10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to         

Commission File Number: 1-13792

Systemax Inc.

 (Exact name of registrant as specified in its charter)

Delaware	11-3262067
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

11 Harbor Park Drive

Port Washington, New York   11050

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 608-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $ .01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes oNo o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best knowledge of the registrant, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o	Accelerated Filer x
Non-Accelerated Filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No x

        The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2009, which is the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $117,681,986. For purposes of this computation, all executive officers and directors of the Registrant and all parties to the Stockholders Agreement dated as of June 15, 1995 have been deemed to be affiliates. Such determination should not be deemed to be an admission that such persons are, in fact, affiliates of the Registrant.

The number of shares outstanding of the registrant’s common stock as of March 5, 2010 was 36,457,941 shares.

Documents incorporated by reference: Portions of the Proxy Statement of Systemax Inc. relating to the 2010 annual meeting of stockholders are incorporated by reference in Part III hereof.

TABLE OF CONTENTS

Part I
Item 1.	Business	4
	General	4
	Products	4
	Sales and Marketing	5
	Customer Service, Order Fulfillment and Support	7
	Suppliers	7
	Competition and Other Market Factors	7
	Employees	8
	Environmental Matters	9
	Financial Information About Foreign and Domestic Operations	9
	Available Information	10
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Submission of Matters to a Vote of Security Holders	18
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Selected Financial Data	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	32
Item 9A.	Controls and Procedures	32
Item 9B.	Other Information	33
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13.	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accounting Fees and Services	34
Part IV
Item 15.	Exhibits and Financial Statement Schedules	34
	Signatures	38

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PART I

Unless otherwise indicated, all references herein to Systemax Inc. (sometimes referred to as “Systemax,” the “Company” or “we”) include its subsidiaries.

Forward Looking Statements

This report contains forward looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934).  Additional written or oral forward looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise.  Statements contained in this report that are not historical facts are forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future operations, financing needs, compliance with financial covenants in loan agreements, plans for acquisition or sale of assets or businesses and consolidation of operations of newly acquired businesses, and plans relating to products or services of the Company, assessments of materiality, predictions of future events and the effects of pending and possible litigation, as well as assumptions relating to the foregoing.  In addition, when used in this report, the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” and “plans” and variations thereof and similar expressions are intended to identify forward looking statements.

Forward looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations.  Consequently, future events and results could differ materially from those set forth in, contemplated by, or underlying the forward looking statements contained in this report.  Statements in this report, particularly in “Item 1. Business,” “Item 1A. Risk Factors,” “Item 3. Legal Proceedings,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Notes to Consolidated Financial Statements describe certain factors, among others, that could contribute to or cause such differences.

Other factors that may affect our future results of operations and financial condition include, but are not limited to, unanticipated developments in any one or more of the following areas, as well as other factors which may be detailed from time to time in our Securities and Exchange Commission filings:

·risks involved with e-commerce, including possible loss of business and customer dissatisfaction if outages or other computer-related problems should preclude customer access to us

·significant changes in the computer products retail industry, especially relating to the distribution and sale of such products

·timely availability of existing and new products

·risks associated with delivery of merchandise to customers by utilizing common delivery services

·the effect on us of volatility in the price of paper and periodic increases in postage rates

·borrowing costs or availability

·pending or threatened litigation and investigations

·the availability of key personnel

Readers are cautioned not to place undue reliance on any forward looking statements contained in this report, which speak only as of the date of this report.  We undertake no obligation to publicly release the result of any revisions to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected events.

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Item 1. Business.

General

Systemax is primarily a direct marketer of brand name and private label products. Our operations are organized in three reportable business segments — Technology Products, Industrial Products and Software Solutions.

Our Technology Products segment sells computers, computer supplies and consumer electronics which are marketed in North America and Europe. Except for certain personal computer (“PC”) and related products that we assemble ourselves and sell on a private label basis, substantially all of our products are manufactured by other companies. Technology Products accounted for 94%, 92% and 92% of our net sales in 2009, 2008, and 2007, respectively.

Our Industrial Products segment sells a wide array of material handling equipment, storage equipment and consumable industrial items which are marketed in North America. Most of these products are manufactured by other companies.  Some products are manufactured for us to our own design and marketed on a private label basis. ™. Industrial products accounted for 6%, 8% and 8% of our net sales in 2009, 2008, and 2007, respectively.

In June, 2009, the Company announced plans to exit the Software Solutions segment as the result of economic conditions and difficulties in marketing the segment’s products successfully (See Note 7 to the Consolidated Financial Statements included in Item 15 of this Form 10-K.). Our Software Solutions segment participated in the emerging market for on-demand, web-based business software applications through the marketing of our PCS ProfitCenter Software™ application. As of December 31, 2009, substantially all of the third party business activities of the Software Solutions segment had been ended.

See Note 10 to the Consolidated Financial Statements included in Item 15 of this Form 10-K for additional financial information about our business segments as well as information about our geographic operations.

The Company was incorporated in Delaware in 1995. Certain predecessor businesses which now constitute part of the Company have been in business since 1949. Our headquarters office is located at 11 Harbor Park Drive, Port Washington, New York.

Recent Developments

On September 18, 2009, the Company acquired WStore Europe SA and its subsidiaries, (“WStore”), a European supplier of business IT products and software solutions with operations in France and the United Kingdom. The purchase price (after giving effect to the conversion of Euros to U.S. dollars) was approximately $4.4 million in cash, $2.2 million of which was placed into an escrow account for one year to secure the sellers’ indemnification obligations under the purchase agreement. This acquisition expands the Company’s business in France and, to a lesser extent, the United Kingdom.

On April 5, 2009, the Company acquired certain intellectual property and ecommerce assets owned Circuit City Stores, Inc. and Circuit City Stores West Coast, Inc. (‘the Sellers”) for $14.0 million in cash. In addition, the Company will pay the Sellers a royalty based on a percentage of sales over a thirty month period dependent upon levels of sales achieved from the acquired assets, with a minimum payment of $3.0 million. This acquisition expands the Company’s ecommerce market.

Products

We offer hundreds of thousands of brand name and private label products. We endeavor to expand and keep current the breadth of our product offerings in order to fulfill the increasingly wide range of product needs of our customers.

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Our computer product include desktops, laptops and notebooks and are primarily offerings of brand name original equipment manufacturers, as well as our own private label brands. Computer supplies and consumer electronics related products include supplies such as laser printer toner cartridges and ink jet printer cartridges; media such as flash memory, recordable disks and magnetic tape cartridges; peripherals such as hard disks, CD-ROM and DVD drives, printers and scanners; memory upgrades; data communication and networking equipment; monitors; digital cameras; plasma and LCD TVs; MP3 and DVD players; PDAs; and packaged software.

We assemble our private label PCs in our ISO-9001:2000 certified facility in Fletcher, Ohio.  We purchase components and subassemblies from suppliers in the United States as well as overseas. Certain parts and components for our PCs are obtained from a limited group of suppliers.  We also utilize licensed technology and computer software in the assembly of our PCs. For a discussion of risks associated with these licenses and suppliers, see Item 1A, Risk Factors.

Our industrial products include material handling equipment, storage and shelving equipment, work benches, packaging supplies, furniture and office products, food service equipment and supplies, janitorial and maintenance supplies, HVAC, electrical and plumbing supplies and consumable industrial products such as first aid items, safety items, protective clothing and OSHA compliance items.

Sales and Marketing

We market our products to both individual consumers and business customers. Our business customers include for-profit businesses, educational organizations and government entities. We have developed numerous proprietary customer and prospect databases.

We continue to have strong growth in sales to individual consumers, through e-commerce means and retail stores. To reach our individual consumer audience, we use online methods such as website campaigns, banner ads and e-mail campaigns. We are able to monitor and evaluate the results of our various advertising campaigns to enable us to execute them in the most cost-effective manner. We combine our use of e-commerce initiatives with catalog mailings, which generate online orders and calls to inbound sales representatives. These sales representatives use our information systems to fulfill orders and explore additional customer product needs. Sales to individual consumers are generally fulfilled from our own stock, requiring us to carry more inventory than we would for our business customers. We also periodically take advantage of attractive product pricing by making opportunistic bulk inventory purchases with the objective of turning them quickly into sales. We have also successfully increased our sales to individual consumers by using retail outlet stores. Over the past several years, the Company has expanded its brick and mortar retail operations through the CompUSA acquisition and by opening new stores.

We have established a multi-faceted direct marketing system to business customers, consisting primarily of our relationship marketers, catalog mailings and proprietary internet websites, the combination of which is designed to maximize sales. Our relationship marketers focus their efforts on our business customers by establishing a personal relationship between such customers and a Systemax account manager. The goal of the relationship marketing sales force is to increase the purchasing productivity of current customers and to actively solicit newly targeted prospects to become customers. With access to the records we maintain, our relationship marketers are prompted with product suggestions to expand customer order values. In certain countries, we also have the ability to provide such customers with electronic data interchange (“EDI”) ordering and customized billing services, customer savings reports and stocking of specialty items specifically requested by these customers. Our relationship marketers’ efforts are supported by frequent catalog mailings and e-mail campaigns, both of which are designed to generate inbound telephone sales, and our interactive websites, which allow customers to purchase products directly over the Internet. We believe that the integration of our multiple marketing methods enables us to more thoroughly penetrate our business, educational and government customer base. We believe increased internet exposure leads to more internet-related sales and also generates more inbound telephone sales; just as we believe catalog mailings and email campaigns which feature our websites results in greater internet-related sales.

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E-commerce

The worldwide growth in active internet users has made e-commerce a significant opportunity for sales growth.

The increase in our internet-related sales enables us to leverage our advertising spending. We currently operate multiple e-commerce sites, including:

North America	Europe
www.tigerdirect.com	www.misco.co.uk
www.compusa.com	www.misco.de
www.circuitcity.com	www.misco.fr
www.compusagoved.com	www.misco.nl
www.compusabusiness.com	www.misco.it
www.tigerdirect.ca	www.misco.es
www.infotelusa.com	www.misco.se
www.globalcomputer.com	www.misco.at
www.globalgoved.com	www.misco.ch
www.systemaxpc.com	www.misco.be
www.dealopro.com
www.globalindustrial.com	www.misco.ie
	www.wstore.co.uk
	www.inmac-wstore.com
	www.wstore.fr
	www.inmac-wstore.eu
	www.inmac-wstore.fr
	www.inmac.com
	www.dealopro.com
	www.dealopro.fr

We are continually upgrading the capabilities and performance of these websites. Our internet sites feature on-line catalogs of hundreds of thousands of products, allowing us to offer a wider variety of computer and industrial products than our printed catalogs.  Our customers have around-the-clock, on-line access to purchase products and we have the ability to create targeted promotions for our customers’ interests. Many of our internet sites also permit customers to purchase “build to order” PCs configured to their own specifications.

In addition to our own e-commerce websites, we have partnering agreements with several of the largest internet shopping and search engine providers who feature our products on their websites or provide “click-throughs” from their sites directly to ours. These arrangements allow us to expand our customer base at an economical cost.

Catalogs

We currently produce a total of 15 full-line and targeted specialty catalogs in North America and Europe under distinct titles. Our portfolio of catalogs includes such established brand names as TigerDirect.com™, Global Computer Supplies™, CompUSA, TigerDirect.ca™, Misco®, Global Industrial™, ArrowStar™ and Nexel™.  Full-line computer product catalogs offer products such as PCs, notebooks, peripherals, computer components, magnetic media, data communication, networking and power protection equipment, ergonomic accessories, furniture and software. Full-line industrial product catalogs offer products such as material handling products and industrial supplies. Specialty catalogs contain more focused product offerings and are targeted to individuals most likely to purchase from such

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catalogs. We mail catalogs to both businesses and individual consumers. In the case of business mailings, we mail our catalogs to many individuals at a single business location, providing us with multiple points-of-entry. Our in-house staff designs all of our catalogs, which reduces overall catalog expense and shortens catalog production time. . Our catalogs are printed by third parties under fixed pricing arrangements. The commonality of certain core pages of our catalogs also allows for economies of scale in catalog production.

With increased focus on internet advertising, the distribution of our catalogs decreased to 46 million in 2009, which was 26.9% less than in the prior year. In 2009, we mailed approximately 38 million catalogs in North America, a 18.5% decrease from last year and approximately 8 million catalogs in Europe, or 51.3% fewer than 2008.

Customer Service, Order Fulfillment and Support

We receive orders through the internet, by telephone, electronic data interchange and by fax. We generally provide toll-free telephone number access for our customers in countries where it is customary. Certain domestic call centers are linked to provide telephone backup in the event of a disruption in phone service.

Certain of our products are carried in stock, and orders for such products are fulfilled on a timely basis directly from our distribution centers, typically within one the day of the order. We operate out of multiple sales and distribution facilities in North America and Europe. Orders are generally shipped by third-party delivery services. We maintain relationships with a number of large distributors in North America and Europe that also deliver products directly to our customers.

We provide extensive technical telephone support to our private label PC customers.  We maintain a database of commonly asked questions for our technical support representatives, enabling them to respond quickly to similar questions. We conduct regular on-site training seminars for our sales representatives to help ensure that they are well trained and informed regarding our latest product offerings.

Suppliers

We purchase substantially all of our products and components directly from manufacturers and large wholesale distributors. In 2009, one vendor accounted for 12.0% of our purchases and another vendor accounted for 11.3% of our purchases. One vendor accounted for 12.0% and 14.4% of our purchases in 2008 and 2007, respectively. The loss of these vendors, or any other key vendors, could have a material adverse effect on us.

Certain private label products are manufactured by third-parties to our specifications. Many of these private label products have been designed or developed by our in-house product design and development teams.

Competition and Other Market Factors

Technology Products

The North American and European technology product markets are highly competitive, with many U.S., Asian and European companies vying for market share.  There are few barriers of entry, with these products being sold through multiple channels of distribution, including direct marketers, local and national retail computer stores, computer resellers, mass merchants, over the internet and by computer and office supply superstores.

Timely introduction of new products or product features are critical elements to remaining competitive. Other competitive factors include product performance, quality and reliability, technical support and customer service, marketing and distribution and price. Some of our competitors have stronger brand-

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recognition, broader product lines and greater financial, marketing, manufacturing and technological resources than us.  Additionally, our results could also be adversely affected should we be unable to maintain our technological and marketing arrangements with other companies, such as Microsoft®, Intel® and Advanced Micro Devices®.

With conditions in the market for technology products remaining highly competitive, reductions in retail prices, as we experienced in 2009, would adversely affect our revenues and profits. Additionally, we rely in part upon the introduction of new technologies and products by other manufacturers in order to sustain long-term sales growth and profitability. There is no assurance that the rapid rate of such technological advances and product development will continue.

Current economic conditions raise additional factors as the loss of consumer confidence in the Company’s markets could result in a decrease of spending in the categories of products we sell.   It is also possible that as manufacturers react to the marketplace they may reduce manufacturing capacity and create shortages of product.

Industrial Products

The market for the sale of industrial products in North America is highly fragmented and is characterized by multiple distribution channels such as small dealerships, direct mail distribution, internet-based resellers, large warehouse stores and retail outlets. We also face competition from manufacturers’ own sales representatives, who sell industrial equipment directly to customers, and from regional or local distributors. Many high volume purchasers, however, utilize catalog distributors as their first source of product. In the industrial products market, customer purchasing decisions are primarily based on price, product selection, product availability, level of service and convenience.  We believe that direct marketing via sales representatives, catalog and the internet are effective and convenient distribution methods to reach mid-sized facilities that place many small orders and require a wide selection of products. In addition, because the industrial products market is highly fragmented and generally less brand oriented, it is well suited to private label products.

Software Solutions

In June 2009, the Company announced plans to exit the Software Solutions segment as the result of economic conditions and difficulties in marketing the segment’s products successfully (See Note 7 to the Consolidated Financial Statements included in Item 15 of this Form 10-K). Our Software Solutions segment participated in the emerging market for on-demand, web-based business software applications through the marketing of our PCS ProfitCenter Software™ application. As of December 31, 2009 substantially all of the third party business activities of the Software Solutions segments had been ended.

Employees

As of December 31, 2009, we employed a total of approximately 5,000 employees, of whom 3,500 were in North America and 1,500 were in Europe.

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Seasonality

As the Company’s consumer channel sales have grown significantly in the past few years, the fourth quarter has represented a greater portion of annual sales than historically. Net sales have historically been modestly weaker during the second and third quarters as a result of lower business activity during those months.  See Item 7, Management’s Discussions and Analysis of Financial Condition and Results of Operations; Seasonality.

Environmental Matters

Under various national, state and local environmental laws and regulations in North America and Western Europe, a current or previous owner or operator (including the lessee) of real property may become liable for the costs of removal or remediation of hazardous substances at such real property. Such laws and regulations often impose liability without regard to fault. We lease most of our facilities. In connection with such leases, we could be held liable for the costs of removal or remedial actions with respect to hazardous substances. Although we have not been notified of, and are not otherwise aware of, any material real property environmental liability, claim or non-compliance, there can be no assurance that we will not be required to incur remediation or other costs in connection with real property environmental matters in the future.

Financial Information About Foreign and Domestic Operations

We conduct our business in North America (the United States, Puerto Rico and Canada) and Europe.  Approximately 33.5%, 37.9% and 39.7% of our net sales during 2009, 2008 and 2007, respectively were made by subsidiaries located outside of the United States. For information pertaining to our international operations, see Note 10, “Segment and Related Information,” to the Consolidated Financial Statements included in Item 15 of this Form 10-K. The following sets forth selected information with respect to our operations in those two geographic markets (in thousands):

	North America		Europe		Total
2009
Net sales	$	2,317,475	$	848,520	$	3,165,995
Operating income	$	62,070	$	11,321	$	73,391
Identifiable assets	$	591,990	$	224,911	$	816,901
2008
Net sales	$	2,092,372	$	940,589	$	3,032,961
Operating income	$	62,268	$	21,099	$	83,367
Identifiable assets	$	552,459	$	149,994	$	702,453
2007
Net sales	$	1,847,477	$	932,398	$	2,779,875
Operating income	$	82,365	$	11,577	$	93,942
Identifiable assets	$	488,761	$	185,110	$	673,871

See Item 7, Management’s Discussions and Analysis of Financial Condition and Results of Operations, for further information with respect to our operations.

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Available Information

We maintain an internet website at www.systemax.com. We file reports with the Securities and Exchange Commission and make available free of charge on or through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, including all amendments to those reports.  These are available as soon as is reasonably practicable after they are filed with the SEC.  All reports mentioned above are also available from the SEC’s website (www.sec.gov). The information on our website is not part of this or any other report we file with, or furnish to, the SEC.

Our Board of Directors has adopted the following corporate governance documents with respect to the Company (the “Corporate Governance Documents”):

·Corporate Ethics Policy for officers, directors and employees

·Charter for the Audit Committee of the Board of Directors

·Charter for the Compensation Committee of the Board of Directors

·Charter for the Nominating/Corporate Governance Committee of the Board of Directors

·Corporate Governance Guidelines and Principles

In accordance with the listing standards of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company website (www.systemax.com).

Item 1A. Risk Factors.

There are a number of factors and variables described below that may affect our future results of operations and financial condition. Other factors of which we are currently not aware or that we currently deem immaterial may also affect our results of operations and financial position.

Risks Related to the Economy and Our Industries

·General economic conditions, such as decreased consumer confidence and spending, reductions in manufacturing capacity, and inflation could result in our failure to achieve our historical sales growth rates and profit levels.

Current economic conditions may cause the loss of consumer confidence in the Company’s markets which may result in a decrease of spending in the categories of products we sell. With conditions in the market for technology products remaining highly competitive, reductions in our retail prices, as we experienced in 2009, would adversely affect our revenues and profits.  It is also possible that as manufacturers react to the marketplace they may reduce manufacturing capacity or allocations to their customers creating shortages of product. Both we and our customers are subject to global political, economic and market conditions, including inflation, interest rates, energy costs, the impact of natural disasters, military action and the threat of terrorism. Our consolidated results of operations are directly affected by economic conditions in North America and Europe. We may experience a decline in sales as a result of poor economic conditions and the lack of visibility relating to future orders. Our results of operations depend upon, among other things, our ability to maintain and increase sales volumes with existing customers, our ability to limit price reductions and maintain our margins, our ability to attract new customers and the financial condition of our customers. A decline in the economy that adversely affects our customers, causing them to limit or defer their spending, would likely adversely affect our sales, prices and profitability as well. We cannot predict with any certainty whether we will be able to maintain or improve upon historical sales volumes with existing customers, or whether we will be able to attract new customers.

In response to economic and market conditions, from time to time we have undertaken initiatives to reduce our cost structure where appropriate. These initiatives, as well as any future workforce and facilities reductions, may not be sufficient to meet current and future changes in

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economic and market conditions and allow us to continue to achieve the growth rates and levels of profitability we have recently experienced. In addition, costs actually incurred in connection with our restructuring actions may be higher than our estimates of such costs and/or may not lead to the anticipated cost savings.

·The markets for our products and services are extremely competitive and if we are unable to successfully respond to our competitors’ strategies our sales and gross margins will be adversely affected.

We may not be able to compete effectively with current or future competitors. The markets for our products and services are intensely competitive and subject to constant technological change. We expect this competition to further intensify in the future. Competitive factors include price, availability, service and support. We compete with a wide variety of other resellers and retailers, as well as manufacturers. Many of our competitors are larger companies with greater financial, marketing and product development resources than ours. In addition, new competitors may enter our markets. This may place us at a disadvantage in responding to competitors’ pricing strategies, technological advances and other initiatives, resulting in our inability to increase our revenues or maintain our gross margins in the future.

In most cases our products compete directly with those offered by other manufacturers and distributors. If any of our competitors were to develop products or services that are more cost-effective or technically superior, demand for our product offerings could decrease.

Our gross margins are also dependent on the mix of products we sell and could be adversely affected by a continuation of our customers’ shift to lower-priced products.

·State sales tax laws may be changed which could result in ecommerce and direct mail retailers having to collect sales taxes in states where the current laws do not require us to do so.  This could reduce demand for our products in such states and could result in us having substantial tax liabilities for past sales.

Our United States subsidiaries collect and remit sales tax in states in which the subsidiaries have physical presence or in which we believe nexus exists which obligates us to collect sales tax. Other states may, from time to time, claim that we have state-related activities constituting a sufficient nexus to require such collection. Additionally, many other states seek to impose sales tax collection obligations on companies that sell goods to customers in their state, or directly to the state and its political subdivisions, even without a physical presence.  Such efforts by states have increased recently, as states seek to raise revenues without increasing the tax burden on residents. We rely on United States Supreme Court decisions which hold that, without Congressional authority, a state may not enforce a sales tax collection obligation on a company that has no physical presence in the state and whose only contacts with the state are through the use of interstate commerce such as the mailing of catalogs into the state and the delivery of goods by mail or common carrier.  We cannot predict whether the nature or level of contacts we have with a particular state will be deemed enough to require us to collect sales tax in that state nor can we be assured that Congress or individual states will not approve legislation authorizing states to impose tax collection obligations on all e-commerce and/or direct mail transactions. A successful assertion by one or more states that we should collect sales tax on the sale of merchandise could result in substantial tax liabilities related to past sales and would result in considerable administrative burdens and costs for us and may reduce demand for our products from customers in such states when we charge customers for such taxes.

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·Events such as acts of war or terrorism, natural disasters, changes in law, or large losses could adversely affect our insurance coverage and insurance expense, resulting in an adverse affect on our profitability and financial condition.

We insure for certain property and casualty risks consisting primarily of physical loss to property, business interruptions resulting from property losses, worker’s compensation, comprehensive general liability, and auto liability. Insurance coverage is obtained for catastrophic property and casualty exposures as well as those risks required to be insured by law or contract. Although we believe that our insurance coverage is reasonable, significant events such as acts of war and terrorism, economic conditions, judicial decisions, legislation, natural disasters and large losses could materially affect our insurance obligations and future expense.

·Changes in accounting standards or practices, as well as new accounting pronouncements or interpretations, may require us to account for and report our financial results in a different manner in the future, which may be less favorable than the manner used historically.

A change in accounting standards or practices can have a significant effect on our reported    results of operations. New accounting pronouncements and interpretations of existing accounting rules and practices have occurred and may occur in the future. Changes to existing rules may adversely affect our reported financial results.

Risks Related to Our Company

·We rely to a great extent on our information and telecommunications systems, and significant system failures or outages, or our failure to properly evaluate, upgrade or replace our systems, or the failure of our security/safety measures to protect our systems and websites, could have an adverse affect on our results of operations.

We rely on a variety of information and telecommunications systems in our operations. Our success is dependent in large part on the accuracy and proper use of our information systems, including our telecommunications systems.  To manage our growth, we continually evaluate the adequacy of our existing systems and procedures. We anticipate that we will regularly need to make capital expenditures to upgrade and modify our management information systems, including software and hardware, as we grow and the needs of our business change.  In particular, our financial and retail point of sale systems will be replaced during the coming years.  The occurrence of a significant system failure, electrical or telecommunications outages or our failure to expand or successfully implement new systems could have a material adverse effect on our results of operations.

Our information systems networks, including our websites, and applications could be adversely affected by viruses or worms and may be vulnerable to malicious acts such as hacking. The availability and efficiency of sales via our websites could also be adversely affected by “denial of service” attacks and other unfair competitive practices.    Although we take preventive measures, these procedures may not be sufficient to avoid harm to our operations, which could have an adverse effect on our results of operations.

·We rely on third party suppliers for most of our products and services. The loss or interruption of these relationships could impact our sales volumes, the levels of inventory we must carry, and/or result in sales delays and/or higher inventory costs from new suppliers.  Coop advertising and other sales incentives provided by our suppliers could decrease in the future thereby increasing our expenses and adversely affecting our results of operations and cash flows.

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We purchase substantially all of our computer products from major distributors and directly from large manufacturers who may deliver those products directly to our customers. These relationships enable us to make available to our customers a wide selection of products without having to maintain large amounts of inventory.  The termination or interruption of our relationships with any of these suppliers could materially adversely affect our business.

Our PC products contain electronic components, subassemblies and software that in some cases are supplied through sole or limited source third-party suppliers, some of which are located outside of the U.S. Although we do not anticipate any problems procuring supplies in the near-term, there is no assurance that parts and supplies will be available in a timely manner and at reasonable prices. Any loss of, or interruption of, supply from key suppliers may require us to find new suppliers. This could result in production or development delays while new suppliers are located, which could substantially impair operating results. If the availability of these or other components used in the manufacture of our products was to decrease, or if the prices for these components were to increase significantly, operating costs and expenses could be adversely affected.

We purchase a number of our products from vendors outside of the United States. Difficulties encountered by one or several of these suppliers could halt or disrupt production and delay completion or cause the cancellation of our orders. Delays or interruptions in the transportation network could result in loss or delay of timely receipt of product required to fulfill customer orders.

Many product suppliers provide us with co-op advertising support in exchange for featuring their products in our catalogs and on our internet sites. Certain suppliers provide us with other incentives such as rebates, reimbursements, payment discounts, price protection and other similar arrangements.  These incentives are offset against cost of goods sold or selling, general and administrative expenses, as applicable. The level of co-op advertising support and other incentives received from suppliers may decline in the future, which could increase our cost of goods sold or selling, general and administrative expenses and have an adverse effect on results of operations and cash flows.

·Goodwill and intangible assets may become impaired resulting in a charge to earnings.

The acquisition of certain assets of CompUSA, CircuitCity and the purchase of the stock of WStore Europe SA resulted in the recording of significant intangible assets and or goodwill. We are required to test goodwill and intangible assets annually to determine if the carrying values of these assets are impaired or on a more frequent basis if indicators of impairment exist. If any of our goodwill or intangible assets are determined to be impaired we may be required to record a significant charge to earnings in the period during which the impairment is discovered.

·Our substantial international operations are subject to risks such as fluctuations in currency rates (which can adversely impact foreign revenues and profits when translated to US Dollars), foreign regulatory requirements, political uncertainty and the management of our growing international operations.

We operate internationally and as a result, we are subject to risks associated with doing business globally. Risks inherent to operating overseas include:

·Changes in a country’s economic or political conditions

·Changes in foreign currency exchange rates

·Difficulties with staffing and managing international operations

·Unexpected changes in regulatory requirements

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For example, we currently have operations located in numerous countries outside the United States, and non-U.S. sales (Europe, Canada and Puerto Rico) accounted for approximately 33.5% of our revenue during 2009.  To the extent the U.S. dollar strengthens against foreign currencies, our foreign revenues and profits will be reduced when translated into U.S. dollars.

·We are exposed to various inventory risks, such as  being unable to profitably resell excess or obsolete inventory and/or the loss of product return rights and price protection from our vendors; such events could lower our gross margins or result in inventory write-downs that would reduce reported future earnings.

Our inventory is subject to risk due to technological change and changes in market demand for particular products. If we fail to manage our inventory of older products we may have excess or obsolete inventory. We may have limited rights to return purchases to certain suppliers and we may not be able to obtain price protection on these items. The elimination of purchase return privileges and lack of availability of price protection could lower our gross margin or result in inventory write-downs.

We also take advantage of attractive product pricing by making opportunistic bulk inventory purchases; any resulting excess and/or obsolete inventory that we are not able to re-sell could have an adverse impact on our results of operations. Any inability to make such bulk inventory purchases may significantly impact our sales and profitability.

·If we fail to observe certain restrictions and covenants under our credit facilities the lenders could refuse to waive such default, terminate the credit facility and demand immediate repayment, which would adversely affect our cash position and materially adversely affect our operations.

Our United States/United Kingdom combined revolving credit agreement contains covenants restricting or limiting our ability to, among other things:

·incur additional debt

·create or permit liens on assets

·make capital expenditures or investments

·pay dividends

If we fail to comply with the covenants and other requirements set forth in the credit agreement, we would be in default and would need to negotiate a waiver agreement with the lenders. Failure to agree on such a waiver could result in the lenders terminating the credit agreement and demanding repayment of any outstanding borrowings, which could adversely affect our cash position and adversely affect the availability of financing to us, which could materially impact our operations.

·We have experienced rapid growth in retail stores in North America and to maintain their profitability we must effectively manage our growth and cost structure, such as inventory needs, point of sales systems, personnel and lease expense.

We have 34 retail stores in North America at December 31 2009, a significant increase over 2008. The Company needs to effectively manage its cost structure in order to maintain profitability including the additional inventory needs, retail point of sales IT systems, retail personnel and leased facilities. Future growth in retail will also be dependent on the ability to attract customers and build brand loyalty. The retail computer and consumer electronics business is highly competitive and has narrow gross margins. If we fail to manage our growth and cost structure while maintaining high levels of service and meeting competitive pressures adequately, our business plan  may not be achieved and may lead to reduced profitability.

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·The failure to timely and satisfactorily process manufacturers’ and our own rebate programs could negatively impact our customer satisfaction levels.

Similar to other companies in the technology products industry, we advertise manufacturers’ mail-in rebates on many products we sell and, in some cases, offer our own rebates. These   rebates are processed through third party vendors and in house. If these rebates are not processed in a timely and satisfactory manner by either third party vendors or our in house operations, our reputation in the marketplace could be negatively impacted.  See Item 3, Legal Proceedings.

·We may be unable to reduce prices in reaction to competitive pressures, or implement cost reductions or new product line expansion to address gross profit and operating margin pressures; failure to mitigate these pressures could adversely affect our operating results and financial condition.

The computer and consumer electronics industry is highly price competitive and gross profit margins are narrow and variable. The Company’s ability to further reduce prices in reaction to competitive pressure is limited. Additionally, gross margins and operating margins are affected by changes in factors such as vendor pricing, vendor rebate and or price protection programs, product return rights, and product mix. Pricing pressure continued to be prevalent in 2009 as a result of the significant decline in economic activity in the markets we serve and we expect this to continue during this or any period of sustained economic decline. We may not be able to mitigate these pricing pressures and resultant declines in sales and gross profit margin with cost reductions in other areas or expansion into new product lines. If we are unable to proportionately mitigate these conditions our operating results and financial condition may suffer.

·We depend on bank credit facilities to address our working capital and cash flow needs from time to time, and if we are unable to renew or replace these facilities, or borrowing capacity were to be reduced our liquidity and capital resources may be adversely affected.

We require significant levels of capital in our business to finance accounts receivable and inventory. We maintain credit facilities in the United States and in Europe to finance increases in our working capital if available cash is insufficient.  The amount of credit available to us at any point in time may be adversely affected by the quality or value of the assets collateralizing these credit lines. In addition, if we are unable to renew or replace these facilities at maturity our liquidity and capital resources may be adversely affected. However, we currently have no reason to believe that we will not be able to renew or replace our facilities when they reach maturity.

We would be exposed to liability, including substantial fines and penalties and, in extreme cases, loss of our ability to accept credit cards, in the event our privacy and data security policies and procedures are inadequate to prevent security breaches of our consumer personal information and credit card information records.

In processing our sales orders we often collect personal information and credit card information from our customers. The Company has privacy and data security policies in place which are designed to prevent security breaches, however, if a third party or a rogue employee or employees are able to bypass our network security or otherwise compromise our customers’ personal information or credit card information, we could be subject to liability. This liability may include claims for identity theft, unauthorized purchases, claims alleging misrepresentation

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of our privacy and data security practices or other related claims. Further, the Company has not yet achieved full compliance with the Payment Card Industry (“PCI”) security standards. Without full compliance any breach involving the loss of credit card information may lead to PCI related fines of up to $500,000. In the event of a severe breach credit card providers may prevent the accepting of credit cards. Any such liability related to the aforementioned risks could lead to reduced profitability and damage our brand(s) and or reputation.

·Sales to individual customers expose us to credit card fraud, which impacts our operations.  If we fail to adequately protect ourselves from credit card fraud, our operations could be adversely impacted.

