any misrepresentation, breach of warranty, covenant or
other agreement (other than those contained in Sections 2.01, 2.04, 5.02, 5.03,
5.04, 6.01, 6.02, 6.03, 7.05, 7.07(b), 7.07(g), 7.08 and 7.09 and Article 8) or
other claim arising out of this Agreement or the transactions contemplated
hereby. Notwithstanding the foregoing, the waiver of rights and claims by Buyer
under this Section and the provisions of Article 10 shall not apply to any
allegation or claim by Buyer against any member of the Parent Group for fraud or
willful misrepresentation in connection with the transactions contemplated by
this Agreement.

         SECTION 10.07. Indemnity Payments to Be Adjustments to Purchase Price.
(a) Sellers and Buyer shall treat any payments that Buyer or Sellers shall
receive pursuant to Article 10 as an adjustment to and refund of the purchase
price for tax purposes, unless a final determination (which shall include the
execution of a Form 870-AD or successor form) with respect to Buyer or Sellers
causes any such payment not to be treated as an adjustment to or refund of the
purchase price for Federal Tax purposes.

         (b) To the extent that any indemnity payment due by Sellers pursuant to
this Agreement or the Tax Sharing Agreement relates to True Temper Ireland,
Sellers (or any other Indemnifying Party) shall make such indemnity payment to
Buyer as a refund of purchase price paid in respect of shares of True Temper
Ireland.


                                   ARTICLE 11
                                   TERMINATION

         SECTION 11.01. Grounds for Termination. This Agreement may be
terminated at any time prior to the Closing:

         (a) by mutual written agreement of US Seller and Buyer;

         (b) by either US Seller or Buyer if the Closing shall not have been
consummated on or before January 15, 2002; provided, however, that the
terminating party may not exercise this right if it or any of its Affiliates is
in breach of its obligations under this Agreement; or


                                       83
<PAGE>


         (c) by either US Seller or Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or Governmental Authority having competent jurisdiction.

         The party desiring to terminate this Agreement pursuant to clauses
11.01(b) or 11.01(c) shall give notice of such termination to the other party.
If this Agreement is terminated as provided herein:

                  (i) upon written request therefor, Buyer will redeliver to
         Sellers all documents, work papers and other material of Sellers or the
         Transferred Companies, relating to the transactions contemplated
         hereby, whether obtained before or after the execution hereof; and

                  (ii) all filings, applications and other submissions made
         shall, to the extent practicable, be withdrawn from the agency or other
         person to which made.

         SECTION 11.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 11.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent, consultant
or representative of such party) to the other party to this Agreement; provided
that if such termination shall result from the willful (i) failure of either
Buyer or Sellers to fulfill a condition to the performance of the obligations of
the other party, (ii) failure to perform a covenant of this Agreement or (iii)
breach by either Buyer or Sellers hereto of any representation or warranty
contained herein, such party shall be fully liable for any and all Damages
incurred or suffered by the other party as a result of such failure or breach.
The provisions of Section 11.02 and Article 12 shall survive any termination
hereof pursuant to Section 11.01.


                                   ARTICLE 12
                                  MISCELLANEOUS

         SECTION 12.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,


                                       84
<PAGE>


if to Buyer, to:

         c/o Wind Point Partners
         676 N. Michigan Avenue
         Suite 3300
         Chicago, Illinois 60611
         Attention: Richard Kracum
         Fax: 312-295-4820

         with a copy to:

         Katten Muchin & Zavis
         525 W. Monroe
         Suite 1600
         Chicago, Illinois 60661
         Attention: Steven V. Napolitano
         Fax: 312-577-8749

if to Sellers, to:

         c/o U.S. Industries, Inc.
         101 Wood Avenue South
         P.O. Box 169
         Iselin, NJ 08830-0169
         Attention: General Counsel
         Fax: (732) 767-2208

         with a copy to:

         Davis Polk & Wardwell
         450 Lexington Avenue
         New York, New York 10017
         Attention: Jeffrey D. Berman
         Fax: (212) 450-4800

         and a copy to (for all notices related to environmental matters):
         Edwards & Angell, LLP
         51 John F. Kennedy Parkway
         Short Hills, NJ 07078
         Attention: Eric J. Nemeth
         Fax: (973) 376-3380

All such notices, requests and other communications shall be deemed received on


                                       85
<PAGE>

the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding business day in the place of receipt.

         SECTION 12.02. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by US Seller and Buyer,
or in the case of a waiver, by the party against whom the waiver is to be
effective.

         (b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

         SECTION 12.03. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense;
provided that none of the Transferred Companies shall be liable for or with
respect to any costs or expenses incurred by or on behalf of Sellers or USI in
connection with the Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, the fees, costs and expenses of Hilco Appraisal
Services, LLC, Cushman & Wakefield and Arthur Andersen in connection with the
appraisal of inventory, machinery and equipment, real estate and audits, which
shall not exceed $500,000 in the aggregate, shall be borne by Buyer.

         SECTION 12.04. Successors and Assigns. The provisions of this
Agreement, together with the Tax Sharing Agreement and the Escrow Agreement,
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that Sellers and Buyer,
respectively, may not assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement, the Tax Sharing Agreement or the Escrow
Agreement without the consent of Buyer or US Seller, respectively, except that
Buyer may assign its right to purchase the Shares or Purchased Assets to its
Affiliates and that at or after the Closing, Buyer may assign, in whole or in
part, its rights under this Agreement together with the Tax Sharing Agreement
and the Escrow Agreement for collateral security purposes to Lenders and after
such collateral assignment, Lenders may exercise all of the rights and remedies
of Buyer hereunder and thereunder, but in each case no such assignment shall
relieve Buyer of its obligations hereunder and thereunder. In addition, after
the Closing, Buyer, or its successor in interest, may assign this Agreement,
together with the Tax Sharing Agreement and the Escrow Agreement, to one
acquirer (who may acquire such interest as a part of a group of affiliated
entities) of, or successor in interest to, all


                                       86
<PAGE>

or substantially all of the business operations of the Transferred Companies,
taken as a whole, as such business operations are conducted at the time of such
assignment or transfer whether through a purchase of assets and liabilities or
all of the capital stock, merger, recapitalization or a substantially similar
transaction; provided however, that such assignee or successor assumes all
obligations of Buyer hereunder and thereunder and agrees to be bound by the
provisions hereunder and thereunder; provided, further, that no such assignment
or transfer shall relieve Buyer, or its successor in interest, of its
obligations hereunder or thereunder; provided further that Buyer and Sellers
agree that Buyer may not assign or transfer this Agreement or the Tax Sharing
Agreement or the Escrow Agreement if doing so would materially and adversely
affect the rights of Sellers hereunder, including without limitation, under any
insurance policies or other agreements with third parties that relate in any
material respect to Sellers' obligations hereunder or thereunder (a "Sellers'
Assignment Conflict"). Notwithstanding the foregoing, Sellers and Buyers will
use reasonable best efforts to resolve any potential Sellers' Assignment
Conflict in connection with a sale that complies with the preceding sentence so
long as Buyer promptly reimburses Sellers for all costs, fees and expenses
(including fees and expenses of counsel and other advisors) incurred by Sellers
arising from or related to the Sellers' efforts to resolve any Sellers'
Assignment Conflict ("Assignment Expenses"). Without limiting the foregoing,
after the Closing, Buyer, or its successor in interest, may enter into
agreements or arrangements pursuant to which Buyer, or its successor in
interest, agrees to enforce its rights hereunder (including without limitation
with respect to Article 10) and pay over any amounts received by it hereunder to
any Buyer Transferee and a Conveyence shall neither expand, broaden, enhance or
increase, on the one hand, nor restrict, contract, reduce or decrease, on the
other, Buyer's or Sellers' respective rights, obligations or liabilities
hereunder or the Tax Sharing Agreement or the Escrow Agreement. "Buyer
Transferee" shall mean any third party acquirer or transferee of all or any
portion of the assets of the Transferred Companies, or capital stock of any
Transferred Company, whether pursuant to a sale, merger, recapitalization or a
substantially similar transaction (a "Conveyance"). All Assignment Expenses and
Damages suffered by Sellers (including the diminution of insurance or other
indemnification benefits) arising out of or in connection with an assignment or
transfer by Buyer or its Affiliate or resulting from any transfer or assignment
shall be referred to as "Assignment Liabilities".

