IN THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY

                          FIRST JUDICIAL DISTRICT OF PENNSYLVANIA

                                    CIVIL TRIAL DIVISION


                                           - - -

                  LEROY AND CAROL STOUT, H/W     :  OCTOBER TERM, 1998

                      VS.

                  PORTEC, INC., AND LABOR READY, :  NO. 653
                  INC., AND MORRISVILLE SUPPLY CORP.

                                           - - -

                                 COURTROOM 253, CITY HALL
                                 PHILADELPHIA, PENNSYLVANIA

                                           - - -

                                        MAY 10, 2001
                                        A.M. SESSION
                                           - - -

                  BEFORE:  HONORABLE VICTOR J. DI NUBILE
                                         AND A JURY

                                           - - -





                       GEORGE D'ANGELIS, RPR, OFFICIAL COURT REPORTER
                                    LAND TITLE BUILDING
                                    100 S. BROAD STREET
                                        SECOND FLOOR
                             PHILADELPHIA, PENNSYLVANIA, 19110
                                       (215) 683-8056


                                           - - -
 









                  APPEARANCES:


                               BY: FRANK D. BRANELLA, ESQUIRE
                               MARC SYKEN, ESQUIRE
                               COUNSEL FOR THE PLAINTIFFS



                               LAW FIRM: POST AND SCHELL, P.C.
                               BY:  GLENN M. CAMPBELL, ESQUIRE
                               COUNSEL FOR LABOR READY INC.



                               LAW FIRM:  EISEMAN, MYERS & LIERO
                               BY:  STEVEN LIERO, ESQUIRE
                               COUNSEL FOR MORRISVILLE SUPPLY CORP.



                               STRADLEY RONON STEVENS & YOUNG, LLP
                               BY:  JEFFREY A. LUTSKY, ESQUIRE
                               HOUSE COUNSEL FOR PORTEC, INC.



                               CHAMBLISS, BAHNER AND STOPHEL
                               BY:  WILLIAM DEARING, ESQUIRE
                               COUNSEL FOR PORTEC, INC.
 








                                           INDEX
                                           _____

                  WITNESSES:

                                           DIRECT       CROSS

                  PETER BADGIO, PH.D.        20           24
                                             28           59
 
                                                                             4




         1                         MORNING_SESSION
                                   _______ _______

         2

         3

         4                     (THE FOLLOWING TRANSPIRED IN OPEN

         5               COURT, OUT OF THE PRESENCE OF THE JURY:)

         6                           THE COURT:  NOW, MR. LIERO AND

         7               MR. EISEMAN, YOU WANT TO PUT SOMETHING ON

         8               THE RECORD AND POSSIBLY MAKE A MOTION FOR A

         9               MISTRIAL?

        10                           MR. LIERO:  YES.

        11                           THE COURT:  COULD YOU STATE

        12               WHAT IT IS?

        13                           MR. LIERO:  YES, SIR.  I AM

        14               MAKING A MOTION FOR MISTRIAL, SIR.  IT HAS

        15               TO DO WITH EVENTS THAT TOOK PLACE ON

        16               TUESDAY OF THIS WEEK IN THE MORNING WHEN,

        17               AS YOU RECALL, IT WAS AROUND THE TIME THAT

        18               THERE WAS SOME SETTLEMENT DISCUSSIONS AND I

        19               WAS ON THE PHONE WITH PEOPLE FROM THE HOME

        20               OFFICE DISCUSSING IT WITH MR. HAHN.

        21                           THE COURT:  WE STARTED ABOUT AN

        22               HOUR AND A HALF LATE.  I DIDN'T REALIZE I

        23               WAS GOING TO START THAT LATE.

        24                           MR. LIERO:  THAT'S RIGHT.  AT A
 
                                                                             5




         1               CERTAIN POINT AFTER THE DISCUSSIONS I CAME

         2               IN TO YOU AND MADE THE REPRESENTATION WHAT

         3               THE COMPANY WAS WILLING TO DO.  THEN I

         4               BELIEVE--

         5                           THE COURT:  THEN MR. BRANELLA

         6               CAME IN AND HE TURNED -- I THINK IT WAS A

         7               $200,000 OFFER WHICH WAS TURNED DOWN, IT

         8               WAS R