Failure to adequately control fraudulent credit card transactions could increase our expenses. Increased sales to individual consumers, which are more likely to be paid for using a credit card, increases our exposure to fraud. We employ technology solutions to help us detect the fraudulent use of credit card information. However, if we are unable to detect or control credit card fraud, we may suffer losses as a result of orders placed with fraudulent credit card data, which could adversely affect our business.

·Our profitability can be adversely affected by increases in our income tax exposure due to, among other things, changes in the mix of U.S. and non-U.S. revenues and earnings, changes in tax rates or laws, changes in our effective tax rate due to changes in the mix of earnings among different countries and changes in valuation of our deferred tax assets and liabilities.

Changes in our income tax expense due to changes in the mix of U.S. and non-U.S. revenues and profitability, changes in tax rates or exposure to additional income tax liabilities could affect our profitability. We are subject to income taxes in the United States and various foreign jurisdictions. Our effective tax rate could be adversely affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws or by material audit assessments. The carrying value of our deferred tax assets, which are primarily in the United States and the United Kingdom, is dependent on our ability to generate future taxable income in those jurisdictions. In addition, the amount of income taxes we pay is subject to ongoing audits in various jurisdictions and a material assessment by a tax authority could affect our profitability.

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We operate our business from numerous facilities in North America and Europe.  These facilities include our headquarters location, administrative offices, telephone call centers, distribution centers, computer assembly and retail stores.  Certain facilities handle multiple functions.  Most of our facilities are leased; certain are owned by the Company.

North America

As of December 31, 2009 we have 6 distribution centers in North America which aggregate approximately 1.2 million square feet, all of which are leased.  Our headquarters, administrative offices and call centers aggregate approximately 250,000 square feet, all of which are leased.  Our computer assembly facility is 297,000 square feet and is owned by the Company.

The following table summarizes the geographic location of our North America stores at the end of 2009:

Location	Stores Open – 12/31/08	Store Openings	Stores Open – 12/31/09
Delaware	—	1	1
Florida	15	3	18
Illinois	3	—	3
North Carolina	2	—	2
Puerto Rico	1	—	1
Texas	3	1	4
Ontario, Canada	5	—	5
	29	5	34

All of our retail stores are leased.  The retail stores average 21,700 square feet.

Europe

As of December 31, 2009 we have 7 distribution centers in Europe which aggregate approximately 300,000 square feet.  Six of these, aggregating approximately 224,000 square feet, are leased; one distribution center of approximately 76,000 square feet is owned by the Company.  Our administrative offices and call centers aggregate approximately 254,000 square feet, of which 176,000 square feet are leased and 78,000 square feet are owned by the Company.

Please refer to Note 10 to the Consolidated Financial Statements for additional information about leased properties.

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Item 3. Legal Proceedings.

State of Florida, Office of the Attorney General

On September 4, 2009, the Office of the Attorney General, Department of Legal Affairs for the State of Florida filed a lawsuit against OnRebate.com Inc, TigerDirect Inc. and Systemax Inc. in the Circuit Court of the Eleventh Judicial Court for Miami-Dade County, Florida alleging deceptive and unfair trade practices under Florida law relating to the offering and processing of customer rebates.  The lawsuit seeks injunctive relief, damages, civil penalties and other equitable relief.  The Company denies the allegations in the lawsuit and intends to vigorously defend the case.

Other Matters

Systemax is a party to various pending legal proceedings and disputes arising in the normal course of business, including those involving commercial, employment, tax and intellectual property related claims, none of which, in management’s opinion, is anticipated to have a material adverse effect on our consolidated financial statements.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Systemax common stock is traded on the NYSE Euronext Exchange under the symbol “SYX.”  The following table sets forth the high and low closing sales price of our common stock as reported on the New York Stock Exchange for the periods indicated.

	High		Low
2009
First Quarter	$	14.19	$	9.12
Second Quarter	17.30		11.25
Third Quarter	14.29		11.34
Fourth Quarter	16.46		12.00
2008
First Quarter	$	20.32	$	9.01
Second Quarter	20.89		12.06
Third Quarter	18.43		14.04
Fourth Quarter	15.10		8.75

On January 2, 2010, the last reported sale price of our common stock on the New York Stock Exchange was $15.71 per share.  As of January 2, 2010, we had 215 shareholders of record.

On November 16, 2009, the Company’s Board of Directors declared a special dividend of $.75 per share payable on December 15, 2009 to shareholders of record on December 1, 2009. This special dividend is the third dividend we have paid since our initial public offering. Depending in part upon profitability, the strength of our balance sheet, our cash position and the need to retain cash for the development and expansion of our business, we may decide to declare another special dividend in the future.

On March 3, 2008, the Company’s Board of Directors declared a special dividend of $1.00 per share payable on April 2, 2008 to shareholders of record on March 21, 2008. This special dividend is the second dividend we have paid since our initial public offering.

On March 14, 2007, the Company’s Board of Directors declared a special dividend of $1.00 per share payable on April 12, 2007 to shareholders of record on April 2, 2007. This special dividend was the first dividend we have paid since our initial public offering.

In May 2008, the Company’s Board of Directors authorized the repurchase of up to 2,000,000 shares of the Company’s common stock. During 2009 the Company repurchased 98,934 common shares. Details of all repurchases are as follows:

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Fiscal Month	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
August 2008	228,401	$	15.04	228,401	1,771,599
December 2008	246,900	$	9.67	475,301	1,524,699
March 2009	32,444	$	11.63	507,745	1,492,255
May 2009	29,200	$	12.02	536,945	1,463,055
June 2009	37,290	$	11.97	574,235	1,425,765
Total	574,235	$	12.19

Information regarding securities authorized for issuance under equity compensation plans and a performance graph relating to the Company’s common stock is set forth in the Company’s Proxy Statement relating to the 2010 annual meeting of shareholders and is incorporated by reference herein.

Item 6. Selected Financial Data.

The following selected financial information is qualified by reference to, and should be read in conjunction with, the Company’s Consolidated Financial Statements and the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this report. The selected statement of operations data for fiscal years 2009, 2008 and 2007 and the selected balance sheet data as of December 2009 and 2008 are derived from the audited consolidated financial statements which are included elsewhere in this report. The selected balance sheet data as of December 2007, 2006 and 2005 and the selected statement of operations data for fiscal years 2006 and 2005 are derived from the audited consolidated financial statements of the Company which are not included in this report.

	Years Ended December 31,
	(In millions, except per share data)
	2009		2008		2007		2006		2005
Statement of Operations Data:
Net sales	$	3,166.0	$	3,033.0	$	2,779.9	$	2,345.2	$	2,115.5
Gross profit	$	460.2	$	458.6	$	426.3	$	342.9	$	307.3
Operating income	$	73.4	$	83.4	$	93.9	$	60.7	$	37.2
Net income	$	46.2	$	52.8	$	69.5	$	45.1	$	11.4
Per Share Amounts:
Net income — diluted (1)	$	1.24	$	1.40	$	1.84	$	1.22	$	.31
Weighted average common shares — diluted	37.3		37.7		37.8		36.9		36.5
Cash dividends declared per common share	$	.75	$	1.00	$	1.00	$	—	$	—
Balance Sheet Data:
Working capital	$	250.1	$	253.1	$	274.4	$	229.4	$	169.8
Total assets	$	816.9	$	702.5	$	677.6	$	584.1	$	504.5
Long-term debt, excluding current portion	$	1.2	$	1.4	$	.3	$	.5	$	8.0
Shareholders’ equity	$	364.7	$	334.0	$	335.8	$	289.5	$	232.8

(1)  previous years have been restated in accordance with accounting guidance concerning participating securities

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

Systemax is primarily a direct marketer of brand name and private label products. Our operations are organized in three reportable business segments — Technology Products, Industrial Products and Software Solutions.

Our Technology Products segment sells computers, computer supplies and consumer electronics which are marketed in North America, Puerto Rico and Europe. Except for certain PC and related products that we assemble ourselves and sell on a private label basis, substantially all of our products are manufactured by other companies.  We also sell private label brands.  Technology products accounted for 94%, 92% and 92% of our net sales in 2009, 2008 and 2007, respectively.

Our Industrial Products segment sells a wide array of material handling equipment, storage equipment, and consumable industrial items which are marketed in North America.  Most of these products are manufactured by other companies.  Some products are manufactured for us to our own design and marketed under the trademarks Global™, GlobalIndustrial.com™ and Nexel™. Industrial products accounted for 6%, 8% and 8%, of our net sales in 2009, 2008 and 2007, respectively.  In both of these product groups, we offer our customers a broad selection of products, prompt order fulfillment and extensive customer service.

The Company announced plans to exit the Software Solutions segment during the second quarter of 2009 as a result of economic conditions and difficulties in marketing the segment’s products successfully. (See Note 7 to the Consolidated Financial Statements included in Item 15 of this Form 10-K).  As of December 31, 2009 substantially all of the third party business activities of the Software Solutions segments had been ended. See Note 10 to the Consolidated Financial Statements included in Item 15 of this Form 10-Kfor additional financial information about our business segments as well as information about our geographic operations.

The market for computer products and consumer electronics is subject to intense price competition and is characterized by narrow gross profit margins. The North American industrial products market is highly fragmented and we compete against companies utilizing multiple distribution channels. Distribution is working capital intensive, requiring us to incur significant costs associated with the warehousing of many products, including the costs of leasing warehouse space, maintaining inventory and inventory management systems, and employing personnel to perform the associated tasks. We supplement our on-hand product availability by maintaining relationships with major distributors and manufacturers, utilizing a combination of stocking and drop-shipment fulfillment.

The primary component of our operating expenses historically has been employee related costs, which includes items such as wages, commissions, bonuses, employee benefits and stock option expenses. We continually assess our operations to ensure that they are efficient, aligned with market conditions and responsive to customer needs.

During the third quarter of 2009, the Company acquired WStore Europe SA and its subsidiaries, (“WStore”), a European supplier of business IT products and software solutions with operations in France and the United Kingdom for approximately $4.4 million in cash (see “Financial Condition, Liquidity and Capital Resources” and Note 2 to the Consolidated Financial Statements included in Item 15 of this Form 10-K).

During the second quarter of 2009, the Company purchased certain intellectual property and ecommerce assets owned by Circuit City Stores, Inc. and Circuit City Stores West Coast, Inc for $14.0 million in cash plus a sales-based royalty over 30 months (See Note 2 to the Consolidated Financial Statements included in Item 15 of this Form 10-K).

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Critical Accounting Policies and Estimates

Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements included in Item 15 of this Form 10-K.  Certain accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates.  By their nature, these judgments are subject to an inherent degree of uncertainty, and as a result, actual results could differ from those estimates.  These judgments are based on historical experience, observation of trends in the industry, information provided by customers and information available from other outside sources, as appropriate.  Management believes that full consideration has been given to all relevant circumstances that we may be subject to, and the consolidated financial statements of the Company accurately reflect management’s best estimate of the consolidated results of operations, financial position and cash flows of the Company for the years presented. We identify below a number of policies that entail significant judgments or estimates.  Actual results may differ from these estimates under different conditions or assumptions.

Revenue Recognition. We recognize product sales when persuasive evidence of an order arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time of receipt by customers when title and risk of loss both are transferred. Sales are shown net of returns and allowances, rebates and sales incentives.  Reserves for estimated returns and allowances are provided when sales are recorded, based on historical experience and current trends.

Allowance for Doubtful Accounts Receivable. We record an allowance for doubtful accounts to reflect our estimate of the collectibility of our trade accounts receivable. We evaluate the collectibility of accounts receivable based on a combination of factors, including an analysis of the age of customer accounts and our historical experience with accounts receivable write-offs. The analysis also includes the financial condition of a specific customer or industry, and general economic conditions.  In circumstances where we are aware of customer charge-backs or a specific customer’s inability to meet its financial obligations, a specific reserve for bad debts applicable to amounts due to reduce the net recognized receivable to the amount management reasonably believes will be collected is recorded. In those situations with ongoing discussions, the amount of bad debt recognized is based on the status of the discussions. While bad debt allowances have been within expectations and the provisions established, there can be no guarantee that we will continue to experience the same allowance rate we have in the past.

Inventory valuation.  We value our inventories at the lower of cost or market, cost being determined on the first-in, first-out method except in Europe and retail locations where an average cost is used. Excess and obsolete or unmarketable merchandise are written down based on historical experience, assumptions about future product demand and market conditions. If market conditions are less favorable than projected or if technological developments result in accelerated obsolescence, additional write-downs may be required. While obsolescence and resultant markdowns have been within expectations, there can be no guarantee that we will continue to experience the same level of markdowns we have in the past.

Goodwill and Intangible Assets. We apply the provisions of relevant accounting guidance in our valuation of goodwill, trademarks, domain names, client lists and other intangible assets. Relevant accounting guidance requires that goodwill and indefinite lived intangibles be reviewed at least annually for impairment or more frequently if indicators of impairment exist. The amount of an impairment loss would be recognized as the excess of the asset’s carrying value over its fair value.

Long-lived Assets. Management exercises judgment in evaluating our long-lived assets for impairment and in their depreciation and amortization methods and lives. We believe we will generate sufficient undiscounted cash flow to more than recover the investments made in property, plant and equipment. Our estimates of future cash flows involve assumptions concerning future operating performance and economic conditions.  While we believe that our estimates of future cash flows are reasonable, different assumptions regarding such cash flows could materially affect our evaluations.

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Accruals. Management exercises judgment in estimating various period end liabilities such as costs related to vendor drop shipments, sales returns and allowances, cooperative advertising and customer rebate reserves, and other vendor and employee related costs. While we believe that these estimates are reasonable, any significant deviation of actual costs as compared to these estimates could have a material impact on the Company’s consolidated financial statements.

Income Taxes. We are subject to taxation from federal, state and foreign jurisdictions and the determination of our tax provision is complex and requires significant management judgment.  Management judgment is also applied in the determination of deferred tax assets and liabilities and any valuation allowances that might be required in connection with our ability to realize deferred tax assets.

Since we conduct operations in numerous US states and internationally, our effective tax rate depends upon the geographic distribution of our pre-tax income or losses among locations with varying tax rates and rules. As the geographic mix of our pre-tax results among various tax jurisdictions changes, the effective tax rate may vary from period to period. We are also subject to periodic examination from domestic and foreign tax authorities regarding the amount of taxes due. These examinations include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. We have established, and periodically reevaluate, an estimated income tax reserve on our consolidated balance sheet to provide for the possibility of adverse outcomes in income tax proceedings. While management believes that we have identified all reasonably identifiable exposures and that the reserve we have established for identifiable exposures is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved.

We recognize deferred tax assets and liabilities for the effect of temporary differences between the book and tax bases of recorded assets and liabilities and for tax loss carry forwards. The realization of net deferred tax assets is dependent upon our ability to generate sufficient future taxable income. Where it is more likely than not that some portion or the entire deferred tax asset will not be realized, we have provided a valuation allowance. If the realization of those deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made. In the event that actual results differ from these estimates or we adjust these estimates in future periods, an adjustment to the valuation allowance may be required, which could materially affect our consolidated financial position and results of operations.

Restructuring charges.  We have taken restructuring actions in the past and could in the future commence further restructuring activities which result in recognition of restructuring charges if events make it necessary. These actions require management to make judgments and utilize significant estimates regarding the nature, timing and amounts of costs associated with the activity. When we incur a liability related to a restructuring action, we estimate and record all appropriate expenses, including expenses for severance and other employee separation costs, facility consolidation costs (including estimates of sublease income), lease cancellations, asset impairments and any other exit costs. Should the actual amounts differ from our estimates; the amount of the restructuring charges could be impacted, which could materially affect our consolidated financial position and results of operations.

Recently Adopted and Newly Issued Accounting Pronouncements

Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure. Below are the new authoritative pronouncements that management believes are relevant to the Company’s current operations.

In October 2009, the FASB issued amended guidance related to revenue recognition in multiple-deliverable revenue arrangements and certain arrangements that include software elements. This standard

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eliminates the residual method of revenue allocation by requiring entities to allocate revenue in an arrangement to all of the deliverables based upon the relative selling prices of the delivered goods and services  The FASB also issued a new accounting standard in October 2009, which changes revenue recognition for tangible products containing software and hardware elements. Under this standard, tangible products containing software and hardware that function together to deliver the tangible products’ essential functionality are scoped out of the existing software revenue recognition guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards are effective for fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact, if any, of the adoption of this standard on our consolidated financial position and results of operations.

Effective January 1, 2009, the Company adopted authoritative guidance that establishes principles and requirements for how an acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquiree, (ii) recognizes and measures goodwill acquired in a business combination or a gain from a bargain purchase, and (iii) determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of the business combination. This guidance is applied prospectively for all business combinations entered into after the date of adoption. In the third quarter of 2009 the Company expensed approximately $0.8 million of costs that would have been capitalized under previous guidance.

In June 2008, FASB issued authoritative guidance to clarify that instruments granted in share-based payment transactions can be participating securities prior to the requisite service having been rendered. The guidance applies to the calculation of Earnings Per Share (“EPS”) for share-based payment awards with rights to dividends or dividend equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of EPS pursuant to the two-class method. This guidance became effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period EPS data presented is adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data). The Company adopted this authoritative guidance in January 2009 and it did not have a material impact on its condensed consolidated financial statements.

Highlights from 2009

The discussion of our results of operations and financial condition that follows will provide information that will assist in understanding our financial statements and information about how certain accounting principles and estimates affect the consolidated financial statements. This discussion should be read in conjunction with the consolidated financial statements included herein.

·Sales increase of 4.4% to $3.2 billion in 2009 over 2008.

·Completed CircuitCity.com asset purchase and WStore Europe SA and Subsidiaries (“WStore”) stock purchase.

·Opened five new retail stores.

·Exited unprofitable Software Solutions segment.

·Diluted earnings per share declined to $1.24 from $1.40 in 2008.

·Movements in exchange rates negatively impacted European and Canadian sales by approximately $103.6 million and $17.3 million, respectively.

·52 weeks in 2009 and 2007 vs. 53 weeks in 2008.

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Results of Operations

Key Performance Indicators (in thousands):

	Years Ended December 31,
	2009			2008			% Change		2008			2007			% Change
Net sales by segment:
Technology products	$	2,967,896		$	2,795,441		6.2	%	$	2,795,441		$	2,553,716		9.5	%
Industrial products	196,129			237,027			(17.3	)%	237,027			225,746			5.0	%
Software solutions	1,970			493			299.6	%	493			413			19.4	%
Total net sales	$	3,165,995		$	3,032,961		4.4	%	$	3,032,961		$	2,779,875		9.1	%
Net sales by geography:
North America	$	2,317,475		$	2,092,372		10.8	%	$	2,092,372		$	1,847,477		13.3	%
Europe	848,520			940,589			(9.8	)%	940,589			932,398			.9	%
Total net sales	$	3,165,995		$	3,032,961		4.4	%	$	3,032,961		$	2,779,875		9.1	%
Consolidated gross profit	$	460,248		$	458,559		.4	%	$	458,559		$	426,301		7.6	%
Consolidated gross margin	14.5		%	15.1		%	(.6	)%	15.1		%	15.3		%	(.2	)%
Consolidated selling, general and administrative costs	$	386,857		$	375,192		3.1	%	$	375,192		$	332,359		12.9	%
Consolidated selling, general and administrative costs as % of sales	12.2		%	12.4		%	(.2	)%	12.4		%	12.0		%	.4	%
Operating income (loss) by segment:
Technology products	$	87,127		$	96,177		(9.4	)%	$	96,177		$	100,958		(4.7	)%
Industrial products	15,415			24,621			(37.4	)%	24,621			20,595			19.5	%
Software solutions	(6,457		)	(17,948		)	64.0	%	(17,948		)	(15,813		)	(13.5	)%
Consolidated operating income	$	73,391		$	83,367		(12.0	)%	$	83,367		$	93,942		(11.3	)%
Operating margin by segment:
Technology products	2.7		%	3.2		%	(.5	)%	3.2		%	3.6		%	(.4	)%
Industrial products	.5		%	.8		%	(.3	)%	.8		%	.7		%	.1	%
Software solutions	(.2		)%	(.6		)%	.4	%	(.6		)%	(.6		)%	—
Consolidated operating margin	2.3		%	2.7		%	(.4	)%	2.7		%	3.4		%	(.7	)%
Effective income tax rate	36.8		%	36.9		%	(.1	)%	36.9		%	30.5		%	6.4	%
Net income	$	46,185		$	52,843		(12.6	)%	$	52,843		$	69,481		(23.9	)%
Net margin	1.5		%	1.7		%	(.2	)%	1.7		%	2.5		%	(.8	)%

NET SALES

SEGMENTS:

The growth in Technology products sales in 2009 is attributable to increased retail and internet sales in the consumer channel, opening 5 retail stores and the two acquisitions completed during 2009. Sales attributable to Circuit City and WStore Europe SA and subsidiaries (acquired in the second and third quarters of 2009, respectively) totaled approximately $131.1 million for the year. On a constant currency basis, translating 2009 foreign results at 2008 exchange rates, sales would have grown 10.5%. or $120.9 million. Adjusting for the impact of the number of weeks, Technology products sales increased 8.3% for the year.

North American technology products sales increased 14.3% in 2009 compared to 2008 benefiting from the opening of 5 retail stores and the Circuit City acquisition which contributed $67.3 million in sales. On a constant currency basis, translating 2009 Other North America results at 2008 exchange rates, North American technology products sales would have grown to 15.2%. The movement in the exchange rates negatively impacted sales by approximately $17.3 million. Adjusting for the impact of the number of weeks, North American technology products sales increased 16.7%.

European technology products sales declined 9.8% to $848.5 million as the result of slower business to business sales. The trend of declining sales in Europe is expected to reverse as global economic conditions improve and as a result of the WStore acquisition. Sales attributable to the WStore acquisition totaled approximately $63.8 million in 2009. On a constant currency basis, translating 2009 foreign results at 2008 exchange rates, European sales would have increased 1.2%. The movement in foreign exchange rates accounted for $103.6 million of the revenue decline in Europe for the year. Adjusting for the impact of the number of weeks, European sales would have declined 8.3%.

The decline in Industrial products sales is attributable to the slowdown in business to business economic activity which started in the second half of 2008 and continued into 2009. Adjusting for the impact of the number of weeks, Industrial products sales decreased 15.9%. The Company has implemented strategies to improve sales growth such as expanding its product offerings and launching an improved customer website.

The Company announced plans to exit its Software solutions segment during the second quarter of 2009. As of December 31, 2009 substantially all of the third party business activities of ProfitCenter Software had ended.

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GEOGRAPHIES:

North American sales increased 10.8% to $2.3 billion compared to 2008. North American sales benefited from increased retail and internet sales in the consumer channel, opening 5 retail stores and the Circuit City acquisition, which contributed $67.3 million of sales offset by the declining sales in the Industrial products segment.  On a constant currency basis, translating 2009 Other North America results at 2008 exchange rates, North American sales would have grown to 11.6%. The movement in the exchange rates negatively impacted sales by approximately $17.3 million. Adjusting for the impact of the number of weeks, North American sales increased 13.1%.

European technology products sales declined 9.8% to $848.5 million. On a constant currency basis, European sales would have increased 1.2%. Sales attributable to the WStore acquisition totaled approximately $63.8 million for the year. Movement in foreign exchange rates accounted for $103.6 million of the sales decline in Europe for the year. The trend of declining sales in Europe is expected to reverse as global economic conditions improve and as a result of the WStore acquisition.

Worldwide consumer-channel revenue, defined as revenues from retail stores, consumer websites, inbound call centers and, shopping channels, were $1.8 billion compared to $1.6 billion in the same period in 2008, an increase of 12.2%. Growth was driven primarily by volume increases in computers, including laptops and netbooks and consumer electronics, including televisions. Worldwide business to business channel sales were $1.3 billion for 2009 compared to $1.4 billion in the prior year, a 4.9% decrease. Worldwide business to business sales declined as the result of the global economic slowdown. The acquisition of WStore in September 2009 partially offset the decline.

2008 vs. 2007:

Sales increased in all reporting business segments and in both geographies during 2008 over 2007. The growth in Technology Products sales increase was driven by increased internet and retail store sales as the result of the acquisition of the CompUSA. The growth in Industrial Products sales resulted from the Company increasing its market share through aggressive acquisition of customers via web and catalog advertising.  Sales attributable to CompUSA web and retail were $226.3 million for the year. In Europe sales increased .9% compared to 2007. Movements in foreign exchange rates positively impacted the European sales comparison by approximately $13 million for the year. Excluding exchange rate benefits, European sales would have been flat year over year. Sales in Canada (Other North America) increased by 13.9% compared to the prior year. Excluding exchange rate benefits, sales would have increased 10.9% for the year. As in the United States, sales slowed in the second half of 2008 in Europe and Canada for both consumer and business to business sales as the result of a slowdown in economic activity. Sales in the Software Solutions segment were not material in 2008 and 2007. The Company reorganized this segment in the fourth quarter of 2008 which resulted in a charge to earnings of approximately $1.7 million.

GROSS MARGIN

Consolidated gross margin declined in 2009.as the Company lowered certain product prices and offered freight incentives in order to maintain and grow market share and to respond to competitive pricing pressures that started in 2008. Additionally, consolidated gross margin has been impacted by a shift in mix, as higher margin Industrial Products accounted for a smaller percentage of consolidated revenues than in previous years. Gross margin is dependent on variables such as product mix, vendor price protection and other sales incentives, competition, pricing strategy, cooperative advertising funds required to be classified as a reduction to cost of sales, freight discounting and other variables, any or all of which may result in fluctuations in gross margin.

Consolidated gross margin declined during 2008 over 2007 due primarily to competitive pricing pressures in the Technology Products segment.

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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased in 2009 over 2008 primarily as a result of the increased sales volume, facility and other operating costs related to opening additional retail stores, costs related to winding down the Software Solutions segment and costs related to the WStore acquisition. Significant expense increases include approximately $7.8 million in charges for severance costs, litigation and contractual lease terminations of which approximately $2.9 million of winding down costs related to Software Solutions segment, $4.3 million of increased credit card fees, and $1.8 million of increased consulting services primarily incurred for new software implementation offset by savings in other various expenses. Also included in 2009 is a gain of approximately $1.8 million from a lawsuit that was settled favorably.

Selling, general and administrative expenses increased in 2008 over 2007 primarily as a result of the increase in sales volume, added personnel, facility and other operating costs associated with the CompUSA acquisition, as well as increased accounting, auditing, legal and professional expenses and reorganization charges incurred in our Software segment.  CompUSA operations accounted for $23.6 million of these cost increases. Included in 2007 is a gain of approximately $2.4 million from a lawsuit that was settled favorably.

OPERATING MARGIN

Technology products operating margin decreased in 2009 compared to 2008 due to decline in business to business sales as the result of the global economic slowdown, price promotions and freight discounts offered during the year and costs related to the WStore acquisition.

Industrial products operating margin decreased in 2009 compared to 2008 due to the slowdown in sales coupled with additional information technology staffing and other costs for the support of new products added and the newly launched e-commerce website.

Software solutions segment operating margin increased due to revenue recognized from contract terminations. This segment has been winding down operations since the second quarter of 2009.

Corporate and other expenses operating costs increased 16.5% in 2009 as compared to 2008 due to increased expenses for new software implementation, acquisition related costs and additional staffing and overhead costs to support the growth in the Company’s business.

INTEREST AND OTHER INCOME AND INTEREST EXPENSE

Interest expense was $.9 million, $.3 million, and $1.0 million in 2009, 2008 and 2007, respectively. The interest expense increase in 2009 compared to 2008 is primarily attributable to the WStore acquisition assumed short term debt and interest on capital lease obligations. Interest expense decreased in 2008 and 2007 as a result of decreased short-term borrowings in the Company’s subsidiaries in the United Kingdom and the Netherlands. Interest and other income, net was $.8 million, $2.0 million, and $5.5 million in 2009, 2008 and 2007, respectively.

INCOME TAXES

The Company’s effective tax rate was 36.8% in 2009 flat as compared to 36.9% in 2008. Included in the 2009 rate was a reversal of tax reserves of approximately $0.9 million, as a result of statute expirations. If excluded, the Company’s effective tax rate would have been 38.4%. The higher tax rate in 2009 is primarily attributed to a higher percentage of taxable income in countries that have higher corporate tax rates. The Company’s effective tax rate will vary as the mix of pre tax income from the countries the Company does business in varies.

The higher tax rate in 2008 compared to 2007 is primarily attributable to a higher effective tax rate in the United Kingdom in 2008 as the result of the reversal of the valuation allowance in 2007. The lower

27

effective tax rate in 2007 resulted primarily from the reversal of a valuation allowance of approximately $5.9 million against deferred tax assets in the United Kingdom partially offset by the recording of a valuation allowance of approximately $1.7 million against the deferred tax assets of Germany. The United Kingdom valuation allowance, originally recorded at $10.2 million, had been established in 2005 as the result of a cumulative loss position in the United Kingdom

During 2009, 2008, and 2007, we did not recognize certain foreign tax credits, certain state deferred tax assets in the United States and certain benefits on losses in foreign tax jurisdictions due to our inability to carry such credits and losses back to prior years and our determination that it was more likely than not that we would not generate sufficient future taxable income in those tax jurisdictions to realize these assets. Accordingly, valuation allowances were recorded against the deferred tax assets associated with those items. If we are able to realize all or part of these deferred tax assets in future periods, it will reduce our provision for income taxes by a release of the corresponding valuation allowance.

Seasonality

As the Company’s consumer channel sales have grown significantly in the past few years, the fourth quarter has represented a greater portion of annual sales than historically.  Net sales have historically been modestly weaker during the second and third quarters as a result of lower business activity during those months. The following table sets forth the net sales, gross profit and income from operations for each of the quarters since January 1, 2007 (amounts in millions).

	Quarter Ended
	March 31			June 30			September 30			December 31
2009
Net sales	$	752		$	722		$	754		$	938
Percentage of year’s net sales	23.8		%	22.8		%	23.8		%	29.6		%
Gross profit	$	108		$	107		$	113		$	132
Operating income	$	15		$	9		$	19		$	30
2008
Net sales	$	725		$	756		$	739		$	813
Percentage of year’s net sales	23.9		%	24.9		%	24.4		%	26.8		%
Gross profit	$	114		$	115		$	115		$	115
Operating income	$	26		$	21		$	20		$	16
2007
Net sales	$	676		$	647		$	687		$	769
Percentage of year’s net sales	24.3		%	23.3		%	24.7		%	27.7		%
Gross profit	$	97		$	99		$	111		$	120
Operating income	$	22		$	20		$	24		$	28

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Financial Condition, Liquidity and Capital Resources

Selected liquidity data (in thousands):

	December 31,
	2009		2008		$ Change
Cash	$	58,309	$	115,967	$	(57,658	)
Accounts receivable, net	$	241,860	$	182,841	$	59,019
Inventories	$	365,725	$	290,594	$	75,131
Prepaid expenses and other current assets	$	20,066	$	12,667	$	7,399
Accounts payable	$	346,362	$	285,410	$	60,952
Accrued expenses and other current liabilities	$	80,945	$	72,352	$	8,593
Current portion of capitalized lease obligations	$	1,029	$	773	$	256
Short term debt	$	14,168	—		$	14,168
Working capital	$	250,082	$	253,092	$	(3,010	)

Our primary liquidity needs are to support working capital requirements in our business, including working capital for new retail stores, to fund capital expenditures, to fund the payment of interest on outstanding debt, to fund special dividends declared by our Board of Directors and for acquisitions. We rely principally upon operating cash flow to meet these needs. We believe that cash flow from operations and our availability under credit facilities will be sufficient to fund our working capital and other cash requirements for the next twelve months.

Our working capital decreased in 2009 as the result of using cash balances of approximately $14.5 million for the purchase of the Circuit City assets, payment of $27.6 million for a special dividend, the $4.5 million cash purchase of WStore and common stock repurchases of $1.2 million. Inventory balances increased related to warehousing additional products as a result in the growth of sales and the stocking our retail stores. Accounts receivable balances increased as the result of growth in open account business to business sales, the WStore acquisition and slight growth in accounts receivable days outstanding. Accounts payable and accrued expense balances increased due to inventory growth and the WStore acquisition. The increase in short term debt was attributable to the assumption of the outstanding debt of WStore. Inventory turnover was consistent at 9 times during 2009 and 2008. Our accounts receivable days outstanding were at 24 in 2009 up from 21 in 2008. We expect that future accounts receivable and inventory balances will fluctuate with growth in net sales and the mix of our net sales between consumer and business customers.

Net cash provided by operating activities was $4.8 million, $82.4 million, and $93.1 million during 2009, 2008, and 2007. The decrease in cash provided by operating activities in 2009 over 2008 resulted from a $3.0 million decrease in net income adjusted by other non-cash items, such as depreciation expense, and a decrease of $74.6 million in cash used for changes in our working capital accounts. The decrease in cash provided by operating activities in 2008 compared to 2007 resulted from a $3.3 million decrease in net income adjusted by other non-cash items, such as depreciation expense, and a decrease of $7.4 million in cash used for changes in working capital accounts.

Net cash used in investing activities was $32.3 million during 2009, primarily for the CircuitCity.com acquisition and capital expenditures. The WStore acquisition used approximately $4.5 million and provided $5.4 million in cash acquired.  Cash flows used in investing activities during 2008 totaled $45.5 million primarily for the CompUSA acquisition and for capital expenditures. Net cash used in investing activities was $7.7 million during 2007, primarily for capital expenditures. Capital expenditures in 2009, 2008, and 2007 included upgrades and enhancements to our information and communications systems hardware and software and expenditures in retail stores in North America.

Net cash used in financing activities was $31.5 million during 2009.  We repaid approximately $3.6 million in short term debt, repaid approximately $0.8 million in capital lease obligations, paid a special dividend of $27.6 million and repurchased Company stock of approximately $1.2 million. Proceeds from stock option exercises provided approximately $1.7 million of cash. Net cash used in financing activities

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was $45.0 million during 2008. We repaid approximately $3.9 million in short-term debt, repaid approximately $0.7 million in capital lease obligations, paid a special dividend of $37.1 million, and repurchased Company stock of approximately $5.8 million. Proceeds and excess tax benefits from stock option exercises provided approximately $2.5 million of cash. Net cash used in financing activities was $42.7 million during 2007, attributable to dividends paid of $36.6 million, repayment of short term debt of $8.7 million, repayment of $0.6 million in capital lease obligations, repurchase of common stock of approximately $1.8 million, offset by proceeds of stock option exercises and related excess tax benefits of $5.0 million.

