Lifetime Brands (LCUT)

NOTE B – MIKASA ACQUISITION

On June 6, 2008, the Company acquired the business and certain assets of Mikasa, Inc. (“Mikasa”) from Arc International SA (“ARC”). Mikasa is a leading provider of dinnerware, crystal stemware, barware, flatware and decorative accessories. Mikasa’s products are distributed through department stores, specialty stores and big box chains, as well as through the Internet. The preliminary purchase price was $20.7 million, consisting of (i) $12.3 million of cash paid at closing, (ii) $3.3 million of certain liabilities assumed at closing, (iii) $5.0 million of cash to be paid on December 15, 2008, and (iv) acquisition related costs of $127,000. The agreement also requires the Company to pay ARC an amount by which the sum of 5% of the annual net sales of Mikasa products for 2009, 2010 and 2011, exceeds the $5.0 million payment due on December 15, 2008.

The Company accounted for its acquisition of the business and certain assets of Mikasa under the purchase method of accounting in accordance with SFAS No. 141. Accordingly, the results of operations of Mikasa have been included in the Company’s condensed consolidated statement of operations from June 6, 2008. The cash purchase price was funded by borrowings under the Company’s Credit Facility. The Mikasa acquisition was not deemed material; accordingly, summary pro forma financial information has not been presented.

A preliminary valuation of the assets acquired from Mikasa indicated an excess of the fair value of the assets acquired from Mikasa over the preliminary purchase price. The Company expects to complete the determination of the fair value of the assets acquired and the related allocation of the purchase price during the quarter ending December 31, 2008. In accordance with SFAS No. 141, since the Company is subject to potential contingent consideration that could result in an addition to the preliminary purchase price, to the extent that the fair value of the assets acquired exceeds the total purchase price, after a reduction to the carrying value of the non current assets acquired, at the end of the contingency period, the Company will recognize the excess value as an extraordinary gain. To the extent that the additional purchase price, if any, at the end of the contingency period exceeds the excess value, the Company will record additional purchase price related to the Mikasa acquisition.

NOTE B – MIKASA ACQUISITION

On June 6, 2008, the Company acquired the business and certain assets of Mikasa, Inc. (“Mikasa”) from Arc International SA (“ARC”). Mikasa is a leading provider of dinnerware, crystal stemware, barware, flatware and decorative accessories. Mikasa’s products are distributed through department stores, specialty stores and big box chains, as well as through its own Internet website. The preliminary purchase price was $20.1 million, consisting of (i) $12.3 million of cash paid at closing, (ii) $2.7 million of certain liabilities assumed at closing, (iii) $5.0 million of cash to be paid on December 15, 2008, and (iv) acquisition related costs of $100,000. The agreement also requires the Company to pay ARC an amount by which the sum of 5% of the annual net sales of Mikasa for 2009, 2010 and 2011, exceeds $5.0 million. On a preliminary basis the purchase price has been allocated to inventory acquired.