Illinois Tool Works, Inc. & Subsidiaries - Page 6




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               disclosed on the Schedules or Exhibits to this                         
               Agreement;                                                             
               Closing was to occur after petitioner completed a due                  
          diligence review and other specified events.  The purchase                  
          agreement disclosed that DeVilbiss had created a $400,000 reserve           
          for pending patent liability claims and legal fees expected to be           
          incurred in litigating the Lemelson lawsuit.  After the price was           
          set for the acquisition and during the due diligence period,                
          DeVilbiss made disclosure to petitioner of pending lawsuits,                
          including the Lemelson lawsuit.  DeVilbiss provided to petitioner           
          a schedule containing the following entry:                                  
               CDCA                     STATE      DATECLAIM AMT                      
               Lemelson, Jerome v. Champion   DE    06/19/85      Open                
               ACTION    Patent infringement claim - Robot Apparatus                  
               COMMENTS  Latest settlement demand is $500,000.  Further               
                         discovery and trial pending.                                 
          During the due diligence period, Becker expressed his opinion to            
          representatives of petitioner that he did not believe that the              
          Lemelson lawsuit was worth anything.  Although Champion remained            
          the named defendant in the Lemelson lawsuit, petitioner became              
          the party in interest after petitioner acquired the assets of               
          DeVilbiss.                                                                  
               During the due diligence period, representatives of                    
          petitioner, including Gary F. Anton (Anton), petitioner’s                   
          director of audits; Thomas Buckman (Buckman), petitioner’s vice             
          president of patents and technology; and John Patrick O’Brien               






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Last modified: May 25, 2011