We have a $120.0 million secured revolving credit agreement (which may be increased by up to an additional $30.0 million, subject to certain conditions).  The facility expires in October 2010 and the Company expects to renew the facility on or before that date.  Borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and 40% of qualified inventories and are secured by accounts receivable, inventories and certain other assets. The undrawn availability under the facility may not be less than $15.0 million until the last day of any month in which the availability net of outstanding borrowings is at least $70.0 million. The revolving credit agreement requires that we maintain a minimum level of availability. If such availability is not maintained, we will then be required to maintain a fixed charge coverage ratio (as defined). The agreement contains certain other covenants, including restrictions on capital expenditures and payments of dividends. As of December 31, 2009, the Company was in compliance with all of the covenants under the credit facility. Eligible collateral under the facility was $110.8 million, total availability was $98.7 million, outstanding letters of credit of were $12.1 million and there were no outstanding advances.

The Company’s Inmac WStore subsidiary maintains a secured revolving credit agreement with a financial institution in France which is secured by WStore Europe SA accounts receivable balances. Available amounts for borrowing under this facility includes all accounts receivable balances not over 60 days past due reduced by the greater of €4.0 million or 10% of the eligible accounts receivable. As of December 31, 2009, there was availability under this credit facility of approximately €6.0 million ($8.6 million) and there was €9.9 million ($14.2 million) of outstanding borrowings.  Outstanding balances under this agreement carry interest at 1.5% as of December 31, 2009.  The credit facility duration is indefinite; however either party may cancel the agreement with ninety days notice. Under this agreement the Company is subject to certain non-financial covenants which it was in compliance with at December 31, 2009.

The Company’s WStore UK subsidiary maintains a £2 million secured resolving credit agreement with a financial institution in the United Kingdom which is secured by WStore UK’s accounts receivable balances. Available amounts for borrowing under this facility includes accounts receivable balances less 30% retention. As of December 31, 2009, there was availability under this credit facility of approximately £.5 million ($.8 million).  Outstanding balances under this agreement carry interest at 2.5% above the overnight daily LIBOR rate (0.5% at December 31, 2009).  The credit facility duration is indefinite; however either party may cancel the agreement with ninety days notice. Under this agreement the Company is subject to certain non-financial covenants which it was in compliance with at December 31, 2009.

The Company’s Netherlands subsidiary maintained a €5.0 million credit facility with a local financial institution. This facility expired in November 2008 and was not renewed.

Our earnings and cash flows are seasonal in nature, with the fourth quarter of the fiscal year generating higher earnings and cash flows than the other quarters. Levels of earnings and cash flows are dependent on factors such as consolidated gross margin and selling, general and administrative costs as a percentage of sales, product mix and relative levels of domestic and foreign sales. Unusual expense items, such as one time charges and settlements, may impact earnings and are separately disclosed. We expect that past performance may not be indicative of future performance due to the competitive nature of our Technology Products segment where the need to adjust prices to gain or hold market share is prevalent.

Macroeconomic conditions, such as business and consumer sentiment, may affect our revenues, cash flows or financial condition.  However, we do not believe that there is a direct correlation between any specific macroeconomic indicator and our revenues, cash flows or financial condition.  We are not currently interest rate sensitive, as we have significant cash balances and minimal debt.

We anticipate cash needs to support our growth and expansion plans, continued investment in upgrading and expanding our technological capabilities and information technology infrastructure, opening of new retail stores, and in building out and expanding our distribution center facilities and inventory systems.

30

These expenses and capital expenditures will require significant levels of liquidity, which we believe can be adequately funded from our currently available cash resources. We have recently engaged in several opportunistic acquisitions, choosing to pay the purchase price in cash, and may do so in the future as favorable situations arise.  However, a deep and prolonged period of reduced consumer and or business to business spending could adversely impact our cash resources and force us to either forego future acquisition opportunities or to pay the purchase price in shares of our common stock, which could have a dilutive effect on the our earnings per share. In addition we anticipate cash needs for implementation of financial and retail point of sale systems. We believe that our cash balances, future cash flows from operations and our availability under credit facilities will be sufficient to fund our working capital and other cash requirements for the next twelve months.

We maintain our cash and cash equivalents primarily in money market funds or their equivalent. As of December 31, 2009, all of our investments had maturities of less than three months.  Accordingly, we do not believe that our investments have significant exposure to interest rate risk.

We are obligated under non-cancelable operating leases for the rental of most of our facilities and certain of our equipment which expire at various dates through 2026.  We have sublease agreements for unused space we lease in Wellingborough, England and Uniondale, New York. In the event the sub lessee is unable to fulfill its obligations, we would be responsible for rents due under the leases.

Following is a summary of our contractual obligations for future principal payments on our debt, minimum rental payments on our non-cancelable operating leases and minimum payments on our other purchase obligations as of December 2009 (in thousands):

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Contractual Obligations:
Capital lease obligations	$	2,423	$	1,145	$	1,278	$	—	$	—
Non-cancelable operating leases, net of subleases	187,951		23,849		67,127		47,213		49,762
Short term debt	14,168		14,168
Purchase & other obligations	26,854		17,191		6,870		2,793		—
Tax contingencies	—		—		—		—		—
Total contractual obligations	$	231,396	$	56,353	$	75,275	$	50,006	$	49,762

Our purchase and other obligations consist primarily of certain employment agreements and service agreements.

In addition to the contractual obligations noted above, we had $11.0 million of standby letters of credit outstanding as of December 2009.

We are party to certain litigation, the outcome of which we believe, based on discussions with legal counsel, will not have a material adverse effect on our consolidated financial statements.

Tax contingencies are related to uncertain tax positions taken on income tax returns that may result in additional tax, interest and penalties being paid to taxing authorities.

31

Off-Balance Sheet Arrangements

We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. We do not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect our liquidity or the availability of capital resources.

The Company currently leases its facility in Port Washington, NY from Addwin Realty Associates, an entity owned by Richard Leeds, Bruce Leeds, and Robert Leeds, senior executives, Directors and controlling shareholders of the Company.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks, which include changes in U.S. and international interest rates as well as changes in currency exchange rates (principally Pounds Sterling, Euros and Canadian Dollars) as measured against the U.S. Dollar and each other.

The translation of the financial statements of our operations located outside of the United States is impacted by movements in foreign currency exchange rates. Changes in currency exchange rates as measured against the U.S. dollar may positively or negatively affect income statement, balance sheet and cash flows as expressed in U.S. dollars. Sales would have fluctuated by approximately $109.3 million and pre tax income would have fluctuated by approximately $1.8 million if average foreign exchange rates changed by 10% in 2009.  We have limited involvement with derivative financial instruments and do not use them for trading purposes. We may enter into foreign currency options or forward exchange contracts aimed at limiting in part the impact of certain currency fluctuations, but as of December 31, 2009 we had no outstanding forward exchange contracts.

Our exposure to market risk for changes in interest rates relates primarily to our variable rate debt.  Our variable rate debt consists of short-term borrowings under our credit facilities.  As of December 31, 2009, there were no outstanding balances under our variable rate credit facility. A hypothetical change in average interest rates of one percentage point is not expected to have a material effect on our financial position, results of operations or cash flows over the next fiscal year.

Item 8. Financial Statements and Supplementary Data.

The information required by Item 8 of Part II is incorporated herein by reference to the Consolidated Financial Statements filed with this report; see Item 15 of Part IV.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2009. Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective.

32

Inherent Limitations of Internal Controls over Financial Reporting

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was effective as of December 31, 2009.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009, a copy of which is included in this report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by Item 10 of Part III is hereby incorporated by reference to the Company’s Proxy Statement for the 2010 Annual Meeting of Stockholders. (the “Proxy Statement”).

Item 11. Executive Compensation.

The information required by Item 11 of Part III is hereby incorporated by reference to the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by item 12 of Part III is hereby incorporated by reference to the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by Item 10 of Part III is hereby incorporated by reference to the Proxy Statement.

Item 14. Principal Accounting Fees and Services.

The information required by Item 14 of Part III is hereby incorporated by reference to the Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)	1.	Consolidated Financial Statements of Systemax Inc.	Reference
		Reports of Ernst & Young LLP Independent Registered Public Accounting Firm	39
		Consolidated Balance Sheets as of December 31, 2009 and 2008	41
		Consolidated Statements of Operations for the years ended December 31, 2009, 2008, and 2007	42
		Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007	43
		Consolidated Statements of Shareholders’ Equity for the Years ended December 31, 2009, 2008 and 2007	44
		Notes to Consolidated Financial Statements	45
	2.	Financial Statement Schedules:
		The following financial statement schedule is filed as part of this report and should be read together with our consolidated financial statements:
		Schedule II — Valuation and Qualifying Accounts	58

34

		Schedules not included with this additional financial data have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.
Item 15. Exhibits and Financial Statement Schedules.
	3.	Exhibits.

Exhibit
No.	Description
3.1	Composite Certificate of Incorporation of Registrant, as amended (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2001)
3.2	Amended and Restated By-laws of Registrant (effective as of December 29, 2007, incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007)
3.3	Amendment to the Bylaws of the Registrant (incorporated by reference to the Company’s report on Form 8-K dated March 3, 2008)
4.1	Stockholders Agreement (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 1995)
10.1	Form of 1995 Long-Term Stock Incentive Plan* (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 333-1852)
10.2	Form of 1995 Stock Plan for Non-Employee Directors* (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 333-1852)
10.3	Form of 1999 Long-Term Stock Incentive Plan as amended* (incorporated by reference to the Company’s report on Form 8-K dated May 20, 2003)
10.4	Form of 2006 Stock Incentive Plan for Non-Employee Directors* (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006)
10.5	Form of 2005 Employee Stock Purchase Plan* (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006)
10.6	Lease Agreement dated September 20, 1988 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 33-92052)
10.7	First Amendment to Lease Agreement dated September 20, 1998 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 1998)
10.8	Second Amendment to Lease Agreement dated September 20, 1988 between the Company and Addwin Realty Associates (Port Washington facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007)
10.9	Build-to-Suit Lease Agreement dated April, 1995 among the Company, American National Bank and Trust Company of Chicago (Trustee for the

35

	original landlord) and Walsh, Higgins & Company (Contractor) (“Naperville Illinois Facility Lease”) (incorporated by reference to the Company’s registration statement on Form S-1) (Registration No. 33-92052)
10.10	First Amendment, dated as of February 1, 2006, to the Naperville Illinois Facility Lease between the Company and Ambassador Drive LLC (current landlord) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005)
10.11	Lease Agreement dated September 17, 1998 between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (incorporated by reference to the Company’s quarterly report on Form 10-Q for the quarterly period ended September 30, 1998)
10.12	First Amendment, dated as of September 5, 2003, to the Lease Agreement between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (filed herewith)
10.13	Second Amendment, dated March 22, 2007, to the Lease Agreement between Tiger Direct, Inc. and Keystone Miami Property Holding Corp. (Miami facility) (filed herewith)
10.14	Third Amendment, dated as of June 26, 2009, to the Lease Agreement between Tiger Direct, Inc. and Mota Associates Limited Partnership (successor in interest to landlord Keystone Miami Property Holding Corp.) (Miami facility) (filed herewith)
10.15	Lease agreement, dated December 8, 2005, between the Company and Hamilton Business Center, LLC (Buford, Georgia facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005)
10.16	First Amendment, dated as of June 12, 2006, to the Lease Agreement between the Company and Hamilton Business Center, LLC (Buford, Georgia facility) (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005)
10.17	Employment Agreement entered into on October 12, 2004 but effective as of June 1, 2004 between the Company and Gilbert Fiorentino* (incorporated by reference to the Company’s report on Form 8-K dated October 12, 2004)
10.18	Amendment No. 1, dated December 30, 2009, to Employment Agreement between the Company and Gilbert Fiorentino* (incorporated by reference to the Company’s report on Form 8-K dated December 30, 2009).
10.19	Restricted Stock Unit Agreement entered into on October 12, 2004 but effective as of June 1, 2004 between the Company and Gilbert Fiorentino* (incorporated by reference to the Company’s report on Form 8-K dated October 12, 2004).
10.20	Amendment No. 1, dated December 30, 2009, to the Restricted Stock Unit Agreement between the Company and Gilbert Fiorentino* (incorporated by reference to the Company’s report on Form 8-K dated December 30, 2009).
10.21	Employment Agreement, dated as of January 17, 2007, between the Company and Lawrence P. Reinhold*(incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2006).
10.22	Amendment No.1, dated December 30, 2009, to the Employment Agreement between the Company and Lawrence P. Reinhold* (incorporated by reference to the Company’s report on Form 8-K dated December 30, 2009).

36

10.23	Amended and Restated Credit Agreement, dated as of October 27, 2005, between JPMorgan Chase Bank, N.A. and affiliates, General Electric Capital Corporation, and GMAC Commercial Finance LLC (as Lenders) with the Company and certain subsidiaries of the Company (as Borrowers) (the “Amended and Restated JP Morgan Chase Loan Agreement”) (incorporated by reference to the Company’s report on Form 8-K dated October 27, 2005)
10.24	Amendment No. 1, dated as of December 19, 2005, to the Amended and Restated JP Morgan Chase Loan Agreement (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2005)
10.25	Asset Purchase Agreement between the Company and CompUSA dated January 5, 2008 (incorporated by reference to the Company’s annual report on Form 10-K for the year December 31, 2007)
10.26	Amendment to Asset Purchase Agreement between the Company and CompUSA dated February 14, 2008 (incorporated by reference to the Company’s annual report on Form 10-K for the year ended December 31, 2007)
10.27	Asset Purchase Agreement, as amended, dated as of April 5, 2009 and May 14, 2009, by and among Systemax Inc., as Buyer and Circuit City Stores West Coast, Inc. and Circuit City Stores, Inc, as Sellers (incorporated by reference to the Company’s report on Form 8-K dated May 20, 2009).
14	Corporate Ethics Policy for Officers, Directors and Employees (revised as of March, 2010)
21	Subsidiaries of the Registrant (filed herewith)
23	Consent of Independent Registered Public Accounting Firm (filed herewith)
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

*   Management contract or compensatory plan or arrangement

37

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SYSTEMAX INC.

By: /s/ RICHARD LEEDS

Richard Leeds

Chairman and Chief Executive Officer

Date: March 18, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ RICHARD LEEDS	Chairman and Chief Executive Officer	March 18, 2010
Richard Leeds	(Principal Executive Officer)
/s/ BRUCE LEEDS	Vice Chairman and Director	March 18, 2010
Bruce Leeds
/s/ ROBERT LEEDS	Vice Chairman and Director	March 18, 2010
Robert Leeds
/s/ LAWRENCE P. REINHOLD	Executive Vice President, Chief Financial Officer	March 18, 2010
Lawrence P. Reinhold	and Director
	(Principal Financial Officer)
/s/ THOMAS AXMACHER	Vice President and Controller	March 18, 2010
Thomas Axmacher	(Principal Accounting Officer)
/s/ GILBERT FIORENTINO	Chief Executive, Technology Products Group	March 18, 2010
Gilbert Fiorentino	and Director
/s/ ROBERT D. ROSENTHAL	Director	March 18, 2010
Robert D. Rosenthal
/s/ STACY DICK	Director	March 18, 2010
Stacy Dick
/s/ MARIE ADLER-KRAVECAS	Director	March 18, 2010
Marie Adler-Kravecas

38

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Systemax Inc.

We have audited the accompanying consolidated balance sheets of Systemax Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009.  Our audits also included the financial statement schedule listed in the index at Item 15(a).  These financial statements and schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Systemax Inc. at December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the Company adopted the guidance issued in Financial Accounting Standards Board (“FASB”) Statement No. 141(R), “Business Combinations” (codified in FASB Accounting Standards Codification Topic 805, “Business Combinations”) on January 1, 2009.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Systemax Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 18, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

March 18, 2010

39

The Board of Directors and Shareholders of Systemax Inc.

We have audited Systemax Inc.’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Systemax Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Systemax Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009 based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Systemax Inc. as of December 31, 2009 and 2008 and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009 of Systemax Inc. and our report dated March 18, 2010 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

New York, New York

March 18, 2010

40

SYSTEMAX INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except for share data)

	December 31,
	2009			2008
ASSETS:
Current assets:
Cash	$	58,309		$	115,967
Accounts receivable, net of allowances of $22,532 and $17,523	241,860			182,841
Inventories	365,725			290,594
Prepaid expenses and other current assets	20,066			12,667
Deferred income taxes	6,626			9,558
Total current assets	692,586			611,627
Property, plant and equipment, net	65,598			48,465
Deferred income taxes	8,564			11,198
Goodwill and intangibles	48,127			29,366
Other assets	2,026			1,797
Total assets	$	816,901		$	702,453
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	346,362		$	285,410
Accrued expenses and other current liabilities	80,945			72,352
Short term debt	14,168			—
Current portion of capitalized lease obligations	1,029			773
Total current liabilities	442,504			358,535
Capitalized lease obligations	1,194			1,411
Other liabilities	8,518			8,552
Total liabilities	452,216			368,498
Commitments and contingencies
Shareholders’ equity:
Preferred stock, par value $.01 per share, authorized 25 million shares; issued none
Common stock, par value $.01 per share, authorized 150 million shares; issued 38,862,019 and 38,855,989 shares; outstanding 36,450,767 and 36,223,747 shares	389			389
Additional paid-in capital	180,508			179,241
Common stock in treasury at cost — 2,411,252 and 2,632,242 shares	(28,545		)	(31,158		)
Retained earnings	210,975			192,401
Accumulated other comprehensive income (loss), net of tax	1,358			(6,918		)
Total shareholders’ equity	364,685			333,955
Total liabilities and shareholders’ equity	$	816,901		$	702,453

See notes to consolidated financial statements.

41

SYSTEMAX INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Year Ended December 31,
	2009			2008			2007
Net sales	$	3,165,995		$	3,032,961		$	2,779,875
Cost of sales	2,705,747			2,574,402			2,353,574
Gross profit	460,248			458,559			426,301
Selling, general and administrative expenses	386,857			375,192			332,359
Operating income	73,391			83,367			93,942
Foreign currency exchange loss (gain)	187			1,300			(1,562		)
Interest and other income, net	(768		)	(1,981		)	(5,505		)
Interest expense	887			305			986
Income before income taxes	73,085			83,743			100,023
Provision for income taxes	26,900			30,900			30,542
Net income	$	46,185		$	52,843		$	69,481
Net income per common share:
Basic	$	1.26		$	1.43		$	1.93
Diluted	$	1.24		$	1.40		$	1.84
Weighted average common and common equivalent shares:
Basic	36,706			36,950			35,968
Diluted	37,343			37,705			37,688

See notes to consolidated financial statements.

42

SYSTEMAX INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2009			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	46,185		$	52,843		$	69,481
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,353			10,387			8,780
Provision (benefit) for deferred income taxes	5,704			6,197			(6,106		)
Provision for returns and doubtful accounts	4,698			2,424			4,575
Compensation expense related to equity compensation plans	2,867			3,869			4,159
Excess tax benefit from exercises of stock options	(576		)	(1,380		)	(2,160		)
Loss (gain) on dispositions and abandonment	154			89			(1,032		)
Changes in operating assets and liabilities:
Accounts receivable	(20,907		)	6,010			29,450		)
Inventories	(69,618		)	(48,924		)	(21,628		)
Prepaid expenses and other current assets	(5,490		)	(16		)	15,916
Income taxes payable/receivable	3,983			602			1,925
Accounts payable, accrued expenses and other current liabilities	25,414			50,318			48,623
Net cash provided by operating activities	4,767			82,419			93,083
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Circuit City assets	(14,494		)	—			—
Purchase of WStore Europe SA	(4,469		)	—			—
Cash acquired WStore Europe SA	5,438			—			—
Purchase of certain CompUSA assets	—			(30,649		)	—
Purchases of property, plant and equipment	(18,855		)	(14,942		)	(7,699		)
Proceeds from disposals of property, plant and equipment	84			72			28
Net cash used in investing activities	(32,296		)	(45,519		)	(7,671		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings from banks	(3,614		)	(3,880		)	(8,708		)
Repayments of capital lease obligations	(726		)	(673		)	(579		)
Dividends paid	(27,611		)	(37,126		)	(36,588		)
Proceeds from issuance of common stock	1,082			1,133			2,830
Repurchase of common stock	—			—			(1,858		)
Purchase of treasury stock	(1,174		)	(5,824		)	—
Excess tax benefit from exercises of stock options	576			1,380			2,160
Net cash used in by financing activities	(31,467		)	(44,990		)	(42,743		)
EFFECTS OF EXCHANGE RATES ON CASH	1,338			(3,964		)	(1,612		)
NET (DECREASE) INCREASE IN CASH	(57,658		)	(12,054		)	41,057
CASH – BEGINNING OF YEAR	115,967			128,021			86,964
CASH – END OF YEAR	$	58,309		$	115,967		$	128,021
Supplemental disclosures:
Interest paid	$	756		$	291		$	1,182
Income taxes paid	$	13,909		$	29,514		$	30,275
Supplemental disclosures of non-cash investing and financing activities:
Acquisitions of equipment through capital leases	$	765		$	2,152		$	251

See notes to consolidated financial statements.

43

SYSTEMAX INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

	Common Stock
	Number of Shares Outstanding		Amount		Additional Paid-in Capital			Treasury Stock, At Cost			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Comprehensive Income (Loss)
Balances, January 1, 2007	35,341		383		172,983			(35,131		)	144,074			7,181
Stock-based compensation expense					4,009
Issuance of restricted stock	205				(2,843		)	2,406
Exercise of stock options	546				(3,569		)	6,401
Income tax benefit on stock-based compensation					2,801
Cumulative effect of adoption of FIN 48											(283		)
Change in cumulative translation adjustment														4,530			4,530
Dividends paid											(36,588		)
Net income											69,481						69,481
Total comprehensive income																	74,011
Balances, December 31, 2007	36,092		383		173,381			(26,324		)	176,684			11,711
Stock-based compensation expense					3,794
Issuance of restricted stock	104		1		283			46
Exercise of stock options	503		5		184			944
Repurchase of treasury stock	(475	)						(5,824		)
Income tax benefit on stock-based compensation					1,599
Change in cumulative translation adjustment														(18,629		)	(18,629		)
Dividends paid											(37,126		)
Net income											52,843						52,843
Total comprehensive income																	34,214
Balances, December 31, 2008	36,224		$	389	$	179,241		$	(31,158	)	$	192,401		$	(6,918	)
Stock-based compensation expense					2,818
Issuance of restricted stock	105				(754		)	1,183
Retired restricted stock					(10		)	(15		)
Exercise of stock options	221				(1,537		)	2,619
Repurchase of treasury stock	(99	)						(1,174		)
Income tax benefit on stock-based compensation					750
Change in cumulative translation adjustment														8,276			8,276
Dividends paid											(27,611		)
Net income											46,185						46,185
Total comprehensive income																	$	54,461
Balances, December 31, 2009	36,451		$	389	$	180,508		$	(28,545	)	$	210,975		$	1,358

See notes to consolidated financial statements.

44

SYSTEMAX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Systemax Inc. and its wholly-owned subsidiaries (collectively, the “Company” or “Systemax”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications— Certain prior year amounts were reclassified to conform to current year presentation.  Additionally foreign exchange loss (gain) has been reclassified from selling, general and administrative expense to a separate income statement line item in prior years to conform to current year presentation on the consolidated statements of operations.

Use of Estimates In Financial Statements — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Fiscal Year — The Company’s fiscal year ends at midnight on the Saturday closest to December 31. Fiscal years will typically include 52 weeks, but every few years will include 53 weeks which was the case in 2008. For clarity of presentation herein, all fiscal years are referred to as if they ended on December 31. The fiscal year will be divided into four fiscal quarters that each end at midnight on a Saturday. Fiscal quarters will typically include 13 weeks, but the fourth quarter will include 14 weeks in a 53 week fiscal year. For clarity of presentation herein, all fiscal quarters are referred to as if they ended on the traditional calendar month.

Foreign Currency Translation — The Company has operations in numerous foreign countries.  The functional currency of each foreign country is the local currency.  The financial statements of the Company’s foreign entities are translated into U.S. dollars, the reporting currency, using year-end exchange rates for assets and liabilities, average exchange rates for the statement of operations items and historical rates for equity accounts.  Translation gains or losses are recorded as a separate component of shareholders’ equity.

Cash — The Company considers amounts held in money market accounts and other short-term investments, including overnight bank deposits, with an original maturity date of three months or less to be cash.

Inventories — Inventories consist primarily of finished goods and are stated at the lower of cost or market value.  Cost is determined by using the first-in, first-out method except in Europe and retail locations where an average cost is used. Allowances are maintained for obsolete, slow-moving and non-saleable inventory.

Property, Plant and Equipment — Property, plant and equipment is stated at cost.  Depreciation of furniture, fixtures and equipment, including equipment under capital leases, are depreciated using the straight-line or accelerated method over their estimated useful lives ranging from three to ten years.  Depreciation of buildings is on the straight-line method over estimated useful lives of 30 to 50 years.  Leasehold improvements are amortized over the lesser of the useful lives or the term of the respective leases.

Evaluation of Long-lived Assets — Long-lived assets are evaluated for recoverability whenever events or changes in circumstances indicate that an asset may have been impaired.  In evaluating an asset for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and eventual disposition.  If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss, equal to the excess of the carrying amount over the fair market value of the asset is recognized.

Goodwill and intangible assets — Goodwill represents the excess of the cost of acquired assets over the fair value of assets acquired. The Company tests goodwill and indefinite lived intangibles for impairment annually or more frequently if indicators of impairment exist. In addition, goodwill is required to be tested for impairment after a portion of the goodwill is allocated to a business targeted for disposal. The Company’s identifiable intangible assets consist of trademarks, trade and domain names, retail leases and customer lists (See Note 2).

Accruals — Management makes estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. These estimates are based upon various factors such as the number of units sold, historical and anticipated results and data received from third party vendors. Actual results could differ from these estimates. Our most significant estimates include those related to the costs of vendor drop shipments, sales returns and allowances, cooperative advertising and customer rebate reserves, and other vendor and employee related costs.

45

Income Taxes — Deferred tax assets and liabilities are recognized for the effect of temporary differences between the book and tax bases of recorded assets and liabilities and for tax loss carry forwards. The realization of net deferred tax assets is dependent upon our ability to generate sufficient future taxable income. Where it is more likely than not that some portion or the entire deferred tax asset will not be realized, we have provided a valuation allowance. If the realization of those deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made.

The Company provides for uncertain tax positions and related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities.  To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected.

Revenue Recognition and Accounts Receivable — The Company recognizes sales of products, including shipping revenue, when persuasive evidence of an order arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Generally, these criteria are met at the time the product is received by the customers when title and risk of loss have transferred.  Allowances for estimated subsequent customer returns, rebates and sales incentives are provided when revenues are recorded.  Costs incurred for the shipping and handling of its products are recorded as cost of sales. Revenue from extended warranty and support contracts on the Company’s assembled PCs is deferred and recognized over the contract period. The Company evaluates collectability of accounts receivable based on numerous factors, including past transaction history with customers and their credit rating and provides a reserve for accounts that are potentially uncollectible. Trade receivables are generally written off once all collection efforts have been exhausted. Accounts receivable are shown in the consolidated balance sheets net of allowances for doubtful collections and subsequent customer returns.

Advertising Costs — Expenditures for internet, television, local radio and newspaper advertising are expensed in the period the advertising takes place. Catalog preparation, printing and postage expenditures are amortized over the period of catalog distribution during which the benefits are expected, generally one to six months.

Net advertising expenses were $38.9 million, $40.0 million and $47.2 million during 2009, 2008 and 2007, respectively and are included in the accompanying consolidated statements of operations.  The Company utilizes advertising programs to support vendors, including catalogs, internet and magazine advertising, and receives payments and credits from vendors, including consideration pursuant to volume incentive programs and cooperative marketing programs. The Company accounts for consideration from vendors as a reduction of cost of sales unless certain conditions are met showing that the funds are used for specific, incremental, identifiable costs, in which case the consideration is accounted for as a reduction in the related expense category, such as advertising expense.  The amount of vendor consideration recorded as a reduction of selling, general and administrative expenses totaled $55.9 million, $60.4 million and $42.6 million during 2009, 2008 and 2007, respectively.

Prepaid expenses as of December 2009 and 2008 include deferred advertising costs of $2.8 million and $4.1 million which are reflected as an expense during the periods benefited, typically the subsequent fiscal quarter.

Stock based compensation— The Company recognizes the fair value of share based compensation in the consolidated statement of operations over the requisite employee service period.  Stock-based compensation expense includes an estimate for forfeitures and is recognized over the expected term of the award.

Net Income Per Common Share — Net income per common share basic is calculated based upon the weighted average number of common shares outstanding during the respective periods presented. Net income per common share diluted is calculated based upon the weighted average number of common shares outstanding and included the equivalent shares for dilutive securities outstanding during the respective periods, where the effect is anti-dilutive. The dilutive effect of outstanding options issued by the Company is reflected in net income per share - diluted using the treasury stock method. Under the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period exceeds the exercise price of the options. Equivalent common shares of 775,000, 941,000, and 1,087,000 in 2009, 2008 and 2007, respectively were included for the diluted calculation. The weighted average number of stock options outstanding excluded from the computation of diluted earnings per share was 711,000, 622,000, and 0 in 2009, 2008 and 2007, respectively due to their antidilutive effect.

Comprehensive Income — Comprehensive income consists of net income and foreign currency translation adjustments and is included in the consolidated statements of shareholders’ equity.  Comprehensive income was $54.5 million, $34.2 million and $74.0 million in 2009, 2008 and 2007, respectively.

Employee Benefit Plans - The Company’s U.S. subsidiaries participate in a defined contribution 401(k) plan covering substantially all U.S. employees.  Employees may invest 1% or more of their eligible compensation, limited to maximum amounts as determined by the Internal Revenue Service. The Company provides a matching contribution to the plan, determined as a percentage of the employees’ contributions.  Aggregate expense to the Company for contributions to such plans was approximately $0.9 million, $0.7 million and $0.6 million in 2009, 2008 and 2007, respectively.

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Fair Value of Financial Instruments - Financial instruments consist primarily of investments in cash, trade accounts receivable, accounts payable and debt obligations.  The Company estimates the fair value of financial instruments based on interest rates available to the Company and by comparison to quoted market prices.  At December 31, 2009 and 2008, the carrying amounts of cash, accounts receivable, debt and accounts payable are considered to be representative of their respective fair values due to their short-term nature.

Concentration of Credit Risk — Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, and accounts receivable.  The Company’s excess cash balances are invested with money center banks.  Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers and their geographic dispersion comprising the Company’s customer base. The Company also performs on-going credit evaluations and maintains allowances for potential losses as warranted.

Recent Accounting Pronouncements

Public companies in the United States are subject to the accounting and reporting requirements of various authorities, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). These authorities issue numerous pronouncements, most of which are not applicable to the Company’s current or reasonably foreseeable operating structure. Below are the new authoritative pronouncements that management believes are relevant to Company’s current operations.

In October 2009, the FASB issued amended guidance related to revenue recognition in multiple-deliverable revenue arrangements and certain arrangements that include software elements. This standard eliminates the residual method of revenue allocation by requiring entities to allocate revenue in an arrangement to all of the deliverables based upon the relative selling prices of the delivered goods and services. The FASB also issued a new accounting standard in October 2009, which changes revenue recognition for tangible products containing software and hardware elements. Under this standard, tangible products containing software and hardware that function together to deliver the tangible products’ essential functionality are scoped out of the existing software revenue recognition guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards are effective for fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact, if any, of the adoption of this standard on our consolidated financial position and results of operations.

Effective January 1, 2009 the Company adopted authoritative guidance that establishes principles and requirements for how an acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any non-controlling interest in the acquiree, (ii) recognizes and measures goodwill acquired in a business combination or a gain from a bargain purchase, and (iii) determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of the business combination. This guidance is applied prospectively for all business combinations entered into after the date of adoption. In the third quarter of 2009 the Company expensed approximately $0.8 million of costs that would have been capitalized under previous guidance.

In June 2008, FASB issued authoritative guidance to clarify that instruments granted in share-based payment transactions can be participating securities prior to the requisite service having been rendered. The guidance applies to the calculation of Earnings Per Share (“EPS”) for share-based payment awards with rights to dividends or dividend equivalents. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of EPS pursuant to the two-class method. This guidance became effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period EPS data presented is adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data). The Company adopted this authoritative guidance in January 2009 and it did not have a material impact on its condensed consolidated financial statements.

2.ACQUISITIONS

On September 18, 2009, the Company acquired all of the outstanding stock of WStore Europe SA and its subsidiaries, (“WStore”), a European supplier of business IT products and software solutions with operations in France and the United Kingdom. The purchase price (after giving effect to the conversion of Euros to U.S. dollars) was approximately $4.4 million in cash, $2.2 million of which was placed into an escrow account for one year to secure the sellers’ indemnification obligations under the purchase agreement. The Company completed a preliminary allocation of the purchase price as of the acquisition date and recorded assets of approximately $3.4 million for Client Lists, $1.4 million for Trademarks, $1.0 million for Technology acquired and $0.1 million of residual goodwill. These assets were recorded in the Company’s Technology Products business segment. The Company expects to amortize its Client Lists and Technology over a weighted average 5 year period.  All other assets have indefinite lives.  A final purchase price allocation will be done in 2010. The operating results of WStore are included in the accompanying condensed consolidated statements of operations from the date of acquisition. WStore is included in the Company’s Technology Products business segment. The Company has determined that this was not a material acquisition.

