Exhibit 2.1

THE HILLMAN COMPANIES, INC.

as the Purchaser

and

H. PAULIN & CO., LIMITED

as the Company

ARRANGEMENT AGREEMENT

December 17, 2012

TABLE OF CONTENTS

(i)

(ii)

SCHEDULES

Schedule A – Plan of Arrangement

Schedule B – Arrangement Resolution

Schedule C – Representations and Warranties of the Company

Schedule D – Representations and Warranties of the Purchaser

Schedule E – Form of Officers’ Certificate re: Debt Reduction

Schedule F – Form of Officers’ Certificate re: Debt Limit

Schedule G – Form of Acknowledgment and Release

Schedule H – Key Consents

Schedule I – Term Sheets for Amended & Restated Related Party Leases

(iii)

ARRANGEMENT AGREEMENT

THIS AGREEMENT is made as of December 17, 2012,

B E T W E E N:

THE HILLMAN COMPANIES, INC., a corporation incorporated under the laws of Delaware

(the “Purchaser”)

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H. PAULIN & CO., LIMITED, a corporation incorporated under the laws of Ontario

(the “Company”).

NOW THEREFORE, in consideration of the covenants and agreements herein contained, the Parties agree as follows:

ARTICLE 1

INTERPRETATION

Section 1.1 Defined Terms

As used in this Agreement, the following terms have the following meanings:

“Acknowledgment and Release” means the acknowledgment and release, substantially in the form of Schedule G hereto, to be executed by each Company Option Holder and each holder of the DSUs and RSUs and delivered to the Company on or prior to the date hereof.

“Aquisitionco” means The Hillman Group Canada ULC, a directly or indirectly wholly-owned subsidiary of the Purchaser, being an unlimited liability corporation continued into the Province of British Columbia.

“Acquisition Proposal” means, other than the transactions contemplated by this Agreement and other than any transaction involving only the Company and/or one or more of its wholly-owned Subsidiaries, any offer, proposal or inquiry (written or oral) from any Person or group of Persons other than the Purchaser (or any affiliate of the Purchaser or any Person acting jointly or in concert with the Purchaser or any affiliate of the Purchaser) after the date of this Agreement relating to: (i) any direct or indirect sale or disposition (or any lease, long-term supply agreement, exclusive license or other arrangement having the same economic effect as a sale), of assets representing 20% or more of the consolidated assets or contributing 20% or more of the consolidated revenue of the Company and its Subsidiaries, taken as a whole, or of 20% or more of the voting or equity securities of the Company or any of its Subsidiaries (or rights or interests in such voting or equity securities); (ii) any take-over bid,

exchange offer or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any class of voting or equity securities of the Company or any of its Subsidiaries; (iii) any plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or winding up involving the Company or any of its Subsidiaries; or (iv) any other similar transaction or series of transactions involving the Company or any of its Subsidiaries.

“affiliate” has the meaning specified in National Instrument 45-106 – Prospectus and Registration Exemptions.

“Agreement”, “this Agreement”, “the Agreement”, “hereof”, “herein”, “hereto”, “hereby”, “hereunder” and similar expressions mean this arrangement agreement as it may from time to time be amended, restated, replaced, supplemented or novated and includes all schedules to it, including all schedules and exhibits and all instruments supplementing, amending, modifying, restating or otherwise confirming this Agreement, in each case in accordance with the terms hereof, and all references to “Articles”, “Sections”, “Schedules” and “Exhibits” mean and refer to the specified article, section, schedule or exhibit of this Agreement.

“Arrangement” means an arrangement under section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably.

“Arrangement Resolution” means the special resolution of the Class A Shareholders to be considered and, if thought appropriate, passed by the Class A Shareholders by the Required Approval at the Company Meeting, substantially in the form of Schedule B hereto.

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Arrangement required by the OBCA to be sent to the Director after the Final Order is made, which shall include the Plan of Arrangement and otherwise be in a form and content satisfactory to the Company and the Purchaser, each acting reasonably.

“Assessment Date” has the meaning specified in Section 4.5(1) (Debt Reduction and Debt Limit).

“associate” has the meaning specified in the Securities Act (Ontario).

“Authorization” means, with respect to any Person, any order, permit, approval, consent, waiver, licence or similar authorization of any Governmental Entity having jurisdiction over the Person.

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“Board” means the board of directors of the Company as constituted from time to time.

“Board Recommendation” has the meaning specified in Section 2.4(2) (The Company Circular).

“Breaching Party” has the meaning specified in Section 4.10(3) (Notice and Cure Provisions).

“Bridge Financing” means the financing to be provided to the Purchaser pursuant to the Commitment Letter.

“Buildings and Fixtures” means all plant, buildings, structures, erections, improvements, appurtenances and fixtures (including fixed machinery and fixed equipment) situate on any of the Owned Properties or Leased Properties.

“Business Day” means any day of the year, other than a Saturday or Sunday or any statutory holiday or any day on which commercial banks are closed for business in either Toronto, Ontario or Cincinnati, Ohio.

“Certificate of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA in respect of the Articles of Arrangement.

“Change in Recommendation” has the meaning specified in Section 7.2(1)(d)(ii) (Termination for Board actions).

“Class A Shares” means the Class A common shares in the capital of the Company.

“Class A Shareholders” means the registered or beneficial holders of the Class A Shares, as the context requires.

“Collective Agreements” means all collective bargaining agreements or union agreements which impose any current obligations upon the Company and/or any of its Subsidiaries.

“Commissioner of Competition” means the Commissioner of Competition appointed pursuant to subsection 7(1) of the Competition Act or his designee, and, when the context so requires, includes his staff at the Competition Bureau.

“Commitment Letter” means that certain commitment and fee letter dated on or about December 17, 2012 to the Purchaser from Barclays Bank PLC and certain of its affiliates.

“Company” means H. Paulin & Co., Limited.

“Company Circular” means the notice of the Company Meeting and accompanying management information circular, including all schedules, appendices and exhibits

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to, and information incorporated by reference in, such management information circular, to be sent to the Class A Shareholders in connection with the Company Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.

“Company Disclosure Letter” means the disclosure letter dated the date of this Agreement and delivered by the Company to the Purchaser with this Agreement.

“Company Employees” means the employees of the Company and its Subsidiaries.

“Company Filings” means all documents publicly filed under the profile of the Company on the System for Electronic Document Analysis Retrieval (SEDAR) since December 31, 2010.

“Company Financial Statements” means the unaudited condensed interim consolidated financial statements of the Company for the nine (9) months ended September 30, 2012 and September 30, 2011, the unaudited condensed interim consolidated financial statements of the Company for the quarters ended September 30, 2012 and September 30, 2011 and the audited consolidated financial statements of the Company for the years ended December 31, 2011, December 31, 2010 and December 31, 2009.

“Company Meeting” means the special meeting of the Class A Shareholders, including any adjournment or postponement of such special meeting, to be called and held in accordance with the Interim Order to consider and, if thought fit, approve the Arrangement Resolution.

“Company Optionholders” means the holders of the Company Options.

“Company Options” means the outstanding options to purchase Class A Shares issued pursuant to the Company’s Stock Option Plan.

“Competition Act” means the Competition Act (Canada).

