AGREEMENT AND PLAN OF MERGER

by and among

BPC HOLDING CORPORATION,

BPC HOLDING ACQUISITION CORP.

and

BPC ACQUISITION CORP.

Dated as of June 28, 2006

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER (this Agreement) is made and entered into this 28^th day of June, 2006, by and among BPC HOLDING CORPORATION, a Delaware corporation (the Company), BPC HOLDING ACQUISITION CORP., a Delaware corporation (Purchaser), and BPC ACQUISITION CORP., a Delaware corporation wholly owned by Purchaser (Merger Sub).

WHEREAS, the respective Boards of Directors of the Company and Merger Sub have determined that the merger of Merger Sub with and into the Company (the Merger), upon the terms and subject to the conditions set forth in this Agreement, would be advisable and in the best interests of the current stockholders of the Company and the stockholders of Merger Sub, respectively;

WHEREAS, concurrently with the execution of this Agreement, the holders of in excess of a majority of the Company Stock have executed written consents approving the Merger and the other transactions contemplated hereby; and

WHEREAS, Purchaser, Merger Sub and the Company desire to make, and have relied upon, certain representations, warranties, covenants and agreements in connection with the transactions contemplated hereby.

NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:

DEFINITIONS

Section 1.1 Defined Terms.

When used in this Agreement, the following terms shall have the meanings set forth below:

Affiliate means, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person, including, without limitation, each Subsidiary of such specified Person. For the purposes of this definition, control, when used with respect to any specified Person, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through ownership of voting securities or by contract, credit arrangement or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.

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Aggregate Exercise Price means the aggregate amount that would be paid to the Company in respect of all Vested Options outstanding immediately prior to the Effective Time if the holders thereof exercised such Vested Options immediately prior to the Effective Time.

Aggregate Stockholder Loan Value means the aggregate amount outstanding with respect to all Stockholder Loans immediately prior to the Effective Time.

Agreement has the meaning set forth in the Preamble.

CIC Payments has the meaning set forth in Section 6.1(c).

Closing has the meaning set forth in Section 2.2.

Closing Cash means

(i) the aggregate amount of the Companys and each of its Subsidiaries cash and cash equivalents on hand or in bank accounts as of the Closing; provided that any cash and cash equivalents will be valued for purposes of calculating Closing Cash net of any fees, costs, and withholding or other Taxes incurred or that would reasonably be expected to be incurred (including as a result of any reduction in any Tax attributes) in connection with causing such cash and cash equivalents to be unrestricted cash held directly by the Company prior to the Effective Time (it being understood that such cash and cash equivalents of the Company's Subsidiaries need not be held directly by the Company prior to the Effective Time), plus

(ii) the Aggregate Stockholder Loan Value.

Closing Date has the meaning set forth in Section 2.2.

Closing Indebtedness means the total amount of Indebtedness of the Company and its Subsidiaries outstanding as of the Effective Time. Closing Indebtedness shall not include any Prepayment Expenses or any amounts taken into account in Net Working Capital or in Transaction Expenses.

Closing Statement has the meaning set forth in Section 2.11(a).

Code means the United States Internal Revenue Code of 1986, as amended.

Commitment Letters has the meaning set forth in Section 4.5.

Company has the meaning set forth in the Preamble.

Company Disclosure Schedule means the Disclosure Schedule delivered by the Company to Purchaser simultaneously with the execution and delivery of this Agreement.

Company Intellectual Property means all Intellectual Property which is owned by or used in connection with the business of the Company and any of its Subsidiaries.

Company Material Adverse Effect means any change, event or effect that, individually or when taken together with all other such changes, events or effects, is or would reasonably be expected to have a material adverse effect on the assets, liabilities, business, results

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of operations or financial condition of the Company and its Subsidiaries, taken as a whole, other than changes, events or effects caused by any state of facts, circumstance, change, development, condition or occurrence to the extent resulting from or attributable to (except, in the case of clauses (a), (b), (c), (e) or (f) to the extent disproportionately affecting the Company and its Subsidiaries relative to other companies in the industry):

(a) general economic conditions,

(b) the financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index),

(c) the industries or markets in which the Company or its Subsidiaries generally operate,

(d) the entry into and announcement of this Agreement and the consummation of the transactions contemplated hereby,

(e) changes in Law or GAAP or

(f) acts of war, terrorism or the escalation of either of the forgoing.

Company Options has the meaning set forth in Section 2.8(d).

Company Stock has the meaning set forth in Section 2.8(b).

Companys Organizational Documents has the meaning set forth in Section 3.1.

Contract means any note, bond, mortgage, indenture, lease, contract, agreement, conveyance to secure debt, deed of trust or other instrument, obligation, commitment or other binding arrangement, whether written or oral.

Controlled Group Liability means any and all liabilities

(i) under Title IV of ERISA,

(ii) under Section 302 of ERISA,

(iii) under Sections 412 and 4971 of the Code, and

(iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code.

DGCL has the meaning set forth in Section 2.1.

Debt Financing has the meaning set forth in Section 4.5.

Debt Receipt Failure has the meaning set forth in Section 9.2(b).

Dissenting Stockholders has the meaning set forth in Section 2.13.

Effective Time has the meaning set forth in Section 2.3.

Employee means each current, former, or retired employee, director or officer of the Company or any of its Subsidiaries.

Employment Agreement means each management, employment or severance agreement or contract between the Company or any of its Subsidiaries and any Employee pursuant to which the Company or any of its Subsidiaries has or may have any liability contingent or otherwise.

Environmental Law means any foreign, federal, state or local law, statute, ordinance, rule or regulation, any common law cause of action providing any right or remedy relating to Environmental Matters, or any legally binding judicial or administrative decision,

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order, or decree, in each case relating to Environmental Matters, as the foregoing are enacted and in effect on or prior to the Closing Date.

Environmental Matter means any matter arising out of, relating to, or resulting from pollution, contamination, protection of the environment, protection of natural resources, or protection of human health or safety from environmental hazards, including any matters relating to emissions, discharges, releases or threatened releases, of Hazardous Substances into the air, surface water, groundwater, soil, land surface or subsurface or otherwise arising out of, relating to, or resulting from the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling, release or threatened release of Hazardous Substances.

Environmental Permits has the meaning set forth in Section 3.16(b).

Environmental Reports means those certain sections of the ENVIRON International Corporation reports identified on Exhibit A attached hereto.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate means, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same controlled group as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

Escrow Account has the meaning set forth in Section 2.10(b)(iii).

Escrow Agent has the meaning set forth in Section 2.10(b)(iii).

Escrow Agreement has the meaning set forth in Section 2.10(b)(iii).

Estimated Merger Consideration means a good faith estimate of the Merger Consideration, as determined by the Company, in accordance with this Agreement.