On April 5, 2009, the Company entered into an Asset Purchase Agreement with Circuit City Stores, Inc. and Circuit City Stores West Coast, Inc. (the “Sellers”). Pursuant to the Asset Purchase Agreement, on May 19, 2009 the Company acquired certain intellectual property and ecommerce assets owned by the Sellers for $14.0 million in cash. In addition, the Company

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will pay the Sellers a royalty based on a percentage of sales over a thirty month period dependent upon levels of sales achieved from the acquired assets, with a minimum payment of $3.0 million. The Company capitalized legal and other fees incurred of approximately $0.5 million. The acquisition has been accounted for as an asset purchase rather than a business combination as the acquisition does not meet the definition of a business under applicable accounting principles.

The Company has completed a purchase price allocation with respect to the Circuit City asset acquisition and recorded assets of approximately $5.0 million for Trademarks and Trade Names, $7.0 million for Domain Names and $2.5 million for Client Lists. These assets were recorded in the Company’s Technology Products business segment. The Company expects to amortize its Client Lists over a weighted average 5 year period.  All other assets have indefinite lives.  The gross carrying amount and accumulated amortization for amortizable intangible assets related to this acquisition at December 31, 2009 and December 31, 2008 was as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization
Client Lists	$	2,541	$	370

On January 5, 2008, the Company, through various subsidiaries, entered into an asset purchase agreement with CompUSA Inc., a Delaware corporation. Pursuant to the Purchase Agreement, the Company acquired certain assets and liabilities related to the e-commerce business of CompUSA Inc., certain intellectual property rights owned by CompUSA, and the E-Commerce Business for $18.9 million in cash. Pursuant to the Purchase Agreement, the Company also acquired sixteen retail leases from CompUSA Inc. and certain fixtures located at these locations. This acquisition accelerated the Company’s planned expansion into the retail market place in North America and Puerto Rico. The Company has recorded assets of approximately $17.0 million for Trademarks and Trade Names, $8.0 million for Domain Names, $3.4 million for Retail Store Leases, $0.4 million for Client Lists, $0.9 million for fixed assets and $0.9 million for Goodwill. These assets were recorded in the Company’s Technology Products business segment. The Company expects to amortize its Retail Store Leases over the remaining weighted average life of the leases, 12.9 years, the Client Lists over a weighted average 5 year period and depreciate its fixed assets over a similar period. All other intangible assets are indefinite lived. All of the Company’s goodwill at December 31, 2009 is deductible for tax purposes on a straight line basis over 15 years. The gross carrying amount and accumulated amortization for amortizable intangible assets at December 31, 2009 was as follows (in thousands):

	2009				2008
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Retail store leases	$	3,410	$	484	$	3,410	$	220
Client lists	400		323		400		$	103
	$	3,810	$	807	$	3,810	$	323

The aggregate amortization expense for material acquisitions was approximately $0.9 million in 2009. The estimated amortization for material acquisitions for future years ending December 31 is as follows (in thousands):

2010	823
2011	781
2012	771
2013	765
2014 and after	2,034
Total	$	5,174

3.PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consist of the following (in thousands):

	December 31,
	2009		2008
Land and buildings	$	28,458	$	26,556
Furniture and fixtures, office, computer and other equipment and software	123,876		92,137
Leasehold improvements	19,212		14,839
	171,546		133,532
Less accumulated depreciation and amortization	105,948		85,067
Property, plant and equipment, net	$	65,598	$	48,465

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Included in property, plant and equipment are assets under capital leases, as follows (in thousands):

	2009		2008
Furniture and fixtures, office, computer and other equipment	$	5,525	$	4,764
Less: Accumulated amortization	3,510		2,573
	$	2,015	$	2,191

Depreciation charged to operations for property, plant and equipment including capital leases  in 2009, 2008, and 2007 was $11.2 million, $10.1 million and $8.8 million, respectively.

4.CREDIT FACILITIES

The Company maintains a $120 million (which may be increased by up to $30 million, subject to certain conditions) secured revolving credit agreement with a group of financial institutions which provides for borrowings in the United States and United Kingdom. The borrowings are secured by all of the domestic and United Kingdom accounts receivable, all domestic inventories, the United Kingdom headquarters building and the Company’s shares of stock in its domestic and United Kingdom subsidiaries. The credit facility expires and outstanding borrowings thereunder are due on October 26, 2010. The borrowings under the agreement are subject to borrowing base limitations of up to 85% of eligible accounts receivable and up to 40% of qualified inventories. The interest on outstanding advances is payable monthly, at the Company’s option, at the prime rate (3.25% at December 31, 2009) plus 0.25% or the overnight daily LIBOR rate (0.5% at December 31, 2009) plus 1.25% to 2.25%. The undrawn availability under the facility may not be less than $15 million until the last day of any month in which the availability net of outstanding borrowings is at least $70 million. The facility also calls for a commitment fee payable quarterly in arrears of 0.375% of the average daily unused portions of the facility.   The revolving credit agreement requires that a minimum level of availability be maintained. If such availability is not maintained, the Company will be required to maintain a fixed charge coverage ratio (as defined). The agreement contains certain other covenants, including restrictions on capital expenditure, acquisitions and payments of dividends. We were in compliance with all of the covenants as of December 31, 2009. As of December 31, 2009, eligible collateral under the agreement was $110.8 million and total availability was $98.7 million. There were outstanding letters of credit of $12.1 million and there were no outstanding advances.

The Company’s Inmac WStore subsidiary maintains a secured revolving credit agreement with a financial institution in France which is secured by WStore Europe SA accounts receivable balances. Available amounts for borrowing under this facility includes all accounts receivable balances not over 60 days past due reduced by the greater of €4.0 million or 10% of the eligible accounts receivable. As of December 31, 2009 there was availability under this credit facility of approximately €6.0 million ($8.6 million) and there was €9.9 million ($14.2 million) of outstanding borrowings. Outstanding balances under this agreement carry interest at 1.5% as of December 31. The credit facility duration is indefinite; however either party may cancel the agreement with ninety days notice. Under this agreement the Company is subject to certain non-financial covenants which it was in compliance with at December 31, 2009.

The Company’s WStore UK subsidiary maintains a £2 million secured revolving credit agreement with a financial institution in the United Kingdom which is secured by WStore UK’s accounts receivable balances. Available amounts for borrowing under this facility includes accounts receivable balances less a 30% retention. As of December 31, 2009 there was availability under this credit facility of approximately £0.5 million ($0.8 million).Outstanding balances under this agreement carry interest at 2.5% above the overnight daily LIBOR rate (0.5% at December 31, 2009. The credit facility duration is indefinite; however either party may cancel the agreement with ninety days notice. Under this agreement the Company is subject to certain non-financial covenants which it was in compliance with at December 31, 2009.

The weighted average interest rate on short-term borrowings was 3.3%, 5.1%, and 7.5% in 2009, 2008 and 2007, respectively.

5.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

	December 31,
	2009		2008
Payroll and employee benefits	$	27,715	$	25,669
Freight	9,171		6,820
Deferred revenue	1,064		5,683
Advertising	8,030		5,286
Sales and VAT tax payable	7,989		8,061
Other	26,976		20,833
	$	80,945	$	72,352

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6.LONG-TERM DEBT

Long-term debt consists of (in thousands):

	December 31,
	2009		2008
Capitalized equipment lease obligations	$	2,223	$	2,184
Less: current portion	1,029		773
	$	1,194	$	1,411

The aggregate maturities of long-term debt outstanding at December 31, 2009 are as follows (in thousands):

	2010		2011		2012		2013		2014
Maturities	$	1,029	$	737	$	307	$	150	—

7.BUSINESS EXIT COSTS

The Company announced plans to exit its Software Solutions segment, in the second quarter of 2009, as the result of economic conditions and difficulties in marketing the segment’s products successfully. Total charges incurred for the year for severances, estimated lease termination costs and other costs were $1.2 million, $1.6 million, and $0.1 million, respectively. These costs were recorded in selling, general and administrative expenses and interest and other income, net in the accompanying condensed consolidated statement of operations.

The following table reconciles the associated liabilities incurred (in thousands):

	Severance and Personnel Costs			Lease Termination Costs			Other Exit Costs			Total
Balance, beginning of period	$	—		$	—		$	—		$	—
Charged to expense	1,208			1,644			80			2,932
Paid or otherwise settled	(1,208		)	(697		)	(80		)	(1,985		)
Balance, end of period	$	—		$	947		$	—		$	947

8.SHAREHOLDERS’ EQUITY

Stock based compensation plans

The Company currently has four equity compensation plans which reserve shares of common stock for issuance to key employees, directors, consultants and advisors to the Company.   The following is a description of these plans:

The 1995 Long-term Stock Incentive Plan - This plan, adopted in 1995, allowed the Company to issue qualified, non-qualified and deferred compensation stock options, stock appreciation rights, restricted stock and restricted unit grants, performance unit grants and other stock based awards authorized by the Compensation Committee of the Board of Directors.  Options issued under this plan expire ten years after the options are granted. The ability to grant new awards under this plan ended on December 31, 2005 but awards granted prior to such date continue until their expiration. A total of 632,475 options were outstanding under this plan as of December 31, 2009.

The 1995 Stock Option Plan for Non-Employee Directors - This plan, adopted in 1995, provides for automatic awards of non-qualified options to directors of the Company who are not employees of the Company or its affiliates. All options granted under this plan will have a ten year term from grant date and are immediately exercisable. A maximum of 100,000 shares may be granted for awards under this plan.  The ability to grant new awards under this plan ended on October 12, 2006 but awards granted prior to such date continue until their expiration. A total of 39,000 options were outstanding under this plan as of December 31, 2009.

The 1999 Long-term Stock Incentive Plan, as amended (“1999 Plan”) - This plan was adopted on October 25, 1999 with substantially the same terms and provisions as the 1995 Long-term Stock Incentive Plan.  The Company increased the number of shares that may be granted under this plan to a maximum of 7.5 million from 5.0 million shares.  The maximum number of shares granted per type of award to any individual may not exceed 1,500,000 in any calendar year and 3,000,000 in total.  In 2009 the Company extended until December 31, 2010 the expiration date under this plan after which no grants shall be made under this plan. The original expiration date was December 31, 2009. Restricted stock grants and common stock awards reduce stock options otherwise available for future grant. A total of 1,410,984 options and 400,000 restricted stock units were outstanding under this plan as of December 31, 2009.

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The 2006 Stock Incentive Plan For Non-Employee Directors — This plan, adopted by the Company’s stockholders on October 11, 2006, replaces the 1995 Stock Option Plan for Non-Employee Directors. The Company adopted the plan so that it could offer directors of the Company who are not employees of the Company or of any entity in which the Company has more than a 50% equity interest (“independent directors”) an opportunity to participate in the ownership of the Company by receiving options to purchase shares of common stock at a price equal to the fair market value at the date of grant of the option and restricted stock awards. Awards for a maximum of 200,000 shares may be granted under this plan. A total of 20,000 options were outstanding under this plan as of December 31, 2009.

Shares issued under our share-based compensation plans are usually issued from shares of our common stock held in the treasury.

The fair value of employee share options is recognized in expense over the vesting period of the options, using the graded attribution method.  The fair value of employee share options is determined on the date of grant using the Black-Scholes option pricing model. The Company has used historical volatility in its estimate of expected volatility. The expected life represents the period of time (in years) for which the options granted are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury yield curve.

Compensation cost related to non-qualified stock options recognized in operating results (selling, general and administrative expense) for 2009, 2008 and 2007 was $2.2 million, $3.2 million, and $3.4 million respectively. The related future income tax benefits recognized for 2009, 2008 and 2007 were $0.9 million, $1.2 million and $1.1 million, respectively.

Stock options

The following table presents the weighted-average assumptions used to estimate the fair value of options granted in 2009, 2008 and 2007:

	2009		2008		2007
Expected annual dividend yield	0	%	0	%	0	%
Risk-free interest rate	2.64	%	3.17	%	4.93	%
Expected volatility	66.9	%	63.8	%	71.2	%
Expected life in years	7.7		6.3		6.2

The following table summarizes information concerning outstanding and exercisable options:

	Weighted Average
	2009					2008					2007
	Shares			Exercise Price		Shares			Exercise Price		Shares			Exercise Price
Outstanding at beginning of year	2,202,584			$	9.23	2,655,937			$	7.95	2,629,076			$	4.69
Granted	164,000			$	13.46	110,000			$	12.90	699,050			$	19.45
Exercised	(221,225		)	$	4.89	(503,078		)	$	2.25	(545,815		)	$	5.19
Cancelled or expired	(42,900		)	$	16.46	(60,275		)	$	17.77	(126,374		)	$	15.64
Outstanding at end of year	2,102,459			$	9.87	2,202,584			$	9.23	2,655,937			$	7.95
Options exercisable at year end	1,558,229					1,560,804					1,645,639
Weighted average fair value per option granted during the year	$	9.53				$	7.94				$	13.19

The total intrinsic value of options exercised was $2.0 million, $4.1 million and $6.5 million respectively, for 2009, 2008 and 2007.

The following table summarizes information about options vested and exercisable or nonvested that are expected to vest (nonvested outstanding less expected forfeitures) at December 31, 2009:

Range of Exercise Prices					Number Exercisable	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in thousands)
$	1.76	to	$	5.00	427,378	$	2.28	2.53	$	5,739
$	5.01	to	$	15.00	1,063,317	$	7.68	6.07	8,538
$	15.01	to	$	20.00	472,174	$	18.76	7.40	28
$	20.01	to	$	20.15	100,000	$	20.15	7.05	—
$	1.76	to	$	20.15	2,062,869	$	9.70	5.69	$	14,305

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The aggregate intrinsic value in the tables above represents the total pretax intrinsic value (the difference between the closing stock price on the last day of trading in 2009 and the exercise price) that would have been received by the option holders had all options been exercised on December 31, 2009. This value will change based on the fair market value of the Company’s common stock.

The following table reflects the activity for all unvested stock options during 2009:

	Shares		Weighted Average Grant- Date Fair Value
Unvested at January 1, 2009	641,780		$	11.18
Granted	164,000		$	9.53
Vested	(241,363	)	$	10.39
Forfeited	(20,187	)	$	12.80
Unvested at December 31, 2009	544,230		$	10.98

At December 31, 2009, there was approximately $2.6 million of unrecognized compensation costs related to unvested stock options, which is expected to be recognized over a weighted average period of 1.19 years. The total fair value of stock options vested during 2009, 2008 and 2007 was $2.5 million, $3.0 million and $0.7 million, respectively.

Restricted Stock and Restricted Stock Units

In October 2004, the Company granted 1,000,000 restricted stock units under the 1999 Plan to a key employee who is also a Company director. A restricted stock unit represents the right to receive a share of the Company’s common stock. The restricted stock units have none of the rights as other shares of common stock until common stock is distributed, other than rights to cash dividends. The restricted stock unit award was a non-performance award which vests at the rate of 20% on May 31, 2005 and 10% per year on April 1, 2006 and each year thereafter. The share-based expense for restricted stock awards was determined based on the market price of the Company’s stock at the date of the award. Compensation expense related to the restricted stock award was approximately $0.6 million in each of 2009, 2008 and 2007. Share-based compensation expense for restricted stock issued to Directors was $0.1 million in each of 2009, 2008 and 2007.

Share repurchase plan

In May 2008, the Company’s Board of Directors authorized the repurchase of up to 2,000,000 shares of the Company’s common stock. During 2009 the Company repurchased 98,934 common shares at a cost of approximately $1.2 million, an average of $11.87 per share. During 2008 the Company repurchased 475,301 common shares at a cost of approximately $5.8 million, an average of $12.25 per share. Theses shares are included in common stock in treasury at cost in the Company’s consolidated balance sheet.

9.INCOME TAXES

The components of income before income taxes are as follows (in thousands):

	Year Ended December 31,
	2009		2008		2007
United States	$	54,468	$	61,220	$	81,832
Foreign	18,617		22,523		18,191
Total	$	73,085	$	83,743	$	100,023

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The provision for income taxes consists of the following (in thousands):

	Year Ended December 31,
	2009		2008		2007
Current:
Federal	$	11,987	$	15,753	$	26,174
State	3,005		4,106		4,842
Foreign	6,204		4,844		5,632
Total current	21,196		24,703		36,648
Deferred:
Federal	4,271		2,242		(1,004		)
State	844		154		277
Foreign	589		3,801		(5,379		)
Total deferred	5,704		6,197		(6,106		)
TOTAL	$	26,900	$	30,900	$	30,542

Income taxes are accrued and paid by each foreign entity in accordance with applicable local regulations.

A reconciliation of the difference between the income tax expense and the computed income tax expense based on the Federal statutory corporate rate is as follows (in thousands):

	Year Ended December 31,
	2009			2008			2007
Income tax at Federal statutory rate	$	25,580		$	29,311		$	35,008
State and local income taxes and changes in valuation allowances, net of federal tax benefit	2,402			3,036			3,332
Foreign taxes at rates different from the U.S. rate	(991		)	(940		)	(2,260		)
Changes in valuation allowances for foreign deferred tax assets	965			(120		)	(6,184		)
Decrease in tax reserves	(1,195		)	—			—
Refunds- prior years	—			(872		)
Non-deductible items	—			—			963
Adjustment for prior year taxes	107			253			(593		)
Other items, net	32			232			276
	$	26,900		$	30,900		$	30,542

The deferred tax assets and liabilities are comprised of the following (in thousands):

	December 31,
	2009			2008
Assets:
Current:
Accrued expenses and other liabilities	$	7,612		$	8,524
Inventory	1,838			1,899
Valuation allowances	(1,507		)	—
Total current assets	$	7,943		$	10,423
Non-current:
Net operating loss and credit carryforwards	$	19,058		$	8,834
Accelerated depreciation	10,516			1,089
Intangible and other assets	2,264			4,606
Other	6,910			5,300
Valuation allowances	(28,326		)	(8,377		)
Total non-current assets	$	10,422		$	11,452
Liabilities :
Current :
Deductible assets	$	1,298		$	753
Other	19			112
Total current liabilities	$	1,317		$	865
Non-current:
Accelerated depreciation	$	1,858		$	248
Other	—			6
Total non-current liabilities	$	1,858		$	254

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The Company has not provided for federal income taxes applicable to the undistributed earnings of its foreign subsidiaries of approximately $62.9 million as of December 31, 2009, since these earnings are considered indefinitely reinvested. The Company has foreign net operating loss carryforwards which expire through 2024. The Company records these benefits as assets to the extent that utilization of such assets is more likely than not; otherwise, a valuation allowance has been recorded.  The Company has also provided valuation allowances for certain state deferred tax assets and net operating loss carryforwards where it is not likely they will be realized.

As of December 31, 2009, the Company has recorded valuation allowances of approximately $29.8 million including valuations against net operating loss carryforwards incurred in foreign and state jurisdictions of $15.9 million and $2.5 million, respectively, deductible temporary differences incurred in foreign jurisdictions of $10.8 million, the majority of which relates to the WStore acquisition, $0.5 million in foreign tax credit carryforwards, and $0.1 million for other state deductible temporary differences.

Valuation allowances increased in 2009 by $20.9 million as a result of the WStore acquisition and the valuation allowances recorded against acquired deferred tax assets and net operating losses. Carryforward losses of $1 million were utilized in 2009 for which valuation allowances had been previously provided.

The Company has foreign tax credit carryforwards in the amount of $0.5 million which begin to expire in 2017.

Valuation allowances decreased $.4 million in 2008 for carryforward losses utilized for which valuation allowances had been previously provided. As of December 31, 2008, the valuation allowances of $8.4 million included $6.4 million related to net operating loss carryforwards in foreign jurisdictions, $2.0 million for state net operating loss carryforwards and $0.2 million for other state deductible temporary differences. During 2008, valuation allowances increased approximately $1.4 additional losses incurred in foreign and state jurisdictions.  Valuation allowances decreased $0.7 million in 2008 for carryforward losses utilized for which valuation allowances had been previously provided.

The Company is routinely audited by federal, state and foreign tax authorities with respect to its income taxes. The Company regularly reviews and evaluates the likelihood of audit assessments and believes it has adequately accrued for exposures for tax liabilities resulting from future tax audits. To the extent the Company would be required to pay amounts in excess of reserves or prevail on matters for which accruals have been established, the Company’s effective tax rate in a given period may be materially impacted. The Company’s federal income tax returns have been audited through 2006. The Company has not signed any consents to extend the statute of limitations for any subsequent years. The Company’s significant state tax returns have been audited through 2005. The Company considers its significant tax jurisdictions in foreign locations to be the United Kingdom, Canada, France, Italy and Germany. The Company remains subject to examination in the United Kingdom for years after 2002, in Canada for years after 2004, in France for years after 2007, in Italy for years after 2005, in Netherlands for years after 2004 and in Germany for years after 2007.

In accordance with the guidance for accounting for uncertainty in income taxes the Company recognizes the tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit of an uncertain tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount that is greater than 50% likely to be realized upon settlement with the tax authority. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of accruals, our effective tax rate in a given financial statement period could be affected. Accrued interest and penalties related to unrecognized tax benefits are recorded in income tax expense in the current year.

The following table details activity of the Company’s uncertain tax positions during 2009 and 2008:

	December 31,
	2009			2008
Balance beginning of year	$	916		$	916
Decreases related to settlements with taxing authorities	(916		)	—
Balance end of year	—			$	916

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Interest and penalties of approximately $0 and $0.1 million related to unrecognized tax benefits were expensed in 2009 and 2008 and are included in income tax expense. Additionally, included in income tax expense in 2008 is an interest and penalty reserves reversal of approximately $0.4 million related to a state tax audit that was settled favorably.

10.COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Leases- The Company is obligated under operating lease agreements for the rental of certain office and warehouse facilities and equipment which expire at various dates through October 2026. The Company currently leases its headquarters office/warehouse facility in New York from an entity owned by the Company’s three principal shareholders and senior executive officers. The Company believes that these payments were no higher than would be paid to an unrelated lessor for comparable space. The Company also acquires certain computer and communications equipment pursuant to capital lease obligations.

At December 31, 2009, the future minimum annual lease payments for capital leases and related and third-party operating leases were as follows (in thousands):

	Capital Leases		Operating Leases		Total
2010	$	1,145	$	24,004	$	25,149
2011	794		24,280		25,074
2012	329		22,793		23,122
2013	155		20,253		20,408
2014			16,367		16,367
2015-2019			66,413		66,413
2020-2024			11,767		11,767
Thereafter			2,428		2,428
Total minimum lease payments	2,423		188,305		190,728
Less: sublease rental income			354		354
Lease obligation net of subleases	2,423		$	187,951	$	190,374
Less amount representing interest	200
Present value of minimum capital lease payments (including current portion of $1,029)	$	2,223

Annual rent expense aggregated approximately $27.1 million, $25.0 million and $14.8 million in 2009, 2008 and 2007, respectively. Included in rent expense was $0.9 million, $0.9 million and $0.6 million in 2009, 2008 and 2007, respectively, to related parties. Rent expense is net of sublease income of $0.1 million, $0.4 million and $0.9 million for 2009, 2008 and 2007, respectively.

Litigation —

State of Florida, Office of the Attorney General

On September 4, 2009 the Office of the Attorney General, Department of Legal Affairs for the State of Florida filed a lawsuit against OnRebate.com Inc, TigerDirect Inc. and Systemax Inc. in the Circuit Court of the Eleventh Judicial Court for Miami-Dade County, Florida alleging deceptive and unfair trade practices under Florida law relating to the offering and processing of customer rebates.  The lawsuit seeks injunctive relief, damages, civil penalties and other equitable relief.  The Company denies the allegations in the lawsuit and intends to vigorously defend the case.

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Other Matters

Systemax is a party to various pending legal proceedings and disputes arising in the normal course of business, including those involving commercial, employment, tax and intellectual property related claims, none of which, in management’s opinion, is anticipated to have a material adverse effect on the consolidated financial statements.

11.SEGMENT AND RELATED INFORMATION

The Company operates and is internally managed in three operating segments, Technology Products, Industrial Products and Software Solutions. The Company’s chief operating decision-maker is the Company’s Chief Executive Officer. The Company evaluates segment performance based on income from operations before net interest, foreign exchange gains and losses, restructuring and other charges and income taxes. Corporate costs not identified with the disclosed segments and restructuring and other charges are grouped as “Corporate and other expenses.” The chief operating decision-maker reviews assets and makes significant capital expenditure decisions for the Company on a consolidated basis only. The accounting policies of the segments are the same as those of the Company described in Note 1.

Financial information relating to the Company’s operations by reportable segment was as follows (in thousands):

	Year Ended December 31,
	2009			2008			2007
Net Sales:
Technology Products	$	2,967,896		$	2,795,441		$	2,553,716
Industrial Products	196,129			237,027			225,746
Software Solutions	1,970			493			413
Consolidated	$	3,165,995		$	3,032,961		$	2,779,875
Depreciation and Amortization Expense:
Technology Products	$	10,141		$	8,219		$	6,818
Industrial Products	1,476			986			1,023
Software Solutions	613			1,111			904
Corporate	123			71			35
Consolidated	$	12,353		$	10,387		$	8,780
Operating Income (Loss):
Technology Products	$	87,127		$	96,177		$	100,958
Industrial Products	15,415			24,621			20,595
Software Solutions	(6,457		)	(17,948		)	(15,813		)
Corporate and other expenses	(22,694		)	(19,483		)	(11,798		)
Consolidated	$	73,391		$	83,367		$	93,942
Total Assets
Technology Products	$	521,900		$	400,340		$	331,033
Industrial Products	103,370			98,670			76,634
Software Solutions	149			3,531			3,783
Corporate	191,482			199,912			266,194
Consolidated	$	816,901		$	702,453		$	677,644

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Financial information relating to the Company’s operations by geographic area was as follows (in thousands):

	Year Ended December 31,
	2009		2008		2007
Net Sales:
United States:
Technology Products	$	1,931,544	$	1,660,902	$	1,451,046
Industrial Products	196,129		237,027		225,746
Software Solutions	1,970		493		413
United States total	2,129,643		1,898,422		1,677,205
Other North America (Technology Products)	187,832		193,950		170,272
Europe	848,520		940,589		932,398
Consolidated	$	3,165,995	$	3,032,961	$	2,779,875
Long-lived Assets:
North America — principally United States	$	39,860	$	30,188	$	21,978
Europe	25,738		18,277		25,602
Consolidated	$	65,598	$	48,465	$	47,580

Net sales are attributed to countries based on location of selling subsidiary.

12.QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial data is as follows (in thousands, except for per share amounts):

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
2009:
Net sales	$	752,268	$	721,599	$	753,880	$	938,248
Gross profit	$	107,550	$	107,054	$	112,763	$	132,881
Net income	$	8,698	$	6,491	$	12,598	$	18,398
Net income per common share:
Basic	$	.24	$	.18	$	.34	$	.50
Diluted	$	.23	$	.17	$	.34	$	.49
2008:
Net sales	$	724,737	$	756,035	$	739,479	$	812,710
Gross profit	$	113,749	$	114,754	$	115,419	$	114,637
Net income	$	18,061	$	13,541	$	11,273	$	9,968
Net income per common share:
Basic	$	.49	$	.36	$	.30	$	.27
Diluted	$	.48	$	.36	$	.30	$	.27

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SYSTEMAX INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

For the years ended December:

(in thousands)

Description	Balance at Beginning of Period		Charged to Expenses		Write-offs			Other			Balance at End of Period
Allowance for sales returns and doubtful accounts
2009	$	17,523	$	4,698	$	(4,493	)	4,804		(2)	$	22,532
2008	$	20,521	$	2,424	$	(5,422	)				17,523
2007	$	18,176	$	4,575	$	(2,230	)				$	20,521
Allowance for deferred tax assets
2009
Current (3)	$	—	$	—				$	1,507		$	1,507
Noncurrent (1)(3)	$	8,377	$	—	$	(2,125	)	$	22,074		$	28,326
2008
Current	$	96						$	(96	)	$	—
Noncurrent (1)	$	7,291	$	1,996	$	(64	)	$	(846	)	$	8,377
2007
Current	$	738			$	(467	)	$	(175	)	$	96
Noncurrent (1)	$	17,141	$	2,842	$	(11,408	)	$	(1,284	)	$	7,291

(1)Charges to expense are net of reductions resulting from changes in deferred tax assets due to changes in tax laws.

(2)Other relates to WStore acquisition allowance for sales returns and doubtful accounts as of acquisition date.

(3)Included in other is allowances recorded for deferred tax assets and net operating losses acquired in the WStore Europe SA acquisition.

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EX-10.12

Exhibit 10.12

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (the “Amendment”) is made and executed on the dates set forth below, to be effective as of 9/5, 2003, by and between Keystone-Miami Property Holding Corp., a Florida corporation (“Landlord”), and Tiger Direct, Inc., a Delaware corporation, doing business as “Tiger Direct” (“Tenant”) for Space Number 35 and 33C in the Mall of the Americas, and Systemax, Inc. formerly known as Global Direct Mail, Inc., a New York Corporation (“Guarantor”).

W I T N E S S E T H:

WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated as of September 17, 1998, as amended by that certain Settlement Agreement and Mutual Release dated as of June 8, 2001 (the “Lease”) pursuant to which Landlord leased to Tenant Space Number 35 and 33C, and such storage space and lobby areas as described in the Lease (“Premises”) in the Mall of the Americas, located at 7795 West Flagler Street, Miami, Florida 33144, Miami-Dade County, Florida, as more particularly described in the Lease;

WHEREAS, Landlord and Tenant entered into that certain Generator Agreement dated as of November 6, 2001(“Generator License Agreement”) with respect to emergency generator services to the Premises;

WHEREAS, Tenant has requested that the Lease be modified as set forth herein, and the Landlord has agreed to modify the Lease, pursuant to the terms set forth herein.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants, representations, warranties and agreements contained herein and the sum of Ten and 00/100 ($10.00) Dollars, the receipt and sufficiency of which are hereby acknowledged, Landlord, Tenant and Guarantor agree as follows:

TERMS

1.Incorporation of Recitals. The foregoing recitals are true and correct and incorporated herein by reference. All terms not defined in this Amendment shall have the meanings ascribed in the Lease, unless the context clearly otherwise requires.

2.Exchange of Space 33C. Tenant agrees to vacate and release to Landlord Space 33C and the storage area located behind the current Foot Locker space (“Release Space”) and, in exchange thereof, lease Space 33D, as depicted on Amendment Exhibit “A” (“Additional Premises”), as part of the Premises under the Lease. The Landlord and Tenant acknowledge and agree that the Storage Area (also known as the loading dock) as set forth in the Lease is not included in the Release Space. The Commencement Date under the Lease with respect to the Additional

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Premises shall be the date that is 90 days after delivery of the Additional Premises to the Tenant (the “Exchange Date”). Prior to the Commencement Date, the Tenant shall continue to pay Rent as provided under the Lease, however, once the Tenant occupies and opens for business in the Additional Premises and returns the Release Space to Landlord as provided herein, Rent will be paid for the Additional Premises at the same rate as Tenant pays for the Premises until the Commencement Date. Upon the Commencement Date, the Tenant shall pay Rent as set forth herein. Upon the earlier to occur of (i) the Commencement Date with respect to the Additional Premises, or (ii) the date that the Tenant occupies and opens for business in the Additional Premises the Tenant shall immediately vacate and surrender the Release Space in the condition required at expiration under the Lease. The Additional Premises consists of approximately 15,984 square feet. The Premises Rentable Area set forth on the Reference Page of the Lease shall be modified to replace the total area of the Premises from 70,882 square feet to 79,866 square feet. The Lease shall expire with respect to the Additional Premises concurrently with the expiration of the Lease Term for the entire Premises. All of Tenant’s obligations, covenants, and conditions under the Lease with respect to the Premises as defined therein, including Options to Renew, shall apply to the Premises as expanded by the Additional Premises. For the purposes of the General Agreement, as of the Commencement Date, the term “Premises” therein shall mean the Premises and the Additional Premises.

3.Rent Payments and Charges.

(a)  Landlord and Tenant agree that commencing as of the Commencement Date, Annual Rent shall be paid at $958,392.00 per annum with $79,866.00 paid per month, excluding the applicable Rent for the Release Space, for which Annual Rent shall be paid at $10,000.00 per annum with $833.34 paid per month until such Release Space is surrendered to Landlord in accordance herewith. Prior to the Commencement Date, Annual Rent shall be paid as provided in the Lease. Annual Rent for the expanded Premises shall thereafter increase at the rates provided in the Lease. Direct Expenses shall continue to be paid by Tenant 100% for the Premises as set forth in the Lease and shall be paid by the Tenant for the Additional Premises, with the “Base Year” for the Additional Premises being calendar year 2004. Tenant’s Proportionate Share for payment of Taxes and for any other purposes under the Lease shall be increased to 12.27%. The “Base Year” with respect to the Additional Premises under the Lease shall be calendar year 2004.

(b)  Tenant shall otherwise be and remain obligated to pay all of the “charges”, rents and additional rents as provided in the Lease, subject to increases as provided in the Lease.

4.Delivery of Additional Premises. The Additional Premises shall be delivered to Tenant as of the Exchange Date in is “as is” “with all faults” condition, except that (a) the air conditioning equipment, plumbing and electric lines will be in good working order, (b) Landlord will replace ceiling tiles, with like kind and quality, in the Additional Premises, (c) Landlord will weatherproof existing exterior doors and close one (1) opening, as identified on Amendment Exhibit “A”, with concrete block, and (d) Landlord will remove all display racks, two (2) counters and two (2) dressing rooms in the Additional Premises. The Landlord agrees to replace the roof over the Additional Premises. Tenant agrees to remove the existing carpet and tile in the Additional Premises

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2

and improve the Additional Premises in accordance with and subject to all obligations and conditions of the Lease. All such work shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld or delayed, and which shall be done by Tenant in accordance with any reasonable requirements and reasonable standards of Landlord, and in a good and workmanlike manner.