“Competition Act Approval” means: (i) the issuance to the Purchaser of an advance ruling certificate by the Commissioner of Competition under subsection 102(1) of the Competition Act to the effect that the Commissioner of Competition is satisfied that he would not have sufficient grounds upon which to apply to the Competition Tribunal for an order under section 92 of the Competition Act with respect to the transactions contemplated by this Agreement; or (ii) (A) the Purchaser shall have received a letter from the Commissioner of Competition, on terms and conditions satisfactory to the Parties, each acting reasonably, indicating that the Commissioner of Competition does not, as of the date of the letter, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by this Agreement and such advice shall not have been rescinded, and (B) if the transactions contemplated by this Agreement constitute a notifiable transaction pursuant to Part IX of the Competition Act, then the waiting period, including any

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extension of such waiting period, under section 123 of the Competition Act shall have expired or been terminated or the obligation to provide a pre-merger notification in accordance with Part IX of the Competition Act shall have been waived in accordance with paragraph 113(c) of the Competition Act.

“Confidentiality Agreement” means the confidentiality agreement dated November 28, 2011 between the Company and the Purchaser.

“Consideration” means $27.60 in cash per Class A Share.

“Constating Documents” means articles of incorporation, amalgamation, or continuation, as applicable, by-laws and all amendments to such articles or by-laws.

“Contract” means any agreement, commitment, engagement, contract, franchise, licence or other legally enforceable obligation or undertaking (written or oral) to which the Company or any of its Subsidiaries is a party or by which it or any of its Subsidiaries is bound or affected or to which any of their respective properties or assets is subject.

“Court” means the Ontario Superior Court of Justice (Commercial List), or other court as applicable.

“Credit Agreement” means that certain credit agreement dated as of May 28, 2010, as amended and as may be further amended from time to time, among the Purchaser, various affiliates of the Purchaser, various banks and other lending institutions from time to time party thereto, Barclays Bank PLC as Administrative Agent, Issuing Lender (as defined in the Credit Agreement) and Swingline Lender (as defined in the Credit Agreement) and certain other parties thereto.

“Current Assets” means the accounts listed as current assets on the Company Financial Statements computed consistent with GAAP, excluding Income Taxes Refunds Receivable and insurance proceeds or receivable (unless such proceeds or receivables represent a claim for a current asset which has been written off).

“Current Liabilities” means the accounts listed as current liabilities on the Company Financial Statements computed consistent with GAAP, excluding Debt and Income Taxes Payable.

“Data Room” means the material contained in the virtual data room established by the Company as at 5:00 p.m. on December 14, 2012, the index of documents of which is appended to the Company Disclosure Letter, or, in the case of the “Double Eagle Sensitive” index, which has been provided to the Purchaser’s transaction advisor, KPMG LLP.

“Debt” means: (i) all indebtedness of the Company and its Subsidiaries for borrowed money, including obligations with respect to borrowings of commodities, bankers’ acceptances, letters of guarantee or letters of credit; (ii) all indebtedness of the

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Company and its Subsidiaries for the deferred purchase price of property or services, including any earn-out payments or contingent purchase price; (iii) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by the Company and its Subsidiaries (even though the rights and remedies of the seller or lender under the agreement in the event of default are limited to repossession or sale of that property); (iv) all current liabilities of the Company and its Subsidiaries represented by a note, bond, debenture or other evidence of debt; (v) all obligations under leases that have been or should be, in accordance with GAAP, recorded as capital leases in respect of which the Company and its Subsidiaries is liable as lessee; (vi) the cost of terminating any forward currency contracts of the Company and its Subsidiaries; (vii) guarantees of any of the items in (i) through (v); and (viii) all interest and break, termination or other fees or expenses on the foregoing.

“Debt Target” means $11,000,000 minus any Working Capital Decrease minus Net Income Taxes.

“Depositary” means a bank, trust company or similar entity reasonably acceptable to the Company to be selected and appointed by the Purchaser at its cost.

“Director” means the Director appointed pursuant to section 278 of the OBCA.

“Dissent Rights” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement.

“DSUs” means the outstanding deferred stock units issued under the Company’s deferred stock unit plan ratified and amended on October 17, 2012.

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement.

“Effective Time” means 12:01 a.m. (Eastern time) on the Effective Date, or such other time on the Effective Date as the Parties agree to in writing before the Effective Date.

“Employee Plans” has the meaning specified in section 33 of Schedule C (Representations and Warranties of the Company).

“Environment” means the natural environment (including soil, land surface or subsurface strata), surface waters, groundwater, sediment, ambient air (including all layers of the atmosphere), organic and inorganic matter and living organisms, and any other environmental medium or natural resource and all sewer systems.

“Environmental Laws” means all Laws and agreements with Governmental Entities relating to public health or the protection of the Environment.

“Exchange” means the Toronto Stock Exchange.

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“Fairness Opinion” means the written opinion of Ernst & Young LLP delivered to the Special Committee and the Board to the effect that, as of the date of such opinion subject to the assumptions and limitations set out therein, the Consideration to be received under the Arrangement by the Class A Shareholders is fair, from a financial point of view, to such holders.

“Final Order” means the final order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal.

“Financing Parties” means the lenders, underwriters, arrangers, initial purchasers or placement agents in connection with the Bridge Financing.

“FIRPTA Affidavit” means the affidavit issued by Paulin Industries Inc. pursuant to U.S. Treasury Regulation § 1.897-2(h)(1) and provided by the Company to the Purchaser in connection with the sale by the Company of the shares of Paulin Industries Inc. to The Hillman Group, Inc., certifying that the Company’s interest in Paulin Industries Inc. is not a “United States real property interest” within the meaning of Section 897(c)(1) of the United States Internal Revenue Code of 1986, as amended.

“GAAP” means generally accepted accounting principles as set out in the Canadian Institute of Chartered Accountants Handbook – Accounting for an entity that prepares its financial statements in accordance with International Financial Reporting Standards, at the relevant time, applied on a basis consistent with the preparation of the year-end audited Company Financial Statements.

“Governmental Entity” means: (i) any international, multinational, national, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, bureau, ministry, agency or instrumentality, domestic or foreign; (ii) any subdivision or authority of any of the foregoing; (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or (iv) for greater certainty any stock exchange.

“Income Taxes Payable” means the income taxes payable by the Company and its Subsidiaries computed consistent with GAAP.

“Income Taxes Refunds Receivable” means the income taxes refunds receivable by the Company and its Subsidiaries computed consistent with GAAP.

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“Intellectual Property” means domestic and foreign: (i) patents and patent applications; (ii) proprietary and non-public business information, including inventions (whether patentable or not), improvements, discoveries, trade secrets, confidential information, know-how, methods, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation relating to any of the foregoing; (iii) copyrights, copyright registrations and applications for copyright registration; (iv) industrial designs; (v) trade names, business names, corporate names, internet domain names, internet website names, common law trade-marks, trade-mark registrations, trade-mark applications, trade dress and logos, and the goodwill associated with any of the foregoing; and (vi) Software.

“Interim Order” means the interim order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be amended by the Court with the consent of the Company and the Purchaser, each acting reasonably.

“Key Consents” means the consents listed on Schedule H (Key Consents).

“Law” or “Laws” means all laws (including common law), by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgments, injunctions, determinations, awards, decrees or other requirements, whether domestic or foreign, and the terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity or self-regulatory authority (including the Exchange), and the term “applicable” with respect to such Laws (including Environmental Laws) and in a context that refers to one or more Parties, means such Laws as are applicable to such Party or its business, undertaking, property or securities and emanate from a person having jurisdiction over the Party or Parties or its or their business, undertaking, property or securities.

“Leased Properties” has the meaning specified in section 26 of Schedule C (Representations and Warranties of the Company).

“Leases” means the leases of the Leased Properties described in section 26 of Schedule C (Representations and Warranties of the Company).