Estimated Option Payment means, with respect to each share of Company Stock subject to a Vested Option,

(a)

(i) the Estimated Merger Consideration plus the Aggregate Exercise Price divided by

(ii) the number of shares of Company Stock outstanding immediately prior to the Effective Time (assuming the exercise of all Vested Options outstanding immediately prior to the Effective Time), minus

(b) the per share exercise price of such Vested Option.

Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Final Closing Amount means the Merger Consideration as set forth on the Final Closing Statement.

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Final Closing Statement has the meaning set forth in Section 2.11(c).

Food and Drug Safety Laws has the meaning set forth in Section 3.22(a).

Foreign Plan means each Plan (as hereinafter defined) that is subject to or governed by the Law of any jurisdiction other than the United States and pursuant to which the Company or any of its Subsidiaries has or may have any liability, contingent or otherwise.

GAAP means United States generally accepted accounting principles and practices as in effect from time to time and applied consistently throughout the periods involved.

Governmental Entity means any government or any court, arbitrator, tribunal, administrative agency or commission or other governmental, public or other regulatory authority, instrumentality, department, ministry, board or agency, federal, state, local, tribal, provincial, regional, municipal, supranational or foreign.

Hazardous Substance means any material, substance or waste with respect to which liability or standards of conduct may be imposed pursuant to any Environmental Laws.

HSR Act has the meaning set forth in Section 3.4.

Indebted Stockholders means the Stockholders of the Company that have outstanding obligations with respect to Stockholder Loans.

Indebtedness means, without duplication,

(a) the principal of and premium (if any) in respect of all indebtedness for borrowed money, including accrued interest and any cost associated with prepaying any such debt,

(b) the principal of and premium in respect of obligations evidenced by bonds, debentures, notes or other similar instruments, including accrued interest,

(c) the principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered to the Company or any of its Subsidiaries,

(d) capital leases of the Company or any of its Subsidiaries classified as such on the Latest Balance Sheet and similar capital leases of the Company or any of its Subsidiaries entered into since the date of the Latest Balance Sheet and

(e) all Indebtedness of another person referred to in clauses (a) through (d) above guaranteed directly or indirectly, jointly or severally, in any manner by the Company or any of its Subsidiaries (other than with respect to Indebtedness otherwise included in clauses (a) through (d) above).

Indemnified Person has the meaning set forth in Section 6.2.

Intellectual Property means all United States or foreign: patents, patent applications, patentable inventions, design patents and industrial designs, and improvements thereto; registered and material unregistered trademarks, trade names, service marks, trade dress, slogans, logos, domain names, and designs, and all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; registered and material unregistered copyrights and copyright applications, and all registrations and renewals in connection therewith; trade secrets and proprietary and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing

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and production processes and techniques, methods, schematics, technology, technical data, designs, drawings, flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost information and business and marketing plans and proposals); and licenses, sublicenses, or agreements related to any of the foregoing.

IRS means the Internal Revenue Service.

ISRA has the meaning set forth in Section 7.3(c).

Key Employees has the meaning set forth in Section 2.8(e).

knowledge of the Company means the knowledge, in each case after reasonable inquiry, of Ira G. Boots- President, CEO, James M. Kratochvil- EVP and CFO, Jeffrey D. Thompson, VP and General Counsel, Ralph Brent Beeler, COO, Randy Hobson, President, Rigid Closed Top, Adam Unfried, President, Rigid Open Top, Brett Bauer, EVP - Corporate Development, Fred Heseman, EVP, Engineering Technology, Marcia Jochem, EVP - Human Resources, Mark Miles, EVP and Controller, or Greg Jones, Corporate Manager Safety, Health & Environmental.

knowledge of Purchaser or knowledge of Merger Sub means the knowledge, in each case after reasonable inquiry, of Robert Seminara, Anthony Civale or Michael Jupiter.

Latest Audited Balance Sheet has the meaning set forth in Section 3.6.

Latest Balance Sheet has the meaning set forth in the definition of Latest Financial Statements.

Latest Financial Statements means the unaudited consolidated balance sheet of the Company as of April 1, 2006 (the Latest Balance Sheet) and the related unaudited statement of operations and cash flow for the three months then ended, including the related notes and schedules thereto, each as set forth in the Companys Form 10-Q for the period ended April 1, 2006 filed with the SEC.

Law means any applicable federal, state, local or foreign law, statute, common law, rule, ordinance, regulation, code, licensing requirement, judgment, injunction, order, writ, decree, license, guideline or interpretation having the force of law, permit, bylaw or other restriction, in each case, of any Governmental Entity.

Leased Real Property means the real property leased by the Company or any of its Subsidiaries, as tenant, together with, to the extent leased by the Company or any of its Subsidiaries, all buildings and other structures, facilities or improvements currently located thereon, all fixtures, systems and equipment attached or appurtenant thereto.

Lien means any material adverse claim, restriction on voting or transfer or pledge, mortgage, lien (including, without limitation, environmental and Tax liens), charge, encumbrance, restriction or security interest of any kind.

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Material Contracts has the meaning set forth in Section 3.13(a).

Material Permits has the meaning set forth in Section 3.8.

Material Software has the meaning set forth in Section 3.12(c).

Merger has the meaning set forth in the Recitals.

Merger Consideration means an amount equal to

(i) $2,250,000,000, plus

(ii) Closing Cash, less

(iii) Closing Indebtedness, less

(iv) Transaction Expenses, plus

(v) the Net Working Capital Adjustment (which may be a negative number).

Merger Sub has the meaning set forth in the Preamble.

Neutral Auditors has the meaning set forth in Section 2.11(c).

Net Working Capital means the consolidated net working capital of the Company and its Subsidiaries as of the Closing, calculated in accordance with GAAP consistently applied with the application thereof in the Latest Audited Balance Sheet, subject to accounting principles, methodologies, procedures and classifications as are set forth in Exhibit B attached hereto.

Net Working Capital Adjustment means the amount by which

(a) the Net Working Capital as of the Closing exceeds the Target Net Working Capital or

(b) the Net Working Capital as of the Closing is less than the Target Net Working Capital; provided that any amount which is calculated pursuant to this clause (b) shall be deemed to be a negative number.

Other Filings means any filings required to be filed by the Company or Purchaser with any Governmental Entity under the Securities Act, the Exchange Act, any stock exchange rule or any other federal, state, local or foreign laws in connection with the transactions contemplated hereby.

Owned Real Property means the real property owned by the Company or any of its Subsidiaries, together with all buildings and other structures, facilities or improvements currently located thereon, all fixtures, systems and equipment of the Company or any of its Subsidiaries attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing.