         SECTION 12.05. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Illinois, without regard to
conflicts of law rules of such state.

         SECTION 12.06. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking


                                       87
<PAGE>

to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the United States District Court for the Northern District of
Illinois (or if such action cannot be brought therein, in any Illinois State
court sitting in Chicago), so long as such courts shall have subject matter
jurisdiction over such suit, action or proceeding, and that any cause of action
arising out of this Agreement shall be deemed to have arisen from a transaction
of business in the State of Illinois. Each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 12.01 shall be deemed effective service of process on such
party.

         SECTION 12.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

         SECTION 12.08. Counterparts; Third Party Beneficiaries. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder except that after any collateral
assignment of rights hereunder to Lenders as permitted by Section 12.04, Lenders
may exercise the rights and remedies of Buyer hereunder.

         SECTION 12.09. Entire Agreement. This Agreement, the Tax Sharing
Agreement, the Escrow Agreement, the Assignment and Assumption Agreement and the
Confidentiality Agreement (a) constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter of this Agreement and (b) does not confer
upon any Person other than the parties hereto any rights or remedies hereunder
(it being explicitly understood that nothing in this Agreement shall confer any
such third


                                       88
<PAGE>

party beneficiary rights upon any current or former employee of the Transferred
Companies or their Affiliates). The provisions of the Confidentiality Agreement
other than Sections 7, 8, 9, 10 and 13 shall terminate upon the Closing.

         SECTION 12.10. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

         SECTION 12.11. Disclosure Schedules. The parties acknowledge and agree
that (i) the disclosure schedules ("Schedules") attached to this Agreement may
include certain items and information solely for informational purposes for the
convenience of Buyer and (ii) the disclosure by Sellers of any matter in the
Schedules shall not be deemed to constitute an acknowledgment by Sellers that
the matter is required to be disclosed by the terms of this Agreement or that
the matter is material. If any Schedule discloses an item or information in such
a way as to make its relevance to the disclosure required by another Schedule
readily apparent, the matter shall be deemed to have been disclosed in such
other Schedule, notwithstanding the omission of an appropriate cross-reference
to such other Schedule.

         SECTION 12.12. Tax Sharing. This Agreement and the Tax Sharing
Agreement shall be the only Tax Sharing Agreement relating to any Company, any
Subsidiary or the Canadian Business.

         SECTION 12.13. Bulk Sales Legislation. Buyer hereby waives compliance
with all relevant bulk sales legislation respecting the sale of the Purchased
Assets. Sellers agree to indemnify and hold Buyer harmless against any and all
claims, losses, damages, liabilities, costs and expenses incurred by Buyer or
any of its Affiliates as a result of any failure to comply with any such bulk
sales legislation, except for any and all Damages incurred by Buyer or any of
its Affiliates (including the Transferred Companies after the Closing) resulting
from the failure of Buyer or its Affiliates to discharge in due course any of
the Assumed Liabilities.

         SECTION 12.14. English Language. The parties confirm that it is their
wish that this Agreement as well as any other documents relating hereto
including notices, have been and shall be drawn up in English only. Les parties
aux presents conferment leur volonte quecette convention de meme tous les
documents, y compris tous avis s y rattachant, soient rediges en anglais
seulement.

         SECTION 12.15. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other


                                       89
<PAGE>

authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.


                                       90
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                       JUSI HOLDINGS, INC.


                                       By: /s/ Steven C. Barre
                                          -----------------------------------
                                          Name:  Steven C. Barre
                                          Title: Vice President and Assistant
                                                 Secretary

                                       SPEAR & JACKSON PLC
                                       By: U.S. Industries, Inc., as director


                                       By: /s/ Steven C. Barre
                                          -----------------------------------
                                          Name:  Steven C. Barre
                                          Title: Senior Vice President

                                       USI GLOBAL CORP.


                                       By: /s/ Steven C. Barre
                                          -----------------------------------
                                          Name:  Steven C. Barre
                                          Title: Vice President

                                       USI CANADA INC.


                                       By: /s/ Steven C. Barre
                                          -----------------------------------
                                          Name:  Steven C. Barre
                                          Title: Vice President

<PAGE>

                                       U.S. INDUSTRIES, INC., as Guarantor


                                       By: /s/ Steven C. Barre
                                          -----------------------------------
                                          Name:  Steven C. Barre
                                          Title: Senior Vice President

                                       ATT ACQUISITION CO.


                                       By: /s/ Michael J. Solot
                                          -----------------------------------
                                          Name:  Michael J. Solot
                                          Title: President
<PAGE>

                                                                       EXHIBIT A

                            FORM OF ESCROW AGREEMENT

         AGREEMENT dated as of December __, 2001 among ATT Acquisition Co., a
Delaware corporation ("Buyer"), JUSI Holdings, Inc., a Delaware corporation ("US
Seller"), Spear & Jackson plc, an English corporation ("True Temper Seller"),
USI Global Corp., a Delaware corporation ("Global"), USI Canada Inc., an Ontario
corporation ("Canadian Seller" and together with US Seller, True Temper Seller
and Global, "Sellers"), U.S. Industries, Inc., a Delaware corporation (USI and
together with the Sellers, the "Seller Parties") and [_________], as Escrow
Agent ("Escrow Agent").

                              W I T N E S S E T H:

         WHEREAS, Buyer and the Seller Parties have entered into a Stock and
Asset Purchase Agreement dated as of December 21, 2001 (the "Purchase
Agreement");

WHEREAS, pursuant to Section 10.02(a) or 10.02(b) of the Purchase
Agreement, Sellers may be obligated to make certain payments to Buyer or to
third parties in connection with certain Pre-Closing Environmental Liabilities
and other liabilities of the Transferred Companies;

         WHEREAS, USI has agreed to guaranty the obligations and liabilities of
Sellers in the Purchase Agreement;

         WHEREAS, pursuant to Section 2.02(b) of the Purchase Agreement, Buyer
and the Seller Parties have agreed that Buyer shall deposit $4,500,000 (the
"Escrow Amount") of the Purchase Price with the Escrow Agent to be held for the
sole benefit of Buyer subject only to the express conditions set forth herein,
upon the fulfillment of which Buyer shall no longer have any right, title or
interest in the various portions of the Escrow Amount to be released in
accordance with this Agreement to the Seller Parties pursuant to this Agreement;

         WHEREAS, the Escrow Amount is being deposited with the Escrow Agent for
the purpose of satisfying certain of the Seller Parties' obligations to Buyer
under the Purchase Agreement; and

         WHEREAS, the Escrow Agent shall apply the Escrow Amount as provided
in this Agreement;

                                      A-1
<PAGE>


         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Definitions. All capitalized terms used herein, and not
otherwise defined herein, shall have the meanings assigned to them in the
Purchase Agreement.

         SECTION 2. Appointment of Escrow Agent. Buyer and the Seller Parties
hereby appoint the Escrow Agent to act as escrow agent on the terms and
conditions set forth herein, and the Escrow Agent hereby accepts such
appointment on such terms and conditions.