“Lien” means any mortgage, charge, pledge, hypothec, security interest, prior claim, encroachment, option, right of first refusal or first offer, occupancy right, assignment, lien (statutory or otherwise), or restriction or adverse right or claim, or other third party interest or encumbrance of any kind, in each case, whether contingent or absolute.

“Matching Period” has the meaning specified in Section 5.3(1)(c) (Right to Match).

“Material Adverse Effect” means any change, event, occurrence, effect or circumstance that, individually or in the aggregate with other such changes, events, occurrences, effects or circumstances, is or would reasonably be expected to be

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material and adverse to the business, operations, results of operations, assets, properties, capitalization, financial condition, liabilities (contingent or otherwise) of the Company and its Subsidiaries, taken as a whole, or materially impairs or delays, or could reasonably be expected to materially impair or delay, the performance by the Company of its obligations under this Agreement or impair or delay the Company’s ability to consummate the Arrangement by the Outside Date, except any such change, event, occurrence, effect, or circumstance resulting from or arising in connection with:

provided, however, that:

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“Material Contract” means any Contract: (i) that if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Material Adverse Effect; (ii) relating directly or indirectly to the guarantee of any liabilities or obligations or to indebtedness for borrowed money; (iii) restricting the incurrence of indebtedness by the Company or any of its Subsidiaries (including by requiring the granting of an equal and rateable Lien) or the incurrence of any Liens on any properties or assets of the Company or any of its Subsidiaries, or restricting the payment of dividends by the Company; (iv) under which the Company or any of its Subsidiaries is obligated to make or expects to receive payments in excess of $500,000 over the remaining term; (v) providing for the establishment, investment in, organization or formation of any joint venture, limited liability company or partnership involving the Company and/or its Subsidiaries; (vi) that creates an exclusive dealing arrangement or right of first offer or refusal; (vii) that is a Collective Agreement; (viii) providing for severance (other than any Contract which is terminable upon reasonable notice in accordance with Law or pursuant to any implied term) or change in control payments; (ix) providing for the purchase, sale or exchange of, or option to purchase, sell or exchange, any property (including equity interests) or asset where the purchase or sale price or agreed value or fair market value of such property or asset exceeds $500,000; (x) that limits or restricts (A) the ability of the Company or any Subsidiary to engage in any line of business or carry on business in any geographic area, or (B) the scope of Persons to whom the Company or any of its Subsidiaries may sell products or deliver services; (xi) that is made out of the Ordinary Course; or (xii) that is otherwise material to the Company and its Subsidiaries, taken as a whole; and includes each of the Contracts listed in section 25(a) of the Company Disclosure Letter.

“MI 61-101” means Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions.

“Misrepresentation” means an untrue statement of a material fact or an omission to state a material fact required or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made.

“Net Income Taxes” means Income Taxes Payable minus Income Taxes Refunds Receivable, determined as of the Assessment Date without giving effect to the transactions contemplated by this Agreement; provided that, for the purposes of this Agreement, if Income Taxes Refunds Receivable are greater than Income Taxes Payable, Net Income Taxes shall be deemed to equal zero dollars ($0).

“OBCA” means the Business Corporations Act (Ontario).

“officer” has the meaning specified in the Securities Act (Ontario).

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“Officers’ Certificate re: Debt Limit” has the meaning specified in Section 4.5(5) (Debt Reduction and Debt Limit), and is substantially in the form of Schedule F hereto.

“Officers’ Certificate re: Debt Reduction” has the meaning specified in Section 4.5(2) (Debt Reduction and Debt Limit), and is substantially in the form of Schedule E hereto.

“Ordinary Course” means, with respect to an action taken by the Company, that such action is consistent with the past practices of the Company and is taken in the ordinary course of the normal day to day operations of the business of the Company.

“Outside Date” means March 28, 2013 or such later date as may be agreed to in writing by the Parties.

“Owned Properties” means the lands and premises listed and described in section 26(a) of the Company Disclosure Letter.

“Parties” means the Company and the Purchaser and “Party” means any one of them.

“Permitted Liens” means, in respect of the Company or any of its Subsidiaries, any one or more of the following:

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“Person” includes any individual, partnership, association, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status.

“Plan of Arrangement” means the plan of arrangement, substantially in the form of Schedule A hereto and subject to any amendments or variations thereto made in

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accordance the terms of this Agreement or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably.

“Pre-Acquisition Reorganization” has the meaning specified in Section 4.7 (Pre-Acquisition Reorganization).

“Purchaser” means The Hillman Companies, Inc.

“Purchaser Material Adverse Effect” means either:

“Real Property” means Owned Properties or Leased Properties.

“Regulatory Approvals” means: (i) the Competition Act Approval; (ii) those sanctions, rulings, consents, waivers, orders, exemptions, permits and other approvals of any Governmental Entity or stock exchange, and the lapse (without objection), exemption or waiver of a prescribed time under any Law that states that a transaction may not be implemented until after a prescribed time lapses following the giving of notice or supply of information or documents, set forth in section 1.1 (Regulatory Approvals) of the Company Disclosure Letter; (iii) the Interim Order; and (iv) the Final Order.

“Related Party Leases” means the Leases in respect of the following Leased Properties:

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“Representative” has the meaning specified in Section 5.1(1) (Non-Solicitation).

“Required Approval” has the meaning specified in Section 2.2(b) (Interim Order).

“RSUs” means the outstanding restricted stock units issued under the Company’s restricted stock unit plan ratified and amended on October 17, 2012.

“Securities Authority” means the Ontario Securities Commission and any other applicable securities commission or securities regulatory authority of a province or territory of Canada.

“Securities Laws” means the Securities Act (Ontario) and any other applicable provincial securities Laws.

“Software” means computer software and programs (both source code and object code form), owned by the Company and material to the operation of the Company’s business, as presently conducted.

“Special Committee” means the special committee of independent members of the Board formed in connection with the proposal to effect the transactions contemplated by this Agreement.

“Stock Option Plan” means the Company’s amended and restated stock option plan, approved at the meeting of the Class A Shareholders held on May 26, 2010.

“Subsidiary” has the meaning specified in National Instrument 45-106 - Prospectus and Registration Exemption.

“Superior Proposal” means any unsolicited bona fide written Acquisition Proposal from a Person who is an arm’s length third party to acquire not less than all of the outstanding Class A Shares or all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis that: (a) in respect of which, each of the Special Committee and the Board determines, in its good faith judgment, complies with Securities Laws, did not result from or involve a breach of Article 5 and is reasonably capable of being completed without undue delay, taking into account, all financial, legal, regulatory and other aspects of such Acquisition Proposal and the Person making such Acquisition Proposal; (b) is not subject to any financing condition and in respect of which adequate arrangements have been made to ensure that the required funds will be available to effect payment in full for all of the Class A Shares; (c) is not subject to any due diligence or access condition; and (d) in respect of which, each of the Special Committee and the Board determines, in its good faith judgment, after receiving the advice of its outside legal and financial advisors and after taking into account all the terms and conditions of the Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Acquisition

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Proposal and the party making such Acquisition Proposal, would, if consummated in accordance with its terms, but without assuming away the risk of non-completion, result in a transaction in which the financial value of the consideration offered to the Class A Shareholders is greater than the financial value of the consideration offered to the Class A Shareholders pursuant to the Arrangement (including any amendments to the terms and conditions of the Arrangement proposed by the Purchaser pursuant to Section 5.3(3) (Right to Match)).

“Superior Proposal Notice” has the meaning specified in Section 5.3(1)(b) (Right to Match).