Per Share Escrow Amount means

(a) the Representative Escrow Amount  divided by

(b) the number of shares of Company Stock outstanding immediately prior to the Effective Time (assuming the exercise of all Vested Options outstanding immediately prior to the Effective Time).

Per Share Estimated Merger Consideration means (a) the Estimated Merger Consideration plus the Aggregate Exercise Price divided by (b) the number of shares of Company Stock outstanding immediately prior to the Effective Time (assuming the exercise of all Vested Options outstanding immediately prior to the Effective Time).

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Per Share Merger Consideration means

(a) the Merger Consideration plus the Aggregate Exercise Price divided by

(b) the number of shares of Company Stock outstanding immediately prior to the Effective Time (assuming the exercise of all Vested Options outstanding immediately prior to the Effective Time).

Permitted Liens means

(a) Liens for Taxes, assessments and governmental charges or levies not yet delinquent or for which adequate reserves are maintained on the financial statements of the Company and its Subsidiaries as of the Closing Date;

(b) Liens imposed by law, such as materialmens, mechanics, carriers, workmens and repairmens liens and other similar liens arising in the ordinary course of business securing obligations that are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings (and, in each case, for which adequate reserves are maintained on the financial statements of the Company and its Subsidiaries as of the Closing Date in conformity with GAAP);

(c) ordinary course pledges or deposits to secure obligations under workers compensation Laws or similar legislation or to secure public or statutory obligations;

(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business consistent with past practice that, individually or in the aggregate, are not material in amount;

(e) with respect to real estate, all matters of record, including, without limitation, survey exceptions, reciprocal easement agreements and other encumbrances on title to real property, provided that such matters, individually or in the aggregate, do not materially impair the current use, utility or value of the underlying real property;

(f) all applicable zoning, entitlement, conservation restrictions and other land use and environmental regulations imposed (in each case) by a Governmental Entity, which do not materially impair the current use of the underlying asset;

(g) all exceptions, restrictions, easements, charges, rights-of-way and other Liens set forth in any Environmental Permits, any deed restrictions, groundwater or land use limitations or other institutional controls utilized in connection with any required environmental remedial actions, or other state, local or municipal Environmental Laws applicable to the Company or any of its Subsidiaries or any of their respective properties, provided that such matters, individually or in the aggregate, do not materially impair the current use, utility or value of the underlying real property;

(h) Liens securing the obligations of the Company or any of its Subsidiaries under secured Indebtedness of the Company or any of its Subsidiaries and

(i) Liens referred to in the Company Disclosure Schedule.

Person means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a Governmental Entity.

Plan has the meaning set forth in the definition of U.S. Benefit Plan.

Prepayment Expenses means any make-whole amount, premium over face amount, termination fees, prepayment penalties, expenses, breakage costs or other fees, costs or expenses incurred in connection with the prepayment, repurchase, tender/consent solicitation or defeasance of any Indebtedness of the Company or any of its Subsidiaries or resulting from the execution and delivery of this Agreement or the consummation of the transactions contemplated

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hereby. For the avoidance of doubt, Prepayment Expenses shall not include any amount included in Net Working Capital.

Proceeding means any writ, injunction, decree, order, judgment, lawsuit, claim, action, suit, arbitration (formal or informational), proceeding, notice of violation, investigation, demand letter or summons.

Purchaser has the meaning set forth in the Preamble.

Purchaser Closing Payment has the meaning set forth in Section 2.11(e)(i).

Purchaser Termination Fee has the meaning set forth in Section 9.2(b).

Q&A-7 has the meaning set forth in Section 6.1(c).

Representative has the meaning set forth in Section 10.1(a).

Representative Escrow Amount means $50,000,000.

Representative Remaining Amount has the meaning set forth in Section 2.11(e)(i).

Resolution Period has the meaning set forth in Section 2.11(b).

SEC means the Securities and Exchange Commission.

SEC Documents means the forms, proxy statements, registration statements, reports, schedules, statements and other documents required to be filed with the SEC by the Company or any of its Subsidiaries since December 31, 2003, together with all information incorporated therein.

Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Senior Indebtedness means the obligations of the Company and Berry Plastics Corporation under the Second Amended and Restated Credit and Guaranty Agreement, dated as of August 9, 2004, as amended by the First Amendment to Second Amended and Restated Credit and Guaranty Agreement dated as of January 1, 2005, the Second Amendment to Second Amended and Restated Credit and Guaranty Agreement dated as of June 3, 2005 and the Third Amendment to Second Amended and Restated Credit and Guaranty Agreement dated as of October 26, 2005, among Berry Plastics Corporation, the Company, certain subsidiaries of Berry Plastics Corporation as Guarantors, the Lenders party thereto, Goldman Sachs Credit Partners L.P., JPMorgan Chase Bank, N.A., and certain agents.

Shortfall has the meaning set forth in Section 2.11(e)(iii).

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Stockholder Loans means the loans in favor of the Company or a Subsidiary of the Company entered into by certain current employees of the Company or a Subsidiary of the Company, as set forth on Exhibit C hereto.

Stockholders means all of the stockholders of the Company as listed in Section 3.2(a) of the Company Disclosure Schedule.

Subsidiary means, with respect to any Person, any corporation, limited liability company, partnership, joint venture, or other legal entity of which such Person (either above or through or together with any other Subsidiary) owns, directly or indirectly, more than 50% of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

Surviving Corporation has the meaning set forth in Section 2.1.

Target Net Working Capital means $163,400,000.

Tax means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, withholding, payroll, employment, excise, severance, stamp, capital stock, occupation, property, environmental or windfall profits tax, or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any tax authority responsible for the imposition of any such tax (domestic or foreign).

Tax Return means any return, declaration or information return relating to Tax, including any schedule or attachment thereto, and including any amendment thereto, required to be filed with any Tax authority.

10 % Notes means Berry Plastics Corporations 10 % Senior Subordinated Notes due 2012.

Termination Date has the meaning set forth in Section 9.1(c).

Transaction Expenses means, to the extent not paid before the Effective Time,

(a) the amount of any fees, costs and expenses (including, without limitation, fees, costs and expenses of legal counsel, investment bankers, brokers or other representatives and consultants) incurred by the Company or any of its Subsidiaries, or for which they are otherwise liable, in connection with this Agreement or the transactions contemplated hereby,

(b)  any amounts payable to any officer, director or employee of the Company or any of its Subsidiaries in the nature of a sale bonus as a result of the consummation of the Merger and

(c) the aggregate amount of the payments to be made to Terry R. Peets under the Stock Appreciation Rights Agreement dated July 21, 2004, in order to satisfy the Companys obligations under such agreement. Transaction Expenses shall not include

(i) any Prepayment Expenses or

(ii) any fees, costs or expenses incurred by the Company or any of its Subsidiaries pursuant to Section 4.6 or 7.8. Any Prepayment Expenses and fees, costs and expenses referred to in clause (ii) of the immediately preceding sentence shall not be included in Net Working Capital.