         SECTION 3. Deposit of Funds. In accordance with Section 2.02(b) of the
Purchase Agreement, on the Closing Date Buyer shall deliver to the Escrow Agent
the Escrow Amount in immediately available funds in accordance with the Purchase
Agreement to be held, invested and disbursed by the Escrow Agent as provided
herein. The Escrow Agent shall deposit, upon receipt, the Escrow Amount into a
separate interest bearing account (the "Escrow Account") established for such
purpose. Until the earlier to occur of (a) the satisfaction of the condition or
conditions upon which the Escrow Agent is authorized by Section 5 to release
funds (solely with regard to the funds entitled to be so released), or (b) the
termination of this Agreement pursuant to Section 7, (i) the Escrow Account
shall be held for the benefit of Buyer, (ii) legal title to the Escrow Amount
shall remain with Buyer and (iii) any right, title or interest of the Seller
Parties in the Escrow Amount is conditioned upon, and shall remain subject and
subordinate to the right, title and interest of Buyer in and to the Escrow
Amount. Upon the satisfaction of the conditions set forth in Section 5 hereof
(solely with regard to Funds entitled to be released as a result of the
satisfaction of such condition or conditions) or termination of this Agreement
pursuant to Section 7 hereof, all right, title and interest to those funds
entitled to be released as a result of such satisfaction or termination shall
vest fully in the Seller Parties.

         SECTION 4. Investment of Escrow Amount; Reporting. (a) The Escrow Agent
shall invest and reinvest the Escrow Amount in either (i) direct obligations of,
or obligations the principal and interest on which are unconditionally
guaranteed by, the United States of America, (ii) repurchase agreements fully
collateralized by securities of the kind specified in clause (i) above, (iii)
money market accounts at or certificates of deposit issued by a bank or trust
company organized under the laws of the United States of America or a State
thereof (a "United States Bank"), (iv) commercial paper issued by a domestic
corporation and given the highest rating by Standard & Poor's Corporation and
Moody's Investors Service, Inc. or (v) demand deposits with any United States
Bank or any federal savings and loan institution having a combined capital
surplus in excess of [$250,000,000]. Any interest, dividend, profit or loss on
any such investment shall be attributed to or borne by the Sellers. The Escrow
Amount and the Escrow


                                      A-2
<PAGE>

Account, if any, shall be managed by the Escrow Agent.

         (b) Reports. Escrow Agent will provide Buyer and the Seller Parties
with semi-annual reports on the status of the Escrow Account and with copies of
all invoices, bills or other statements that are submitted to the Escrow Agent
for payment by the other party. Parties.

         SECTION 5. Release of Escrow Amounts.

         (a) Joint Requests for Disbursement. If the Escrow Agent receives a
certificate (or any number of counterparts thereof) (i) signed by both an
officer of Buyer and an officer of US Seller, (ii) directing the Escrow Agent as
to payment of all or any part of the Escrow Amount and (iii) identifying the
amount and type of the payment and the party to whom payment shall be made
("Joint Request Certificate"), the Escrow Agent shall immediately release such
amount from the Escrow Account as directed in such certificate.

         (b)(i) Sellers' Requests for Reimbursements. The Seller Parties may
request reimbursement of Seller Environmental Claims arising under Section
10.02(b) of the Purchase Agreement from the Escrow Account as follows. The
Seller Parties shall deliver to the Escrow Agent and Buyer written notice
stating that the Seller Party is entitled to reimbursement of Seller
Environmental Claims pursuant to Section 10.02(b) of the Purchase Agreement
("Seller Payment Request"). Any such Seller Payment Request shall include
invoices, statements, bills or other charges for which the Seller Party seeks
payment or reimbursement from the Escrow Account, together with instructions to
the Escrow Agent. The Escrow Agent shall disburse funds from the Escrow Account
pursuant to the Seller Party's instructions for each Seller Payment Request
unless Buyer provides the Seller Parties and Escrow Agent with a written notice
of its objection to release of the funds by the Escrow Agent ("Buyer Objection
Notice") within ten (10) days following delivery of each Seller Payment Request.
Buyer's sole basis for serving a Buyer Objection Notice shall be that the
Remedial Action Costs for which the Seller Parties seek payment or reimbursement
are not authorized pursuant to Section 10.02(b)(2) of the Agreement and each
Buyer Objection Notice shall state with specificity the basis for Buyer's
objection to payments.

         (ii) Buyer's Requests for Reimbursements. Buyer may request
reimbursement of Buyer Environmental Claims or Buyer Non-Environmental Claims
from the Escrow Account as follows. Buyer shall deliver to Escrow Agent and the
Seller Parties written notice stating that Buyer is entitled to reimbursement of
Buyer Environmental Claims or Buyer Non-Environmental Claims pursuant to Section
10.02(a) or 10.02(b) of the Purchase Agreement setting forth the basis
(including certification that a Payment Default has occurred) and amount of any


                                      A-3

<PAGE>

such Buyer Non-Environmental Claim or Buyer Environmental Claim, as the case may
be ("Buyer Payment Request"). Any such Buyer Payment Request shall include
appropriate documentation or evidence in support of such Buyer Payment Request,
including, if applicable, invoices, statements, bills or other charges, together
with instructions to the Escrow Agent. The Escrow Agent shall disburse funds
from the Escrow Account pursuant to Buyer's instructions for each Buyer Payment
Request unless a Seller Party provides Buyer and Escrow Agent with a written
notice of its objection to release of the funds by the Escrow Agent ("Seller
Objection Notice") within ten (10) days following delivery of each Buyer Payment
Request. The Seller Parties' sole basis for serving a Seller Objection Notice
shall be that the Buyer Environmental Claim or Non-Environmental Claim, as
applicable, for which Buyer seeks payment or reimbursement is not authorized
pursuant to Article 10 of the Purchase Agreement and each Seller Objection
Notice shall state with specificity the basis for the Seller Parties' objection
to payments.

         (iii) In the event the Parties cannot resolve any dispute under either
Section 5(b)(i) or 5(b)(ii) hereof within seven business days of service of a
Buyer Objection Notice or Seller Objection Notice, as applicable, and the
dispute relates to a Seller Environmental Claim or Buyer Environmental Claim, as
the case may be, the matter shall be submitted to arbitration pursuant to
Section 10.02(b)(10) of the Purchase Agreement.

         (iv) If a Buyer Objection Notice or Seller Objection Notice has been
timely filed, the Escrow Agent shall only disburse the funds pursuant to the
Seller Payment Request or Buyer Payment Request, as applicable under Section
5(a) or 5(c) hereof, as the case may be.

         (c) Adjudicated/Arbitrated Claims. For claims that have been disputed
and resolved by judgment of a court or order of an arbitration panel, pursuant
to Section 10.02(b)(10) or other binding arbitration process mutually agreed to
by the Seller Parties and Buyer, Buyer or the Seller Parties may submit a
certificate ("Dispute Resolution Certificate") to the Escrow Agent and the other
party, to the effect that such person has received a final non-appealable
judgment or order from a court of competent jurisdiction or arbitrator (and
attaching a copy of such judgment or order) resolving the dispute. The Dispute
Resolution Certificate shall set forth in reasonable detail the substance of
such judgment or arbitration order and shall be submitted with instructions
regarding disbursement, if any, of the applicable portion of the Escrow Amount.
The Escrow Agent shall disburse the amount according to the Dispute Resolution
Certificate and submitted instructions.

         (d) Indemnifiable Contingent Costs. In the event Buyer becomes


                                      A-4
<PAGE>

aware of any potential or contingent claim, or facts which may be the basis for
such a claim, for which Buyer believes in good faith that it may be entitled to
indemnification pursuant to Article 10 of the Purchase Agreement but for which a
Buyer cannot make a Buyer Payment Request because the information required to be
certified in a Buyer Payment Request is not available to Buyer, Buyer shall have
the right to deliver to the Escrow Agent written notice of such potential or
contingent claim (a "Contingent Claim Notice"), which Contingent Claim Notice
shall describe the basis for any such potential or contingent claim and the
estimated maximum amount thereof. The Escrow Agent shall continue to hold the
estimated maximum amount set forth in the Contingent Claim Notice with respect
to any matter for which Buyer has delivered a Contingent Claim Notice, until
such amount is disbursed in accordance with this Section 5.

         (e) Retention of Disputed Amounts. If the Escrow Agent timely receives
a Seller Objection Notice or Buyer Objection Notice, the Escrow Agent shall
retain the disputed amount (the "Disputed Amount") referenced in such notice
until the first to occur of the following:

                  (i) receipt by the Escrow Agent of a certificate signed by
         both an officer of Buyer and an officer of US Seller pursuant to
         paragraph (a) above, in which case the Escrow Agent shall make such
         disbursement of the disputed amount in accordance with the directions
         set forth in such certificate; or

                  (ii) receipt of a Dispute Resolution Certificate.