“Support Agreements” means the support agreements in favour of the Purchaser executed contemporaneously herewith by certain Class A Shareholders.

“Tax Act” means the Income Tax Act (Canada).

“Tax Returns” means any and all returns, reports, declarations, elections, notices, forms, designations, filings, and statements (including estimated tax returns and reports, withholding tax returns and reports, and information returns and reports) filed or required to be filed in respect of Taxes.

“Taxes” means: (i) any and all taxes, duties, fees, excises, premiums, assessments, imposts, levies and other charges or assessments of any kind whatsoever imposed by any Governmental Entity, whether computed on a separate, consolidated, unitary, combined or other basis, including those levied on, or measured by, or described with respect to, income, gross receipts, profits, gains, windfalls, capital, capital stock, production, recapture, transfer, land transfer, license, gift, occupation, wealth, environment, net worth, indebtedness, surplus, sales, goods and services, harmonized sales, use, value-added, excise, special assessment, stamp, withholding, business, franchising, real or personal property, health, employee health, payroll, workers’ compensation, employment or unemployment, severance, social services, social security, education, utility, surtaxes, customs, import or export, and including all license and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions; (ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity on or in respect of amounts of the type described in clause (i) above or this clause (ii); (iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of being a member of an affiliated, consolidated, combined or unitary group for any period; and (iv) any liability for the payment of any amounts of the type described in clauses (i) or (ii) as a result of any express or implied obligation to indemnify any other Person or as a result of being a transferee or successor in interest to any party.

“Technology” has the meaning specified in section 28 of Schedule C (Representations and Warranties of the Company).

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“Term Loan” means the loan to be provided to the Purchaser pursuant to a joinder agreement dated as of November 7, 2012, which is subject to the terms of the Credit Agreement.

“Terminating Party” has the meaning specified in Section 4.10(3) (Notice and Cure Provisions).

“Termination Fee” has the meaning specified in Section 8.2 (Termination Fee).

“Termination Fee Event” has the meaning specified in Section 8.2 (Termination Fee).

“Termination Notice” has the meaning specified in Section 4.10(3) (Notice and Cure Provisions).

“Transaction Expenses” means: (i) the fees and expenses of legal counsel, investment bankers, accountants and other advisors (including any representatives of legal counsel, investment bankers, accountants or other advisors) incurred by the Company on or after September 1, 2012 in connection with the Arrangement; and (ii) any change of control bonus, transaction bonus, discretionary bonus, “stay put” or other compensatory payments to be made to the Company Employees or the employees of any of the Company’s affiliates as a result of entering into the Agreement or the completion of the Arrangement or at the discretion of the Company, in each case, that have been paid by the Company on or prior to the Effective Time or that are paid or payable by the Company after the Effective Time, as more particularly described in section 1.1 (Transaction Expenses) of the Company Disclosure Letter.

“Transaction Personal Information” has the meaning ascribed in Section 8.8 (Privacy).

“Working Capital” means, at any time and from time to time, Current Assets minus Current Liabilities computed consistent with GAAP on a year-end basis (ie., require a hard close or the closest approximation thereof), without giving effect to the transactions contemplated by this Agreement.

“Working Capital Decrease” means, should Working Capital as of the Assessment Date be less than Working Capital as at August 31, 2012 (for greater certainty, acknowledged and agreed as being $70,531,000), the amount representing the difference between: (i) Working Capital as at August 31, 2012; and (ii) Working Capital as at the Assessment Date.

Section 1.2 Certain Rules of Interpretation

In this Agreement, unless otherwise specified:

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Section 1.3 Schedules

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ARTICLE 2

THE ARRANGEMENT

Section 2.1 Arrangement

The Company and the Purchaser agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions of this Agreement and the Plan of Arrangement.

Section 2.2 Interim Order

As soon as reasonably practicable after the date of this Agreement, but in any event on or before January 10, 2013 the Company shall apply, pursuant to section 182 of the OBCA, prepare, file and diligently pursue an application for the Interim Order, which must request that the Interim Order provide, among other things:

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Section 2.3 The Company Meeting

Subject to receipt of the Interim Order, the Company shall:

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Section 2.4 The Company Circular

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Section 2.5 Final Order

If the Arrangement Resolution is passed at the Company Meeting as provided for in the Interim Order, the Company shall take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to section 182 of the OBCA, as soon as reasonably practicable.

Section 2.6 Court Proceedings

Subject to the terms and conditions hereof, the Purchaser shall, co-operate with, diligently assist in pursuing and consent to the Company seeking the Interim Order and Final Order, including by using commercially reasonable efforts to provide to the Company, on a timely basis, any information required to be supplied by the Purchaser or Acquisitionco in connection therewith. In connection with all Court proceedings relating to obtaining the Interim Order and the Final Order, the Company shall:

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Section 2.7 Options and Other Securities

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Section 2.8 Articles of Arrangement and Effective Date

Section 2.9 Payment of Consideration

The Purchaser shall, following receipt of the Final Order and immediately prior to the filing by the Company of the Articles of Arrangement with the Director, provide the Depositary with sufficient immediately available funds to be held in escrow (the terms and conditions of such escrow to be satisfactory to the Company and the Purchaser, each acting reasonably) to satisfy the aggregate Consideration as provided in the Plan of Arrangement.

Section 2.10 Adjustments to Consideration

If, on or after the date of this Agreement, the Company declares, sets aside or sets a record date for any dividend or other distribution on the Class A Shares that is payable prior to the Effective Time or the Company pays any dividend or other distribution on the Class A Shares prior to the Effective Time (whether in cash, stock or property or any combination thereof): (i) to the extent that the amount of such dividends or distributions per Class A Share does not exceed the applicable Consideration per Class A Share, the applicable Consideration per Class A Share shall be reduced by the amount of such dividends or distributions; and (ii) to the extent that the amount of such dividends or distributions per Class A Share exceeds the applicable Consideration per Class A Share, such excess amount shall be placed in escrow for the account of the Purchaser or another Person designated by the Purchaser.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties of the Company

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Section 3.2 Representations and Warranties of the Purchaser

ARTICLE 4

COVENANTS

Section 4.1 Conduct of Business of the Company

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Section 4.2 Regarding the Arrangement

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Section 4.3 Mutual Covenants Regarding Regulatory Approvals

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related entities; or (ii) negotiate or agree to (A) the sale, divestiture or disposition of any of the businesses, operations or assets of the Purchaser, the Company or any of their affiliates or related entities, (B) any form of behavioral remedy including any interim or permanent hold separate order or any form of undertakings or other restrictions on the businesses, operations or assets of the Purchaser, the Company or any of their affiliates or related entities, or (C) defend any actions, applications, suits or claims brought by a Governmental Entity. The Purchaser will use its commercially reasonable efforts to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the consummation of the Arrangement and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement or this Agreement.

Section 4.4 Transaction Expenses

During the period from September 1, 2012 until the Effective Time, the Company shall not incur, assume or allow the Company or any of its Subsidiaries to pay or become obliged to pay any Transaction Expenses in excess of an aggregate of $2,000,000.