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Transfer Taxes means all sales, use, transfer, real property transfer, documentary, recording, stock transfer and similar Taxes (but not

(a) any Taxes on income or gains,

(b) any franchise Taxes or

(c) any Taxes imposed on a Stockholder (or its Affiliate (other than the Company or any of its Subsidiaries) or direct or indirect owner) by reason of the Stockholder (or such Affiliate or owner) being resident in or otherwise having a taxable presence (other than a taxable presence in a Taxing jurisdiction held by all or substantially all Stockholders by reason of their ownership of Company Stock) in a Taxing jurisdiction, such Taxes to be paid and borne by the applicable Stockholder) and any deficiency, interest or penalty with respect thereto.

Unvested Options has the meaning set forth in Section 2.8(d).

U.S. Benefit Plan means each written material plan, program, policy, contract, agreement or other arrangement providing for compensation, retirement benefits, severance, termination pay, performance awards, stock or equity-related awards, insurance, fringe benefits, health benefits or other employee benefits of any kind, whether formal or informal, funded or unfunded, written or oral, other than an Employment Agreement (each of the preceding hereinafter is referred to individually as a Plan and collectively as the Plans), including, without limitation, each employee benefit plan, within the meaning of Section 3(3) of ERISA which is now or previously has been sponsored, maintained, contributed to, or required to be contributed to, or with respect to which any withdrawal liability (within the meaning of Section 4201 of ERISA) has been or may be incurred by the Company or any of its Subsidiaries for the benefit of any U.S. Employee.

Vested Options has the meaning set forth in Section 2.8(d).

Section 1.2 Interpretation.

Meanings specified in this Agreement shall be applicable to both the singular and plural forms of such terms and to the masculine, feminine and neuter genders, as the context requires and the words include, includes or including shall be deemed to be followed by the words without limitation.

ARTICLE II

THE MERGER

Section 2.1 The Merger.

Upon the terms and subject to the conditions of this Agreement and in accordance with the Delaware General Corporation Law (the DGCL), at the Effective Time, Merger Sub shall be merged with and into the Company and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (the Company in its capacity as the surviving corporation is sometimes hereinafter referred to as the Surviving Corporation). The Merger shall have the effects specified in the DGCL.

Section 2.2 Closing.

Unless this Agreement is sooner terminated as provided in Article IX, upon the terms and subject to the conditions set forth in this Agreement, the

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closing of the Merger (the Closing) shall take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 W. 52nd St., New York, New York 10019, at 9:00 a.m. local time, on the later of

(a) five business days after the day on which the last to be fulfilled or waived of the conditions set forth in Article VIII (other than those conditions that by their nature are to be fulfilled at the Closing, but subject to the fulfillment of such conditions) shall be fulfilled or waived in accordance herewith or

(b) September 29, 2006, or at such other time or date as the parties hereto may agree. The date on which the Closing shall occur is hereinafter referred to as the Closing Date.

Section 2.3 Effective Time.

If all the conditions to the Merger set forth in Article VIII shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated as provided in Article IX, the parties hereto shall cause a Certificate of Merger meeting the requirements of Section 251 of the DGCL to be properly executed and filed in accordance with such Section on the Closing Date. The Merger shall become effective at the time of filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL or at such later time which the parties shall have agreed upon and designated in such filing as the effective time of the Merger (the Effective Time).

Section 2.4 Certificate of Incorporation.

At the Effective Time, the certificate of incorporation of Merger Sub as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation until thereafter amended, except that the Surviving Corporation shall have the name BPC Holding Corporation.

Section 2.5 Bylaws.

At the Effective Time, the bylaws of Merger Sub as in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until thereafter amended.

Section 2.6 Directors of the Surviving Corporation.

As of the Effective Time, the directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

Section 2.7 Officers of the Surviving Corporation.

As of the Effective Time, the officers of the Company immediately prior to the Effective Time shall be the officers of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

Section 2.8 Effect of Merger on Capital Stock and Vested Options.

As of the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of the capital stock of the Company or any shares of the capital stock of Merger Sub:

(a) Each share of common stock, $0.01 par value, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one fully paid and nonassessable share of voting common stock, $0.01 par value, of the Surviving Corporation.

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(b) Except as otherwise provided herein, each share of common stock of the Company (Company Stock) issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive from the Surviving Corporation, upon the consummation of the Merger, upon surrender of the certificate or certificates which prior thereto represented shares of Company Stock, an amount equal to the Per Share Merger Consideration in accordance with Section 2.9 and Section 2.11. The Per Share Merger Consideration payable to any Stockholder shall be paid solely in cash. As of the Effective Time, all shares of Company Stock issued and outstanding immediately prior to the Effective Time shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares of Company Stock shall, upon surrender of such certificate in accordance with Section 2.9, cease to have any rights with respect thereto, except the right to receive the Per Share Merger Consideration in accordance with Section 2.9 and Section 2.11. Each share of Company Stock owned by Purchaser, Merger Sub or any of their respective Subsidiaries immediately prior to the Effective Time shall automatically be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto.

(c) Notwithstanding anything in this Agreement to the contrary, shares of Company Stock issued and outstanding immediately prior to the Effective Time held by a holder (if any) who has the right to demand payment for and an appraisal of such shares in accordance with the DGCL shall not be converted into a right to receive the Per Share Merger Consideration unless such holder fails to perfect or otherwise loses such holders right to such payment or appraisal, if any.

(d)  All vested options to purchase shares of Company Stock (including options that vest upon the consummation of the Merger) that are outstanding and unexercised immediately prior to the Effective Time whether under any Company stock option plan or otherwise (individually, a Vested Option and collectively, the Vested Options), shall be canceled immediately prior to the Effective Time and each holder of a Vested Option will be entitled to receive from the Surviving Corporation as soon as practicable following the Effective Time, for each share of Company Stock subject to a Vested Option, an amount in cash equal to

(i) the Per Share Merger Consideration minus

(ii) the per share exercise price of such Vested Option. All unvested options to purchase shares of Company Stock outstanding immediately prior to the Effective Time whether under any Company stock option plan or otherwise (Unvested Options and, together with the Vested Options, Company Options) shall be cancelled without payment or obligation pursuant to the terms of the BPC Holding Corporation 2002 Stock Option Plan. All amounts payable pursuant to this Agreement shall be subject to any required withholding of Taxes. Any adjustment or conversion of Unvested Options pursuant to this Section 2.8(d) shall be made in accordance with the requirements of Section 409A of the Code and the regulations promulgated thereunder.