5.Expansion Rights. Tenant’s “First Right of Notice to Lease” set forth in Section R-6 of the Rider to the Lease and Tenant’s “Expansion Rights” set forth in Section R-7 of the Rider to the Lease shall be modified to specifically exclude from such rights any portion of the Building leased to Technical Career Institute, Inc., its successors or permitted assigns, specifically being Spaces 230 and 240 of the Building.

6.Relocation of Additional Premises.

(a)   On at least one hundred eighty (180) days’ prior written notice at any time during the Term, Landlord may require Tenant to move from the Additional Premises to another space of between 10,000 square feet to 16,000 square feet in the Shopping Center or Building in order to permit Landlord to consolidate or expand the Premises with adjoining space, or to expand or renovate the Shopping Center or the portion thereof in which the Premises are located, or for the rearrangement of tenant mix groupings or for any other aesthetic purposes. Such substitute premises shall provide an exterior double-door entrance for retail customer use and, unless Tenant otherwise consents, which consent shall not be unreasonably withheld, delayed or conditioned, shall be located in the “Permitted Relocation Area” on the sketch attached hereto as Amendment Exhibit “B”. Upon such notice, Tenant may elect not to move to the other space only by terminating this Lease with respect to the Additional Premises only, by delivering written notice to Landlord within sixty (60) days after the date of Landlord’s original notice of relocation, such termination to be effective upon the expiration of such one hundred eighty (180) day period.

(b)   If Tenant relocates to the new space, this Lease shall remain in full force and effect and thereupon be deemed applicable to such new space except that:

(i)If the relocation is to substitute premises in the Shopping Center as such currently exists, the Landlord shall revise the Lease to reflect the new premises and any proportionate changes in the Annual Rent and Direct Costs and Taxes if any, effective as of the date of relocation, resulting from a difference in the floor area of the Additional Premises and such substituted premises.

(ii)If the relocation is to substitute premises in the Shopping Center after such has been substantially redeveloped, renovated or reconfigured (“substantially” being based on the total cost to Landlord of such redevelopment, renovation or reconfiguration being at least $20,000,000, which costs shall include without limitation, soft and hard costs of development and construction, cancellation fees, buy out costs, lost, abated or waived rent, relocation expenses, and any other costs and expenses associated therewith) rent for the substitute premises shall commence at the then current gross rent under the Lease without reduction of offset for the substitute space

RREEF

3

being less than the area of the Premises and Additional Premises, provided the substitute premises is between 11,500 square feet and 16,000 square feet.

(iii)Tenant’s pro rata share shall, as of the date of relocation, be adjusted pursuant to the provisions of the Lease.

(iv)There shall be no abatement of any Rent payable hereunder on account of Tenant’s relocation or any inconvenience or business loss caused to Tenant thereby, unless due to the negligence or willful misconduct of Landlord or unless the Tenant cannot operate its business during the physical relocation.

(c)   In the event of Tenant’s relocation to the substitute premises pursuant to this Section, occasioned solely at Landlord’s requirement pursuant hereto, Landlord shall pay to Tenant all reasonable out-of-pocket expenses of moving Tenant to the substitute premises, including but not limited to moving trade fixtures and equipment, wiring of computers (including network connections to the main office), moving telephone equipment, printing of new stationery, moving of inventory, and construction of replacement tenant improvements in the substitute premises (of a scope and quality substantially similar to that originally constructed) and relocation of signs (if signs cannot be removed and relocated due to the reduced size of the facade or applicable sign ordinances, Landlord shall provide new signs of like kind, quality and style). Such payment shall be made so long as Tenant was otherwise in full compliance with the terms of this Lease, that there are no claims or charges due to Landlord from Tenant, and Tenant has vacated and surrendered the Additional Premises in accordance with the requirements of the Lease.

7.Ratification. Except as modified herein, the Lease remains in full force and effect without change, and the terms of the Lease are reaffirmed and ratified by the Tenant and the Guarantor. This is not a novation nor an accord and satisfaction of the Lease. The Tenant represent and warrant to the Landlord that, to the best of Tenant’s knowledge, there are no events of default, or events by the passage of time would become events of default, under the Lease by either the Landlord or the Tenant. In consideration of Landlord’s agreements herein, Tenant and Guarantor each hereby waive and release any and all setoffs, defenses, claims, and counterclaims which exist, or which may exist with respect to: (i) the Lease, (ii) the condition of the Premises and the Shopping Center and the Building and (iii) the business relations between Landlord and Tenant or between Landlord and Guarantor. The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy provided by the Lease or by law, and all such rights and remedies shall be cumulative.

8.Commissions. Each of the parties represents and warrants to the other that it has not dealt with any broker or finder in connection with this Lease, except Abood Wood Fay Real Estate Group LLC and NAI Miami. Tenant party indemnifies and holds the Landlord harmless from and against any commission fee or other compensation claimed by any broker based on a commitment allegedly made by Tenant.

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4

9.Exclusive Rights. Amendment Exhibit “C” is attached to and incorporated into the Lease. Tenant shall not violate or breach any exclusive right granted to any tenant as set forth in Amendment Exhibit “C” and, without limiting the foregoing, Tenant specifically agrees not to violate or breach the exclusive right granted to Gateway Computers, such agreement being a material inducement to Landlord to enter into this Amendment. Tenant specifically acknowledges and agrees that, in addition to any other remedies under the Lease for breach of this provision, the Landlord shall be entitled to specific performance to enforce the restrictions set forth herein.

10.Protected Parking Area. The Tenant acknowledges and agrees that, notwithstanding any contrary provision contained in the Lease and without the consent of the Tenant, the Landlord shall be entitled to construct or permit others to construct an additional 20,000 square feet of gross leasable area as a “Permanent Building” under the Lease, whether by the addition of new buildings or expansion or replacement of existing buildings, in the portion of the parking lot designated as “Protected Area” as shown on Amendment Exhibit “D” hereto. Further, the Landlord may construct, with the Tenant’s consent, which shall not be unreasonably withheld, delayed or conditioned, greater than such 20,000 square feet of gross leasable area as a “Permanent Building” within the Protected Area (such excess above the 20,000 square feet being defined herein as the “Excess GLA”) so long as (a) the parking spaces in the Protected Area removed are replaced with a parking structure, (b) the parking spaces replaced are reserved in the parking structure for the exclusive use of Tenant, (c) the parking structure provides direct access to Tenant’s second floor portion of the Premises (the location of which direct access shall be subject to Tenant’s approval, which shall not be unreasonably withheld, delayed or conditioned and any zoning or building codes), and (d) a minimum of 100 surface parking spaces will remain for use by customers of Tenant, 25 of which shall be designated as Tenant customer parking and remain located in the area immediately in front of Tenant’s main entrance as reasonably agreed by both Landlord and Tenant. If Tenant does not provide specific reasonable written objections to the configuration of the Excess GLA within ten (10) days from receipt of a location sketch from Landlord, such Excess GLA shall be deemed approved by Tenant.

11.Signage. The Tenant acknowledges and agrees that, notwithstanding any contrary provision contained in the Lease, upon vacation of the Release Space, the Tenant shall have no right to signage in connection therewith and all signage installed by Tenant in connection with the Release Space shall be removed by Tenant, at Tenant’s sole cost and expense. The Tenant may have exterior signage with respect to the Additional Premises as permitted under applicable law, ordinances and codes, without variance or special exception, and as approved by the Landlord in writing as to size, style, design, color, lighting, and other factors in accordance with Section R-9 of the Lease. In connection with such signage, the provisions of Section R-9 of the Lease shall apply, except that the second and third sentences thereof are deemed deleted hereby.

[Signature Page continues]

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5

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment on the dates specified below.

WITNESSES:	LANDLORD:
	KEYSTONE-MIAMI PROPERTY HOLDING CORP., a Florida corporation,
/s/ [ILLEGIBLE]	By: RREEF MANAGEMENT COMPANY, a Delaware corporation
[ILLEGIBLE]	By:	/s/ [ILLEGIBLE]
	Name:	[ILLEGIBLE]
[ILLEGIBLE]	Title:	General Manager
	Date:	9/5, 2003
	TENANT:
/s/ [ILLEGIBLE]	TIGER DIRECT, INC., a Delaware corporation
/s/ Andrea Fongyee	By:	/s/ Gilbert Fiorentino
	Name:	Gilbert Fiorentino
	Title:	CEO
	Date:	8/22, 2003
	guarantor:
/s/ [ILLEGIBLE]	SYSTEMAX, INC. formerly known as Global Direct Mail, Inc., a New York Corporation
/s/ [ILLEGIBLE]	By:	/s/ Steven Goldschein
	Name:	Steven Goldschein
	Title:	SRVP
	Date:	8/8/03, 2003

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6

Amendment Exhibit “A”

Attached to and made part of First Amendment to Lease

Reference Date of September 5th, 2003 between Keystone-

Miami Property Holding Corp., as Landlord and Tiger District,

Inc., as Tenant and Systemax, Inc. as Guarantor

Amendment Exhibit “B”

Permitted Relocation Area

The crosshatched area is the

Permitted Relocation Area

Attached to and made part of First Amendment to Lease

Reference Date of September 5th, 2003 between Keystone-

Miami Property Holding Corp., as Landlord and Tiger District,

Inc., as Tenant and Systemax, Inc. as Guarantor

Mall of the Americas
Exhibit C
Exclusives/Restrictive Covenants

attached to and made part of First Amendment to Lease bearing the ReferenceDate of 9/5,2003 between Keystone-Miami Property Holding Corp., as Landlord
and Tiger Direct, Inc., as Tenant and Systemax, Inc. as Guarantor.

“Tenant hereby expressly acknowledges that the exclusive uses set forth below are in existence at the Shopping Center and have been previously granted to other Tenants prior to the commencement of this lease. Licensee shall not violate and shall at all times herein, abide by and recognize the exclusive uses set forth below or any other exclusives granted by Licensor, so long as such future exclusives do not impede or reduce the uses granted Licensee herein. Should Licensor grant an exclusive that violates Licensee’s use clause, such exclusive, only to the extent that it violates Licensee’s use clause, shall not be binding on Licensee”.

AMC	Kay Bee Toys
Citibank	Mail Boxes, Etc.
Citicorp ATM	Marshalls
Cohen’s Fashion Optical	Pizza USA
Electronics Boutique	Subway
F.Y.E	TCI
Gateway	T.J. Maxx
Home Depot

AMC

Landlord will not use any other premises or equipment owned or controlled by Landlord and located on the Entire Premises in such manner as would result in any noise or vibration interfering with the acoustics required by Tenant in its use of Tenant’s Building, or as would result in any offensive odors penetrating Tenant’s Building.

Landlord will not sell or permit to be sold video cassettes or discs or any candy or popcorn in or from any premises located within 150 feet from any wall of Tenant’s Building or in from any part of the parking area or other Common Facilities located within the Restricted Area.

The foregoing limitation on sales from premises within 150 feet of Tenant’s Building shall not be applicable to the premises currently occupied by the tenants doing business under the names of Woolworth, Waldenbooks or Judy’s Hallmark (“Unrestricted Tenants”) during the continuance of Landlord’s leases with each such Unrestricted Tenant.

CITIBANK

Provided that Tenant is not in default under any of the terms of this Lease, Landlord agrees, during the term of this Lease or any extensions hereof, not to enter into any leases for space in the southern half of the Shopping Center, as now existing, as said southern half is depicted on Exhibit “B” attached hereto and made part hereof, for use as a savings and loan institution or for banking services.

CITICORP SAVINGS ATM

Provided that the demised premises are used solely for a drive-through ATM and Tenant is not in default under this Lease, Landlord agrees that during the entire term of this Lease (i) it shall not enter into any lease, ground lease or sale agreement with any bank, savings and loan association or similar financial institution for any outparcels located in the southern one-half of the Shopping Center as now existing or hereafter altered and developed, to be used as a free standing banking or ATM facility; and (ii) it shall not agree or permit an ATM facility to be installed in the Shopping Center buildings

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(exclusive outparcels) by any party other than Tenant. Subparagraph (ii) hereof shall not be construed to prohibit the construction and installation of any ATM to which Landlord has heretofore given consent or to require any ATM already installed and in existence to be removed or relocated.

COHEN’S OPTICAL

During the term of this Lease (as the same may be earlier terminated or extended), and so long as Tenant (including its successors and assigns if and as herein permitted) is in possession of the demised premises and not in default (after the expiration of applicable cure periods), Landlord agrees hereafter not to enter into any lease or suffer or permit the use or occupancy of any person or entity for mall space in the Shopping Center with any tenant or occupant whose primary business (i.e., gross sales therefrom shall constitute more than 50% of the gross sales of such tenant’s or occupant’s business in such space at the Shopping Center) is the sale of prescription eyeglasses, contact lenses and/or sunglasses (“Prohibited Items”). In no event shall any occupant or tenant perform eye examinations. Nothing contained herein shall prevent, restrict, impair or otherwise affect any leases existing as of the date hereof; provided however that Landlord agrees not to enter into any modification of an existing lease for such mall space in the Shopping Center in contravention of the foregoing provisions of this paragraph. Landlord represents and warrants that the Optica USA Lease has been terminated and that Landlord will use commercially reasonable efforts to cause such Tenant to vacate its premises on or before the opening date of Tenant. Landlord further represents that as of the date hereof Landlord has not entered into any lease with a Tenant whose primary business is (a) the sale of the Prohibited Items or (b) the conducting of eye examinations. Landlord agrees that it shall use commercially reasonable efforts to enforce such restrictive covenants against all tenants in the Shopping Center.

ELECTRONICS BOUTIQUE

EXCLUSIVE RIGHT: So long as no Event of Default (or event which with the notice and/or lapse of time could become an Event of Default) has occurred under this Lease, Landlord agrees that it shall not, at any time during the Term of the Lease, enter into any lease of space in the Shopping Center with any tenant whose primary business is the sale of hand-held game hardware, electronic board games, or video game hardware and software. The term “primary business” as used in this Article, shall mean sales aggregating at least seventy percent (70%) of such tenant’s gross sales. Any existing leases in the Shopping Center on the Commencement Date and any future leases to tenants leasing at least 7,500 square feet of space in the Shopping Center, including their respective renewal options, are not subject to the above-described exclusive right. Landlord agrees it shall not lease space to “GameStop”.

FYE

Provided Tenant is not in default, Landlord agrees, during the term of this Lease (subject to termination prior to its expiration, if applicable), that hereafter it shall not enter into a lease for space in the building of which the demised premises forms a part with any other tenant whose primary business (i.e., occupying more than fifty (50%) percent of its gross leasable area and constituting more than fifty (50%) percent of its annual gross sales) is the sale and display of pre-recorded music, including record albums, cassette tapes and compact discs. Except as expressly aforesaid, there shall be no restrictions on Landlord’s right to lease space in the Shopping Center to any tenant and for whatever use Landlord shall deem appropriate, in Landlord’s sole discretion. Nothing contained in this Rider Paragraph shall restrict Landlord’s ability freely to lease space in the out parcels or any other portion of the Shopping Center, not a part of the building for which the demised premises forms a part.

GATEWAY

Landlord covenants and agrees that, during the Term, Tenant has the exclusive in the Shopping Center (or any property contiguous or adjacent to the Shopping Center), owned

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or leased by Landlord (or any affiliate of Landlord), or in which Landlord (or any affiliate of Landlord), has an interest directly or indirectly to (a) the sale and rental of personal computer hardware and software as well a related and complimentary products and services. (b) The delivery of computer software training programs and (c) The service and repairs of such type of product that is permitted to be sold and rented as outlined in (a) all of the forgoing in clauses (a) through (c) are hereinafter collectively referred to as outlined in (a) all the forgoing (or any affiliate of Landlord) has an interest, directly or indirectly, during the term of this lease. Landlord agrees, subject to the limitations set forth below, that upon written notice by Tenant of a violation of Tenant’s Exclusive Right, Landlord shall enforce Tenant’s Exclusive Right against other tenants in the Shopping Center using all reasonable legal means. In the event of a breach by Landlord under this Article 1.D., Tenant shall be entitled to injunctive relief as well as all other remedies available at law or in equity. Notwithstanding the foregoing, in the event any tenant violates Tenant’s Exclusive Right, Landlord shall not be required to expend in excess of $25,000.00 in enforcing Tenant’s Exclusive Right; provided, however, Tenant may elect, at its option, to pay any cost in excess of $25,000.00, in which event landlord shall continue enforcing Tenant’s Exclusive Right if requested by Tenant. Notwithstanding any provision of this Article 1.D. to the contrary, it is understood and agreed that: (i) Tenant’s Exclusive Right shall not apply to or be enforceable against any tenants of the Shopping Center (or their respective successors and assigns) under leases in effect as of the date of full execution of this Lease and which leases permit such Tenant’s to violate Tenant’s Exclusive Right; (ii) any future tenant of the Shopping Center that occupies at least 25,000 square feet of gross leasable area shall be permitted to use not more than fifteen percent (15%) of its gross leasable area for computer and computer-related sales and rentals, but no event shall any such tenant sell or rent “custom built” computers; and (iii) Landlord shall be permitted to lease space in the Shopping Center to an electronics retailer such as Best Buy, Circuit City or BrandsMart or to other tenants for the purpose of operating electronic stores that sell computers or computer-related items.

HOME DEPOT

No portion of the Shopping Center outside of the Premises may be used for home improvements sales, meaning for the sale of any one or more of the following items exclusive of the sales of electronics... lumber, hardware items, plumbing supplies, electrical supplies, paint, wallpaper, carpeting, floor coverings, cabinets, siding, ceiling fans, gardening supplies, (exclusive of the sale of electronics), plants, nursery products, Christmas trees or other related items customarily carried as of the date hereof by a home improvement center (the “Home Improvement Restriction”) except that (i) business or occupants of less than a total of three thousand (3,000) square feet of gross leasable area shall be exempt from the foregoing Home Improvement Restriction; and (ii) the sale of any restricted items under the Home Improvement Restriction, if made in any single “major” premises (a “major” premises being defined for the purpose hereof as premises that are in excess of 20,000 square feet) and if ancillary to another primary use, within a retail sales area that does not exceed the lesser of ten (10%) percent of the retail sales area of such major premises or five thousand (5,000) square feet) shall be exempt from the foregoing Home Improvement Restriction (the foregoing Home Improvement Restriction as affected by exceptions (i) and (ii) in this sentence is hereinafter referred to as the “Home Improvement Exclusive”). [Par. 8.2]

KAY BEE TOYS

Landlord is not permitted to Lease any other premises in the Shopping Center for use as a toy or hobby store.

MAILBOXES, ETC.

To provide the following products and services: Answering service; mail box rental; postal and parcel shipping; rapid air via UPS, DHL, Federal Express, Airborne, Emery, US Postal Service; Western Union; copying service to the general public; secretarial Desktop publishing/resume service (collectively, “Primary Business”) and as incident thereto provide printing, electronic typesetting, electronic mail message transmission,

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notary public services, laminating services and the sale of packing and general office supplies (collectively, “Incidental Business”), and for no other use.

Provided Tenant is not in default of any of the terms and conditions of the Lease Agreement, Landlord agrees, during the term of this Lease (subject to termination prior to the expiration, if applicable), that hereafter it shall not enter into a Lease for space in the building of which the demised premises forms a part, with any other tenant whose primary business is to provide the same products and: services as outlined under primary business of the Tenant contained in this Rider paragraph. Notwithstanding the above, existing Tenant and their respective successor or assigns are specifically excluded from this provision of this Rider, R-1.

MARSHALLS

During the term of this lease, as the same may be extended, Landlord specifically agrees with Tenant as follows:

In recognition of the fact that the following types of operations would unduly burden to parking areas serving the demised premises and would hamper the use of said parking areas by customers of Tenant, Landlord will not lease, sell, or otherwise permit any structure within the Shopping Center to be used in whole or in part as a:

food supermarket (except within the premises shown and identified on the Site Plan as “Winn Dixie”); restaurant (except within (I) the areas shown and identified on the Site Plan as “Food Court,” (ii) the accessory restaurants currently operated within the premises shown and identified on the Site Plan as “Woolworth’s” and “Walgreen”, (iii) those portions of the Shopping Center located outside of the “Prohibited Restaurant Area” shown on the Site Plan and (iv) the free-standing structures shown on the Site Plan);

(a)bar (unless such bar is included within permitted restaurant premises which derive at least fifty percent (50%) of their annual gross revenues from the sale of food for on-premises consumption);

(b)theatre of any kind (except within the premises shown and identified on the Site Plan as “AMC Theatre 8-Plex;

(c)bowling alley (except within the premises shown and identified on the Site Plan as (i) “Winn Dixie”, “T.J. Maxx”, “Lurias” or (ii) the northerly forty thousand (40,000) square feet of the premises identified as “Home Depot”);

(d)skating rink (except within the premises shown and identified on the Site Plan as (i) “Winn Dixie”, “T.J. Maxx”, “Lurias” or (ii) the northerly forty thousand (40,000) square feet of the premises identified as “Home Depot”);

(e)amusement park;

(f)carnival;

(g)meeting hall;

(h)bingo parlor (except within the premises shown and identified on the Site Plan as “West Side Amusement Bingo”);

(i)“Disco” or other dance hall;

(j)sporting event or other sports facility;

(k)auditorium or any other like place of public assembly.

Notwithstanding anything to the contrary set forth above in subsection A of this Section 2, Landlord agrees that in no event will Landlord lease, sell or otherwise permit more than a total of thirty thousand (30,000) square feet of floor area (exclusive of the areas identified on the Site Plan as “Food Court” and the free-standing structures shown in the Site Plan) to be used for restaurant purposes within the Shopping Center nor, further, will Landlord lease, sell or otherwise permit any single restaurant operation within the Shopping Center to occupy more than ten thousand (10,000) square feet of floor area.

Landlord agrees during the term of this lease that it will not lease, sell or otherwise permit any structure within the Shopping Center to be used in whole or in part for any manufacturing operation; as a factory; for any industrial usage; as a warehouse (except as

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incidental to an otherwise permitted use), processing or rendering plant; for any establishment selling cars (new or used) (provided, however, that a new car showroom or leasing gallery for automobiles may be permitted within the areas shown and identified on the Site Plan as “Permitted Showroom Areas”), trailers, mobiles homes; for the operation of a billiard parlor, amusement center (other than one such center consisting of no more than seven thousand (7,000) square feet of floor area provided the same is located outside of the areas shown and identified on the Site Plan as the “Food Court” and the “Prohibited Restaurant Area”), flea market, massage parlor; for a so-called “off-track betting” operation (other than operations having no direct access to their premises from the Mall); lottery ticket sales (unless located within areas of the Shopping center outside of the area identified on the Site Plan as “Food Court” and the area identified on the Site Plan as “Prohibited Restaurant Area”); for the sale or display of pornographic materials; or for any other purpose which would be considered to be inconsistent with the use of the Shopping Center as a community oriented retail shopping center.

Landlord agrees that the term of this lease it will not lease, sell or otherwise permit any portion of the Shopping Center to be used for office purposes (other than incidental to a primary retail use) except within those areas which are currently used for office purposes and those areas which are identified on the Site Plan as “Southern Bell” on the second floor of the Shopping Center. Similarly, Landlord agrees that during the term of this lease it will not lease, sell or otherwise permit any portion of the Shopping Center to be used for medical offices other than those premises currently so used and identified on the Site Plan as such.

Landlord permits any one occupant of the Shopping Center (or any affiliate of such occupant), other than Tenant, to use premises consisting of more than twenty-seven thousand (27,000) square feet of floor area for the sale or display at discount prices of more than two of the following in combination (i) brand-name men’s clothing, (ii) brand-name woman’s clothing, (iii) brand-name children’s clothing, (iv) brand-name shoes, (v) brand-name giftware, or brand-name domestics, then minimum rent payable pursuant hereto shall be reduced to forty percent (40%) of the amount provided for Section 1 of ARTICLE III, and such reduction in minimum rent shall remain effective for so long as such use continues.

PIZZA USA

During the term of this Lease (as the same may be earlier terminated or extended), Landlord agrees hereafter not to enter into any lease for in-line (that is, space with an entrance directly into the enclosed Mall) space in the Shopping Center owned by Landlord with any tenant whose permitted use includes the right to sell at retail cooked and prepared ready to eat hot pizza only; subject however to the following terms and conditions including those relating to restaurants. In addition to the foregoing agreement whereby Landlord shall not enter into any lease, Landlord further agrees not to enter into any modification of an existing lease for such in-line space as provided above in contravention of the foregoing provisions of this Rider R-3. Nothing contained in this Rider R-3 shall limit, impair or otherwise affect (i) Landlord’s leases, tenants or the uses by such tenants under such leases existing on the date of this Lease, and extensions thereof or (ii) the space reserved for “majors” (i.e. spaces containing 20,000 sq. ft. of gross leasable area or more), (iii) any space in or upon so-called “outparcels” of the Shopping Center (that is, spaces which do not have entrances leading directly into the enclosed Mall, including parcels surrounded by or abutting portions of the common areas which are exterior to the enclosed mall), or (iv) Landlord’s leases, tenants or their uses respecting the operation of a full service (eat in and take out) restaurant, including an Italian restaurant, unless such restaurant’s “primary business” (hereafter defined) is comprised entirely of the sale of cooked and prepared ready to eat hot pizza (for purpose of this sentence, “primary business” shall refer to such a restaurant where more than fifteen (15%) percent of its gross sales are derived from the sale at retail of such cooked and prepared ready to eat hot pizza).

SUBWAY

Provided Tenant is not in default, Landlord agrees, during the term of this Lease (subject to termination prior to its expiration, if applicable), that hereafter it shall not enter into a

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lease for space in the building of which the demised premises forms a part with any other tenant whose primary business (i.e., occupying more than fifty (50%) percent of its gross leasable area and constituting more than fifty (50%) percent of its annual gross sales) is the sale of submarine and/or hoagie sandwiches. Except as expressly aforesaid, there shall be no restrictions on Landlord’s right to lease space in the Shopping Center to any tenant and for whatever use Landlord shall deem appropriate, in Landlord’s sole discretion. Nothing contained in this Rider Paragraph shall restrict Landlord’s ability freely to lease space in the outparcels or any other portion of the Shopping Center, not a part of the building of which the demised premises forms a part. Any present food tenant, its successors or assigns, may continue to sell submarine and/or Hoagie type sandwiches, however, Landlord will not permit future food tenants to sell submarine/hoagie type sandwiches

TCI (TECHNICAL CAREER INSTITUTE)

LIMITED EXCLUSIVE RIGHT. The parties acknowledge Landlord leases space to another postsecondary school (“New Horizons”) that is currently not accredited or eligible to offer Federal student aid funds to its students under Title IV of the Federal Higher Education Act (“Education Act”), however, the Tenant acknowledges that such accreditation is not prohibited under the New Horizons lease. Landlord agrees that if Landlord should hereafter (a) lease any portion of the Building to a tenant that primarily provides postsecondary educational services under the Education Act and has obtained accreditation (including pre-accreditation, candidacy for accreditation or any similar type of approval) from any accrediting agency that (i) qualify such school to become eligible to participate in the Federal student aid programs authorized under Education Act, and (ii) is recognized by the U.S. Department of Education as offering a form of accreditation required for a school to become eligible to participate in the Federal student aid programs authorized under the Education Act or (b) permit New Horizons to provide postsecondary educational services under the Education Act and New Horizons has obtained accreditation (including pre-accreditation, candidacy for accreditation or any similar type of approval) from any accrediting agency that (i) qualify such school to become eligible to participate in the Federal student aid programs authorized under the Education Act, and (ii) is recognized by the U.S. Department of Education as offering a form of accreditation required for a school to become eligible to participate in the Federal student aid programs authorized under the Education Act for programs or specialties not currently permitted under New Horizons’ lease, Tenant, may terminate this Lease after the twenty-fourth (24th) month of the Lease term, by providing written notice to Landlord of its intent to terminate, upon which notice, the Landlord shall have ninety (90) days to cure such, and failing such cure, such termination shall become effective six (6) months after the expiration of such ninety (90) day cure period and upon the payment to the Landlord of an amount, in cleared and collected funds, and the unamortized value of all tenant improvements made by or paid for by the Landlord based on a five-year straight-line amortization and unamortized broker commission based on a five-year straight-line amortization. Tenant acknowledges that if New Horizons obtains accreditation under Title IV for any use permitted under its lease, including computer and computer training classes, such shall not be a violation under this Section nor trigger Tenant’s termination right pursuant hereto.

T.J. MAXX

Landlord agrees that as long as any retail sales activity shall be conducted in the Demised Premises the Shopping Center shall not be used for any non-retail purposes (repairs, alterations and offices incidental to retailing, and banks and small loan offices, not being deemed non-retail), or for any entertaining purposes such as a bowling alley, skating rink, cinema, bar, nightclub, discotheque, amusement gallery, poolroom, health club, massage parlor or off-track betting club except as existing on the date thereof and any replacement of any existing on the date hereof and except for a cinema in the location labeled AMC Theatre 8 Plex upon the Lease Plan except for a health club in the location labeled Proposed Health Spa or other Retail upon the Lease Plan and except for one (1) amusement gallery containing not more than two thousand (2,000) square feet of floor area and located within either area on the easterly and westerly sides of the Mall labeled Designated Area for Video Game Arcade upon the Lease Plan and except incidental dancing within a restaurant situated more than one hundred fifty (150) feet from the

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Amendment Exhibit “D”

Attached to and made part of First Amendment to Lease

Reference Date of September 5th, 2003 between Keystone-
Miami Property Holding Corp., as Landlord and Tiger Direct,
Inc., as Tenant and Systemax, Inc. as Guarantor

The solid colored area within the crosshatched Protected Area is the approved area for construction of an addition 20,000 SF of gross leasable area as a “Permanent Building” per Item 10 of the First Amendment to Lease.

This Exhibit is a representative diagram and is intended solely for the purpose of identifying the general location of the Premises and the current configuration. Landlord reserves the right at all times herein to (i) change, modify or relocate any tenant location in the Shopping Center, (ii) change the name, identity or type of other tenants or occupants at the Shopping Center, (iii) change the name and address of the Shopping Center, and/or (iv) change modify, relocate, add to or subtract from the number of structures, rooms, storerooms, parking spaces, entrances, service areas, common areas or other portions or parts of the Shopping Center, and otherwise change or alter the configuration of all or any part of the Shopping Center as Landlord, in its, sole discretion, deems necessary or appropriate.

“Parking Area” comprised of Protected Area and other parking space areas reflected hereon, subject expressly to Landlord’s rights under the Lease, including without limitation, those mentioned in Rider R-10.

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Demised Premises and except for ten thousand (10,000) square feet of floor area for non-retail offices situated more than one hundred fifty (150) feet from the Demised Premises and except for the second floor area presently leased to Southern Bell for offices in the Shopping center as shown upon the Lease Plan.

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EX-10.13

Exhibit 10.13

SC MOTA ASSOCIATES LIMITED PARTNERSHIP

ONE NORTH CLEMATIS STREET, SUITE 305
WEST PALM BEACH, FL 33401

Tel:   (561) 835-1810

Fax: (561) 833-4118

March 22, 2007

Tiger Direct Inc.

7827- B West Flagler Street

Miami, FL 33144

Dear Sirs:

Reference is made to that certain Lease dated September 17, 1998 as amended by certain Settlement Agreement and Mutual Release dated June 8, 2001 and First Amendment to Lease dated September 5, 2003, (the “Lease”) between SC MOTA Associates Limited Partnership, as successor in interest to Keystone-Miami Property Holding Corp. (“Landlord”) and Tiger Direct Inc. (“Tenant”) and pertaining to space no. 35 and 33D containing approximately 79,866 s.f. (the “Original Premises”) located in The Mall of the Americas (the “Shopping Center”). This letter sets forth the terms which we are prepared to recommend to the Landlord in connection with your request to lease certain additional premises (the “Additional Premises”) in the Shopping Center.

1.Expansion: Landlord hereby agrees to lease the Additional Premises to Tenant and Tenant hereby agrees to lease the Additional Premises from Landlord upon and subject to the following terms and conditions:

a)Additional Premises: Approximately 3,000 square feet contained within the space known as Bay 33C (the “Additional Premises”) as shown outlined in red on the site plan attached to this letter as Schedule “A”.

b)Term: The Term of the Lease in respect of the Additional Premises will commence the day following the date Tenant receives possession of the Additional Premises (the “Additional Premises Commencement Date”) and will expire concurrently with the expiration of the lease term of the Original Premises (January 31, 2010) and shall have the right to renew as set forth in Section R-5 of the Lease so the Additional Premises will expire coterminous with the Original Premises.

c)Annual Rent: During the period commencing on the Additional Premises Commencement Date, and ending on the 31st day of January, 2010 (both inclusive), Annual Rent in respect of the Additional Premises will be the annual sum of $40,500.00, based upon an annual rate of $13.50 per square foot of the gross leasable floor space of the Additional Premises. In the option periods the Annual Rent shall increase at the rates provided in the Lease.

d)Additional Rent. In addition to the Annual Rent, Tenant hereby further agrees topay to Landlord during the Extension Term, all Additional Rent and other charges required to be paid by Tenant pursuant to the Lease, including, but not limited to, all Utility Charges and Tenant’s Proportionate Share of Taxes, Insurance Premiums, Common Area maintenance expenses, and other Shopping Center Operating Costs.

Notwithstanding anything in the Lease to the contrary, during the Term of this Lease and any extensions thereof, for the Additional Premises only, Tenant agrees to pay Landlord as Additional Rent Tenant’s Percentage Share (As it relates to Property Insurance defined as that fraction, the numerator of which is the total number of rentable square feet of space contained within the Additional Premises and the denominator of which is the total number of leasable square feet within the Shopping Center less any area not covered by the Property Insurance policy) of any cost associated with the Property Insurance (including but not limited to windstorm, “All Risk”, fire, flood, etc.) obtained by Landlord in its reasonable discretion, for the Shopping Center. If Landlord determines in it’s reasonable discretion that Tenant will be required to pay Additional Rent to cover it’s Percentage Share of Property Insurance, then Tenant shall pay Landlord an estimated amount of such costs in equal monthly installments together with Rent. Initially, Landlord estimates that Tenant will be required to pay Four Hundred and Fifty Dollars per month ($450.00) together with its Rent towards Tenant’s Percentage Share of Property Insurance.