Section 4.5 Debt Reduction and Debt Limit

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Section 4.6 Access to Information; Confidentiality

Section 4.7 Pre-Acquisition Reorganization

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Section 4.8 Public Communications

The Parties shall co-operate in the preparation of presentations, if any, to Class A Shareholders regarding the Arrangement. A Party must not issue any press release or make any other public statement or disclosure with respect to this Agreement or the Arrangement (except at the Company Meeting) without the consent of the other Party (which consent shall not be unreasonably withheld or delayed), and the Company must not make any filing with any Governmental Entity with respect to this Agreement or the Arrangement without the consent of the Purchaser (which consent shall not be unreasonably withheld or delayed); provided that any Party that is required to make disclosure by Law shall use its commercially reasonable efforts to give the other Party prior oral or written notice and a reasonable opportunity to review or comment on the disclosure or filing (other than with respect to confidential information contained in such disclosure or filing). The Party making such disclosure shall give reasonable consideration to any comments made by the other Party or its counsel, and if such prior notice is not possible, shall give such notice immediately following the making of such disclosure or filing.

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Section 4.9 Cooperation re: Purchaser Financing

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Section 4.10 Notice and Cure Provisions

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Section 4.11 Insurance and Indemnification

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Section 4.12 No Amendments to Support Agreements

The Purchaser hereby covenants not to amend the Support Agreements, without the prior written consent of the Company.

Section 4.13 Purchaser Material Adverse Effect

From the date of this Agreement until the Effective Date, the Purchaser hereby covenants not to amend, modify or restate, without the prior written consent of the Company (such consent not to be unreasonably withheld or delayed), the definition of “Material Adverse Effect” applicable to the Purchaser under the Credit Agreement or the first paragraph of section 2 of the Commitment Letter, such that such amendment, modification or restatement would result in terms more favourable to the applicable lenders under the applicable Credit Agreement or Commitment Letter, as the case may be.

ARTICLE 5

ADDITIONAL COVENANTS REGARDING NON-SOLICITATION

Section 5.1 Non-Solicitation

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provided that prior to entering into any discussions or negotiations or furnishing any information to such Person, (A) the Board has received from such Person an executed confidentiality agreement (if one had not already been entered into prior to the date hereof) which is no less favourable to the Company than the Confidentiality Agreement (including in respect of a standstill) but which allows such Person, its affiliates and Representatives to make an Acquisition Proposal to and negotiate the terms of an Acquisition Proposal, and any agreement related thereto, with the Board or any Representatives of the Company, in each case on a confidential basis, and to seek and arrange financing for an Acquisition Proposal, including negotiating and entering into any agreement with respect to financing an Acquisition Proposal, and (B) the Purchaser has been provided with a list of any information provided to such Person, and in the case of information not previously made available to the Purchaser, the Company shall make such information available to the Purchaser.

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Section 5.2 Notification of Acquisition Proposals

Section 5.3 Right to Match

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Section 5.4 Breach by Subsidiaries and Representatives

Without limiting the generality of the foregoing, the Company shall advise its Subsidiaries and the Representatives of the prohibitions set out in this Article 5 and any violation of the restrictions set forth in this Article 5 by the Company, its Subsidiaries or Representatives is deemed to be a breach of this Article 5 by the Company.

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ARTICLE 6

CONDITIONS

Section 6.1 Mutual Conditions Precedent

The Parties are not required to complete the Arrangement unless each of the following conditions is satisfied on or prior to the Effective Time, which conditions may only be waived, in whole or in part, by the mutual consent of each of the Parties:

Section 6.2 Additional Conditions Precedent to the Obligations of the Purchaser

The Purchaser is not required to complete the Arrangement unless each of the following conditions is satisfied on or before the Effective Time, which conditions are for the exclusive benefit of the Purchaser and may only be waived, in whole or in part, by the Purchaser in its sole discretion:

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Section 6.3 Additional Conditions Precedent to the Obligations of the Company

The Company is not required to complete the Arrangement unless each of the following conditions is satisfied on or before the Effective Time, which conditions are for the exclusive benefit of the Company and may only be waived, in whole or in part, by the Company in its sole discretion:

Section 6.4 Satisfaction of Conditions

The conditions precedent set out in Section 6.1 (Mutual Conditions Precedent), Section 6.2 (Additional Conditions Precedent to the Obligations of the Purchaser) and Section 6.3 (Additional Conditions Precedent to the Obligations of the Company) will be conclusively deemed to have been satisfied, waived or released when the Certificate of Arrangement is issued by the Director.

ARTICLE 7

TERM AND TERMINATION

Section 7.1 Term

This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.

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Section 7.2 Termination

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Section 7.3 Effect of Termination/Survival

ARTICLE 8

GENERAL PROVISIONS

Section 8.1 Amendments

This Agreement may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties, and any such amendment may, without limitation, to the extent permitted by Law:

Section 8.2 Termination Fee

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Section 8.3 Expenses and Expense Reimbursement

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Section 8.4 Notices

Any notice, or other communication given regarding the matters contemplated by this Agreement (must be in writing, sent by personal delivery, courier or facsimile (but not by electronic mail) and addressed:

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Any notice or other communication is deemed to be given and received: (i) if sent by personal delivery or same day courier, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day; (ii) if sent by overnight courier, on the next Business Day; or (iii) if sent by facsimile, on the Business Day following the date of confirmation of transmission by the originating facsimile. A Party may change its address for service from time to time by providing a notice in accordance with the foregoing. Any subsequent notice or other communication must be sent to the Party at its changed address. Any element of a Party’s address that is not specifically changed in a notice will be assumed not to be changed. Sending a copy of a notice or other communication to a Party’s legal counsel as contemplated above is for information purposes only and does not constitute delivery of the notice or other communication to that Party. The failure to send a copy of a notice or other communication to legal counsel does not invalidate delivery of that notice or other communication to a Party.

Section 8.5 Time of the Essence

Time is of the essence in this Agreement.

Section 8.6 Injunctive Relief

The Parties agree that irreparable harm would occur for which money damages would not be an adequate remedy at law in the event that any of the provisions of this

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Agreement were not performed by the Company in accordance with their specific terms or were otherwise materially breached by the Company. It is accordingly agreed that the Purchaser shall be entitled to injunctive and other equitable relief to prevent breaches of this Agreement (including wilful breaches), and to enforce compliance with the terms of this Agreement against the Company without any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief, this being in addition to any other remedy to which the Purchaser may be entitled at law or in equity.

Section 8.7 Third Party Beneficiaries

Section 8.8 Privacy

Each Party shall comply with applicable privacy Law in the course of collecting, using and disclosing personal information about an identifiable individual in connection with the transactions contemplated herein (the “Transaction Personal Information”). Each Party shall not disclose the Transaction Personal Information of the other Party to any person other than to its advisors who are evaluating and advising on the transactions contemplated by this Agreement. If the Purchaser completes the transactions contemplated by this Agreement, the Purchaser shall not, following the Effective Date, without the consent of the individuals to whom the Transaction Personal Information of the Company relates or as permitted or required by Law, use or disclose such Transaction Personal Information:

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Each Party shall protect and safeguard the Transaction Personal Information of the other Party against unauthorized collection, use or disclosure. Each Party shall cause its advisors to observe the terms of this Section 8.8 above and to protect and safeguard Transaction Personal Information of the other Party in their possession. If this Agreement is terminated, each Party shall promptly deliver to the other Party all Transaction Personal Information of the other Party in its possession or in the possession of any of its advisors, including all copies, reproductions, summaries or extracts thereof. Notwithstanding this Section 8.8, each of the Parties acknowledges and agrees that Transaction Personal Information may be provided to the Commissioner of Competition in connection with obtaining the Competition Act Approval.

Section 8.9 Waiver

No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless executed in writing by the Party to be bound by the waiver. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

Section 8.10 Entire Agreement

This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the Parties with respect to the transactions contemplated by this Agreement and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties. There are no representations, warranties, covenants, conditions or other agreements, express or implied, collateral, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement. The Parties have not relied and are not relying on any other information, discussion or understanding in entering into and completing the transactions contemplated by this Agreement.