(e) At or prior to the Effective Time, the Company, the board of directors of the Company or the compensation committee of the board of directors of the Company, as applicable, shall adopt any resolutions and take any reasonable actions which are necessary to effectuate the provisions of Section 2.8(d). The Company shall take all reasonable actions necessary to ensure that the actions contemplated by Section 2.8(d) shall be effectuated.

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Purchaser desires to amend and extend the terms of employment agreements between the Company and one or more of its Subsidiaries and certain employees of the Company or such Subsidiaries (the Key Employees) and enter into certain equity incentive agreements with the Key Employees prior to the Closing, in each case effective as of the Closing. From the date hereof through the Closing, the parties hereto agree to reasonably cooperate with each other in order to effectuate such amendments and agreements, including by agreeing to equitable adjustments to the payment provisions of Section 2.11(d), (e) and (f) to account for amounts that but for such arrangements would be payable to such Key Employees. At or prior to the Effective Time, the Company, the board of directors of the Company or the compensation committee of the board of directors of the Company, as applicable, shall adopt any resolutions and take any reasonable actions which are necessary to effectuate the provisions of this Section 2.8(e) and the agreements contemplated hereby.

Section 2.9 Exchange of Certificates.

(a) At the Effective Time, each holder of an outstanding certificate or certificates which prior thereto represented shares of Company Stock shall surrender to the Surviving Corporation the certificate or certificates representing such shares of Company Stock, together with a duly executed letter of transmittal substantially in the form of Exhibit D attached hereto and, upon acceptance thereof by the Surviving Corporation, be entitled to the amount of cash into which such holders shares of Company Stock have been converted pursuant to this Agreement. After the Effective Time, there shall be no further transfer on the records of the Company or its transfer agent of certificates representing shares of Company Stock which have been converted, in whole or in part, pursuant to this Agreement into the right to receive cash and if such certificates are presented to the Surviving Corporation for transfer, they shall be canceled against delivery of cash. Until surrendered as contemplated by this Section 2.9(a), each certificate for shares of Company Stock shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Per Share Merger Consideration with respect to each share of Company Stock represented by such certificate as contemplated by Section 2.8(b). No interest will be paid or will accrue on any amounts payable as Per Share Merger Consideration.

(b) No dividends or other distributions with respect to Company Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered certificate for shares of Company Stock with respect to the shares of Company Stock represented thereby.

(c) Neither Purchaser nor the Company shall be liable to any Person in respect of any shares of retained Company Stock (or dividends or distributions with respect thereto) or the Merger Consideration required to be delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

(d) If any consideration is to be paid to a Person other than the Person in whose name the certificate surrendered in exchange therefor is registered, it shall be a condition to such exchange that the Person requesting such exchange shall pay to the Surviving Corporation any Transfer Taxes or other Taxes required by reason of the payment of such consideration to a Person other than that of the registered holder of the certificate so surrendered, or such Person shall establish to the reasonable satisfaction of the Surviving Corporation that such Tax has been paid or is not applicable.

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(e) If any certificate for shares of Company Stock 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 and, if requested by the Surviving Corporation, the posting by such person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such certificate (and such affidavit of loss shall not be deemed effective without the posting of such bond if required hereunder), the Surviving Corporation will pay, in exchange for such lost, stolen or destroyed certificate, the Per Share Merger Consideration to be paid in respect of each share of Company Stock represented by such certificate in accordance with this Section 2.9 and Section 2.11.

Section 2.10 Payments at Closing.

(a) Not less than three business days prior to the Closing Date, the Company shall in good faith prepare and deliver to Purchaser a statement containing the Estimated Merger Consideration and the components thereof, together with reasonable supporting detail. Such statement shall be binding for purposes of the Estimated Merger Consideration, absent mathematical error or calculation inconsistent with the terms of this Agreement, in which case the Estimated Merger Consideration shall be adjusted to correct such error or inconsistency.

(b) Subject to the provisions of this Agreement, simultaneously with the Closing, Purchaser shall:

(i) pay, or cause the Surviving Corporation to pay, to the Stockholders (other than Dissenting Stockholders) with respect to each share of Company Stock outstanding immediately prior to the Effective Time, an amount equal to the Per Share Estimated Merger Consideration less the Per Share Escrow Amount;

(ii) pay, or cause the Surviving Corporation to pay to the holders of Vested Options with respect to each share of Company Stock subject to a Vested Option, an amount equal to the Estimated Option Payment less the Per Share Escrow Amount; and

(iii) deposit, or cause to be deposited, the Representative Escrow Amount into an escrow account (the Escrow Account), which shall be established pursuant to an escrow agreement (the Escrow Agreement), which Escrow Agreement (A) shall be entered into on the Closing Date by Purchaser, the Representative and an escrow agent (the Escrow Agent) to be mutually agreed upon between Purchaser and the Representative and (B) shall be substantially in the form of Exhibit E attached hereto.

(c) The Company shall request each Stockholder and each holder of Vested Options to submit to the Company, not later than five business days prior to the Closing Date, instructions for delivery of the payment in respect of such delay to be made pursuant to Section 2.10(b)(i) and (ii), together with customary documentation and tax information for the delivery of shares (or with respect to Vested Options), which documentation and tax information shall be reasonably acceptable to the Company and Purchaser. No later than two business days prior to the Closing Date the Company shall deliver to Purchaser a schedule setting forth how the

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payments to be made pursuant to Section 2.10(b)(i) and (ii) will be distributed, including wire instructions in the case of payments to be made at the Closing by wire transfer.

Section 2.11 Post-Closing Adjustments.

(a) As promptly as practicable after the Closing, but in no event more than 30 days after the Closing Date, the Surviving Corporation shall in good faith prepare and deliver to the Representative (on behalf of the Stockholders and holders of Vested Options) a statement (the Closing Statement) indicating the Surviving Corporations calculation of the Merger Consideration and the components thereof, together with reasonable supporting detail.

(b) After receipt of the Closing Statement, the Representative shall have 15 days to review the Closing Statement, together with the work papers used in the preparation thereof. The Surviving Corporation shall

(i) provide the Representative and its representatives reasonable access during normal business hours to all relevant work papers, trial balances and other financial information to the extent necessary or useful to complete the review of the Closing Statement, and

(ii) reasonably cooperate with the Representative and its representatives reasonable requests with respect to the review of the Closing Statement, including by providing on a timely basis all information reasonably necessary or useful in reviewing the Closing Statement. Unless the Representative delivers written notice to the Surviving Corporation on or prior to the 15^th day after the Representatives receipt of the Closing Statement specifying in reasonable detail the amount, nature and basis of all disputed items, the Representative shall be deemed to have accepted and agreed to the calculation of the Merger Consideration set forth on the Closing Statement. If the Representative notifies the Surviving Corporation of its objection to the calculation of the Merger Consideration as set forth on the Closing Statement, the Representative and the Surviving Corporation shall, within 30 days (or such longer period as the parties may agree in writing) following such notice (the Resolution Period), attempt to resolve their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive (other than as a result of manifest error or fraud). Items not objected to by the Representative shall be deemed resolved.