         The Seller Parties and Buyer agree to use reasonable best efforts to
resolve the objections in the Seller Objection Notice or Buyer Objection Notice
within 30 days of the date of such notice.

         [Sellers and Buyer to discuss appropriate dispute resolution mechanics
with respect to Contingent Claim Notices and Disputed Amounts and if mutually
acceptable, such provisions to be inserted]

         (f) Expiration of Indemnity; Release of Remaining Funds. If any part of
the Escrow Amount remains on deposit with the Escrow Agent hereunder on the
Environmental Indemnity Expiration Date, the Escrow Agent shall release and
promptly deliver to the Seller Parties such amount, less amounts relating to any
outstanding Buyer Payment Request or any Contingent Claim Notice.

         (g) Release of Interest. The Escrow Agent will release all interest
collected on the Escrow Amount to US Seller, on behalf of the Sellers, on a
quarterly basis.


                                      A-5
<PAGE>

         SECTION 6. Substitute Form W-9. Each of Buyer and the Seller Parties
shall provide the Escrow Agent with a correct taxpayer identification number on
a substitute Form W-9 within 90 days of the date hereof and indicate thereon
that it is not subject to backup withholding on income earned on any amount
received hereunder.

         SECTION 7. Termination of Escrow Account. This Agreement shall
terminate when the Escrow Agent shall have released from the Escrow Account the
entire Escrow Amount pursuant to Section 5 hereof.

         SECTION 8. Escrow Agent. The Escrow Agent shall have no duty or
obligation hereunder other than to take such specific actions as are required of
it from time to time under the provisions hereof, and it shall incur no
liability hereunder or in connection herewith for anything whatsoever other than
as a result of its own negligence or willful misconduct. The Seller Parties
agree to indemnify, hold harmless and defend the Escrow Agent from and against
any and all losses, claims, liabilities and reasonable expenses, including the
reasonable fees of its counsel (collectively, the "Losses"), which it may suffer
or incur hereunder, or in connection herewith, arising solely from the acts of
the Seller Parties, except damages arising solely and directly from Escrow
Agent's own gross negligence or willful misconduct. Buyer agrees to indemnify,
hold harmless and defend the Escrow Agent from and against any and all Losses,
which it may suffer or incur hereunder, or in connection herewith, arising
solely from the acts of the Buyer, except damages arising solely and directly
from Escrow Agent's own gross negligence or willful misconduct. The Seller
Parties, on the one hand, and Buyer, on the other, severally as to 50 percent
each, agree to indemnify, hold harmless and defend the Escrow Agent from and
against any and all Losses, which it may suffer or incur hereunder, or in
connection herewith, arising out of the fault of both Buyer and the Seller
Parties or neither Buyer nor the Seller Parties, except such Losses as shall
result solely and directly from Escrow Agent's own gross negligence or willful
misconduct. The Escrow Agent shall not be bound in any way by any agreement or
contract between Buyer and the Seller Parties (whether or not the Escrow Agent
has knowledge thereof) and the only duties and responsibilities of the Escrow
Agent shall be to hold and invest the Escrow Amount received hereunder and to
release such Escrow Amount in accordance with the terms of this Escrow
Agreement. The Escrow Agent's fees and expenses for acting as Escrow Agent
hereunder are set forth in Schedule I hereto. Such fees and expenses shall be
paid by Buyer.

         SECTION 9. Miscellaneous. (a) Notices. All notices or other
communications to either party hereunder shall be in writing (including telex,
telecopy or similar writing) and shall be given,


                                       A-6
<PAGE>

if to the Seller Parties, to:

         c/o U.S. Industries, Inc.
         101 Wood Avenue South
         P.O. Box 169
         Iselin, NJ 08830-0169
         Attention: General Counsel
         Fax: (732) 767-2208

with a copy to:

         Davis Polk & Wardwell
         450 Lexington Avenue
         New York, New York 10017
         Attention: Jeffrey D. Berman
         Fax: (212) 450-4800

and a copy to:

         Edwards & Angell, LLP
         51 John F. Kennedy Parkway
         Short Hills, NJ 07078-2701
         Attention: Eric J. Nemeth
         Fax: (888) 325-9146

if to Buyer, to:

         c/o Wind Point Partners
         676 N. Michigan Avenue, Suite 3300
         Chicago, Illinois 60611
         Attention: Richard Kracum
         Fax: (312) 255-4820

with a copy to:

         Katten Muchin & Zavis
         525 West Monroe Street
         Suite 1600
         Chicago, IL 60661-3693
         Attention: Steven V. Napolitano
         Fax: (312) 577-8749

if to the Escrow Agent, to:


                                      A-7
<PAGE>

         [Name of Escrow Agent]
         [Address]
         [Fax:]

         (b) Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns.

         (c) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York, without regard to the
conflicts of law rules of such state.

         (d) Definitions. Terms used herein that are defined in the Purchase
Agreement are, unless otherwise defined, used herein as therein defined.

         (e) Amendments. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each party hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.

         (f) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.

         (g) Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.

         (h) Other. The Seller Parties shall have no obligation to provide
additional sums to the Escrow Agent in the event the Escrow Amount is fully
expended prior to the Environmental Indemnity Expiration Date.


                                      A-8

<PAGE>

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

                                       ATT ACQUISITION CO.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                       JUSI HOLDINGS, INC.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                       SPEAR & JACKSON PLC


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                       USI GLOBAL CORP.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                       USI CANADA INC.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                      A-9
<PAGE>

                                       U.S. INDUSTRIES, INC.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

                                       [NAME OF ESCROW AGENT],
                                       as Escrow Agent


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                      A-10
<PAGE>

                                                                      SCHEDULE I
                                                             to Escrow Agreement

                        ESCROW AGENT'S FEES AND EXPENSES

[to come]

                                ESCROW AGREEMENT




                                      A-11
<PAGE>

                                                                       EXHIBIT G

         TAX SHARING AND INDEMNIFICATION AGREEMENT dated as of _________, 2001,
among JUSI Holdings, Inc., a Delaware corporation ("US Seller"), Spear & Jackson
plc, an English corporation ("True Temper Seller"), USI Global Corp., a Delaware
corporation ("Global"), USI Canada Inc., an Ontario corporation ("Canadian
Seller" and together with US Seller, True Temper Seller and Global, "Sellers"),
ATT Acquisition Co., a Delaware corporation (the "Buyer"), and solely for
purposes of Section 4, U.S. Industries, Inc., a Delaware corporation ("USI").

         WHEREAS, Buyer and Sellers have entered into the Stock and Asset
Purchase Agreement (as defined herein); and

         WHEREAS, in connection with the transaction contemplated by the Stock
and Asset Purchase Agreement, Buyer and Sellers wish to enter into an agreement
governing tax sharing and indemnification and certain related tax matters.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, Buyer and Sellers agree as follows:

         1. Definitions. Except as otherwise defined herein, all terms used
----------- herein shall have the same meaning as in the Stock and Asset
Purchase Agreement among Sellers and Buyer dated ____________, 2001 (the "Stock
and Asset Purchase Agreement"). For purposes hereof, (a) "Tax Sharing
Agreement" shall mean this Tax Sharing and Indemnification Agreement dated
<PAGE>

_____________, 2001; (b) "Seller Year" or "Seller Years" shall mean all taxable
periods of any Company or any Subsidiary ending on or before the Closing Date;
(c) "Buyer Year" or "Buyer Years" shall mean all taxable periods of any Company
or any Subsidiary beginning after the Closing Date; (d) "Straddle Period" shall
mean any taxable period of any Company or any Subsidiary that includes (but does
not end on) the Closing Date; (e) "Tax Asset" means any net operating loss, net
capital loss, investment tax credit, foreign tax credit, charitable deduction or
any other credit that could be carried forward or back to reduce Taxes;
provided, however, that "Tax Asset" shall not include any such loss, credit or
deduction related to True Temper Ireland; (f) "Federal Tax" means any Tax
imposed under Subtitle A of the Code with respect to which any Company or any
Subsidiary has filed or will file a Tax Return; and (g) "Federal Tax Return"
means any Tax Return filed with respect to Federal Tax. For purposes hereof, a
Person's liability for Tax shall be deemed to include without limitation, such
Person's obligation to withhold any Tax in respect of any other Person.