Section 8.11 Successors and Assigns

Section 8.12 Severability

If any provision of this Agreement is determined to be illegal, invalid or unenforceable by an arbitrator or any court of competent jurisdiction, that provision will be severed from this Agreement and the remaining provisions shall remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

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Section 8.13 Governing Law

Section 8.14 Rules of Construction

The Parties to this Agreement waive the application of any Law or rule of construction providing that ambiguities in any agreement or other document shall be construed against the party drafting such agreement or other document.

Section 8.15 No Liability

Section 8.16 Language

The Parties expressly acknowledge that they have requested that this Agreement and all ancillary and related documents thereto be drafted in the English language only. Les parties aux présentes reconnaissent avoir exigé que la présente entente et tous les documents qui y sont accessoires soient rédigés en anglais seulement.

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Section 8.17 Counterparts

This Agreement may be executed in any number of counterparts (including counterparts by facsimile or other electronic means) and all such counterparts taken together shall be deemed to constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the Parties.

[Remainder of page intentionally left blank. Signature page follows.]

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IN WITNESS WHEREOF the Parties have executed this Arrangement Agreement.

Signature Page to Arrangement Agreement

Schedule A – Plan of Arrangement

PLAN OF ARRANGEMENT UNDER SECTION 182

OF THE BUSINESS CORPORATIONS ACT (ONTARIO)

ARTICLE 1

INTERPRETATION

Section 1.1 Definitions

Unless indicated otherwise, where used in this Plan of Arrangement, capitalized terms used but not defined shall have the meanings specified in the Arrangement Agreement and the following terms shall have the following meanings (and grammatical variations of such terms shall have corresponding meanings):

“Acquisitionco” means The Hillman Group Canada ULC, a directly or indirectly wholly-owned subsidiary of the Purchaser, being an unlimited liability corporation continued into the Province of British Columbia.

“affiliate” has the meaning specified in National Instrument 45-106 – Prospectus and Registration Exemptions.

“Arrangement” means the arrangement under section 182 of the OBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations made in accordance with the terms of the Arrangement Agreement or Section 5.1 of this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company, the Purchaser and Acquisitionco, each acting reasonably.

“Arrangement Agreement” means the arrangement agreement made as of December 17, 2012 between the Purchaser, Acquisitionco and the Company (including the Schedules thereto) as it may be amended, modified or supplemented from time to time in accordance with its terms.

“Arrangement Resolution” means the special resolution approving the Plan of Arrangement presented to the Class A Shareholders at the Company Meeting.

“Articles of Arrangement” means the articles of arrangement of the Company in respect of the Arrangement required by the OBCA to be sent to the Director after the Final Order is made, which shall include this Plan of Arrangement and otherwise be in a form and content satisfactory to the Company, the Purchaser and Acquisitionco, each acting reasonably.

“Automotive & General Trusts” means each of the trusts created pursuant to the declaration of trusts dated September 12, 1969 executed by each of Stanley Paulin and Arthur Paulin in favour of the Company.

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“Business Day” means a day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario or Cincinnati, Ohio.

“Certificate of Arrangement” means the certificate of arrangement issued by the Director pursuant to subsection 183(2) of the OBCA in respect of the Articles of Arrangement.

“Class A Shares” means the Class A common shares in the capital of the Company.

“Class A Shareholders” means the registered or beneficial holders of the Class A Shares, as the context requires.

“Company” means H. Paulin & Co., Limited.

“Company Circular” means the notice of the Company Meeting and accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the Class A Shareholders in connection with the Company Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Arrangement Agreement.

“Company Meeting” means the special meeting of the Class A Shareholders, including any adjournment or postponement of such special meeting in accordance with the terms of the Arrangement Agreement, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution.

“Company Options” means the outstanding options to purchase Class A Shares issued pursuant to the Company’s amended and restated stock option plan, approved at the meeting of the Class A Shareholders held on May 26, 2010.

“Consideration” means $27.60 in cash per Class A Share.

“Court” means the Ontario Superior Court of Justice (Commercial List), or other court as applicable.

“Depositary” means —, at its offices set out in the Letter of Transmittal.

“Denco Trust” means the trust created pursuant to the declaration of the trust dated March 8, 1995, executed by Ian Denison in favour of the Company.

“Director” means the Director appointed pursuant to section 278 of the OBCA.

“Dissent Rights” has the meaning specified in Section 3.1 of this Plan of Arrangement.

“Dissenting Holder” means a registered Class A Shareholder who has duly exercised its Dissent Rights and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights, but only in respect of the Class A Shares in respect of which Dissent Rights are validly exercised by such holder.

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“DSUs” means the outstanding deferred stock units issued under the Company’s deferred stock unit plan ratified and amended on October 17, 2012.

“Effective Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement.

“Effective Time” means 12:01 a.m. (Toronto time) on the Effective Date, or such other time as the Parties agree to in writing before the Effective Date.

“Final Order” means the final order of the Court in a form acceptable to the Company, the Purchaser and Acquisitionco, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of the Company, the Purchaser and Acquisitionco, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to the Company, the Purchaser and Acquisitionco, each acting reasonably) on appeal.

“Governmental Entity” means: (i) any international, multinational, national, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, bureau, ministry, agency or instrumentality, domestic or foreign; (ii) any subdivision or authority of any of the above; (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or (iv) any stock exchange.

“Interim Order” means the interim order of the Court in a form acceptable to the Company, the Purchaser and Acquisitionco, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be amended by the Court with the consent of the Company, the Purchaser and Acquisitionco, each acting reasonably.

“Law” means, with respect to any Person, any and all applicable law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign, enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business, undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental Entity, as amended.

“Lien” means any mortgage, charge, pledge, hypothec, security interest, prior claim, encroachments, option, right of first refusal or first offer, occupancy right, covenant, assignment, lien (statutory or otherwise), defect of title, or restriction or adverse right or claim, or other third party interest or encumbrance of any kind, in each case, whether contingent or absolute.

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“Letter of Transmittal” means the letter of transmittal sent to the Class A Shareholders for use in connection with the Arrangement.

“OBCA” means the Business Corporations Act (Ontario).

“Person” includes any individual, partnership, association, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status.

“Plan of Arrangement” means this plan of arrangement proposed under section 182 of the OBCA, and any amendments or variations made in accordance with Section 8.1 of the Arrangement Agreement or Section 5.1 of this plan of arrangement or made at the direction of the Court in the Final Order with the consent of the Company, the Purchaser and Acquisitionco, each acting reasonably.

“Purchaser” means The Hillman Companies, Inc.

“RSUs” means the outstanding restricted stock units issued under the Company’s restricted stock unit plan ratified and amended on October 17, 2012.

“Subsidiary” has the meaning specified in National Instrument 45-106 - Prospectus and Registration Exemption.

“Tax Act” means the Income Tax Act (Canada).

Section 1.2 Certain Rules of Interpretation.

In this Agreement, unless otherwise specified:

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ARTICLE 2

THE ARRANGEMENT

Section 2.1 Arrangement Agreement

This Plan of Arrangement is made pursuant to the Arrangement Agreement.

Section 2.2 Binding Effect

This Plan of Arrangement and the Arrangement, upon the filing of the Articles of Arrangement and the issuance of the Certificate of Arrangement, will become effective, and be binding on the Purchaser, Acquisitionco, the Company, all Class A Shareholders, including Dissenting Holders, the registrant and transfer agent of the Company and the Depositary, at and after, the Effective Time without any further act or formality required on the part of any Person.