(c) If, at the conclusion of the Resolution Period, there are any amounts remaining in dispute, then such amounts remaining in dispute shall be submitted to KPMG, LLP, or such other Person as the Company and Purchaser reasonably agree (the Neutral Auditors). The Neutral Auditors shall act as an arbitrator to determine, based solely on the provisions of this Section 2.11 and the presentations by the Representative and the Surviving Corporation, and not by independent review, only those issues still in dispute. The Neutral Auditors determination for any disputed amount shall be within the range implied by the amount indicated for such amount in the Purchasers Closing Statement and the amount indicated for such amount in the Representatives written notice to Purchaser. The Neutral Auditors determination shall be made within 30 days of the dispute being submitted for their determination, shall be set forth in a written statement delivered to the Representative and the Surviving Corporation and shall be final, non-appealable and binding on the parties hereto, absent manifest error or fraud. A judgment of a court of competent jurisdiction may be entered upon the Neutral Auditors determination. The Neutral Auditors shall have exclusive jurisdiction over, and resort to the Neutral Auditors as provided in this Section 2.11(c) shall be the only recourse and remedy of the

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parties against one another with respect to, any disputes arising out of or relating to the adjustments pursuant to this Section 2.11. The fees, costs and expenses of the Neutral Auditors shall be paid by Purchaser, on the one hand, and the Representative Escrow Amount, on the other hand, in inverse proportion (based on value) as Purchaser and the Representative prevail on any disputed matters, as determined by the Neutral Auditors. The term Final Closing Statement shall mean the definitive Closing Statement agreed to (or deemed to be agreed to) by the Surviving Corporation and the Representative in accordance with Section 2.11(b) or resulting from the determinations made by the Neutral Auditors in accordance with this Section 2.11(c) (in addition to those items theretofore agreed to by the Representative and the Surviving Corporation).

(d) If the Final Closing Amount exceeds the Estimated Merger Consideration, then:

(i) The Representative (on behalf of the Stockholders and holders of Vested Options) shall be entitled to receive an amount equal to (A)(x) the Final Closing Amount minus (y) the Estimated Merger Consideration, plus interest thereon at the annual rate of 5% from the Closing Date to the date of payment, plus (B) the Representative Escrow Amount (the Representative Closing Payment).

(ii) Purchaser and the Representative shall cause the Escrow Agent to release from the Escrow Account to the Representative an amount equal to the Representative Closing Payment.

(e) If the Estimated Merger Consideration exceeds the Final Closing Amount, then:

(i) Purchaser shall be entitled to receive an amount equal to (x) the Estimated Merger Consideration minus (y) the Final Closing Amount, plus interest thereon at the annual rate of 5% from the Closing Date to the date of payment (the Purchaser Closing Payment); and the Representative shall be entitled to receive an amount equal to the difference between the Representative Escrow Amount and the Purchaser Closing Payment if the Purchaser Closing Payment is less than the Representative Escrow Amount (the Representative Remaining Amount).

(ii) Purchaser and the Representative shall cause the Escrow Agent to release from the Escrow Account

(A) to Purchaser an amount equal to the Purchaser Closing Payment and

(B) to the Representative an amount equal to the Representative Remaining Amount.

(iii) If the Purchaser Closing Payment exceeds the Representative Escrow Amount, then Purchaser shall be entitled to recover the amount of such excess (the Shortfall) from the Stockholders and the holders of Vested Options severally on a pro rata basis, it being understood that Purchaser may assert such right against any or all of the Stockholders and holders of Vested Options in its sole discretion; provided that if Purchaser elects to recover the relevant pro rata portion of the Shortfall from GS Capital Partners 2000,

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L.P., J.P. Morgan Partners (BHCA), L.P. or any of their respective affiliated investment funds that are Stockholders, then Purchaser must concurrently seek to recover the relevant pro rata share of the Shortfall from each of GS Capital Partners 2000, L.P., J.P. Morgan Partners (BHCA), L.P. and their respective affiliated investment funds that are Stockholders.

(f) If the Estimated Merger Consideration equals the Final Closing Amount, then Purchaser and the Representative shall cause the Escrow Agent to release from the Escrow Account the Representative Escrow Amount to the Representative.

(g) All payments made pursuant to this Section 2.11 shall be made by wire transfer of immediately available funds within two days of the determination of the Final Closing Statement to accounts previously designated in writing by Purchaser and the Representative.

(h) The Escrow Account exists solely to secure the obligations of the parties pursuant to this Section 2.11 and shall not be subject to any other provision of this Agreement.

Section 2.12 Stockholder Loans.

Notwithstanding anything in this Agreement to the contrary, all amounts paid to each Indebted Stockholder with respect to the shares of Company Stock or Vested Options held by such Indebted Stockholder immediately prior to the Closing shall be reduced by the aggregate amount of the Stockholder Loan owed to the Company or any of its Subsidiaries by such Indebted Stockholder, in accordance with the note or notes representing such Stockholder Loan.

Section 2.13 Appraisal Rights.

Holders of shares of Company Stock who have complied with all requirements for demanding and perfecting appraisal rights as set forth in Section 262 of the DGCL (Dissenting Stockholders) are entitled to their rights under such laws. Each share of Company Stock held by Dissenting Stockholders shall not be converted into or represent the right to receive the Per Share Merger Consideration. Dissenting Stockholders shall be entitled to receive payment of the appraised value of such shares held by them in accordance with the provisions of Section 262 of the DGCL. Each share of Company Stock held by holders who shall have failed to perfect or who effectively shall have withdrawn or lost their rights to appraisal of such shares under Section 262 shall thereupon be deemed to have been converted into and to have become exchangeable for, as of the Effective Time, the right to receive the Per Share Merger Consideration, without any interest thereon, upon surrender, in the manner provided in Section 2.9, of the certificate or certificates that formerly evidenced such shares. The Company shall give Purchaser prompt written notice of any assertions of appraisal rights or withdrawals of assertions of appraisal rights, and any other instrument in respect thereof received by the Company and the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the DGCL.

Section 2.14 Transfer Taxes.