         2. Tax Matters.

         (a) Filing. For any Straddle Period, Buyer shall timely prepare and
file with or deliver to the appropriate authorities or other persons all Tax
Returns required to be filed or delivered and shall pay all Taxes due with
respect to such Tax Returns; provided that Sellers shall reimburse Buyer (in
accordance with the procedures set forth in Section 3(a)) for any amount owed by
Sellers pursuant to Section 3(a) with respect to such Straddle Period. Any such
Straddle Period Tax


                                       2
<PAGE>

Returns shall be prepared in a manner consistent with past practice of the
relevant Company or Subsidiary and without a change of any election or any
accounting method if such methods are in compliance with applicable law, and
shall be submitted by Buyer to the relevant Seller (together with schedules,
statements and, to the extent requested by such Seller, supporting
documentation) at least 25 days prior to the due date (including extensions) of
such Tax Returns. Such Seller shall have the right to review all work papers and
procedures used to prepare any such Tax Return. If such Seller, within 10
business days after delivery of such Tax Return, notifies Buyer in writing that
it objects to any items in such Tax Return, the disputed items shall be resolved
(within a reasonable time, taking into account the deadline for filing such Tax
Return) by an internationally recognized independent accounting firm chosen and
mutually acceptable to both Buyer and such Seller. Upon resolution of all such
items, the relevant Tax Return shall be adjusted to reflect such resolution and
shall be binding upon the parties without further adjustment. The costs, fees
and expenses of such accounting firm shall be borne equally by Buyer and the
applicable Seller.

         For any Seller Year, Sellers shall timely prepare and file with or
deliver to the appropriate authorities or other persons all Tax Returns based on
or measured by income that are required to be filed or delivered after the
Closing Date. Seller shall pay all Taxes due with respect to such Tax Returns or
otherwise due with respect to any Seller Year, except to the extent specifically
reflected as a liability of any Company or any Subsidiary on the Closing Balance
Sheet. Buyer and


                                       3
<PAGE>

Sellers agree to cause the Companies or Subsidiaries to file all Tax Returns for
periods that include the Closing Date on the basis that the relevant taxable
period ended as of the close of business on the Closing Date, unless the
relevant taxing authority will not accept a Tax Return filed on that basis. The
final Federal Tax Return filed by the Sellers with respect to any Company or any
Subsidiary shall reflect a tax period ending as of the close of the Closing
Date.

         (b) Cooperation. Sellers, the Companies, the Subsidiaries and Buyer
shall reasonably cooperate, and shall cause their respective Affiliates,
officers, employees, agents, auditors and representatives to cooperate, in
preparing and filing all returns, reports and forms relating to Taxes, including
maintaining and making available to each other all records necessary in
connection with Taxes and in resolving all disputes and audits with respect to
all taxable periods relating to Taxes. Buyer and Sellers recognize that Sellers
and their Affiliates will need access, from time to time, after the Closing
Date, to certain accounting and Tax records and information held by the
Companies or the Subsidiaries to the extent such records and information pertain
to events occurring on or prior to the Closing Date; therefore, Buyer agrees,
and agrees to cause the Companies and the Subsidiaries, (i) to use their best
efforts to properly retain and maintain such records until the expiration of the
applicable statute of limitations (giving effect to any extension thereof), and
thereafter not to dispose of such records without first offering them to the
Sellers, (ii) to allow Sellers and their agents and representatives (and agents
or representatives of any of Sellers' Affiliates), at


                                       4
<PAGE>

times and dates mutually acceptable to the parties, to inspect, review and make
copies of such records as Sellers reasonably deem necessary or appropriate from
time to time, such activities to be conducted during normal business hours, and
(iii) to prepare, in accordance with past practice and on a timely basis if
such practice is in accordance with applicable law, the information required by
Sellers to file their Tax Returns in accordance with past practice.

         (c) Refunds. Any refunds or credits of Taxes of the Companies (other
than refunds related to True Temper Ireland) or the Subsidiaries for any Seller
Year shall be for the account of Sellers, except to the extent reflected as an
asset or a reduction in a Tax liability on the Closing Balance Sheet. Any
refunds or credits of Taxes (i) of the Companies or the Subsidiaries for any
Buyer Year, and (ii) of True Temper Ireland for any Seller Year, shall be for
the account of Buyer; provided, however, that Sellers shall not benefit from any
refund or credit, to the extent that such refund or credit is reflected as an
asset or a reduction of a Tax liability on the Closing Balance Sheet. Any
refunds or credits of Taxes for the Companies or the Subsidiaries for any
Straddle Period shall be equitably apportioned between Sellers and Buyer. Buyer
shall, if Sellers so request and at Sellers' expense, file or cause the
Companies or the Subsidiaries to file for and obtain any refunds or credits to
which Sellers are entitled under this Section 2(c). Buyer shall permit Sellers
to control the prosecution of any such refund claim; provided, however, that
Buyer and Sellers shall jointly control the prosecution of any refund claim
involving any matter that may be reasonably expected to


                                       5
<PAGE>

adversely affect Buyer's tax position for any Buyer Year. Where deemed
appropriate by Sellers, shall cause any Company or any Subsidiary to authorize
by appropriate powers of attorney such Persons reasonably satisfactory to Buyer
as Sellers shall designate to represent the Company or the Subsidiary with
respect to such refund claim. Buyer shall pay, or cause the Companies or the
Subsidiaries to pay, to Sellers any such refund within 20 days after the refund
is received, except to the extent the amount of any such refund is applied to
offset a liability of Sellers to Buyer under this Tax Sharing Agreement or the
Stock and Asset Purchase Agreement outstanding as of the date Buyer receives
such refund. In the case of an amount that is applied to reduce a Tax liability
for a Buyer Year or increase a Tax Asset that can be carried forward to a Buyer
Year, Buyer shall pay, or cause the Company or the Subsidiary to pay, to
Sellers the amount of any such reduction in Tax liability or the amount of any
benefit resulting from such increase in Tax Asset, as the case may be, within
20 days after the Tax benefit is actually realized, except to the extent that
any such amount otherwise payable to Sellers is applied to offset a liability
of Sellers to Buyer under this Tax Sharing Agreement or the Stock and Asset
Purchase Agreement outstanding as of the date such Tax benefit is actually
realized. In such case, the benefit resulting from an increase in a Tax Asset
shall be considered equal to the excess of (x) the amount of Taxes that would
have been payable (or of the Tax refund, offset or other reduction in Tax
liability actually receivable) by any Company, any Subsidiary, Buyer or any
Affiliate of Buyer, over (y) the amount of Taxes actually payable (or

                                        6
<PAGE>


of the Tax refund, offset or other reduction in Tax liability that would have
been receivable) by any Company, any Subsidiary, Buyer or any Affiliate of
Buyer. Sellers and Buyer shall treat any payments that Sellers or Buyer shall
receive pursuant to this Section 2(c) as an adjustment to the purchase price for
tax purposes, unless a final determination (which shall include the execution of
a Form 870-AD or successor form) with respect to Sellers or Buyer causes any
such payment not to be treated as an adjustment to the purchase price for
Federal Tax purposes.

         (d) Amended Returns. Sellers shall, at their expense, be responsible
for filing any amended consolidated, combined or unitary Tax Returns for Seller
Years which are required as a result of examination adjustments made by the
Internal Revenue Service or by the applicable state, local or foreign taxing
authorities for such taxable years as finally determined. For those
jurisdictions in which separate Tax returns are filed by any Company or any
Subsidiary, any required amended returns resulting from such Seller Year
examination adjustments, as finally determined, shall be prepared by Sellers and
furnished to the Company or the Subsidiary, as the case may be, for approval
(which approval shall not be unreasonably withheld), signature and filing at
least 30 days prior to the due date for filing such returns.