Section 2.3 Arrangement

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Section 2.4 Adjustment to Consideration.

If, on or after the date of the Arrangement Agreement, the Company declares, sets aside or sets a record date for any dividend or other distribution on the Class A Shares that is payable prior to the Effective Time or the Company pays any dividend or other distribution on the Class A Shares prior to the Effective Time (whether in cash, stock or property or any combination thereof): (i) to the extent that the amount of such dividends or distributions per Class A Share does not exceed the applicable Consideration per Class A Share, the applicable Consideration per Class A Share shall be reduced by the amount of such dividends or distributions; and (ii) to the extent that the amount of such dividends or distributions per Class A Share exceeds the applicable Consideration per Class A Share, such excess amount shall be placed in escrow for the account of the Purchaser or another Person designated by the Purchaser.

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ARTICLE 3

RIGHTS OF DISSENT

Section 3.1 Rights of Dissent

Registered Class A Shareholders may exercise dissent rights (“Dissent Rights”) in connection with the Arrangement pursuant to and in the manner set forth in section 185 of the OBCA, as modified by the Interim Order and this Section 3.1; provided that, notwithstanding subsection 185(6) of the OBCA, the written objection to the Arrangement Resolution referred to in subsection 185(6) of the OBCA must be received by the Company not later than 5:00 p.m. (Toronto time) on the Business Day that is two Business Days prior to the date of the Company Meeting (as it may be adjourned or postponed from time to time). Dissenting Holders who duly exercise their Dissent Rights shall be deemed to have transferred the Class A Shares held by them and in respect of which Dissent Rights have been validly exercised to Acquisitionco free and clear of all Liens, as provided in Section 2.3(2)(b) and if they:

Section 3.2 Recognition of Dissenting Holders

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ARTICLE 4

CERTIFICATES AND PAYMENTS

Section 4.1 Payment of Consideration

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Section 4.2 Lost Certificates

In the event any certificate which immediately prior to the Effective Time represented one or more outstanding Class A Shares that were transferred pursuant to Section 2.3(2)(a) shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, cash deliverable in accordance with such Class A Shareholder’s Letter of Transmittal. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Person to whom such cash is to be delivered shall as a condition precedent to the delivery of such cash, give a bond satisfactory to Acquisitionco, the Purchaser and the Depositary (acting reasonably) in such sum as Acquisitionco may direct, or otherwise indemnify Acquisitionco, the Purchaser and the Company in a manner satisfactory to Acquisitionco, the Purchaser and the Company, acting reasonably, against any claim that may be made against Acquisitionco, the Purchaser and the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 4.3 Withholding Rights

Acquisitionco, the Purchaser, the Company or the Depositary shall be entitled to deduct and withhold from any amount payable to any Person under the Plan of Arrangement (including, without limitation, any amounts payable pursuant to Section 3.1), such amounts as Acquisitionco, the Purchaser, the Company or the Depositary determines, acting reasonably, are required or permitted to be deducted and withheld with respect to such payment under the Tax Act, the United States Internal Revenue Code of 1986 or any provision of any other Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the Person in respect of which such withholding was made, provided that such amounts are actually remitted to the appropriate taxing authority.

Section 4.4 Section 338 Election

The Purchaser may make an election under Section 338 of the Internal Revenue Code with respect to acquired Subsidiaries (and the Company shall cooperate with the Purchaser in making such election and shall take such actions as reasonably requested by the Purchaser to make such election).

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Section 4.5 No Liens

Any exchange or transfer of securities pursuant to this Plan of Arrangement shall be free and clear of any Liens or other claims of third parties of any kind.

Section 4.6 Paramountcy

From and after the Effective Time: (a) this Plan of Arrangement shall take precedence and priority over any and all Class A Shares issued prior to the Effective Time; (b) the rights and obligations of the Class A Shareholders, the Company, Acquisitionco, the Purchaser, the Depositary and any transfer agent or other depositary therefor in relation thereto, shall be solely as provided for in this Plan of Arrangement, and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Class A Shares shall be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.

ARTICLE 5

AMENDMENTS

Section 5.1 Amendments to Plan of Arrangement

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then no Court approval or communication to the Shareholders shall be required.

ARTICLE 6

FURTHER ASSURANCES

Section 6.1 Further Assurances

Notwithstanding that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the parties to the Arrangement Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by either of them in order further to document or evidence any of the transactions or events set out in this Plan of Arrangement.

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Schedule B – Arrangement Resolution

BE IT RESOLVED THAT:

1. The arrangement (the “Arrangement”) under Section 182 of the Business Corporations Act (Ontario) (the “OBCA”) of H. Paulin & Co., Limited (the “Company”), as more particularly described and set forth in the management proxy circular (the “Circular”) dated —, 2013 of the Company accompanying the notice of this meeting (as the Arrangement may be amended, modified or supplemented in accordance with the definitive agreement (the “Arrangement Agreement”) made as of December 17, 2012 between the Company and The Hillman Companies, Inc. is hereby authorized, approved and adopted.

2. The plan of arrangement of the Company (as it has been or may be amended, modified or supplemented in accordance with the Arrangement Agreement) (the “Plan of Arrangement”), the full text of which is set out in Appendix “—” to the Circular, is hereby authorized, approved and adopted.

3. The: (i) Arrangement Agreement and related transactions; (ii) actions of the directors of the Company in approving the Arrangement Agreement; and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement, and any amendments, modifications or supplements thereto, are hereby ratified and approved.

4. The Company be and is hereby authorized to apply for a final order from the Ontario Superior Court to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be amended, modified or supplemented and as described in the Circular).

5. Notwithstanding that this resolution has been duly passed (and the Arrangement adopted) by the shareholders of the Company or that the Arrangement has been approved by the Ontario Superior Court, the directors of the Company are hereby authorized and empowered to, without notice to or approval of the shareholders of the Company: (i) amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and related transactions and to revoke this resolution at any time prior to the Effective Time (as defined in the Arrangement Agreement).

6. Any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute and deliver for filing with the Director under the OBCA articles of arrangement and such other documents as are necessary or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement, such determination to be conclusively evidenced by the execution and delivery of such articles of arrangement and any such other documents.

7. Any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed and to deliver or cause to be

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delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.

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Schedule C - Representations and Warranties of the Company

Representations and Warranties of the Company

Except as set forth in the correspondingly numbered paragraph of the Company Disclosure Letter:

The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution and delivery and performance by the Company of this Agreement and the consummation of the Arrangement have been duly authorized by the Special Committee and the Board and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the consummation of the Arrangement other than the Required Approval.

This Agreement has been duly executed and delivered by the Company, and constitutes a legal, valid and binding agreement of the Company enforceable against it in accordance with its terms, subject only to any limitation under bankruptcy, insolvency or other Law affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Arrangement does not require any Authorization or other action by or in respect of, or filing, recording, registering or

publication with, or notification to, any Governmental Entity, other than (i) the Interim Order and any approvals required by the Interim Order; (ii) the Final Order; (iii) filings with the Director under the OBCA; (iv) the Regulatory Approvals; and (v) compliance with Securities Laws and the rules and policies of the Exchange.

with such exceptions, in the case of paragraphs (ii) through (iv), as would not be reasonably expected to adversely impair or materially delay the consummation of the Arrangement.

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3

As of November 30, 2012, each of the Debt, Income Taxes Payable, Income Taxes Refunds Receivable and Working Capital is accurately set out in Section 7 of the Company Disclosure Letter.