Purchaser, the Company or the Surviving Corporation shall file all Tax Returns relating to, and assume liability for and pay, all New York State stock transfer tax imposed as a result of the Merger, including purchasing and affixing any stamps as required by law, and the liability therefor shall not be taken into account for purposes of calculating Net Working Capital. Except as provided in Section 2.9(d), Purchaser, the Company or the Surviving Corporation shall file all Tax Returns relating to, and assume liability

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for and pay, all other Transfer Taxes imposed as a result of the Merger, and 50% of the liability therefore shall be taken into account for purposes of calculating Net Working Capital. For the avoidance of doubt, the parties hereto agree that no amount of the liability for Transfer Taxes shall be included in Transaction Expenses.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the information included in the financial statements (including any notes to such statements) and as set forth in any statements of factual historical occurrences of the Company or any of its Subsidiaries (excluding, for the avoidance of doubt, risk factor and similarly precatory or forward looking statements; it being understood that such exclusion shall not be deemed a qualification of the matters expressly set out in the Company Disclosure Schedule or the exceptions in the definition of Company Material Adverse Effect), in each case disclosed in the periodic reports of the Company on Form 10-K or Form 10-Q, or any amendment thereof, filed with the SEC prior to the date hereof (but after January 1, 2005), the Company represents and warrants to Purchaser and Merger Sub as follows:

Section 3.1 Organization and Qualification.

The Company and each of its Subsidiaries is duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, has the requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is in good standing and duly qualified to do business in each jurisdiction in which the transaction of its business makes such qualification necessary, except where the failure to be so organized, existing, qualified and in good standing or to have such power or authority would not have a Company Material Adverse Effect. Except as set forth in Section 3.1 of the Company Disclosure Schedule, true, correct and complete copies of the Companys and each of its Subsidiarys certificate of incorporation and by-laws (or if such Subsidiary is not a corporation, its organizational documents) (collectively, the Companys Organizational Documents), each as amended to date and currently in full force and effect, have been made available to Purchaser.

Section 3.2 Capitalization.

(b) The authorized capital stock of the Company consists of 5,000,000 shares of Company Stock. As of the date of this Agreement,

(i) 3,375,611 shares of Company Stock are issued and outstanding and 23,196 shares of Company Stock are held in treasury and

(ii) 635,931 shares of Company Stock are reserved or required to be reserved for issuance pursuant to outstanding options. All outstanding shares of Company Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Section 3.2(a) of the Company Disclosure Schedule sets forth a list, as of the date of this Agreement, of the Stockholders and the number of shares of Company Stock held by each such Stockholder. Except as set forth in Schedule 3.2(a) of the Company Disclosure Schedule, there are no outstanding subscriptions, options, warrants, calls, rights, puts, convertible securities, exchangeable securities, commitments or any other agreements, whether written or oral, to which the Company is a party or by which the Company is bound that obligate the Company to

(i) issue, deliver or sell or cause to be issued, delivered or sold any additional shares of Company Stock or

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any other capital stock of the Company or any other securities convertible into, or exercisable or exchangeable for, or evidencing the right to subscribe for, any such shares of Company Stock or any other capital stock of the Company or

(ii) purchase, redeem or otherwise acquire any shares of Company Stock or any other capital stock of the Company. Except as set forth in Section 3.2(a) of the Company Disclosure Schedule, there are no stock appreciation, phantom stock or other similar rights with respect to the Company or any Subsidiary. Except as set forth in Section 3.2(a) of the Company Disclosure Schedule, to the knowledge of the Company, there are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Company Stock. No Subsidiary of the Company owns any shares of Company Stock. There are no dividends or other distributions with respect to the Company Stock that have been declared but remain unpaid.

(b) Except as set forth in Section 3.2(b) of the Company Disclosure Schedule, the Company does not have any Subsidiaries nor does it presently own, directly or indirectly, any capital stock or other proprietary interest, or rights or obligations to acquire the same, in any Person. Except as set forth in Section 3.2(b) of the Company Disclosure Schedule, the Company, either directly or indirectly, owns 100% of all of the issued and outstanding shares of capital stock or limited liability interests of each of its Subsidiaries, which in each case are duly authorized, validly issued, fully paid and nonassessable, and are not subject to preemptive rights, and have been issued in compliance with applicable securities laws. There are no options, warrants, calls, convertible securities, exchangeable securities, rights, puts, commitments or agreements of any character, written or oral, to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound obligating any Subsidiary to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any additional shares of capital stock (or other voting securities or equity equivalents) of any Subsidiary or obligating the Company or any Subsidiary to grant, extend or enter into any such option, warrant, call, convertible security, exchangeable security, right, put, commitment or agreement. Except as set forth in Section 3.2(b) of the Company Disclosure Schedule all such interests are owned by the Company or a wholly-owned Subsidiary of the Company and are held free and clear of all Liens other than Permitted Liens. The Company and each entity set forth in Section 3.2(b) of the Company Disclosure Schedule are the only entities through which the business of the Company is conducted.

Section 3.3 Authorization and Validity of Agreement.

The Board of Directors of the Company has declared the Merger advisable and fair to and in the best interest of the Company and the stockholders, unanimously approved and adopted this Agreement and the transactions contemplated hereby in accordance with the DGCL and recommended the approval and adoption of this Agreement by the Companys stockholders. The Company has the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby in accordance with the terms of this Agreement. The Company has duly authorized the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors rights generally or by general principles of equity. Concurrently with the execution of this Agreement, the holders of

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in excess of a majority of the Company Stock have executed written consents approving the Merger and the other transactions contemplated hereby, which action by written consent complies with the provisions of Section 228 of the DGCL, the Companys Organizational Documents and any other agreements between the Company and any holder of Company Stock relating to voting, consent or other approval rights. The offer to consummate the transactions contemplated by this Agreement is a Section 5 Offer as defined in that certain Stockholders Agreement, dated as of July 22, 2002, by and among the Company and certain stockholders of the Company (listed on Annex A thereto), and the notice of such Section 5 Offer referred to in Section 5(a) of such Stockholders Agreement and the notice and request referred to in Section 5(b) of such Stockholders Agreement will be delivered in accordance with the procedures set forth therein. No other action, vote or approval of the Company or the Stockholders is required to authorize the execution and delivery by the Company of this Agreement or the consummation by it of the Merger.

Section 3.4 Consents and Approvals.

Neither the execution and delivery of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will require on the part of the Company or any of its Subsidiaries any action, consent, approval, order, authorization or permit of, or filing with, or notification to, any Governmental Entity, except

(a) for any applicable filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act),

(b) as set forth in Section 3.4 of the Company Disclosure Schedule,

(c) as provided for in Section 2.3 or

(d) where the failure to obtain such consent, approval, authorization or permit, or to make such filing or notification, would not have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby.