Within 180 days after the end of each Year or during such other periods as Landlord deems reasonable, the Landlord will determine and advise Tenant by statement of the exact amount or the Tenant’s Percentage Share of the Shopping Center’s Property Insurance and, if necessary, an adjustment will be made between the parties within 15 days after the Tenant has been advised of the actual amount paid. Upon request by Tenant, Landlord agrees to provide Tenant with a copy of the paid Property Insurance bill as evidence of the basis upon which any increase in Property Insurance is chargeable to Tenant. Tenant shall be responsible for its Percentage Share of such Property Insurance for fractional years occurring at the beginning and expiration of the Term of this Lease, and any extensions thereof.

e)Additional Premises Delivered “As Is”: Except as expressly provided in theLease, Tenant agrees to accept the Premises in its “as-is” condition as of the Commencement Date except that the air conditioning equipment, will be in good working order upon delivery of the Premises. Tenant shall be responsible for performing all renovations, alterations, leasehold improvements, fixturing and other work required in order to combine the Additional Premises with the Original Premises and in order to fixture and improve the Additional Premises for the Tenant’s business purposes. Landlord shall have no responsibility or obligation to perform any work with respect to the shell, floor, storefront, walls, ceilings, lighting fixtures, HVAC system, toilet rooms, utilities systems or otherwise with respect to the Premises prior to the Commencement Date or thereafter. All such work shall be carried out by the Tenant, at Tenant’s sole cost and expense, in a good and workmanlike, lien free manner and in accordance with: (a) Schedule “B” (annexed);(b) all applicable codes, ordinances, rules, regulations and insurance requirements;(c) detailed plans and specifications prepared at Tenant’s cost by a licensed

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architect (which plans and specifications shall be submitted to Landlord in advance for Landlord’s review and approval); and (d) all other applicable provisions of the Lease.

f)Premises: From and after the Additional Premises Commencement Date, the“Premises” demised pursuant to the Lease shall be deemed to consist and be comprised of both the Original Premises and the Additional Premises (totaling, in the aggregate, 82,866 square feet of gross leaseable floor space). Accordingly, from and after the Additional Premises Commencement Date: (i) all terms, conditions and provisions contained in the Lease, as modified by this letter Agreement, shall also apply in respect of the Additional Premises as if the Additional Premises were originally included within the Premises on the date upon which the Lease was originally executed; and (ii) all references to the “Premises” appearing in the Lease and/or in this letter agreement shall be deemed to mean and referred to the entire Premises (including both the Original Premises and the Additional Premises).

2.Binding Agreement: Once this letter is signed by the Tenant and countersigned by theLandlord this letter will constitute a binding supplement to, and modification of, the Leaseupon the terms set forth in this letter. The Lease, as so modified, is and shall remain in fullforce and effect.

3.Expansion Rights: Tenant’s “First Right of Notice to Lease” set forth in Section R-6 of the Rider to the Lease and Tenant’s Expansion Rights” set forth in Section R-7 of the Rider to the Lease shall be modified to specifically exclude from such rights any portion of the Building leased to Technical Career Institute, Inc., its successors or permitted assigns, specifically being Spaces 230, 240 and Technical Career Institute Inc’s expansion premises consisting of approximately 6,000 sq. ft. contained within a portion of Bay 220.

4.Lease Remains in Full Force and Effect, Setoffs or Defenses, Etc.: Tenant does hereby certify, confirm and agree that as of the date hereof (a) that the Lease, as amended and modified herein, is, and shall remain and continue, in full force and effect, binding and enforceable in accordance with its terms, (b) that Landlord is not in default in the performance of any duty or obligation on its part to be performed under the Lease, and (c) that Tenant has no offsets, defenses or counterclaims to Tenant’s obligation to pay all Rent and other sums and to perform all other duties and obligations, on Tenant’s part to be paid and/or performed under the Lease, as herein amended and modified.

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The foregoing agreement is being recommended to the Landlord by the undersigned and is not to become effective or binding upon the Landlord until such time as the Landlord has accepted the terms of this agreement set forth above as evidenced by its signature below.

Kindly confirm your agreement with these terms by signing and returning the additional enclosed copy of this letter in the place designated below.

AGREED TO this 26 day of March 2007.

	Tiger Direct Inc. (Tenant)
/s/ Andrea Fongyee	By:	/s/ MF
Witness
Witness
APPROVED this 12th day of April 2007.
	SC MOTA Associated Limited Partnership
	By:		SC MOTA GP, Inc. (Landlord)
/s/ JoAnn Carlisi			By:	/s/ Brian Kosoy
Witness				Brian Kosoy
JoAnn Carlisi				President
Print Name
/s/ Sarah Hall
Witness
Sarah Hall
Print Name

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EX-10.14

Exhibit 10.14

THIRD AMENDMENT TO LEASE

THIS THIRD AMENDMENT TO LEASE (this “Amendment”), dated as of June 26, 2009, is between SC MOTA ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”), and TIGERDIRECT, INC., a Florida corporation, doing business as TigerDirect (“Tenant”).

RECITALS

A.Landlord (as successor in interest to Keystone-Miami Property Holding Corp.) and Tenant entered into a Lease, dated September 17, 1998, as amended by a Settlement Agreement and Mutual Release dated June 8, 2001, a First Amendment to Lease dated as of September 5, 2003, and a [Second Amendment to Lease] dated March 22, 2007 (collectively, the “Lease”), pursuant to the terms of which Landlord leased to Tenant an aggregate of 82,866 rentable square feet of space comprised of Suite 235 containing 63,882 rentable square feet (the “Office Premises”), Bay M33D containing 15,984 rentable square feet (the “Original Retail Premises”), and Bay E33C containing 3,000 rentable square feet (the “Storage Premises”), all as more particularly described in the Lease and located in Mall of the Americas (which, as of the date hereof, contains 651,011 rentable square feet of space), Miami — Dade County, State of Florida, on the land described on Exhibit “A” to this Amendment.

B.Tenant desires to (i) extend the term of the Lease for the Office Premises, the Original Retail Premises and the Storage Premises (collectively, the “Original Remaining Premises”) for a period of ten (10) years, (ii) lease additional retail space known as Bay M34 containing 25,320 rentable square feet of space and marked as such on Exhibit “B” attached hereto (the “Additional Retail Premises”) for a period co-terminus with the term of the Original Remaining Premises, and (iii) modify certain other provisions of the Lease.

C.Landlord agrees to such extension, lease of additional space and modifications pursuant to the terms and conditions set forth herein.

D.Therefore, for good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.Recitals; Capitalized Terms. The foregoing Recitals are true and correct and are hereby incorporatedinto this Amendment. Capitalized terms used but not otherwise defined in this Amendment will have the meanings set forth in the Lease.

2.Leasing of Additional Retail Premises. Landlord hereby agrees to lease to Tenant, and Tenanthereby agrees to lease from Landlord, the Additional Retail Premises upon the following terms and conditions, subject to the other terms and conditions in the Lease that affect the Additional Retail Premises:

(a)Additional Retail Premises. Landlord and Tenant agree that for the purposes of all calculations in the Lease, the rentable square footage of the Additional Retail Premises shall be deemed to be 25,320 rentable square feet.

(b)Additional Retail Term. The lease term (the “Additional Retail Term”) for the Additional Retail Premises shall commence on the Additional Retail Commencement Date and end on January 31, 2020 such that the last day of the Additional Retail Term shall be co-terminus with the Original Extension Term (as defined below), subject to Tenant’s extension options in Section 4 of this Amendment.

(c)Additional Retail Commencement Date. The “Additional Retail Commencement Date” shall be the earlier to occur of the date that (i) possession of the Additional Retail Premises is tendered to Tenant by Landlord and (ii) Tenant shall occupy any portion of the Additional Retail Premises. Tenant’s failure to accept possession of the Additional Retail Premises within five (5) days after the date on which Landlord tenders possession in accordance with this Amendment will constitute an Event of Default under the Lease. Landlord may confirm the Additional Retail Commencement Date and the Additional Retail Rent Commencement Date (as hereinafter defined) in writing by sending notice to Tenant. If the Additional Retail Commencement Date or the Additional Retail Rent Commencement Date in such notice is not disputed by Tenant within five (5) days of receipt, such date(s) shall be deemed correct.

(d)Additional Retail Rent Commencement Date.  Notwithstanding anything set forth herein to the contrary, but provided no Event of Default exists (beyond any applicable notice and cure period), Tenant’s obligations for Annual Rent, Tenant’s Percentage Share of Operating Expenses (as defined below) and Tenant’s Percentage Share of Real Estate Taxes (as defined below) shall be abated for a period (the “Free Rent Period”) of twelve (12) months commencing on the Additional Retail Commencement Date. Tenant’s obligations for Annual Rent, Tenant’s Percentage Share of Operating Expenses and Tenant’s Percentage Share of Real Estate Taxes shall commence on the first day following the Free Rent Period; provided, however, that if an Event of Default occurs during the Free Rent Period, Tenant shall have no further right to the abatement set forth in this Section 2(d) and shall commence the payment of Monthly Installments of Annual Rent, Tenant’s Percentage Share of Operating Expenses and Tenant’s Percentage Share of Real Estate Taxes for the Additional Retail Premises on the first day following the occurrence of such Event of Default. Furthermore, if Event of Default occurs during or after the Free Rent Period, then in addition to any other costs, damages and unpaid rent that Tenant may owe to Landlord, Tenant shall further owe to Landlord the total sum of the Annual Rent and other rent abated by Landlord during the Free Rent Period. The date on which Tenant’s obligation to commence paying Annual Rent, Tenant’s Percentage Share of Operating Expenses and Tenant’s Percentage Share of

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Real Estate Taxes for the Additional Retail Premises under this Section is referred to as the “Additional Retail Rent Commencement Date”

(e)Delivery of Additional Retail Premises. If Landlord is unable to deliver possession of theAdditional Retail Premises to Tenant on or before March 1, 2010 (the “Anticipated Completion Date”) because the Landlord’s Work (as defined below) has not been Substantially Completed (as defined below), Tenant shall receive two days abatement of Annual Rent and additional rent for each day from and after the Anticipated Completion Date until the Additional Retail Premises are Substantially Completed. In the event the Additional Retail Premises are not Substantially Completed on or before June 1, 2010 (the “Outside Completion Date”), Tenant shall have the right to terminate its obligation to lease the Additional Retail Premises from Landlord under this Section 2 by giving Landlord thirty (30) days prior written notice of such termination within fifteen (15) days following the Outside Completion Date, with time being of the essence. If Tenant timely exercises its termination right under this Section 2(e), but the Additional Retail Premises are Substantially Completed within thirty (30) days of such notice, then Tenant’s termination will be null and void and of no force or effect. If Tenant timely exercises its termination right under this Section 2(e), and the Additional Retail Premises are not Substantially Completed within thirty (30) days of such notice, then such termination shall not affect the Original Remaining Premises or any other terms or conditions under the Lease or this Amendment affecting the Original Remaining Premises. If Tenant fails to deliver such termination to Landlord within such fifteen (15) day period. Tenant will be deemed to have waived its termination right under this Section 2(e). Substantially Completed is defined as receipt of final inspections from the applicable governmental authorities having jurisdiction over the permits issued for Landlord’s Work such that Tenant may take possession of the Additional Retail Premises.

(f)Annual Rent for Additional Retail Premises. Tenant agrees to pay to Landlord, as AnnualRent for the Additional Retail Premises, the amount of Five Hundred Six Thousand Four Hundred and 00/100 Dollars ($506,400.00) per annum (based on $20.00 per rentable square foot of the Additional Retail Premises), payable in Monthly Installments of Rent equal to Forty Two Thousand Two Hundred and 00/100 Dollars ($42,200.00). The Annual Rent for the Additional Retail Premises will not increase during the Additional Retail Term.

(g)Additional Rent for Additional Retail Premises. In addition to the Annual Rent payable onthe Additional Retail Premises, Tenant shall, at its sole cost and expense, pay as additional rent with each Monthly Installment of Rent, one-twelfth (1/12) of Landlord’s estimate of Tenant’s Percentage Share of any Operating Expenses and any Real Estate Taxes on the Additional Retail Premises. Tenant shall not be obligated to pay Tenant’s Percentage Share of any Operating Expenses or any Real Estate Taxes attributable to the Original Remaining Premises, but rather will continue to pay Direct Expenses and Taxes attributable to the Original Remaining Premises in accordance with the Lease. Within one hundred twenty (120) days after the end of each calendar year, Landlord shall furnish to Tenant a statement setting forth the Operating Expenses and Real Estate Taxes applicable to such period and Landlord or Tenant shall within thirty (30) days thereafter make such payment or allowance necessary to adjust estimated payment to the actual amount of Tenant’s actual Percentage Share of Operating Expenses and Real Estate Taxes as shown on such statement. Any amount due Tenant shall be credited against installments next coming due of rent or by payment to Tenant when adjustment is to be made in the last year of the Lease. The calculation of Operating Expenses and Real Estate Taxes for less than a full calendar year shall be based upon the pro-rata share of Operating Expenses and Real Estate Taxes for the calendar year in which the Lease commences and expires. If at any time during any year of the Lease the rates of any Operating Expenses items or Real Estate Taxes for the Center are increased to rate(s) or amount(s) greater than that used in calculating the estimated amounts for such year, Landlord shall have the right to adjust Tenant’s monthly payments of Tenant’s Percentage Share of such items so that the same shall increase concomitantly. Tenant shall pay such increases to Landlord as part of Tenant’s monthly payments of estimated Operating Expenses and Real Estate Taxes commencing with the month in which such increase shall be effective. Landlord agrees to keep true and accurate records of Operating Expenses for each year. Tenant shall have the right to dispute Landlord’s Operating Expense statement provided such notice is given within one hundred eighty (180) days after the receipt by Tenant of such statement. During any such dispute, Tenant shall continue to make payments on account of Operating Expenses in accordance with Landlord’s most recent statement thereof. In connection with such dispute, Tenant shall be permitted to examine such records, during reasonable business hours and upon not less than fifteen (15) business days’ prior written notice to Landlord, at Landlord’s corporate office currently located in Palm Beach, Florida. Tenant shall not be allowed to use any third party audit recovery company acting wholly or partly on a contingency fee basis to perform such audit or examination of Landlord’s books and records and shall evidence the same to Landlord’s satisfaction. If the parties are unable to resolve any dispute as to the correctness of such statement within thirty (30) days following such notice of dispute, either party may refer the issues raised to a nationally recognized independent public accounting firm selected by Landlord and reasonably acceptable to Tenant, and the decision of such accountants shall be conclusively binding upon Landlord and Tenant. In connection therewith, Tenant and such accountants shall execute and deliver to Landlord a confidentiality agreement, in form and substance reasonably satisfactory to Landlord, whereby such parties agree not to disclose to any third party any of the information obtained in connection with such review. Tenant shall pay the fees and expenses relating to such procedure, unless such accountants determine that Landlord overstated Operating Expenses by more than ten percent (10%) with respect to such statement, in which case Landlord shall pay such fees and expenses. Upon expiration of the thirty (30) day period following delivery of Landlord’s Operating Expense statement to Tenant, Landlord’s Operating Expense statement shall be deemed conclusive by Tenant, unless Tenant has theretofore timely delivered a notice of dispute.

(h)Limitation on Increase in Real Estate Taxes. Notwithstanding anything set forth herein tothe contrary, if (i) the Center is sold, or there is a change in control of Landlord, on or before the fifth (5th) anniversary of the Additional Retail Commencement Date, and (ii) there is an increase in Real Estate Taxes directly attributable to such sale or change in control, then, in such event, Tenant shall not be responsible for paying Tenant’s Percentage Share of such increase for the remainder of the Additional Retail Term. There shall be no limitation on Tenant’s obligation to pay Tenant’s Percentage Share of any increase in Real Estate Taxes as a result of any sale or change in control after the fifth (5th) anniversary of the Additional Retail Commencement Date or during any renewal term of the Lease.

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(i)Defined Terms: As to the Additional Retail Premises, the following terms shall have thefollowing meanings:

(i)Center: shall mean Mall of the Americas, as legally described on Exhibit “A” to thisAmendment, together with all improvements and other appurtenances relating thereto currently located or hereinafter erected thereon, plus such modifications thereto as Landlord may from time to time designate.

(ii)Common Areas: shall mean those areas and facilities which, from time to time, may be furnished by Landlord in or near the Center for the non-exclusive general common use of tenants and other occupants of the Center, their agents, employees and customers, including, without limitation, parking areas, driveways, loading docks, passageways, walkways (interior and exterior), roofs, ramps, common seating areas, landscaped areas, stairways, escalators, elevators, sewage treatment facilities (if any), restrooms, fountains, play areas, meeting rooms and other similar areas or facilities.

(iii)Majors: Shall mean any store other than the Additional Retail Premises within the Center containing more than 15,000 square feet of space.

(iv)Operating Expenses: shall mean all costs and expenses incurred by or on behalf of Landlord (less any contribution, if any, to such costs and expenses made by any Majors, any tenants occupying space on the second floor of the Center, or any tenants who pay their respective costs and expenses directly) in operating, managing, insuring and maintaining the Common Areas and other portions of the Center that are the responsibility of Landlord, including, without limitation, all costs and expenses of operating, managing (Tenant agreeing that such management may be undertaken by an entity affiliated with Landlord, in which case such affiliate shall be compensated in a commercially reasonable manner and amount as any third party manager), maintaining, repairing, lighting, signing, cleaning, painting, and striping of the Common Areas (including, without limitation, the cost of uniforms, equipment and employment taxes and benefits); alarm and life safety systems; insurance, including, without limitation, rental abatement insurance, liability insurance for bodily injury, death, personal injury and property damage, special form or all-risk property insurance (including coverage for losses due to fire, flood, wind or other casualties covered by such insurance), worker’s compensation insurance or similar insurance covering personnel; maintenance of sprinkler systems; removal of water, trash and debris; regulation of traffic; payments as required by any governmental authorities; costs and expenses in connection with maintaining ambient air and environmental standards of any governmental authority; costs and expenses incurred, if any, which are designed to protect or enhance the health, safety and welfare of the tenants of the Center or their employees; the costs of all materials, supplies and services purchased or hired therefor; operation of public toilets; installing and renting of signs; fire protection; maintenance, repair and replacement of utility systems serving the Center, including, without limitation, water, sanitary sewer and storm water lines and other utility lines, pipes and conduits and any fees associated therewith; costs and expenses of maintaining, repairing, or replacing machinery and equipment used in the operation and maintenance of the Common Areas and personal property taxes and other charges (including, but not limited to, financing, leasing or rental costs) incurred in connection with such equipment; costs and expenses of maintenance, repair or replacement of awnings, paving, curbs, walkways, landscaping, roofs, walls, drainage, pipes, ducts, conduits and similar items, plate glass, lighting shrubbery and planters; costs and expenses incurred in the purchases or rental of music program services and loudspeaker systems; costs of providing light and power to the Common Areas; cost of water services, if any, furnished by Landlord for the non-exclusive use of all tenants; and administrative costs attributable to the Common Areas for on-site personnel and an overhead cost equal to five percent (5%) of the total costs and expenses of operating and maintaining the Common Areas. With respect to any of the foregoing costs which are capital in nature, Landlord shall amortize or depreciate such costs and expenses over a useful life in accordance with general accounting principles, and the amount of such amortization or depreciation shall be included in Operating Expenses.

(v)Real Estate Taxes: shall mean all federal, state, local, governmental, special district and special service area taxes, assessments (special or otherwise), charges, governmental liens, surcharges and levies, general and special, ordinary and extraordinary, foreseen and unforeseen (and substitutes therefor), of any kind whatsoever (including interest thereon whenever same shall be payable in installments) that Landlord shall be obligated to pay arising out of the use, occupancy, ownership, leasing, management, repair or replacement of the Center, or any property, fixtures or equipment thereon, as well as all taxes attributable to the Additional Retail Premises or rent imposed on the Center from time to time by any governmental authority. Notwithstanding the foregoing, Real Estate Taxes shall exclude inheritance, transfer or gift taxes imposed upon Landlord and any income taxes attributable to the Center or any rent).

(vi)Retail Lease Year: shall mean each period (during the Additional Retail Term) of twelve (12) calendar months, commencing as of (A) the Additional Retail Rent Commencement Date, if the Additional Retail Rent Commencement Date is the first day of a calendar month, or (B) the first day of the month next following the month in which the Additional Retail Rent Commencement Date occurred if the Additional Retail Rent Commencement Date is other than the first day of a calendar month, in which event the first Retail Lease Year shall include the partial month commencing on the Additional Retail Rent Commencement Date.

(vii)Tenant’s Percentage Share: shall mean that fraction, the numerator of which is the total number of rentable square feet of space contained within the Additional Retail Premises and the denominator of which is the total number of rentable square feet within the Center less (A) the area leased to Majors, and (B) the square footage occupied by tenants on the second floor of the Center. Commencing on the first day of the third full calendar year of the Additional Retail Term, in no event shall Tenant’s payment of Tenant’s Percentage Share of Operating Expenses increase by more than 5% over the previous calendar years’ Operating Expenses due hereunder (excluding from the foregoing cap taxes, insurance, utilities, and any other expense not controllable by Landlord).

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(j)Utilities for Additional Retail Premises. Tenant shall be responsible, at Tenant’s sole cost and expense, for all utility services that exclusively serve the Additional Retail Premises irrespective of whether the utility services are located inside or outside the Additional Retail Premises. If any such utilities are not separately metered or submetered and/or are used in common with other tenant’s in the Center, Tenant will pay Tenant’s share of same as Additional rent.

(k)Prepaid Rent. Concurrently with Tenant’s execution of this Amendment, Tenant shall pay toLandlord the Prepaid Rent in the amount of Sixty Eight Thousand Five Hundred Seventy Five and 00/100 Dollars ($68,575.00), which represents Tenant’s first Monthly Installment of Rent.

(l)Landlord’s Work in the Additional Retail Premises. Landlord will complete the work designated as the “Landlord’s Work” in accordance with Exhibit “C” hereto. If requested by Landlord in writing, Tenant shall within ten (10) days after such written request provide all information required in order to enable Landlord to complete the Landlord’s Work. There shall be no postponement or the Additional Retail Commencement Date (or the Additional Retail Rent Commencement Date) for the Additional Retail Premises for (i) any delay in the delivery of possession of the Additional Retail Premises which results from any act or omission of Tenant, including delays due to changes in, additions to or interference with any work to be done by Landlord, or delays by Tenant in submission of information or approving working drawings or estimates or giving authorizations or approvals, or (ii) any delay by Landlord in the performance of any punch list items relating to the Landlord’s Work. If there is a dispute as to (A) the completion of the Landlord’s Work, or (B) the availability of the Additional Retail Premises for possession by Tenant, a certificate of Landlord’s architect will be final and binding on the parties. Tenant will examine the Additional Retail Premises before taking possession and will furnish Landlord with written notice specifying any defects within ten (10) days after taking possession otherwise, Tenant will be deemed to have agreed that the Additional Retail Premises are in good order and have been completed. Notwithstanding anything herein to the contrary, during the first twelve (12) months following the completion of the Landlord’s Work, Landlord shall be responsible to correct any latent defects in the Landlord’s Work. There is no promise, representation or undertaking by or binding upon Landlord with respect to any alteration, remodeling or redecorating of or installation of equipment or fixtures in the Additional Retail Premises, unless expressly set forth in this Amendment.

(m)HVAC. Tenant shall be responsible for the maintenance and repair of existing HVAC units serving the Additional Retail Premises during the Additional Retail Term and any extensions thereto including (i) belt and filter replacement, (ii) charging of the coolant systems, if required, (iii) performing quarterly inspections using a licensed HVAC contractor reasonably acceptable to the Landlord, and (iv) for all maintenance, repairs and replacement cost of less than Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) to any existing HVAC units serving the Additional Retail Premises (i.e., Tenant shall be responsible for paying the first $2,500 of any such costs). If any maintenance, repair or replacement costs to the HVAC units exceed Two Thousand Five Hundred and 00/100 Dollars ($2,500.00), then Tenant shall have the option to either (A) require Landlord to repair and/or replace such HVAC unit and Landlord shall amortize the cost of such repair and/or replacement over the useful life of the unit or part and Tenant shall pay such cost to Landlord as additional rent, or (B) repair and/or replace such HVAC unit at Tenant’s sole cost and expense.

(n)Permitted Use. Tenant may use the Additional Retail Premises for the retail sale, rental and servicing of the following uses (collectively, the “Permitted Retail Use”): (i) computer hardware and software; (ii) general business office equipment; (iii) multi media electronics and equipment and interactive games and equipment; (iv) telecommunications equipment; (v) consumer electronics and equipment; (vi) audio, video and game software, compact discs, laser discs, digital hardware and software; (vii) digital photographic equipment; and (viii) wireless and broadband phone and data services, and for other hardware, software products and accessories, including without limitation, those for sending, receiving, viewing, and playback and those created by changing technologies related to categories (i) through (viii) above. Tenant may also use the Additional Retail Premises to offer services or events related to the technology products that Tenant sells and incidental thereto (the “Incidental Services & Events”), which Incidental Services & Events shall include, but not limited to, trainings, seminars and computer gaming events, and video or photographic production. Notwithstanding anything herein to the contrary, Tenant shall not use the Additional Retail Premises in violation of the exclusive and prohibited uses set forth on Exhibit “D” attached hereto.

(o)Operating Covenant. Tenant shall occupy the Additional Retail Premises upon the Additional Retail Commencement Date. Tenant may only use the Additional Retail Premises for the Permitted Retail Use under the Permitted Trade Name (as defined below) and for no other purpose or name whatsoever without Landlord’s prior written consent. Tenant covenants and agrees that the Additional Retail Premises shall be fully staffed and stocked and open for business to the general public for at least one (1) day within the first three (3) months after the Additional Retail Commencement Date. Furthermore, at all times that Tenant is open and operating for business, Tenant shall maintain an access point between the Additional Retail Premises and the enclosed portion of the Center (to allow ingress and egress of Tenant’s customers and invitees), which access point shall have no less than two (2) cash register check out stations. If Tenant fails to maintain such access point in accordance with this Section 2(o), and such failure continues for five (5) days after written notice from Landlord, then such failure will be an Event of Default under the Lease. For purposes of the Additional Retail Premises, the term “Permitted Trade Name” shall mean CompUSA, Tiger Direct.com Discount Computers or other trade name used or may be used by Tenant at a majority of its retail locations in the United States. If Tenant fails to continuously operate the Additional Retail Premises for more than sixty (60) days, then Landlord shall have the right (but shall not have any obligation), at any time thereafter, to terminate Tenant’s right to possession of the Additional Retail Premises by written notice to Tenant (the “Re-Capture Notice”). The Re-Capture Notice will set forth the date (the “Re-Capture Date”) on which Tenant’s right to possession of the Additional Retail Premises will terminate. If Landlord delivers a Re-Capture Notice, Tenant’s rights to occupy the Additional Retail Premises will terminate on the Re-Capture Date, and Tenant will then vacate and surrender the Additional Retail

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Premises to Landlord in the condition required by the Lease. If Landlord delivers a Re-Capture Notice, then from and after the date on which Tenant surrenders the Additional Retail Premises in accordance with this Section 2(o), Tenant shall have no further obligations under the Lease with respect to the Additional Retail Premises, except for those obligations that expressly survive the expiration or termination of the Lease. If Tenant fails to vacate and surrender the Additional Retail Premises on the Re-Capture Date in accordance with this Section 2(o), and such failure continues for five (5) days after written notice from Landlord, then such failure will be an Event of Default under the Lease.

(p)Sublease of Additional Retail Premises. Tenant shall have the right to sublease the Additional Retail Premises in accordance with Section 9 of the Lease.

(q)Signage. Tenant shall have the right, at its sole costs and expense, to install signage on the building in which the Additional Retail Premises are located, subject to (i) obtaining Landlord’s prior written consent, which consent will not be unreasonably withheld or delayed, and (ii) complying with all applicable governmental requirements (including building codes).

3.Extension of Term of Original Remaining Premises

(a)Original Extension Term. As to the Original Remaining Premises, consisting of an aggregate of 82,866 rentable square feet, the Term of the Lease is hereby extended for a period (the “Original Extension Term”) of ten (10) years, commencing February I, 2010 (the “Original Extension Term Commencement Date”) and ending January 31, 2020. Tenant shall have the right to further extend the Term of the Lease under Section 4 of this Amendment. Section R-5 of the Lease Rider is hereby deleted and will be of no further force or effect.

(b)Annual Rent for Original Remaining, Premises. Tenant agrees to pay to Landlord, as Annual Rent for the Original Remaining Premises for the first five (5) years of the Original Extension Term, without notice, demand, deduction, setoff or counterclaim, plus all applicable sales, rent, use and/or other taxes thereon, the sum of One Million Two Hundred Twenty Eight Thousand Seventy Four and 10/100 Dollars ($1,228,074.10) based upon the rate of $14.82 per square foot, payable in Monthly Installments of Rent equal to One Hundred Two Thousand Three Hundred Thirty Nine and 50/100 Dollars ($102,339.50). The Annual Rent shall be increased on February 1, 2015 to One Million Six Hundred Fifty Seven Thousand Three Hundred Twenty and 00/100 Dollars ($1,657,320.00) based upon the rate of $20.00 per square foot, payable in Monthly installments of Rent equal to One Hundred Thirty Eight Thousand One Hundred Ten and 00/100 Dollars ($138,110.00). Monthly Installments of Rent at the rate set forth above shall be payable to Landlord in advance, on the first day of each calendar month during the Original Extension Term.

(c)Additional Rent for Original Remaining Premises. In addition to the Annual Rent payable on the Original Remaining Premises, Tenant hereby further agrees to pay to Landlord during the Original Extension Term, all Direct Expenses, Taxes and other charges due and payable by Tenant pursuant to the Lease (including, without limitation, Tenant’s Percentage Share of the cost associated with the Property Insurance as to the Storage Premises only). Upon the Original Extension Term Commencement Date, the Base Year for Direct Expenses and Taxes shall be changed to the calendar year 2010. On February 1, 2015, the Base Year for Direct Expenses and Taxes shall be changed to the calendar year 2015.

(d)Original Remaining Premises Accepted by Tenant “AS IS” Subject to Landlord’s maintenance and repair obligations under the Lease for the Original Remaining Premises, Tenant acknowledges and agrees that: (i) Tenant has been in occupancy oldie Original Remaining Premises for an extended period of time; and (ii) Tenant is fully familiar with the Original Remaining Premises and the Center and accepts the same now, and at the Original Extension Term Commencement Date in an “AS IS” condition. Within three hundred sixty (360) days of the occurrence of the Original Extension Term Commencement Date. Tenant, at its sole option, shall have the right upon written notice to Landlord to perform the following work (collectively, the “Reimbursable Improvements”) to the Office Premises, the Original Retail Premises and the Additional Retail Premises: install new carpeting in the Office Premises to equal or better quality as when first installed at inception of the Lease; repaint the Office Premises to equal or better quality as when first painted at inception of the Lease; and/or make other tenant improvements to the Office Premises, the Original Retail Premises and the Additional Retail Premises which are permanent in nature, all in accordance with the terms of the Lease. If Tenant performs any of the Reimbursable Improvements within such three hundred sixty (360)-day period, then Landlord shall reimburse Tenant for the cost of the Reimbursable Improvements, in an amount not to exceed. Three Hundred Twenty Five Thousand and 00/100 Dollars ($325,000.00), within thirty (30) days of Landlord’s receipt of reasonable documentary evidence that the Reimbursable Improvements was performed in accordance with the Lease and the cost of the same has been paid in full (as evidenced by unconditional lien waivers from the trades performing the Reimbursable Improvements); provided, however, that Landlord will only be obligated to reimburse Tenant up to an amount of One Hundred Sixty Two Thousand Five Hundred and 00/100 Dollars ($162,500.00) for any Reimbursable Improvements to the Original Retail Premises and the Additional Retail Premises. If Tenant fails to perform the Reimbursable Improvements within such three hundred sixty (360)-day period, then Landlord will have no obligation to reimburse Tenant for any of the Reimbursable Improvements. For purposes of Tenant’s reimbursement under this Section 3(d), the term Reimbursable Improvements shall specially exclude any furniture, equipment or similar removable personal property.

4.Options to Renew the Original Extension Term and the Additional Retail Term.

(a)First Renewal Term. Provided Tenant is not in default under the Lease at the time of itsexercise thereof, Tenant shall have the right to extend the Original Extension Term for the Original Remaining Premises and the Additional Retail Term for the Additional Retail Premises (together but not separately) for an additional five (5) year period (“First Renewal Term”) which shall commence immediately upon expiration of the Original Extension Term and the Additional Retail Term. Tenant will not have the right to extend the Original Extension Term for the Original

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Remaining Premises without also extending the Additional Retail Term for the Additional Retail Premises (and vice versa). If Tenant fails to notify Landlord in writing on or before two hundred seventy (270) days prior to the end of the Original Extension Term and the Additional Retail Term (time being of the essence with respect thereto), then Tenant’s right to extend the Lease for the First Renewal Term (as well as for the Second Renewal Term) shall lapse, and the Lease shall terminate upon expiration or earlier termination of the Original Extension Term and the Additional Retail Term. If Tenant extends the term of the Lease for the First Renewal Term, all terms and conditions of the Lease shall remain the same except as set forth in this Amendment and reference to the Term of the Lease shall include the First Renewal Term; provided, however that, subject to Section 4(e) below, the Base Year for Direct Expenses and Taxes shall be changed to the calendar year 2020 with respect to the Original Remaining Premises only.