The Company has never been subject to, or affected by, any unanimous shareholders agreement and is not party to any shareholder, pooling, voting, or other similar arrangement or agreement relating to the ownership or voting of any of the securities of the Company or pursuant to which any Person may have any right or claim in connection with any existing or past equity interest in the Company and the Company has not adopted a shareholder rights plan or any other similar plan or agreement.

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Neither the Company nor any of its Subsidiaries is indebted to any director, officer, employee or agent of, or independent contractor to, the Company or any of its Subsidiaries or any of their respective affiliates or associates (except for amounts due in the Ordinary Course as salaries, bonuses and director’s fees or the reimbursement of Ordinary Course expenses). To the knowledge of the Company, there are no Contracts with, or advances, loans, guarantees, liabilities or other obligations to, on behalf or for the benefit of, any shareholder, officer, director, employee or agent of, or independent contractor to, of the Company or any of its Subsidiaries, or any of their respective affiliates or associates.

To the knowledge of the Company, no related party of the Company (within the meaning of Multilateral Instrument 61-101 – Insider Bids, Issuer Bids, Going Private Transactions and Related Party Transactions) together with its associated entities, beneficially owns or exercises control or direction over 1% or more of the outstanding Class A Shares, except for related parties who will not receive a “collateral benefit” (within the meaning of such instrument) as a consequence of the transactions contemplated by this Agreement.

8

The forecasts, budgets or projections related to the fourth quarter of 2012 and the first quarter of 2013 provided by or on behalf of the Company to the Purchaser have been prepared in good faith and contain reasonable estimates of the prospects of the business of the Company.

The Company, each of its Subsidiaries and each of their respective directors and officers is, and since December 31, 2009 has been, in compliance with Law. Neither

9

the Company nor any of its Subsidiaries has been convicted of any crime, has engaged in any conduct that could result in criminal liability or, to the knowledge of the Company, is under any investigation with respect to, has been charged or threatened to be charged with, or has received notice of, any violation or potential violation of any Law. None of the directors or officers of the Company and the Subsidiaries have been disqualified from acting as a director or officer or subject to any order required to be disclosed pursuant to Securities Laws.

The Board and the Special Committee have received the Fairness Opinion. The Company has made true and complete disclosure to the Purchaser of all fees, commissions or other payments that may be incurred pursuant to such engagement or that may otherwise be payable to Ernst & Young LLP.

Except for the engagement letter between the Company and Ernst & Young LLP and the fees payable under or in connection with such engagement, no investment

10

banker, broker, finder, financial adviser or other intermediary has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries, or any of their respective officers, directors or employees, or is entitled to any fee, commission or other payment from the Company or any of its Subsidiaries, or any of their respective officers, directors or employees, in connection with this Agreement.

11

The Company and/or its Subsidiaries have good title to all material personal or movable property of any kind or nature which the Company or any of its Subsidiaries owns (as reflected on the most recent balance sheet of the Company), free and clear of all Liens (other than Permitted Liens). The Company and its Subsidiaries, as lessees, have the right under valid and subsisting leases to use, possess and control all material personal or movable property leased by and to the Company or any of its Subsidiaries as used, possessed and controlled by the Company or its Subsidiaries, as applicable.

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The Company has filed all documents required to be filed by it in accordance with applicable Securities Laws with the Securities Authority or the Exchange. All such documents and information comprising the Company Filings as of their respective dates (or, if amended, as of the date of such amendment): (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; and (ii) complied in all material respects with the requirements of applicable Securities Laws, and any amendments to the Company Filings required to be made have been filed on a timely basis with the Securities Authority or the Exchange. The Company has not filed any confidential material change report with any Securities Authority or the Exchange that at the date of this Agreement remains confidential.

The assets and property of the Company and its Subsidiaries include all rights and interests necessary to enable the Purchaser to conduct such business substantially in the same manner as it was conducted prior to the Effective Time. With the exception of inventory, motor vehicles and equipment in transit, or those that may be in possession of Company Employees in the Ordinary Course, all of the assets and property of the Company and its Subsidiaries are situate at the Owned Properties or the Leased Properties.

25

The Company and its Subsidiaries own (with good title) all of the properties and assets (whether real, personal or mixed and whether tangible or intangible, and for greater certainty excluding Leases) reflected as being owned by the Company or its Subsidiaries in its financial books and records. The Company or its Subsidiaries have legal and beneficial ownership of such assets free and clear of all Liens, except for Permitted Liens. No other Person owns any property or assets which are being used in the business of the Company or its Subsidiaries except for the Leased Properties, the personal property leased by the Company pursuant to the Material Contracts and the Intellectual Property licensed to the Company or its Subsidiaries and disclosed in Section 38 of the Company Disclosure Letter.

No Person has any written or oral agreement, option, understanding or commitment, or any right or privilege capable of becoming such for the purchase or other acquisition from the Company or any Subsidiary of any of their respective property or assets.

The buildings, plants, structures, vehicles, equipment, technology and communications hardware and other tangible personal property of the Company (including the Buildings and Fixtures) are structurally sound, in good operating condition and repair having regard to their use and age and are adequate and suitable for the uses to which they are being put.

The Company has not received any written notice from the appropriate municipality, fire department, sanitation, health or safety authorities of any outstanding material breaches of any Law relating to the Buildings and Fixtures on the Owned Properties which are not in the process of being dealt with in the Ordinary Course. The Company has ingress and egress into the Owned Properties. The Company has not received any written notice of any pending condemnation or expropriation proceeding against any of the Owned Properties which would preclude or impair the use of any of the Owned Properties for the purposes for which they are currently used. There are no outstanding work orders from or required by any municipality, police department, fire department, sanitation, health or safety authorities or from any other Person and there are no matters under discussion with or by the Company relating to any work orders.

26

The Company has all right-of-way agreements, license agreements or other agreements or consents permitting or requiring the Company or any of its Subsidiaries to lay, build, operate, maintain or place cable, wires, conduits or other equipment and facilities over land or underground, that are material to the conduct of the business, as presently conducted, of the Company and its Subsidiaries taken as a whole, (each, a “Right-of-Way Agreement”), and each such Right-of-Way Agreement is valid, legally binding, enforceable and in full force and effect, and none of the Company or any of its Subsidiaries is in breach of or default under any Right-of-Way Agreement, no event has occurred which, with notice or lapse of time, would constitute a breach or default by any of the Company or its Subsidiaries or permit termination, modification or acceleration by any third party under any Right-of-Way Agreement, and no third party has repudiated or has the right to terminate or repudiate any Right-of-Way Agreement.

All accounts receivable are bona fide, and, subject to an allowance for doubtful accounts that has been reflected in the books and records of the Company in accordance with GAAP and consistent with past practice, collectible without set off or counterclaim.

The inventory of the Company is good and usable and is capable of being processed and sold in the Ordinary Course at normal profit margins, subject to a reasonable allowance for obsolete inventory consistent with the allowances reflected in the Company’s most recently published financial statements. The inventory levels of the Company have been maintained at levels sufficient for the continuation of the business in the Ordinary Course. All inventories of the Company have been determined and valued in accordance with the policies, practices and procedures set forth in Section 45 of the Company Disclosure Letter.

27

The Company and its Subsidiaries have Contracts that have executory obligations to be performed by, or require additional payments to be made to, the Company or any of its Subsidiaries only with Persons resident, domiciled or existing only under the laws of the countries set out in Section 46 of the Company Disclosure Letter and shall not have any such Contracts with Persons resident, domiciled or existing under the laws of any other countries.