         (e) Transfer and Other Taxes. All transfer, documentary, sales, use,
registration and other such Taxes (including all applicable real estate transfer
or gains Taxes, but not including the Canadian Federal Goods and Services Tax,
the


                                       7
<PAGE>

Canadian Federal Harmonized Sales Tax (together with the Canadian Federal Goods
and Services Tax, the "GST") and the Quebec Sales Tax (the "QST")) and related
fees and expenses (including any penalties, interest and additions to Tax, but
not including interest and penalties relating to the GST and/or QST) incurred in
connection with this Tax Sharing Agreement and the transactions contemplated
hereby shall be borne equally by Sellers and Buyer. Buyer will file any
necessary Tax Returns and other documentation with respect to all such Taxes and
fees, and Sellers shall cooperate with Buyer in timely making all filings,
returns, reports and forms as may be required to comply with the provisions of
such Tax laws. All expenses relating to filing Tax Returns and other documents
pursuant to this Section 2(e) shall be borne equally by Sellers and Buyer.

         (f) Tax Covenants. (i) Buyer covenants that it will not cause or permit
the Company, any Subsidiary or any Affiliate of Buyer to take any action on the
Closing Date other than in the ordinary course of business (including, but not
limited to, the distribution of any dividend or the effectuation of any
redemption, but other than such transactions expressly required by applicable
law or expressly permitted by this Tax Sharing Agreement or the Stock and Asset
Purchase Agreement, including but not limited to the Section 338(h)(10) Election
as described below and any elections pursuant to Code Section 338 or any similar
provision of state, local or foreign law).

         (ii) Buyer and US Seller agree to make a timely, effective and
irrevocable election under Section 338(h)(10) of the Code and under any
comparable statutes


                                       8
<PAGE>

in any other jurisdiction ("Section 338(h)(10) Election") with respect to ATT,
IXL and each of their domestic Subsidiaries, and file such election in
accordance with applicable regulations. The Section 338(h)(10) Election shall
properly reflect the Price Allocation (as hereinafter defined). As soon as
practicable after the Closing Date, Buyer shall deliver to US Seller a
statement (the "Allocation Statement") allocating the ADSP (as such term is
defined in Treasury Regulations Section 1.338-4) (the "Aggregate Deemed Sales
Price") of the assets of ATT, IXL and each of their Subsidiaries in accordance
with the Treasury regulations promulgated under Section 338(h)(10). US Seller
shall have the right to review the Allocation Statement. If within 30 days
after receipt of the Allocation Statement US Seller notifies Buyer in writing
that it objects to the allocation of one or more items reflected in the
Allocation Statement, US Seller and Buyer will negotiate in good faith to
resolve such dispute. If US Seller and Buyer fail to resolve such dispute
within 30 days, then (1) US Seller and Buyer within 5 days after such 30-day
period expires shall select an internationally recognized accounting firm which
is reasonably acceptable to US Seller and Buyer and which has no material
relationship with US Seller or Buyer (the "Accounting Referee"); (2) the
Accounting Referee shall determine whether the allocation was reasonable and,
if not reasonable, shall appropriately revise the Allocation Statement; and (3)
the costs, fees and expenses of the Accounting Referee shall be borne equally
by US Seller and Buyer. If US Seller does not respond within 30 days, or upon
resolution of the disputed items, the allocation


                                       9
<PAGE>

reflected on the Allocation Statement (as such may have been adjusted) shall be
the "Price Allocation" and shall be binding on the parties hereto. US Seller
and Buyer agree to act, and cause their Affiliates to act, in accordance with
the Price Allocation in the preparation, filing and audit of any Tax Return.

         (iii) Buyer and the Canadian Seller agree to elect jointly in the
prescribed form under section 22 of the Income Tax Act (Canada) (and the
equivalent provision of any applicable provincial tax statute, including
paragraph 184 of the Quebec Income Tax Act (Quebec)) as to the sale of the
accounts receivable forming part of the Purchased Assets and described in
section 22 of the Income Tax Act (Canada) (and any provincial equivalent) and to
designate in such election the face value of such accounts receivable and an
amount equal to the portion of the Purchase Price allocated to such assets
pursuant to Schedule 2.01(d) of the Stock and Asset Purchase Agreement, as
adjusted pursuant to Section 2.04(c) of the Stock and Asset Purchase Agreement,
as the consideration paid by the Buyer therefor. Canadian Seller and Buyer shall
each file such election with the Canada Customs and Revenue Agency ("CCRA")
forthwith after execution therefor and, in any event, with the respective income
tax returns for the year of sale to make such election.

         (iv) Buyer and Canadian Seller agree to elect jointly under section 167
of Part IX of the Excise Tax Act (Canada) (the "ETA") to have subsection
167(1.1) of Part IX of the ETA apply to the sale under the Stock and Asset
Purchase Agreement ( "Section 167 Election"); provided, however, that Buyer is


                                       10
<PAGE>

registered for purposes of the GST on the Closing Date and has provided its
business number for GST purposes ("Business Number") to Canadian Seller on or
prior to the Closing Date. The Buyer shall file the election in the manner and
within the time prescribed by the ETA.

         (v) Buyer and Canadian Seller agree to elect jointly under paragraph
75.1 of the Quebec Sales Tax Act (Quebec) in connection with the purchase of the
Purchased Assets ("Section 75.1 Election"); provided, however, that Buyer and
Canadian Seller agree to make the Section 167 Election pursuant to section
2(f)(iv) above. The Buyer shall file the Section 75.1 Election in the manner and
within the time prescribed by the Quebec Sales Tax Act (Quebec).

         (vi) Buyer and Canadian Seller agree that, should Buyer fail to provide
its Business Number to Canadian Seller on or prior to the Closing Date, or
should the Section 167 Election and/or the Section 75.1 Election be rejected by
the CCRA and/or the Quebec Ministry of Finance:

                  (A) Canadian Seller shall provide to Buyer sufficient
         documentation (including, without limitation, such documentation or
         particulars referred in subsection 223(2) of the ETA) charging to
         Buyer, at the applicable tax rate, the GST in accordance with the ETA,
         and/or the QST in accordance with the Quebec Sales Tax Act (Quebec), in
         connection with the sale of the Canadian Business.

                  (B) Buyer shall pay to Canadian Seller forthwith and not less
         than 10 days following the receipt of the documentation referred to in
         section


                                       11
<Page>

         2(f)(vi)(A) above, the full amount of GST and/or QST payable by Buyer
         and required to be collected by Canadian Seller in connection with the
         sale of the Canadian Business.

                  (C) Canadian Seller shall provide to Buyer, within 10 days of
         receipt of a written request from Buyer, an amount equal to 50% of the
         taxes that Buyer is required to pay to Canadian Seller pursuant to
         section 2(f)(vi)(B) above (the "Reimbursable Amount"); provided,
         however, that Canadian Seller has received the Business Number from
         Buyer on or prior to the Closing Date.

                  (D) Buyer shall submit to the appropriate government
         authorities any necessary invoices, agreements and documentation
         required for the Buyer to claim the input tax credit and the equivalent
         thereof pursuant to the Quebec Sales Tax Act (Quebec) for the GST
         and/or QST paid to Canadian Seller pursuant to section 2(f)(vi)(B)
         above, with Buyer's next monthly GST and/or QST tax return after the
         month the CCRA and/or the Quebec Ministry of Finance advises Buyer in
         writing that the Section 167 Election and/or the Section 75.1 Election,
         as the case may be, is considered to be invalid or inapplicable.