(b)Second Renewal Term. Provided Tenant had exercised its option for the First Renewal Term and is not in default under the Lease at the time of the exercise of its option for the Second Renewal Term, Tenant shall have the right to extend the Term for an additional five (5) year period (“Second Renewal Term”) which shall commence immediately upon expiration of the First Renewal Term. Tenant will not have the right to extend the First Renewal Term for the Original Remaining Premises without also extending the First Renewal Term for the Additional Retail Premises (and vice versa). If Tenant fails to notify Landlord in writing on or before two hundred seventy (270) days prior to the end of the First Renewal Term (time being of the essence with respect thereto), then Tenant’s right to extend the Lease for the Second Renewal Term shall lapse, and the Lease shall terminate upon expiration or early termination of the First Renewal Term. If Tenant extends the Term of the Lease for the Second Renewal Term, all terms and conditions of the Lease shall remain the same except as set forth in this Amendment and reference to the Term of the Lease shall include the Second Renewal Term; provided, however that, subject to Section 4(e) below, the Base Year for Direct Expenses and Taxes shall be changed to the calendar year 2025 with respect to the Original Remaining Premises only.

(c)Rent During Renewal Terms. The Annual Rent for the renewal terms shall be as follows:

For the Original Remaining Premises:

	Rent Per Rentable
	Square Foot		Annual Rent		Monthly Rent
First Renewal Term	$	23.00	$	1,905,918.00	$	158,826.50
Second Renewal Term	$	26.45	$	2,191,805.70	$	182,650.47

For the Additional Retail Premises:

	Rent Per Rentable
	Square Foot		Annual Rent		Monthly Rent
First Renewal Term	$	22.50	$	569,700.00	$	47,475.00
Second Renewal Term	$	25.31	$	640,849.20	$	53,404.10

(d)Reminder Notice. Notwithstanding the above, if (i) Landlord fails to provide a written reminder notice (a “Reminder Notice”) to Tenant not less than thirty (30) days before the expiration of the 270-day notice deadline in Section 4(a) and 4(b) above (each such deadline being referred to as an “Option Notice Deadline”), and (ii) Tenant fails to give Landlord an extension notice before the expiration the Option Notice Deadline, then Tenant’s option to extend shall nevertheless remain in full force and effect for an additional period of thirty (30) days after written notice from Landlord (given by Landlord after the expiration of the Option Notice Deadline) advising Tenant that the extension notice has not been received; provided, however, that in no event will Tenants option to extend remain in full force or effect beyond the expiration of the then current Term. lf, however, Landlord sends Tenant a Reminder Notice, and Tenant nevertheless fails to give Landlord an extension notice prior to the expiration the Option Notice Deadline, then Tenant’s option to extend shall lapse and not remain in full force or effect beyond the Option Notice Deadline. It is agreed between Landlord and Tenant that it is the intention of the parties under this Section 4(d) to avoid forfeiture of Tenant’s right to exercise its option to extend through Tenant’s inadvertent or negligent failure to give notice of extension prior to the expiration of the Option Notice Deadline.

(e)No Decrease in Rent. Notwithstanding anything set forth in this Section 4 to the contrary (including the resetting of the Base Year under Section 4(a) and 4(b) above), in no event shall the Annual Rent, additional rent and other recurring amounts payable by Tenant to Landlord in any Lease Year during the First Renewal Term (including the first Lease Year of the First Renewal Term) or the Second Renewal Term (including the first Lease Year of the Second Renewal Term) be less than the Annual Rent, additional rent and other recurring amounts payable by Tenant to Landlord in the immediately preceding Lease Year.

5.Parking. Subject to complying with all applicable governmental requirements (including buildingcodes), in addition to the reserved parking set forth in Section R-10 of the Lease, Tenant shall have the right, at its sole cost and expense, to designate twenty five (25) additional parking spaces exclusively for the use by Tenant’s customers and marked on the parking bumper “TigerDirect Visitor” in the location shown on the parking plan attached as Exhibit “E” to this Amendment (the “Additional Parking Spaces”). Notwithstanding anything set forth in this Section 5 to the contrary, (a) if any person or entity has a contractual right, as of the date hereof, to object to the designation or location of any Additional Parking Spaces, and (b) without prior communication from Landlord to such person or entity of the granting of the Additional Parking Spaces to Tenant, such person or entity notifies Landlord in writing that the designation or location of any Additional Parking Spaces violates such contractual right, then Landlord will notify Tenant in writing of such violation and Tenant will cease to have the right to use such Additional Parking Spaces, and will remove the designation on all such parking bumpers, within thirty (30) days of such written notice from Landlord. Furthermore, if Tenant is unable to use any of the Additional Parking Spaces because of applicable governmental requirements (including building codes) or any of the conditions set forth in this Section 5, the same will not constitute a

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default by Landlord under the Lease, will not reduce or otherwise modify Tenant’s obligations under the Lease and will not be grounds for Tenant to terminate the Lease or any of Tenant’s obligations with respect to the Additional Retail Premises.

6.References. From and after the Additional Retail Commencement Date, all references to the “Premises” in the Lease shall mean and refer to the Original Remaining Premises and the Additional Retail Premises.

7.Confidentiality. Tenant agrees not to disclose any of the terms or provisions of this Amendment to other present or future tenants or prospective tenants of the Center or their respective representatives, nor to anyone else, excepting professionals (i.e., attorneys and accountants) who require knowledge thereof in furtherance of Tenant’s bona fide interests.

8.Broker Indemnification. Tenant agrees to indemnify Landlord against any loss, expense (including reasonable attorneys’ fees), cost or liability incurred by Landlord as a result of a claim by any broker, agent or finder representing Tenant or otherwise negotiating this Amendment on behalf of Tenant.

9.Ratification. Landlord and Tenant hereby ratify and confirm the Lease, as amended by this Amendment, and expressly acknowledge and agree that the Lease, as amended by this Amendment, remains and shall continue in full force and effect. In the event of any conflict between the terms and provisions of the Lease and the terms and provisions of this Amendment, the terms and provisions of this Amendment shall take precedence and control.

10.Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.

11.Amendments. The provisions of this Amendment (including this Section 11) may only be amended, supplemented or waived by a further agreement in writing duly executed and delivered by Landlord and Tenant.

12.Advice of Counsel. Each of Landlord and Tenant has reviewed this Amendment with its legal counsel or had an opportunity to review this Agreement with its legal counsel. This Amendment shall be interpreted without regard to any presumption or rule requiring construction against the party causing this Amendment to be drafted.

13.INTEGRATION. THE LEASE AND THIS AMENDMENT CONSTITUTE THE ENTIRE UNDERSTANDING AND AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT MATTER OF THE LEASE AND THIS AMENDMENT. ALL PRIOR UNDERSTANDINGS AND AGREEMENTS BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT MATTER OF THIS AMENDMENT ARE MERGED INTO THIS AMENDMENT. AS TO THIS AMENDMENT, LANDLORD ACKNOWLEDGES THAT NO REPRESENTATION, WARRANTY, INDUCEMENT, PROMISE OR AGREEMENT HAS BEEN MADE, ORALLY OR OTHERWISE, BY TENANT OR ANYONE ACTING ON BEHALF OF TENANT, UNLESS SUCH REPRESENTATION, WARRANTY, INDUCEMENT, PROMISE OR AGREEMENT IS EXPRESSLY SET FORTH IN THIS AMENDMENT. LIKEWISE, AS TO THIS AMENDMENT, TENANT ACKNOWLEDGES THAT NO REPRESENTATION, WARRANTY, INDUCEMENT, PROMISE OR AGREEMENT HAS BEEN MADE, ORALLY OR OTHERWISE, BY LANDLORD OR ANYONE ACTING ON BEHALF OF LANDLORD, UNLESS SUCH REPRESENTATION, WARRANTY, INDUCEMENT, PROMISE OR AGREEMENT IS EXPRESSLY SET FORTH IN THIS AMENDMENT. IN ADDITION TO EXECUTING AND DELIVERING THIS AMENDMENT, A DULY AUTHORIZED REPRESENTATIVE OF LANDLORD AND TENANT IS INITIALING THIS SECTION 13 WHERE INDICATED BELOW TO AVOID ANY DOUBT WHATSOEVER THAT LANDLORD AND TENANT UNDERSTAND THE PROVISIONS OF THIS SECTION 13.

INITIALS	INITIALS
/s/ [ILLEGIBLE]	/s/ [ILLEGIBLE]
LANDLORD	TENANT

[The remainder of this page is intentionally blank.]

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THE PARTIES have executed and delivered this Amendment as of the day and year first written above.

WITNESSES:		LANDLORD:
		SC MOTA ASSOCIATES LIMITED
		PARTNERSHIP, a Delaware limited partnership
		By: SC MOTA GP, Inc., a Delaware corporation
/s/ Karen Lynch		By:	/s/ Brian Kosoy
Print Name:	Karen Lynch	Print Name:	Brian Kosoy
		Title:	President
/s/ JoAnn Carlisi
Print Name:	JoAnn Carlisi
		TENANT:
		TIGERDIRECT, INC., a Florida corporation
/s/ Ed Schmidt		By:	/s/ Gilbert Fiorentino
Print Name:	Ed Schmidt	Print Name:	Gilbert Fiorentino
		Title:	CEO
/s/ Andrea Fongyee
Print Name:	Andrea Fongyee

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ACKNOWLEDGMENT OF GUARANTY

The undersigned, as the guarantor of the Lease pursuant to the Guaranty attached to the Lease, hereby acknowledges the terms of this Amendment, and further acknowledges the continuing liability of the undersigned during the term of the Guaranty as guarantor with respect to the Lease, as modified by this Amendment. Nothing herein shall be deemed to limit any provisions of the Guaranty or the continuing liability of the undersigned for all obligations of Tenant under the Lease, as modified by this Amendment.

WITNESSES:		GUARANTOR:
		SYSTEMAX, INC., formerly known as Global Direct Mail, Inc., a Delaware corporation
/s/ Ed Schmidt		By:	/s/ Curt Rush
Print Name:	Ed Schmidt	Print Name:	Curt Rush
		Title:	Secretary
/s/ Andrea Fongyee
Print Name:	Andrea Fongyee

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EXHIBIT “A”

LEGAL DESCRIPTION OF THE CENTER

Tract “A” of MALL OF THE AMERICAS, according to the Plat thereof as recorded in Plat Book 159, Page 70, of the Public Records of Miami-Dade County, Florida.

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EXHIBIT “B”

SITE PLAN

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EXHIBIT “C”

LANDLORD’S WORK

LANDLORD’S WORK FOR ADDITIONAL RETAIL PREMISES

The Tenant acknowledges that it accepts the Additional Retail Premises in an “as is” condition and that all alterations, renovations, decorations or other work required in connection with the Additional Retail Premises will be performed by the Tenant, at its sole cost and expense, and in accordance with Exhibit “C”.

Notwithstanding the immediately preceding paragraph, and subject to obtaining requisite approvals from the appropriate governmental authorities, Landlord agrees to (i) construct a loading area with a hydraulic lift adjacent to the west wall of the Additional Retail Premises, and (ii) install entry doors and entry façade on the southern wall of the Additional Retail Premises (including the installation of overhead security doors and bollards consistent with the overhead security doors and bollards currently installed in the Original Retail Premises), all as more particularly shown on the plans and specifications listed on or attached to Exhibit “C-1”

The Landlord’s Work below has been described solely for the purpose of determining and outlining the extent of the Landlord’s repair and restoration obligations under Section 22 of the Lease in case of damage and destruction.

1.Washroom:

Washrooms to code (fan, light, ceiling and accessories to be supplied and installed by the Landlord).

2.Electrical:

150 amp., 3 phase, 4 wire electrical service at 120/208 V. Location to be determined by the Landlord. The Landlord will also provide 2 foot by 4 foot lay in fixtures based on one fixture per 80 square feet of area and install receptacles per code. The tenant shall provide all other electrical work including, but not limited to, additional lighting, outlets and wiring required.

3.Heating and Air Conditioning Equipment:

One (1) ton of cooling capacity per 300 square feet of area will be supplied and installed on the roof of the Leased Premises. All duct work and other work required to hook up the system to be completed by the Landlord based on an open retail unit (i.e. no partition walls, bulkheads, etc.). The Tenant is required to make its own inquiries regarding the adequacy of the HVAC capacity provided by the Landlord above. The Tenant will be responsible for the costs of any additional HVAC equipment and distribution in which it requires.

4.Walls:

Unpainted plasterboard on interior face of demising walls, finished to a maximum height of ten (10) feet, ready for paint. Masonry fire walls (Landlord’s obligation will be to a maximum 1-hour rating) and exterior walls will be concrete block with flush joints ready for paint.

5.Floor:

Concrete floor with a smooth finish.

6.Storefront:

Landlord’s standard storefront.

7.Ceiling:

Standard 2 foot by 4 foot T-Bar ceiling with acoustical tile

8.Sprinklers:

If required by code, the Landlord will provide a complete sprinkler system within the unit based on open area. (i.e. no partition walls, bulkheads, etc.). The tenant will be responsible for any alterations to the system to maintain proper coverage as per code due to the construction or installation of any obstruction such as walls, bulkheads, shelving, etc.

9.General:

If the Tenant requests a credit in lieu of any work which the Landlord was to have provided, the credit shall, at the option of the Landlord, be determined either (a) by an estimate by the Landlord as to the amount of the credit, or (b) to equal the amount offered by the Landlord’s contractor as a credit to delete the work from its contract, in each case, less fifteen percent (15%) which the Landlord shall retain for co-ordination charges.

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TENANT’S WORK

A.Structure

Landlord has provided a single level structure designed in accordance with all governing building codes. All elements and dimensions must be verified by Tenant’s architect due to the previous occupancy of the space and subsequent modifications.

1.Columns shall be un-primed structural steel shapes as depicted in lease outline drawing showing Tenant’s demised area.

2.Roof structure over space leased shall be structural steel framing bar joist, metal deck, insulation, and built-up roofing.

3.Exterior walls are masonry concrete block with #5REBAR split face brick veneer.

4.Floor Slab on grade 4' hand troweled concrete surface with 6" x 6' wire mesh approximately 1/2' below finished mall areas.

5.Roof penetration shall be held to a minimum. All required Tenant penetrations of roofing system shall be made by Landlord’s roofing contractor at Tenant’s expense after notification to Landlord for approval. Any structural framing required by Landlord’s Engineer due to Tenant’s roof penetrations for roof mounted equipment shall be by Landlord’s Contractor at Tenant’s expense. All engineering costs for modification to Landlord’s structure are Tenant’s responsibility.

6.Should an expansion joint occur in the leased premises, Tenant is responsible for all construction affected by such joint including floor, walls, and ceiling. Tenant shell maintain integrity of all such expansion joints In a manner consistent with acceptable construction design practices.

7.Tenant areas will be left exposed to the steel and metal deck structure above. Approximate height, slab to deck, is 28'.

8.All drilling, welding, or other attachment to the structural system must be approved by Landlord in writing before work is begun, and must be clearly identified on Tenant’s drawings. Landlord approval of drawings does not relieve Tenant of responsibility to make this request in writing.

B.Demising Walls and Storefronts

1.Each Tenant must furnish and install 5/8' fire code gypboard, taped and bedded, up to the structural deck and airtight against the deck, on Tenant’s side of all common dividing partitions. Tenant must seal gypboard airtight and seal in an airtight manner all structural shapes, ducts, piping, and penetrations through the demising walls. Demising walls shall be installed to roof deck and shall be airtight, since the space between the deck and the finished ceiling is used as a return air plenum. Tenant shall provide openings in demising walls above the ceiling as directed by the Landlord for proper circulation of air. Storefront bulkhead must remain open to permit return airflow.

2.Vertical neutral strips separating Tenant storefront construction are erected in front of storefront at lease line, contiguous with dividing partitions. The storefront area left open between the edges of the neutral strips and between the mall finished floor and the under-side of the soffit, is for storefront work by Tenant. Tenant shall be responsible for constructing a complete storefront or remodeling an existing storefront in the full height of the opening and making suitable attachment or termination of construction to the soffit and proper closure against each neutral strip. All aluminum on Tenant storefront must be anodized with a dark bronze finish, including exposed portions of security gates.

3.All storefront glass must be safety plate or tempered. Use of plate glass mirrors on storefront will be permitted only if solidly bonded to non-combustible backing material subject to Landlords approval. Storefront glass of any type will not be permitted to terminate directly against flooring. A durable kickplate is required.

4.Construction or design elements of the storefront construction will not be allowed to project beyond Tenant’s lease line.

5.Tenant must furnish and install a minimum of 3'0" x 7'0' service door connecting to service corridors. This shall be a class ‘B” labeled door and frame, complying with uniform building code. This door’s secondary use is that of an exit, and must be recessed the full width of Tenant’s door, swing in the direction of travel, and be equipped with the necessary hardware. Tenant is required to make complete installation, including proper anchorage of frame, providing hole in sheet rock on corridor side, necessary headers and other accessories for a proper installation.

Locking hardware on exterior entrances or exits must function from the inside of Tenant’s lease space only. such that after hours access cannot be gained to Tenant’s space except through the common area.

6.Tenant whose normal operations generate moderate or high sound levels, i.e., pet shops, coin operated

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amusement centers, musical instrument showrooms, stereo centers, etc., are required to insulate their demising walls against sound transmission.

7.Key switches for motorized grilles shall be mounted as inconspicuously as possible. Switch covers are to match adjacent storefront material or covers. Approximate maximum height 6f switch above finished floor shall be twelve (12) inches. All switches shall be flush mounted and not located on front face of storefront. Manual override is required for emergency operation.

C.Interior Finishes

1.Floors

a.All Tenant finish floor covering materials must be selected or adapted in thickness to correspond exactly with the level of the finished mail floor.

b.Tenant may elect to set its show window, grille, or other storefront elements back from the lease line within the premises. If such set-back storefront configuration is established, Tenant is encouraged to install flooring material identical In color, quality, and pattern to the adjacent mall flooring.

c.Tenant’s drawing, submitted for Landlord’s approval, must show the exact dimensions and locations of all floor penetrations. Tenant will be required to complete all penetrations in such manner that odors or liquids will not permeate the slab at these openings. Tenant shallprovide liquid tight sleeves at all floor penetrations at Tenant’s expense.

d.If Tenant elects to install carpeting it must not extend past center line of door track to lease line.

e.All slab on grade concrete installed by Tenant shall be 3,000 psi, reinforced with 6' x 6' wire mesh. Any cutting and patching of the slab requires written approval by Landlord before work by Tenant can be initiated.

2.Walls

a.Interior partitions shall be constructed of noncombustible materials. If non-combustible wood is used, it shall bear the U.L. approval and mill stamp indicating it is treated, must be completely enveloped, and solidly locked with 5/8' fire core gypboard. Field applied treatment to combustible material is not permitted.

b.Interior metal studs should be a minimum of 3-5/8'.

c.Partition wall must be anchored.

3.Ceiling

a.Combustible material of any nature will not be allowed above finished ceilings. Organic material, either treated or non-treated will not be allowed above finished ceilings.

b.All non-combustible ceiling material must be equal to class ‘A’ fire rating.

c.Ceiling not terminating tight against wall surface must be returned to the deck above and sealed as required.

D.Heating, Ventilating and Air Conditioning

1.Design criteria of premises

a.Heating

1.Outside dry bulb temperature: 28 F.

2.Inside dry bulb temperature: prevailing minimum temperature of substantially 70 F + I in merchandising areas.

b.Cooling

1.Outside dry bulb temperature: 96 F.

2.Outside wet bulb temperature: 78 F.

3.Inside dry bulb temperature: prevailing minimum temperature of substantially 78 F + I in merchandising areas.

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4.Inside relative humidity: 50%.

c.Total electrical heat producing load: Maximum ten (10) watts per square foot of gross Tenant area. Total electrical load shall be based on the total wattage from lighting, appliances, equipment and miscellaneous electrical items in the premises. Food service areas maximum electrical load is 30 wafts per square foot of gross Tenant area.

d.Number of people for internal sensible latent heat gains: Maximum fifty (50) square foot of leased area per person.

e.Air supply: Total cool air supply to the Tenant’s premises is based on the total internal sensible heat load calculated from the design criteria established in paragraphs b, c, d, and where applicable on exposed outside wall ‘U’ value of 0.2 and a roof ceiling assembly ‘U’ value of 0.12 and a supply air diffusion temperature difference of 18 F +/-2.

2.Landlord System

a.Packaged rooftop air-cooled air conditioning units furnish 56 F +/- 2 supply air. Supply air from the units through Landlord’s common duct system is delivered at the premises by providing a duct connection point for Tenant’s distribution system. Air is returned to Landlord’s air conditioning unit via ceiling plenum.

b.Ventilation: Outside fresh air is provided at not less than 1 0% during occupied cycle.

c.Air supply is quantified in cubic feet per minute or CFM’S.

3.Tenant System

a.Tenant shall design and install a complete supply air distribution system. Such system shall be complete with variable volume boxes and controls, supply and return diffusers, supply grilles and registers, return air grilles, return air openings with fire dampers, insulated ductwork, thermostat(s) and electric controls for temperature control In the premises.

b.Tenant’s air distribution system including ductwork, variable volume air control devices, electric reheat coils, diffusers, grilles and registers shall be designed such that the static pressure loss in Tenant distribution system does not exceed 0.35'W..C.

c.Variable volume boxes, supplied and installed by Tenant, shall be equal to Titus ESC1000.

d.Ductwork: Tenant’s ductwork shall be designed, furnished and installed in strict accordance with the standards described in the latest edition of the ASHRAE Guide and Data Book and in the latest editions of the Duct Manual and Sheet Metal Construction for Ventilating and Air Conditioning Systems, published by SMACNA and/or local codes. No fiberglass ductwork shall be used. Maximum length of flex is 48'. Ductwork from Landlord’s main supply duct to VAV Box shall be hard pipe only.

e.Diffusers, registers, grilles: Shall be of adjustable type for volume and direction control.

f.Thermostat(s) shall be located in an accessible location and not obstructed by any merchandising or appliances nor shall it have light fixtures or other similar heat producing elements directed or adjacent to it. Thermostat(s) shall act to control variable volume box(es).

g.Tenant shall provide 24" x 24" access panels for service to Landlord’s and/or Tenant’s equipment and/or facilities, and all connections to Landlord’s services and facilities above the ceiling level within the premises.

h.Tenant is responsible for air balance of the HVAC system in their premises.

E.Exhaust System

1.Each Tenant will provide its own toilet duct with ceiling grille in accordance with the requirements of all applicable codes. In no cases shall Tenant system exhaust be less then 2 CFM per square foot of toilet room area. Landlord has provided had provided sheet metal exhaust stacks through the roof at various locations. Tenant shall install a toilet fan(s) within its space, sized for code toilet exhaust quantities as a minimum. Tenant shall install one (1) back draft damper in the discharge duct, and shall extend the discharge duct to the nearest exhaust and shall connect thereto, providing a capped inlet for connection of future Tenants.

2.Exhaust systems for food services:

a.Maximum exhaust air shall be based on codes and special requirements. Food or other odors

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from kitchen, dining room and cafeteria areas must be exhausted to atmosphere through Tenant-furnished and installed upblast exhaust fan equal to the Penn Ventilator Co. Fume-X fan. The manufactured fan unit shall be modified by the addition of a fabricated venture type duct adapter to assure a minimum discharge velocity of 2000 FPM. The exhaust fan shall be provided with a drainage area at the bottom of the unit complete with a residue trough equipped to be cleaned periodically by Tenant. The location of the exhaust fan shall be no less than 20'-O’ from any air intakes so as to avoid contaminating air supplied to other Tenants.  If necessary, an additional duct extension on the fan discharge may be required if odors become a problem within the mall. Exhaust duet and fan location shall be submitted to Landlord for approval.

b.Tenant shall clean its filter and duct system on a regular program so that grease is not deposited on the roof. All exhaust system ductwork and exhaust fans used for exhausting cooking odors and grease-contaminated air shall be cleaned on a regular schedule by an established contractor engaged in that type of service. This cleaning will occur at intervals often enough to insure against grease accumulation in exhaust system, thus eliminating the probability of fires in this system. Tenant will provide to Landlord a copy of the service agreement between Tenant and authorized service dealer. Any grease related damage shall be corrected at Tenant’s expense.

c.Tenant shall provide an electrical interlock so that its kitchen exhaust fan shall run at all times that the lights in the kitchen area are on.

d.Tenant is required to run exhaust fans so that no odors are allowed to enter the public mall or any adjacent Tenant spaces.

e.Makeup air for exhaust system from kitchen, dining room, and cafeteria areas must be accomplished by Tenant-furnished and installed makeup air systems.

3.Exhaust system fire protection, food service:

a.The automatic extinguishing equipment should be installed in accordance with the National Fire Protection Association Standards. The extinguishing system shall be Underwriters’ Laboratories, Inc. CO2 or dry chemical pre-engineered system. Underwriter’s Laboratories approved grease extracting hoods with water washdown cycle are suggested. However, a properly designed conventional range hood with washable grease filters is acceptable, provided that fire protection sprinkler heads or chemical fire protection is provided above the filters and within the exhaust duct run between the hood and the roof mounted exhaust fan, and is approved by Landlord’s fire protection engineer.

b.Automatic devices for shutting down fuel or power supply to the appliances must be of the manual reset type and not automatic reset. In addition, gas fire cooking comment must have a permanent notice posted at the reset device cautioning the operator to shut off the gas at all appliances before resetting the device.

c.A readily accessible means to manually actuate the fire extinguishing equipment shall be provided in a path of ingress or egress and shall be clearly identified. This means shall be mechanical and shall not rely on electric power for actuation.

d.The installation of the above systems to be made only by persons properly trained and qualified by the manufacturer of the system being installed. Tenant shall also have an inspection agreement with the firm whose personnel are properly trained and qualified (by the manufacturer) to make such inspections.

e.If dry chemical systems are used, the exhaust fan must run during the actuation of the extinguishing system in order to draw the dry chemical extinguishant up through the ductwork.

f.Before the system is fabricated and installed, the systems vendor shall submit plans and other pertinent information on the proposed system to Landlord for review and approval.

F.Electrical

1.Electrical service and design

a.Landlord will provide an electric distribution system of 480/277 volts, three phases, 60 cycle, electrical distribution to electrical meter rooms. Tenant will furnish all necessary labor, disconnects, branch and main circuit breakers, panels, transformer, conduit, wire, etc., to provide a complete approved electric distribution system within the leased premises.

b.Landlord has sized electrical service sufficient to accommodate an electrical installation of 10
watts per square foot for retail Tenants, 30 watts per square foot for fast food Tenants, and 60 wafts per square foot for restaurants and cafeterias.

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c.Tenant’s electrical drawing submittal must include a tabulation of the electrical load including quantities and sizes Of 12MPS, appliances, signs, water heaters, equipment, etc., and a KW demand for each installed item. A complete electrical panel schedule is required for each installation. Tenant plan shall provide a single line diagram showing electrical distribution with method of grounding of Tenant’s system clearly shown.

2.Electrical construction

a.General material: All electrical materials shall be new and shall be National Electrical Code Standard unless better grade is required by local, code, and shall bear the Underwriters’ Laboratories label.

b.Lighting fixtures shall bear Underwriters’ label and be of a type approved by City and NEC codes. Recessed fixtures installed in furred spaces shall be connected by means of flexible conduit with wire run to a branch circuit outlet box which is independent of the fixture. Fluorescent ballast shall be energy efficient.

c.The following equipment shall be identified with engraved bakelite nameplates: distribution panels, motor starters, lighting panels, and push button stations.

d.Electric hot water heaters, if needed, shall be provided by Tenant for its domestic water requirements, shall be automatic and shall be limited to 12 gallon capacity. Special approval for heaters of larger capacity will be required. Unit shall be U.L. approved. Heaters will have a pressure relief piped to nearest drain in Tenant space. All water heaters above ceiling must have overflow drain pan piped to nearest drain.

e.All fluorescent fixtures shall, be provided and installed by Tenant with switch legs and local switches rated 20 amps at 277 volts. All fluorescent fixtures must have internal protection devices.

f.Panel board furnished and installed by Tenant for 120/208 volt lighting within the [eased premises shall be equal to type NLAB class panels and 277/480 volt panels shall be equal to type NHB class with single or multiple pole bolted thermal magnetic breakers.

g.Transformer shall be furnished and installed by Tenant, as required.

G.Plumbing

1.Domestic cold water will be provided by Landlord at or near the boundary of the leased premises. The location for this point of service shall be in Tenant’s blackout area. Tenant shall connect at this point and extend service according to Tenant’s requirements. All runs downstream of Landlord’s valve shall be insulated to prevent condensation.

2.Tenant’s plumbing facilities shall be confined to the limits of the leased premises and in the immediate vicinity of adjacent service corridors. Plumbing installation shall be in accordance with all applicable codes.

3.Sanitary sewer

a.Sanitary sewer taps to which Tenant may connect will be provided by Landlord, under each leased premises. All Tenants are required to provide toilet facilities within their leased premises, at Tenant’s expense.

b.Tenants are encouraged to locate toilets in areas where sewer taps are provided. Tenant shall excavate for sewer taps, complete plumbing connections, and backfill to a 90 percent density. If Tenant’s design does not work with location established by Landlord, then Tenant shall remove existing stab according to accepted construction practice.

c.Common vents are provided at strategically located points. Tenant shall connect to these vents and provide “T” connection with plug to allow connection by other Tenants.

d.All Tenants shall provide floor drains in toilets, however, boutique and restaurant Tenants shall also provide floor drains in kitchen areas. Local codes shall govern; however, a minimum of one (I) drain shall be required.

e.All Tenants shall provide accessible clean-outs in toilet and kitchen areas.

f.Tenant shall provide access to all Landlord clean-outs that may occur in Tenant’s leased premises.

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4.Grease trap

All food service Tenants are required to use the Landlord’s grease distribution system. Landlord provides the grease line tap within the Tenants premises. Connection to this system will be at Tenant’s expense.

5.Water consumption

Large water consumers such as food preparation establishments, hair salons, and other large water consumers in the judgment of Landlord, shall furnish and install a water meter conforming to American Water Works Association specifications for domestic service. If a meter is required, it shall be installed by Tenant at Tenant’s expense in an area easily accessible to Landlord’s personnel. The meter reading shall be used to calculate Tenant’s bill in accordance with established utility rates.

H.Telephone System

All telephone services shall be provided by Tenant. All telephone charges shall be paid by Tenant directly to the telephone utility company furnishing the service. Complete conduit system, if required, shall be provided by Tenant for utility company with pull wires installed in all conduit. Outlet boxes shall be 4" square minimum with single device cover and telephone plate.

I.Gas Service

Gas service will be available from the local gas company at a designated area. All piping and associated work for extension of services from the designated area to the Tenant’s leased space is by Tenant contractor at Tenant’s expense subject to Landlord’s approval and governing code requirements.

J.Fire Life Safety

1.Landlord has installed within the leased premises a fire protection system with standard head spacing in accordance with code requirements. Modifications made to Landlord’s system due to Tenant requirements, requirements of governing agencies or for any other reason shall be at Tenant’s expense. The final system shall be engineered in accordance with the codes and standards of all governing bodies.

Tenant’s contractor shall notify Landlord’s local authority 24 hours in advance to each shut down of sprinkler system. Tenant shall reimburse Landlord for the cost of each shut down sprinkler system in the amount of One Hundred Fifty Dollars (S150.00) for each occurrence.

2.Exit requirements and exit identifications within Tenant’s premises shall be furnished and installed by Tenant in accordance with requirements of the governing building code as it may be revised and amended, up to the time that construction is completed by Tenant, and approved by the local building authority. Exit lights will have auxiliary battery power provided with individual battery units for each fixture. Exit lights must be illuminated at all times, exit lights must also have auxiliary battery power.

3.Tenant shall furnish and install a minimum of one fire extinguisher throughout Its leased premises. The requirement is one extinguisher per 3000 square feet of space with a maximum separation of 75'- O' walking distance. Type of extinguisher shall be Class ABC, 10 lb. dry chemical. This requirement is necessary for insurance ratings. Locations must be approved by Landlord’s fire protection consultant.

K.General

1.Tenant must submit design and construction documents in two phases. For the first phase, Tenant will submit preliminary drawings. For the second phase, Tenant will submit Working Drawings sealed by a Registered Architect. Three (3) sets of plans and one (1) set of sepias shall be submitted to Landlord for approval. Work shall not commence until Landlord has received and approved Tenants drawings.

2.Landlord, Tenant or utility company shall have the right, subject to Landlord’s approval, to run utility lines, pipes, roof drainage pipes, and conduit, wire or ductwork where necessary, above ceiling space, column space, or other parts of the leased premises, and to maintain same in a manner which does not interfere unnecessarily with Tenant’s use. It shall be Tenant’s responsibility to provide access panels in its finish work where required by Landlord.

3.Tenant shall prepare all its plans and perform all its work to comply with all governing statutes, ordinances, regulations, codes and insurance rating boards; obtain all necessary permits and obtain Certificates of Occupancy for the work performed. Landlord’s approval of Tenant’s plans does not relieve Tenant of its obligation to complete the construction in accordance with the terms of the Lease Agreement, nor does it relieve Tenant of complying with the laws, rules, regulations, and requirement of local governing authorities. Certificates of Occupancy or copy is mandatory and shall be filed with Landlord before Tenant opens for business.

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4.All drilling, welding, or other attachment to the structural system must be approved by Landlord in writing before work is begun, and must be clearly identified on Tenant’s drawings. Landlord’s approval of drawings does not relieve Tenant of the responsibility to make the request in writing.

5.Tenant’s contractor shall be responsible for providing and maintaining a temporary storefront barricade made of paneling or painted sheetrock during Tenant construction. The temporary storefront shall completely enclose Tenant storefront and is subject to approval by Landlord. If Landlord has previously constructed a temporary barricade, then Tenant shall reimburse Landlord for Landlord’s cost.

6.Existing materials, fixtures and equipment planned to be reused must be of quality level equal to new, and are subject to Landlord’s approval. Used materials other than that which is existing on the premises will not be permitted. Any damaged materials must be replaced as directed by Landlord.

7.Tenant’s contractor will be held responsible for all clean-up in the common mall or joint use area. Tenant’s contractor must provide a walk-off mat.

8.All construction plans in the field must bear the Landlord’s approval.

9.All work performed in the leased premises is contingent upon final approval by the Landlord.

10.Tenant shall repaint neutral piers and soffit after completion of Tenant construction if required by Landlord.

11.All construction work shall be done within Tenant’s leased premises. All materials shall be stored and confined within Tenant’s leased premises.

12.Tenant shall comply with all current provisions of the “Occupational Safety and Health Act” (OSHA) that may apply to Tenant’s operations.

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EXHIBIT “C-1”

PLANS FOR LANDLORD’S WORK

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EXHIBIT “D”

MALL OF THE AMERICAS
EXCLUSIVES and RESTRICTIONS

AMC Theatres:    No portion of the Restricted Area outside Tenant’s Building shall be used (y) as a nightclub or bowling alley or (z) for any purpose other than for the operation of establishments selling goods wares, merchandise, food, beverages, and services to the public at retail and for such office and storage areas as may reasonably be needed in connection with the operation of the Shopping Center; PROVIDED, HOWEVER, the foregoing shall not be construed to prohibit the operation of a health club, nor the leasing of premises for office purposes, so long as office premises located in the enclosed mall north of the “Office Line” shown on Exhibit B are not utilized by the occupant thereof during evening hours (i.e., after 6:00 pm). The covenants and agreements of Landlord set forth in this Section are sometimes collectively herein referred to as the “Landlord’s Operating Covenant.”

Casa Larios:         During the term and for so long as the Premises are operated as Casa Larios Restaurant in accordance with the Applicable Use, Landlord agrees hereafter not to enter into any lease for space in the Center (excluding, however, (i) other tenants in the Center already engaged in such use as of the date of this Agreement, (ii) any renewals, transfers, or assignment of such leases, and (iii) any new tenants occupying space previously occupied by tenants set forth in (i) and (ii), and further excluding food court tenants within the Center) with any tenant whose primary business is that of a full service sit down restaurant serving Cuban food and/or cuisine as its primary menu. Landlord further agrees not to modify any lease in the center to permit a use in violation of the foregoing restrictions.”

Citicorp Savings of Florida:              Provided that Tenant is not in default under this Lease, Landlord agrees, during the term of this Lease or any extensions hereof, not to enter into any leases for space in the southern half of the Shopping Center, as now existing, as said southern half is depicted on Exhibit “B” attached to the Lease for use as a savings and loan institution or for banking services.

Citicorp Savings of Florida #2          Provided that the demised premises are used solely for a drive-through ATM and Tenant is not in default under this Lease, Landlord agrees that during the entire term of this Lease (i) it shall not enter into any lease, ground lease or sale agreement with any bank, savings and loan association or similar financial institution for any outparcels located in the southern one-half of the Shopping Center as now existing or hereafter altered and developed, to be used as a free standing banking or ATM facility; and (ii) it shall not agree or permit an ATM facility to be installed in the Shopping Center Buildings (exclusive of outparcels) by any party other than tenant.

CFO Mall of the Americas, Inc. d/b/a Cohen Fashion Optical: No other tenants whose primary business (gross sales therefrom shall constitute more than 50% of the gross sales of such tenant’s business in such space at the Shopping Center) is the sale of prescription eyeglasses, contact lenses and/or sunglasses. In no event shall any occupant or tenant perform eye examinations.

EB Games:            So long as no Event of Default (or event with the notice and/or lapse of time could become an Event of Default) has occurred under this Lease. Landlord agrees that it shall not, at any time during the Term of the Lease, enter into any lease of space in the Shopping Center with any tenant whose primary business is the sale of hand-held game hardware and software, electronic board games, or video game hardware and software. The term “primary business” as used in this Section, shall means sales aggregating at least seventy percent (70%) of such tenant’s gross sales. Any existing leases in the Shopping Center on the Commencement Date and any future leases to tenants leasing at least 7,500 square feet of space in the Shopping Center, including their respective renewal options, are not subject to the above- described exclusive right. If Landlord should at any time breach this restriction on Tenants lease rights, Tenant shall notify Landlord in writing within ninety (90) days after such other tenant opens for business in the Shopping Center, and shall provide Landlord an additional ninety (90) days to cure such breach. If Landlord does not cure such breach within 90 day period, Landlord shall pay to Tenant an amount equal to $32,480.00 as liquidated damages for such breach and Tenant shall continue to be obligated to perform all of its obligations under this Lease as if no such breach had occurred. Tenant shall not be entitled to, and does hereby waive, any other rights or remedies to which Tenant may be entitled under applicable law, in equity, or otherwise by reason of such, breach by Landlord and failure of Landlord to cure, including, without limitation, any right to terminate this Lease. Landlord agrees it shall not lease space to “GameStop”

Final Round Arcade:           Landlord agrees at no time will Landlord lease space in the Shopping Center to a tenant who shall be authorized by its lease to carry on, as its principal business, the operation of a video arcade. The term “primary business” means that greater than ten percent (10%) of such other tenant’s Net Sales shall derive from the revenue of video arcade machines.

Footlocker:           So long as F.W. Woolworth Co. leases, uses, or occupies any space in the area described in Schedule “A” hereof as Entire Premises, the Landlord covenants that notwithstanding the amendment, cancellation, termination, or expiration of the herein lease: (a) no covenant or agreement not specified in Schedule “BV” hereof made by the Landlord with any other person or corporation restricting the use or occupancy of all r part of said Entire Premises shall be of any force or effect against F. W. Woolworth Co., (b) no building or structure shall be erected or maintained on any part of the Entire Premises except in the area designated Building Area or Future Building Area on the drawing attached to Schedule “A” hereof; (c) no building, structure, or other space in said Entire Premises having a ground floor area in excess of 10,000 square feet shall be leased to or used or occupied by any person or corporation unless said lease, use or occupancy is specifically consented to in writing by the Tenant, and (d) no other space in said Entire Premises, shall be used or occupied as, or in connection with, a store commonly known as a variety store or junior department store.

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GNC:      Landlord shall not enter into any new leases with other tenants in the Shopping (excluding kiosks and pushcarts provided such kiosks and pushcarts are not within the “Restricted Zone” as indicated on Exhibit A attached hereto), which contain a use clause permitting the tenant to conduct a business for the primary purpose of the sale of health foods, vitamins, mineral, and herbal supplements or sports nutrition supplements (the “Restricted Business”), nor permit any tenant to conduct the Restricted Business in violation of such tenant’s use clause. “Primary purpose” shall be defined as a store selling the aforesaid items within an area which occupies in excess of the lesser of: (a) ten percent (10%) of its floor area or (b) 200 square feet of floor area.

Home Depot: Tenant shall at all times have the right to assign this Lease, or to sublet all or any portion of the Premises at its option provided subsequent to such subletting or assignment. Tenant remains liable for the payment and performance of all Rent and other obligations of the tenant required hereunder. Such assignee shall agree to be bound by the terms hereof and shall assume the obligations of Tenant hereunder in writing. Tenant shall also have the right to mortgage, pledge or encumber this Lease, and any entry or foreclosure and sale by the mortgagee of any such mortgage shall be a permitted assignment. Landlord shall provide all notices to be provided to Tenant hereunder to any such mortgagee and Landlord shall provide such mortgagee the opportunities to cure any defaults provided in Section 14.2 hereof.

Marshalls of Miami-Flagler, FL., Inc.  d/b/a Marshalls: Landlord will not lease, sell, or otherwise permit any structure within the Shopping Center to be used in whole or in part as a:

(a)food supermarket (except within the premises shown and identified on the Site Plan as “Winn Dixie”);

(b)restaurant (except within (i) the areas shown and identified on the Site Plan as “Food Court”, (ii) the accessory restaurants currently operated within the premises shown and identified on the Site Plan as “Woolworth’s” and “Walgreen”, (iii) those portions of the Shopping Center located outside of the “Prohibited Restaurant Area” shown on the Site Plan and (iv) the free-standing structures shown on the Site Plan);

(c)bar (unless such bar is included within permitted restaurant premises which derive at least fifty percent (50%) of their annual gross revenues from the sale of food for on-premises consumption);

(d)theatre of any kind (except within the premises shown and identified on the Site Plan as “AMC Theatre 8-Plex”);

(e)bowling alley (except within the premises shown and identified on the Site Plan as (i) “Winn Dixie”. “T.J. Maxx”. “Lurias” or (ii) the northerly forty thousand (40,000) square feet of the premises identified as “Home Depot”);

(f)skating rink (except within the premises shown and identified on the Site Plan as (i) “Winn Dixie”, “T.J. Maxx”, “Lurias” or (ii) the northerly forty thousand (40,000) square feet of the premises identified as “Home Depot”);

(g)amusement park;

(h)carnival;

(i)meeting hall;

(j)bingo parlor (except within the premises shown and identified on the Site Plan as “West Side Amusement Bingo”);

(k)“disco” or other dance hall;

(I)sporting event or other sports facility;

(m)auditorium or any other like place of public assembly.

Landlord agrees that in no event will Landlord lease, sell or otherwise permit more than a total of thirty thousand (30,000) square feet of floor area (exclusive of the areas identified on the Site Plan as “Food Court” and the free-standing structures shown on the Site Plan) to be used for restaurant purposes within the Shopping Center nor, further, will Landlord lease, sell or otherwise permit any single restaurant operation within the Shopping Center to occupy more than ten thousand (10,000) square feet of floor area. [Article IX, §2(A)]

Landlord agrees during the term of this lease that it will not lease, sell or otherwise permit any structure within the Shopping Center to be used in whole or in part for any manufacturing operation; as a factory; for any industrial usage; as a warehouse; any establishment selling cars, trailers or mobile homes; for the operation of a billiard parlor, amusement center (other than one such center consisting of no more than seven thousand (7,000) square feet of floor area, provided the same is located outside of the areas shown and identified on the Site Plan as the “Food Court” and the “Prohibited Restaurant Area”), flea market, massage parlor; for a so-called “off-track betting” operation (other than operations having no direct access to their premises from the Mall); lottery ticket sales (unless located within areas of the Shopping Center outside of the area identified on the Site Plan as “Food Court” and the area identified on the Site Plan as “Prohibited Restaurant Area”); for the sale or display of pornographic materials; or for any other purpose which would be considered

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to be inconsistent with the use of the Shopping Center as a community oriented retail shopping center. [Article IX, §2(B)]

Ross Dress for Less:          Shopping Center is and will remain retail in character, and, further, that no part of which shall be used for office purposes (except [a] such space as is so used as of January 1, 1998, [b] that second story space located above the Store and the adjacent T.J. Maxx premises which is, as of the date of this Lease, occupied by Santa Cruz Furniture, and [c] that space designated on the Site Plan as “Offices”) or residential purposes, and no part of which within five hundred (500) feet of the Store shall be used as a theatre; auditorium, meeting hall, or school larger than 3,000 square feet; church or other place of public assembly; “flea market;” gymnasium; health club (other than north of the Center Court shown on the Site Plan); dance hall; billiard or pool hall; massage parlor; video game arcade (other than north of the Center Court shown on the Site Plan); bowling alley; skating rink; car wash; facility for the sale, leasing or repair of motor vehicles; night club; adult video store (which are defined as stores at least ten percent (10%) of the inventory of which is not available for sale or rental to children under 15 years old because such inventory explicitly deals with or depicts human sexuality). Except for restaurant space existing as of January 1, 1998 and that space which is used as a Blockbuster Music store as of January 1, 1998, no additional restaurant space shall be permitted in the Shopping Center within five hundred (500) feet of the Store. Notwithstanding anything contained herein to the contrary, Landlord may (a) lease premises within the Shopping Center for the operations of storefront type financial, banking, insurance, real estate and brokerage offices, and (provided the same are at least two hundred fifty (250) feet from the Store) dental and medical offices; and (b) permit the leasing or repair of motor vehicles if such activity is associated with the operation of a business engaged primarily in the sale of automotive parts and/or tires and is located at least four (400) feet from the Store. [§ 3.1]

Pizza USA:           During the term of this Lease, Landlord agrees hereafter not to enter into any lease for in-line (that is, space with an entrance directly into the enclosed Mall) space in the Shopping Center owned by Landlord with any tenant whose permitted use includes the right to sell at retail cooked and prepared ready to eat hot pizza only; subject however to the following terms and conditions including those relating to restaurants. Nothing contained in this Rider shall limit, impair or otherwise affect (i) Landlord’s leases, tenants or the uses by such tenants under such leases existing on the date of this Lease, and extensions thereof or (ii) the space reserved for “majors” (i.e. spaces containing 20,000 sq. ft. of gross leasable area or more), (iii) any space in or upon so-called “outparcels” of the Shopping Center (that is, spaces which do not have entrances leading directly into the enclosed Mall, including parcels surrounded by or abutting portions of the common areas which are exterior to the enclosed Mall), or (iv) Landlord’s leases, tenants or their uses respecting the operation of a full service (eat in and take out) restaurant, including an Italian restaurant, unless such restaurant’s “primary business” (hereafter defined) is comprised entirely of the sale of cooked and prepared ready to eat hot pizza (for purposes of this sentence, “primary business” shall refer to such a restaurant where more than fifteen (15%) of its gross sales are derived from the sale at retail of such cooked and prepared ready to eat hot pizza).

Subway:  Landlord agrees it shall not enter into a lease for space in the building of which the demised premises forms a part with any other tenant whose primary business (i.e. occupying more than fifty percent (50%) of its gross leasable area and constituting more than fifty percent (50%) of its annual gross sales) is the sale of submarine and/or hoagie sandwiches.

Technical Career Institute:              Accredited post secondary educational services. If Landlord leases to an accredited post secondary school or allows “New Horizons” to become an accredited post secondary school, Tenant may terminate the Lease after the twenty-fourth (24th) month of the Lease term.

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EXHIBIT “E”

PARKING PLAN OF ADDITIONAL PARKING SPACES

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EX-14

Exhibit 14

SYSTEMAX INC.

CORPORATE ETHICS POLICY

(REVISED MARCH 2010)

The Corporate Ethics Policy of Systemax Inc. (the “Company”) was prepared to provide the directors, officers, employees and other representatives of the Company and its subsidiaries (collectively “Company Representatives”) as well as the Company’s shareholders, customers, suppliers and the general public with a statement of the Company’s commitment to ethical business conduct.  This Corporate Ethics Policy applies to the Company and all of its subsidiaries on a worldwide basis.  The Company is committed to acting as a responsible and ethical corporate world citizen.  Company Representatives will conduct Company business with the highest regard for the Company’s ethical and legal obligations and with the utmost loyalty to its shareholders and customers.  It is the duty of all Company Representatives to see that these policies are followed.  Every Company Representative is expected to comply with these policies.  Failure to do so may not only harm the Company and your fellow employees, it will subject you to disciplinary action, including termination of employment under appropriate circumstances.

Summary of Duties for All Company Representatives:

·Avoid conflicts of interest and potential conflicts of interest between you and the Company.

·Do not offer or make gifts to customers (unless not of excessive value and unless for a business purpose of the Company).  Cash or cash equivalent gifts of any value are absolutely prohibited.

·Do not offer or make gifts or payments to or otherwise attempt to bribe or unfairly influence a government official.

·Do not accept gifts from suppliers, service providers, customers or competitors (unless not of excessive value).  Cash or cash equivalent gifts over $100 are absolutely prohibited.

·Do not compete with the Company or take personal advantage of Company business opportunities, or have significant interests in companies the Company does business with.

·Do not waste or misuse Company assets.

·Keep all non-public Company information confidential.

·Deal with all customers, suppliers and competitors fairly.

·Comply with all laws and government regulations in all countries where the Company does business including laws against non-competitive practices (antitrust laws), insider stock trading, employment discrimination, bribery and other foreign corrupt practices, workplace safety laws and export/customs laws.

·Disclose and record accurately any use of Company funds.

·Do not falsify, inflate or disguise any accounting record or other business records of the Company.

·Report all violations of law and/or Company Ethics Policy to appropriate Company officials (see Section 11 below) or to the Company’s Anonymous Complaint Hotline (see Section 12 below).

Policies:

1.Loyalty to the Company and its Shareholders:

Company Representatives owe a duty of loyalty to the Company and to its shareholders.  The duty of loyalty includes both a duty to protect the interests of the Company and an obligation to refrain from business conduct that would injure the Company and its shareholders.

2.Conflicts of Interest:

Company Representatives are required to avoid conflicts of interest, appearances of conflicts of interest and potential conflicts of interest.  A “conflict of interest” occurs when an individual’s private interest interferes in any way — or even appears to interfere - with the interests of the Company.  A conflict situation can arise when a Company Representative takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively.  Conflicts of interest also arise when a Company Representative, or a member of his or her family, receives improper personal benefits as a result of his or her position in the Company or has a personal interest in a transaction involving the Company (beyond merely being a Company Representative).  Company Representatives shall not allow any consideration such as the receipt of gifts or financial interests in other businesses or personal or family relationships to interfere with the independent exercise of his or her business judgment and work activities to the benefit of the Company. Company Representatives should not have significant ownership interests in, or positions with, or financial or other involvements with, the Company’s vendors, customers, or other third parties doing business with the Company, without prior written disclosure to the Company and approval by the Company’s Board of Directors or a Committee of the Board. Company Representatives shall have no ownership interest in any private company that directly competes with the Company. Company Representatives shall have no more than a one percent (1%) ownership interest in any public company that directly competes with the Company.   Loans to, or guarantees of obligations of, Company Representatives are prohibited unless permitted by law and authorized by the Board of Directors or a Committee designated by the Board.  If a Company Representative becomes aware of a potential conflict of interest he or she must communicate such potential conflict of interest to the Company.

3.Gifts, Incentive Awards and Relationships with Customers, Suppliers and Service Providers:

No gift may be offered or provided to any corporate or individual customer or potential customer unless the gift is not cash or cash equivalent and also not of excessive value and is made for business purposes of the Company.  No gift of any value may be made to any government customer, government official or individual agent of a government customer.  No gift, gratuity, incentive payment or award whether in the form of cash or its equivalent, personal property, rebates or points awarded towards the entitlement to any of the foregoing (an “Incentive Award”) may be specifically offered or provided to any purchasing agent or other employee of any corporate or government customer (a “Purchasing Agent”) without the knowledge of such customer’s management.  A “gift” includes any tangible and intangible payment or gratuity such as cash, products, meals, tickets to events, services, etc.  A gift, which is by itself not of “excessive value” may be, when aggregated with other gifts from the same source, a gift that is of excessive value.

The receipt of cash or cash equivalent gifts greater than $100 are absolutely prohibited.  No gift may be solicited or accepted from any supplier or potential supplier (including any service provider), customer, competitor or any other entity that does business with the Company either directly or indirectly unless (a) the gift is not of excessive value, (b) the gift cannot be construed as a bribe, payoff or improper inducement and (c) the gift is for a business purpose of the Company. In considering whether a gift is of “excessive value” the Company will consider, among other things, the value of the gift as well as the job responsibilities and annual compensation of the gift recipient.

Any gift offered or received (for any amount) that is in cash or cash equivalent must be reported to an employee’s supervisor. Any gift offered or received that is not cash or cash equivalent and that is greater than $100 in value must be reported to an employee’s supervisor.

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No gift, friendship, or other non-business aspect of any relationship with any customer or supplier should affect a Company Representative’s obligation to deal with all customers, prospective customers and suppliers in a manner consistent with the best interests of the Company.  Neither a Company Representative nor any member of his/her family may have any financial or economic involvement with the Company or with any customer or supplier of the Company (such as employment or an employment agreement, a business venture, a consulting or service agreement, or an investment other than the ownership of the stock of a publicly traded company) without prior written disclosure to the Company and approval by the Company’s Board of Directors or a Committee of the Board.

Company managers are prohibited from accepting gifts from subordinate employees unless not of excessive value.

Routine entertainment by suppliers that is business related - such as business meals, entertainment, recreation, sports outings or cultural events - is acceptable; however, Company Representatives must obtain the approval of their supervisor. It is not acceptable to solicit gifts, gratuities or business courtesies for personal benefit or the benefit of a Company employee, family member or friend. Gifts should not be accepted from a supplier or potential supplier during, or in connection with, contract negotiations. Accepting cash or cash equivalents - including checks, money orders, vouchers, gift certificates, loans, stock or stock options - is not acceptable. If a Company Representative has received gifts or favors, such person must immediately notify his or her supervisor. In some circumstances, such person may be required to return the gift with a letter explaining Company policy or, if a gift is perishable or impractical to return, such person may be required to distribute it to employees or donate it to charity, with a letter of explanation to the donor.

4.Corporate Opportunities:

Company Representatives are prohibited from (a) taking for themselves personally opportunities that are discovered through the use of Company property, information or position; (b) using Company property, information, or position for personal gain; and (c) competing with the Company.  Company Representatives owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

5.Protection and Proper Use of Company Assets:

Company Representatives must guard against any misuse or waste of the Company’s assets or corporate opportunities.  This includes, but is not limited to, trade secrets, intellectual property rights such as trademarks and patents, product sourcing information, strategic plans, etc.  Company Representatives will refrain from the use of Company property for personal use other than on an incidental basis.  Company Representatives will comply with internal controls and procedures of the Company that are intended to allow for better management and protection of the Company’s assets.  All Company Representatives should protect the Company’s assets and ensure their efficient use.  Theft, carelessness and waste have a direct impact on the Company’s profitability.  All Company assets should be used for legitimate business purposes.

6.Confidentiality:

Company Representatives must maintain the confidentiality of information entrusted to them by the Company or its customers, except when disclosure is authorized or legally mandated.  Confidential information includes all non-public information that might be of use to competitors or harmful to the Company or its customers if disclosed.

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7.Fair Treatment of Fellow Employees:

Company Representatives will not discriminate against any Company employee or potential employee on the basis of race, color, religion, sex, national origin, age, handicap, veteran status, marital status or sexual preference.  Company Representatives will be sensitive to the rights of all employees to work in an environment free from all aspects of illegal discrimination, including an environment free from all forms of illegal harassment.

8.Fair dealing:

Company Representatives should endeavor to deal fairly and honestly with the Company’s customers, suppliers, competitors and employees and should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing practice.  Company Representatives shall not knowingly engage in conduct that results in the Company using any trade secrets, copyrights, trademarks, patents or other proprietary or confidential information belonging to a competitor.

9.Compliance With Applicable Laws and Regulations of Governmental Bodies and Agencies:

The Company and all Company Representatives shall fully comply with all applicable laws and regulations, including securities laws (which require fair disclosure of the Company’s business and financial information to the public and prohibit any use of inside information about the Company in deciding to buy or sell stock of the Company, among other things), antitrust laws (which establish standards for dealing fairly with competitors, suppliers and customers), laws regarding safety in the workplace, laws relating to the preservation of the environment, laws protecting employees and prospective employees from discrimination or sexual harassment, customs laws, including country of origin marking and value laws, and other laws regulating products as well as laws prohibiting corrupt practices such as payments to public officials or improper political activities.

While the Company encourages its employees to participate in the political process, they are cautioned not to create the impression that they speak or act on behalf of the Company.  Certain U.S. and foreign laws prohibit the Company from contributing to political candidates of parties or party officials except under limited conditions.  The numerous applications of domestic and international laws to the activities of the Company cannot be set forth fully here, but all Company Representatives should be sensitive to the ongoing need to assure appropriate consideration of any activity that might violate any such laws.  Clarification of these matters can be obtained by contacting the Company’s General Counsel.

Foreign Corrupt Practices Act

Many countries have laws or rules prohibiting gifts to people who are employed by the government of that country.  In addition the U.S. Foreign Corrupt Practices Act prohibits the Company or any Company Representative from making a payment or giving anything of value to a foreign official or political party for the purpose of obtaining or retaining business.  This provision also applies to payments or offers of anything of value to intermediaries, sales representatives or agents if the Company Representative knows, or has reason to know, that the payment or offer will be used for a prohibited payment, gift or favor.  Company Representatives must obey these laws.

Export Control Laws and Regulations

It is the Company’s policy to comply with the export control laws and regulations of all countries in which the Company does business.  Compliance with these laws and regulations may result in some loss

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of business opportunities but a failure to comply may result in fines and penalties and loss of exporting privileges.  U.S. customs law prohibits the shipment of goods to certain countries as well as to certain designated individuals and entities while shipment (including re-export) to some other countries, persons, and/or entities requires U.S. Government license application and approval.  Consult these websites for further information.  (www.treas.gov/ofac/index.html; www.bxa.doc.gov; www.pmdtc.org).

10.Maintenance of Accurate and Complete Books and Records; Financial Reporting:

Every Company Representative has an obligation to maintain accurate and complete books and records in accordance with the Company’s Standard Accounting Policies.  No false or misleading entries may be made on the Company’s books and records and no documents shall be signed without proper authorization.  No funds or assets may be used or maintained by the Company for any illegal purpose.  All transactions shall be fully and completely documented and recorded in the Company’s accounting records.  All labor, travel, material and other expenses should be recorded truthfully.  A variety of U.S.  and foreign laws govern the accurate and complete entry of accounting and financial information.  The Company and Company Representatives are to maintain all such financial records in an accurate and complete manner in accordance with such laws.

Company Representatives shall take all reasonable action within the scope of their responsibilities to promote full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission, the New York Stock Exchange or any other applicable regulatory body or in other public communications made by the Company. Company Representatives shall not knowingly misrepresent or conceal with an intent to mislead, or cause others to misrepresent or conceal with an intent to mislead, material facts concerning the Company.

In connection with Company’s financial disclosures, Company Representatives shall take reasonable action within the scope of their responsibilities designed to cause the Company, and/or to require its personnel, as appropriate, to comply with generally accepted accounting principles and the rules and regulations of the SEC concerning financial and accounting matters; maintain books and records that accurately and fairly reflect the transactions, assets and liabilities of the Company, as required by applicable law; refrain from any financial or accounting practices or pubic financial disclosure that, while in possible technical compliance with generally accepted accounting principles and applicable law, are intended to present a misleading picture of the Company’s financial condition or results of operations or trends relating to these items; promptly report to the Audit Committee any significant or material deficiencies or weaknesses in the design or operation of the Company’s internal controls over financial reporting; promptly report to the Company’s internal audit department or the Audit Committee any information indicating that a material violation of generally accepted accounting principles or any illegal financial or accounting practices has or may have occurred; cooperate fully with the Company’s internal audit department, independent auditors, internal legal staff, outside legal advisors or any governmental authority in any investigation regarding possible wrongdoing related to the Company’s financial and accounting disclosure; and refrain from improperly influencing or attempting to coerce, manipulate, mislead or fraudulently influence the activities of the internal audit department or any audit conducted by the Company’s independent auditors.

11.Procedures in the Event of a Legal or Policy Violation or Concern:

Company Representatives must promptly report violations of laws, rules, regulations or the Corporate Ethics Policy to appropriate personnel as indicated below.  The Company will not allow retaliation for reports made in good faith. Any Company Representative who is charged with a felony or other serious crime, and any Company Representative who learns that another Company Representative has been charged with a felony or other serious crime, must immediately inform the local Human Resources

5

Department. The local Human Resources Department, upon being advised of this information, must immediately inform the Company’s Legal Department at the Company’s headquarters in Port Washington, New York.

In addition, all Company Representatives have an obligation to discuss any concern they have with regard to the application of these policies to any conduct in which they participate, are asked to participate, or become aware of.  Normally, such concerns should be brought to the attention of the immediate supervisor of the Company Representative.  The Company is aware that in certain situations it may be unrealistic to discuss concerns with a supervisor and encourages any Company Representative to contact any of the following in such circumstances (all of whom can be reached at the Company’s headquarters in Port Washington, New York).

Richard Leeds - Chairman and Chief Executive Officer

Larry Reinhold - Executive Vice President and Chief Financial Officer

Curt Rush - General Counsel

Robert D. Rosenthal - Chair of the Nominating and Corporate Governance Committee of the Board of Directors

12.Anonymous Complaint Hotline:

The Company has implemented an anonymous reporting system to receive and address complaints regarding improper or questionable accounting practices.  (Examples of improper accounting practices include improper recording of sales transactions, inventory, accounts receivable, accounts payable or other revenue, expense or asset items.) The Company’s Audit Committee of the Board of Directors oversees this process.  The Company has set up an anonymous Telephone Hotline to receive such complaints.  In order to maintain complete anonymity for callers, the Company is utilizing the services of an independent company called Ethicspoint to administer the hotline.

The system is easy to use.  Simply phone the 24 hour toll-free Hotline Number:

866-292-1177	(U.S. and Canada)
0800-032-3687	(England and Scotland)
800-786907	(Italy)
0800-90-4683	(France)
020-793699	(Sweden)
###-##-####	(Spain)
0800-180-0707	(Germany)
800-022-6570	(Holland)

An Ethicspoint compliance specialist will guide you through the questions to complete the report.  The reports will be available only to specific individuals in the Company who are charged with evaluating and, when appropriate, investigating the violation.  The system is designed so that no report is ever shared with implicated parties.

The Company believes this hotline will be an effective tool in reducing losses from improper accounting, fraud and similar practices and therefore help to protect its financial strength.  If you are uncertain if a practice violates Company policy or is illegal, please call the hotline.  The Company would rather be informed of a potential problem than let it go unchecked.  Should you have any questions regarding the

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anonymous reporting procedures or the hotline, you may contact Curt Rush, the Company’s General Counsel.

13.Exceptions in Particular Cases; Waiver:

In certain very limited circumstances, the Company, acting through the Board of Directors’ Corporate Governance Committee and after being provided with full and complete information as to the circumstances, upon the request of a Company Representative, may permit an activity otherwise restricted under this Policy (other than an activity that would constitute illegal conduct).  In such cases, prior written disclosure of the matter shall be made to one of the persons identified in Section 11 above for further consideration by the Corporate Governance Committee as to whether such activity should be permitted.  In the event that such waiver is requested by a director or executive officer of the Company, such waiver may be granted only by the Board, and must be promptly disclosed to shareholders.

14.Importance of Compliance with These Policies:

It is the duty of all Company Representatives to see that these policies are followed.  Every Company Representative is expected to comply with the policies set forth above.  Failure to do so may not only harm the Company and your fellow employees, it will subject you to disciplinary action, including termination of employment under appropriate circumstances.

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EX-21

Exhibit 21

SUBSIDIARIES OF SYSTEMAX INC.

Domestic Subsidiaries

CircuitCity.com Inc. (a Delaware corporation)

CompUSA Realty Inc. (a Delaware corporation)

CompUSA.com Inc. (a Florida corporation)

Global Computer Supplies Inc. (a New York corporation)

Global Equipment Company Inc. (a New York corporation)

Global Gov/Ed Solutions, Inc. (a Delaware corporation)

Global Government & Education Inc. (a Delaware corporation)

Misco America Inc. (a Delaware corporation)

Misco Germany Inc. (a New York corporation)

Nexel Industries Inc. (a New York corporation)

New CompUSA Corp.  (a Delaware corporation)

Papier Catalogues Inc. (a New York corporation)

OnRebate.com (a Delaware corporation)

Profit Center Software Inc. (a New York corporation)

Streak Products Inc. (a Delaware corporation)

Systemax Manufacturing Inc. (a Delaware corporation)

Systemax Puerto Rico, Inc. (a Puerto Rico corporation)

SYX  Services Inc. (a New York corporation)

SYX Distribution Inc. (a Delaware corporation)

TigerDirect Inc. (a Florida corporation)

Foreign Subsidiaries

H C S Global SA (a French corporation) d/b/a Misco France

I-Com Software Eurl (a French corporation)

Inmac WStore SAS (a French corporation)

Misco AB (a Swedish corporation)

Misco Iberia Computer Supplies S.A. (a Spanish corporation)

Misco Ireland Ltd. (an Irish corporation)

Misco Italy Computer Supplies S.P.A. (an Italian corporation)

Misco Netherlands BV (a Dutch corporation)

Misco OY (a Finnish corporation)

Systemax Europe Ltd. (a U.K. corporation) d/b/a Misco U.K.

TigerDirect CA Inc. (a Canadian corporation)

WStore Europe SA (a French corporation)

WStore UK Ltd.  ( a U.K. corporation)

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)Registration Statement (Form S-8 No. 333-21489), pertaining to the 1995 Stock Plan for Non-Employee Directors,

(2)Registration Statement (Form S-8 No. 333-21491), pertaining to the 1995 Long-Term Stock Incentive Plan, and

(3)Registration Statement (Form S-8 No. 333-111618), pertaining to the 1999 Long-Term Stock Incentive Plan;

of our reports dated March 18, 2010, with respect to the consolidated financial statements and schedule of Systemax Inc., and the effectiveness of internal control over financial reporting of Systemax Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2009.

/s/ Ernst & Young LLP

New York, New York

March 18, 2010

EX-31.1

Exhibit 31.1

CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Richard Leeds, certify that:

1. I have reviewed this annual report on Form 10-K of Systemax Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this l report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter( the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 18, 2010

/s/ RICHARD LEEDS

Richard Leeds, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Lawrence P. Reinhold, certify that:

1. I have reviewed this annual report on Form 10-K of Systemax Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this l report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this  report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter ( the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 18, 2010

/s/ LAWRENCE P. REINHOLD

Lawrence P. Reinhold, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Executive Officer of Systemax Inc., hereby certifies that Systemax Inc.’s Form 10-K for the Year Ended December 31, 2009 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 (o)(d)) and that the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Systemax Inc.

Dated: March 18, 2010

/s/ RICHARD LEEDS

Richard Leeds, Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, the Chief Financial Officer of Systemax Inc., hereby certifies that Systemax Inc.’s Form 10-K for the Year Ended December 31, 2009 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78 (o)(d)) and that the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Systemax Inc.

Dated: March 18, 2010

/s/ LAWRENCE P. REINHOLD

Lawrence P. Reinhold, Chief Financial Officer