                  (E) Buyer shall pay to Canadian Seller the Reimbursable
         Amount, if any, no later than 45 days after Buyer files its next
         monthly GST and/or QST tax return (the "Due Date") as contemplated in
         section 2(f)(vi)(D) above; provided, however, if Buyer does not receive
         any credit (including any input tax credit), offset, refund, or any
         other benefit (the "Refund") in respect of or relating to the GST or
         QST paid to Canadian Seller on or prior to the Due Date,


                                       12
<PAGE>

         Buyer shall pay to Canadian Seller the Reimbursable Amount within 2
         business days after Buyer receives the Refund, but this exception to
         the payment on the Due Date shall be applicable only if Buyer
         demonstrates in good faith that the failure of Buyer to receive such
         Refund by the Due Date is not attributable to any action or omission by
         Buyer or any of its Affiliates, including the taking or omitting to
         take any action that is reasonably necessary or advisable in connection
         with receiving such Refund.

                  (F) Any penalties or interest resulting from the rejection of
         Section 167 Election and/or Section 75.1 Election made under this Tax
         Sharing Agreement shall be borne equally by Buyer and Canadian Seller.

         (vii) Canadian Seller shall have delivered to Buyer evidence
satisfactory to Buyer that all taxes required to be paid by Canadian Seller
under the Retail Sales Tax Act (Ontario) have been paid and, in the case of the
Retail Sales Tax Act (Ontario), the delivery of a certificate issued under
section 6 of that Act which covers all periods up to and including the Closing
Date shall constitute satisfactory evidence for the purposes of the taxes
required to be paid under that Act.

         (viii) Sellers agree not to elect under Section 172(b)(3) of the Code
to relinquish the carryback period with respect to any net operating loss for
the Sellers' taxable year ending in 2002 that includes the transaction
contemplated by the Stock and Asset Purchase Agreement.

         3. Indemnification.


                                       13
<PAGE>


         (a) General Provisions. Except to the extent such Taxes are reserved
for on the Closing Balance Sheet, Sellers agree to indemnify and hold Buyer
(including the Companies and the Subsidiaries) and its Affiliates, (and their
respective officers, directors, employees and agents) (each in its capacity as
an indemnitee, an "Indemnitee") harmless from and against (i) all liability for
Taxes of the Companies and the Subsidiaries for any Seller Year and portion of
any Straddle Period ending on the Closing Date and any expense or other
liability (including, without limitation, reasonable attorney fees) arising out
of or incident to the imposition, assessment or assertion of such Taxes, (ii)
all liability for Taxes of the Canadian Seller to the extent such liability
results in a Lien on any of the Purchased Assets, and any expense or other
liability (including, without limitation, reasonable attorney fees) arising out
of or incident to the imposition, assessment or assertion of such Taxes, (iii)
all liability (as a result of Treasury Regulation ss. 1.1502-6(a) or similar
state, local or foreign law or otherwise) for Taxes of Sellers, the Companies
and the Subsidiaries or any other corporation which is or has been affiliated
with Sellers, the Companies and the Subsidiaries on or prior to the Closing Date
and any expense or other liability (including, without limitation, reasonable
attorney fees) arising out of or incident to the imposition, assessment or
assertion of such Taxes, (iv) any Tax resulting directly or indirectly from the
Section 338(h)(10) Election or as a consequence of any election pursuant to
Section 338 of the Code or any similar provision of any state, local or foreign
law and any expense or other liability (including, without


                                       14
<PAGE>


limitation, reasonable attorney fees) arising out of or incident to the
imposition, assessment or assertion of such Tax, and (v) any Tax and any expense
or other liability (including, without limitation, reasonable attorney fees)
arising out of or incident to the imposition, assessment or assertion of such
Tax or other liability for any taxable period or portion thereof ending on or
prior to the Closing Date resulting from any breach of any representation in
Section 3.22 of the Stock and Asset Purchase Agreement. Notwithstanding the
foregoing, Sellers shall not indemnify and hold harmless any Indemnitee from or
against any liability for Taxes attributable to (i) any action not in the
ordinary course of business taken on the Closing Date by Buyer (other than any
such action expressly required by applicable law or expressly required or
permitted by the Stock and Asset Purchase Agreement or this Tax Sharing
Agreement), such action not in the ordinary course of business being referred to
as a "Buyer Tax Act" (provided that (1) any action that results in a clawback or
recapture of Irish CGT, stamp duty or company capital duty as a result of True
Temper Ireland having claimed, received or enjoyed any exemption, reduction or
relief from Irish Tax, and (2) the Section 338(h)(10) Election or any election
under Section 338(g) of the Code, shall not constitute a Buyer Tax Act for
purposes of this Tax Sharing Agreement), or (ii) a breach by Buyer of its
obligations under this Tax Sharing Agreement. If Sellers' indemnification
obligation under this Section 3(a) arises in respect of an adjustment which
makes allowable to Buyer, any of its Affiliates or, effective upon the Closing,
any Company or any Subsidiary any deduction, amortization,


                                       15
<PAGE>

exclusion from income or other allowance ("Tax Benefit") which would not, but
for such adjustment, be allowable, then any payment by Sellers to Buyer pursuant
to this Section 3(a) shall be an amount equal to (x) the amount otherwise due
but for this paragraph (including, but not limited to, any Tax on any taxable
income recognized by Buyer as a result of any indemnification payments), minus
(y) the actual Tax Benefit realized by Buyer (net of the present value of any
actual reduction in Tax Benefit available to Buyer as a result of the treatment
of the indemnity payment as an adjustment to the purchase price) as determined
by Buyer's accountants.

         Buyer (in its capacity as an indemnifying party, an "Indemnifying
Party") agrees to, and shall cause the Companies and the Subsidiaries to,
indemnify and hold Sellers and their Affiliates (and their respective officers,
directors, employees and agents) (each in its capacity as in indemnitee, an
"Indemnitee") harmless from and against (i) all liability for Taxes of the
Companies and the Subsidiaries for any Buyer Year and the portion of any
Straddle Period beginning after the Closing Date, (ii) all liability for Taxes
attributable to a Buyer Tax Act or to a breach by Buyer of its obligations under
this Tax Sharing Agreement or the Stock and Asset Purchase Agreement, and (iii)
any Tax imposed on any Company or any Subsidiary that Sellers have no obligation
to make any payment pursuant to Section 3(a).

         In the case of any Straddle Period:


                                       16
<PAGE>


         (i) real, personal and intangible property Taxes ("Property Taxes") of
a Company or a Subsidiary, or the Canadian Seller primarily relating to the
Canadian Business, for property held during the portion of the Straddle Period
ending on the Closing Date shall be equal to the amount of such Property Taxes
for the entire Straddle Period multiplied by a fraction, the numerator of which
is the number of days in the Straddle Period prior to and including the Closing
Date and the denominator of which is the number of days in the Straddle Period
(for purposes of this paragraph (i), Straddle Period shall include the taxable
period for Property Taxes of Canadian Seller); and

         (ii) the Taxes (other than Property Taxes) of a Company or a Subsidiary
for the portion of the Straddle Period ending on the Closing Date shall be
computed as if such taxable period ended as of the close of business on the
Closing Date.

         Sellers' indemnity obligation in respect of Taxes for a Straddle Period
shall initially be effected by their payment to Buyer of the excess of (x) such
Taxes as are paid or payable for the portion of the Straddle Period ending on
the Closing Date over (y) the amount of such Taxes for the Straddle Period paid
by Sellers or any of their Affiliates and the balance of such Tax liabilities
reserved for, if any, on the Closing Balance Sheet, plus the amount of such
Taxes paid by the Companies or the Subsidiaries on or prior to the Closing Date
for the Straddle Period. Sellers shall initially pay such excess to Buyer at
least 3 days prior to the return, report or form with respect to the final
liability for such Taxes is filed. If


                                       17
<PAGE>

the sum of (1) the amount of such Taxes paid by Sellers or any of their
Affiliates (other than the Companies or the Subsidiaries), (2) the balance of
such Tax liabilities reserved for on the Closing Balance Sheet, and (3) the
amount of such Taxes paid by the Companies or the Subsidiaries on or prior to
the Closing Date for the Straddle Period, exceeds the amount payable by Sellers
pursuant to clause (x) of the second preceding sentence, Buyer shall pay such
excess to Sellers at least 3 days prior to the return, report or form with
respect to the final liability for such Taxes is filed. The payments to be made
pursuant to this paragraph by Sellers or Buyer with respect to a Straddle Period
shall be appropriately adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to Straddle
Period Taxes.

         (b) Losses Net of Insurance, etc. The amount of any loss, liability,
claim, damage, expense or Tax (collectively, a "Loss") for which indemnification
is provided under this Section 3 shall be net of any amounts recovered (net of
reasonable costs of collection of such amounts including, but not limited to,
reasonable attorney fees) by the Indemnitee under insurance policies with
respect to such Loss and shall be reduced to take account of any net Tax benefit
actually realized by the Indemnitee arising from the incurrence or payment of
any such Loss. In computing the amount of any such Tax benefit, the Indemnitee
shall be deemed to recognize all other items of income, gain, loss deduction or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence or payment of any indemnified Loss. For
purposes of


                                       18
<PAGE>

this Tax Sharing Agreement, an Indemnitee shall be deemed to have "actually
realized" a net Tax benefit to the extent that, and at such time as, the amount
of Taxes payable by such Indemnitee is reduced below the amount of Taxes such
Indemnitee would be required to pay but for the incurrence or payment of such
Loss as determined by such Indemnitee's accountants. The amount of any reduction
hereunder shall be adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to the
Indemnitee's liability for Taxes and payments between Sellers and Buyer to
reflect such adjustment shall be made if necessary. Any indemnity payment under
this Tax Sharing Agreement or the Stock and Asset Purchase Agreement shall be
treated as an adjustment to the purchase price for tax purposes, unless a final
determination (which shall include the execution of a Form 870-AD or successor
form) with respect to the Indemnitee or any of its Affiliates causes any such
payment not to be treated as an adjustment to the purchase price for Federal Tax
purposes.

         (c) Termination of Indemnification. The obligations to indemnify and
hold harmless a party hereto pursuant to Section 3(a) shall terminate 60 days
after the applicable statutes of limitations with respect to the Tax liabilities
in question expire (giving effect to any waiver, mitigation or extension
thereof); provided, however, such obligations to indemnify and hold harmless
shall not terminate with respect to any item as to which the Indemnitee or the
related party thereto shall have, before the expiration of the applicable
period, previously made a claim by


                                       19
<PAGE>

delivering a notice of such claim (stating in reasonable detail the basis of
such claim) to the Indemnifying Party.

         (d) Procedures Relating to Indemnification of Tax Claims. If a claim
shall be made by any taxing authority, which, if successful, might result in an
indemnity payment to Buyer pursuant to Section 3(a), Buyer shall notify Sellers
in writing of such claim (a "Tax Claim") within 10 days of receipt of any
written notice from the taxing authority, and shall give Sellers such other
information with respect thereto as Sellers may reasonably request.

         With respect to any Tax Claim (other than a Tax Claim relating solely
to Taxes of the Company for a Straddle Period), Sellers may, at their own
expense, participate in and assume the defense of any such claim, suit, action,
litigation or proceeding (including any Tax audit). If Sellers assume such
defense, Sellers shall control all proceedings taken in connection with such Tax
Claim (including selection of counsel) and may, in their reasonable discretion,
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with any taxing authority with respect thereto, and may, in their
reasonable discretion, either pay the Tax claimed and sue for a refund where
applicable law permits such refund suits or contest the Tax Claim in any
permissible manner; provided, however, that the prior written consent of Buyer
shall be required for any matter that may reasonably be expected to adversely
affect Buyer's tax position for any Buyer Year. Sellers and Buyer shall jointly
control all proceedings taken in


                                       20
<PAGE>

connection with any Tax Claim relating solely to Taxes of the Companies or the
Subsidiaries for a Straddle Period.

         Buyer, the Companies and the Subsidiaries shall cooperate reasonably
with Sellers in contesting any Tax Claim, which cooperation shall include,
without limitation, the retention and (upon Sellers' request) the provision to
Sellers of records and information which are reasonably relevant to such Tax
Claim, and making employees available on a mutually convenient basis to provide
additional information or explanation of any material provided hereunder.

         In no case shall Buyer, the Companies or the Subsidiaries settle or
otherwise compromise any Tax Claim relating to a Seller Year or a Straddle
Period without Sellers' prior written consent (which consent shall not be
unreasonably withheld). Neither party shall settle a Tax Claim relating solely
to Taxes of a Company or a Subsidiary for a Straddle Period without the other
party's prior written consent (which consent shall not be unreasonably
withheld).

         (e) Resolution of Claims. Buyer and Sellers shall cooperate with each
other with respect to resolving any claim or liability with respect to which one
party is obligated to indemnify the other party hereunder, including by making
commercially reasonable efforts to resolve any such claim or liability; provided
that such party shall not be required to make such efforts if they would be
detrimental in any material respect to such party.

         (f) To the extent that any indemnity payment pursuant to this Tax
Sharing Agreement or the Stock and Asset Purchase Agreement by the Sellers


                                       21
<PAGE>

relates to True Temper Ireland, Sellers (or any other indemnifying party) shall
make such indemnity payment to the Buyer as a refund of purchase price paid in
respect of shares of True Temper Ireland.

         4. Guarantees. USI (the "Guarantor") hereby unconditionally guarantees
to Buyer (the "Guaranty") that Guarantor will duly and punctually pay and/or
perform, as the case may be, all obligations, liabilities and undertakings of
Sellers under this Tax Sharing Agreement.

         This Guaranty is an absolute, unconditional and continuing Guaranty by
the Guarantor of the obligations, liabilities and undertakings of Sellers under
this Tax Sharing Agreement in accordance with their terms and not of their
collectibility only. Enforcement of the liabilities and obligations of the
Guarantor hereunder is in no way conditioned upon any requirement that Buyer
first attempts to collect or take any action against Sellers, or any other
person primarily or secondarily liable with respect to such obligations, or
resort to any security or other means of obtaining payment of any of the
obligations, liabilities and undertakings of Sellers which Sellers may have or
may acquire after the date hereof or upon any contingency whatsoever; provided,
however, that nothing herein shall adversely affect Guarantor's rights to assert
any defense available to Sellers under this Tax Sharing Agreement, the Stock and
Asset Purchase Agreement or at law. Upon any default by Sellers in the full and
punctual payment and/or performance of any or all of the obligations under this
Tax Sharing Agreement, the liabilities and obligations of the Guarantor
hereunder


                                       22
<PAGE>


shall, at the option of Buyer, become forthwith due and payable to Buyer,
without demand or notice of any nature, all of which are hereby expressly
waived by the Guarantor. Payments by the Guarantor hereunder may be required by
Buyer on any number of occasions until such time as the obligations of Sellers
under this Tax Sharing Agreement are paid or satisfied, as the case may be, in
full in accordance with their terms.

         5. Notwithstanding any other provision of this Tax Sharing Agreement,
True Temper Seller's aggregate liability under this Tax Sharing Agreement, the
Stock and Asset Purchase Agreement and Ancillary Agreements shall in no event
exceed $3 million.

         6. Miscellaneous.

         (a) Except as otherwise expressly provided in this Tax Sharing
Agreement, the provisions in Article 12 (other than sections 12.03) of the Stock
and Asset Purchase Agreement shall apply equally to this Tax Sharing Agreement.

         (b) The fees, costs and expenses of Hilco Appraisal Services, LLC,
Cushman & Wakefield and Arthur Andersen in connection with the appraisal of
inventory, machinery and equipment, real estate and audits, which shall not
exceed $500,000 in the aggregate, shall be borne by the Buyer.


                                       23
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                       JUSI HOLDINGS, INC.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       SPEAR & JACKSON PLC


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       USI GLOBAL CORP.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       USI CANADA INC.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:


                                       24
<PAGE>

                                       ATT ACQUISITION CO.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       For purposes of Section 4 only
                                       U.S. INDUSTRIES, INC.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:


                                       25


</TEXT>
</DOCUMENT>