Section 3.5 No Violations. Except as set forth in Section 3.5 of the Company Disclosure Schedule, neither the execution, delivery or performance of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby will

(a) conflict with or violate the Companys Organizational Documents,

(b) result in a violation or breach of, constitute a default (with or without notice or lapse of time, or both) under, give rise to any right of consent, approval, authorization, termination, recapture, cancellation or acceleration of, or result in the imposition of any Lien, other than a Permitted Lien, on any assets, capital stock or property of the Company or any of its Subsidiaries pursuant to any Contract or other obligation to which the Company or any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their assets or properties are bound, except for such violations, breaches and defaults (or rights of consent, approval, authorization, termination, cancellation or acceleration or Lien) as to which requisite waivers or consents have been obtained or which would not have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby or

(c) assuming the consents, approvals, authorizations or permits and filings or notifications referred to in Section 3.4 and this Section 3.5 are duly and timely obtained or made, violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its Subsidiaries or any of their respective assets and properties, except for such conflicts, violations, breaches or defaults which would not have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby.

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Section 3.6 No Undisclosed Liabilities.

Neither the Company nor any of its Subsidiaries has any liability, whether absolute, accrued, contingent or otherwise other than (w) liabilities to the extent disclosed or reflected on the audited consolidated balance sheet of the Company as of December 31, 2005, including the related notes and schedules thereto (the Latest Audited Balance Sheet), set forth in the Companys Form 10-K for the period ended December 31, 2005 filed with the SEC, (x) liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2005 and not inconsistent with the terms of this Agreement, (y) Transaction Expenses, and (z) other liabilities which, individually or in the aggregate, are not material in amount and would not have a Company Material Adverse Effect.

Section 3.7 SEC Documents; Financial Statements.

(a) The Company and each Subsidiary of the Company listed in Section 3.7 of the Company Disclosure Schedule have timely filed or, in the case of filings not due as of the date of this Agreement, will timely file with the SEC all SEC Documents, together with any amendments required to be made with respect thereto. No Subsidiary of the Company, other than the Subsidiaries listed in Section 3.7 of the Company Disclosure Schedule, is required to file any form, report, schedule, statement or other document with the SEC. As of their respective dates, the SEC Documents complied, or in the case of filings not yet due as of the date of this Agreement, will comply in all material respects with the accounting requirements and in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, and the rules and regulations of the SEC promulgated thereunder, in each case applicable to such SEC Documents, and none of the SEC Documents at the time they were or will be filed contained or will contain any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(b) The records, systems, controls, data and information of the Company and its Subsidiaries are recorded, stored, maintained and operated under means that are under the exclusive ownership and direct control of the Company or its Subsidiaries or accountants, except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a material adverse effect on the system of internal accounting controls described in the following sentence. The Company and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including that:

(i) transactions are executed only in accordance with managements authorization;

(ii) transactions are recorded as necessary to permit preparation of the financial statements of the Company and its Subsidiaries and to maintain accountability for the assets of the Company and its Subsidiaries;

(iii) access to such assets is permitted only in accordance with managements authorization; and

(iv) the reporting of such assets is compared with existing assets at regular intervals. Each of the Company and its Subsidiaries

(A) has designed disclosure controls and procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information relating to such entity and its Subsidiaries is made known to the management of such entity (or its general partner) by others within those entities as appropriate to allow timely decisions regarding required disclosure and to make the certifications required by the Exchange Act with respect to the SEC Documents, and

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(B) has disclosed, based on its most recent evaluation prior to the date of this Agreement, to its auditors and the audit committee of its board of directors

(1) any significant deficiencies in the design or operation of internal controls which could adversely affect in any material respect its ability to record, process, summarize and report financial data and have disclosed to its auditors any material weaknesses in internal controls and

(2) any fraud, whether or not material, that involves management or other employees who have a significant role in its internal controls.

(c) Since December 31, 2003, to the knowledge of the Company,

(i) none of the Company or any of its Subsidiaries or any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices and

(ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company, any Subsidiary of the Company, or any of their respective officers, directors, employees or agents to the board of directors of the Company or any of its Subsidiaries or any committee thereof or to the General Counsel or Chief Executive Officer of the Company or any of its Subsidiaries.

(d) Each of the balance sheets contained in or incorporated by reference into the SEC Documents (including the related notes and schedules thereto) fairly presents the financial position of the entity or entities to which it relates as of its date, and each of the statements of income, changes in stockholders equity and cash flows in the SEC Documents (including any related notes and schedules thereto) fairly presents the results of operations, changes in stockholders equity and changes in cash flows, as the case may be, of the entity or entities to which it relates for the periods to which it relates, in each case in accordance with GAAP consistently applied during the periods involved, except, in each case, as may be noted therein, subject to normal year-end audit adjustments in the case of unaudited statements.

Section 3.8 Compliance with Law. Except as set forth in Section 3.8 of the Company Disclosure Schedule, each of the Company and its Subsidiaries is in compliance with all Laws which apply to such entity, except for instances of noncompliance that would not have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby. Except as set forth in Section 3.8 of the Company Disclosure Schedule, none of the Company or any of its Subsidiaries has received any written communication during the past two years from a Governmental Entity that alleges that such Person is not in compliance in all material respects with any Law. This Section 3.8 does not relate to matters with respect to Employee Benefit Matters, which are the subject of Section 3.10, Taxes, which are the subject of Section 3.11, Environmental Matters, which are the subject of Section 3.16, or Labor and Employee Matters, which are the subject of Section 3.17. Each of the Company and its Subsidiaries owns, holds or possesses all material permits, licenses, franchises, privileges, immunities, orders, consents, approvals and other authorizations from Governmental

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Entities and other Persons that are necessary to entitle it to own or lease, operate and use its assets and to carry on and conduct its business (collectively, the Material Permits). Each Material Permit is in full force and effect and none of them is subject to any restriction or condition that would limit in any material respect the ownership or operation of the business of the Company or any of its Subsidiaries as presently owned or conducted.

Section 3.9 Litigation.

(a) Except as disclosed in Section 3.9 of the Company Disclosure Schedule, there are no Proceedings pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, except for Proceedings which would not have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby. The Company and its Subsidiaries are not subject to any outstanding and unsatisfied order, writ, judgment, injunction or decree or settlement or consent agreement by or with a Governmental Entity which would have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby.

(b) Except as set forth in Section 3.9 of the Company Disclosure Schedule, since December 31, 2004, neither the Company nor any of its Subsidiaries has received any written notice relating to, nor does the Company have any knowledge of any facts or circumstances which are reasonably expected to give rise to, any claim involving any service provided or any product designed, manufactured, serviced, produced, modified, distributed or sold by or on behalf of the Company or any of its Subsidiaries resulting from an alleged defect in design, manufacture, materials or workmanship, performance, or any alleged failure to warn, or from any alleged breach of implied warranties or representations, or any alleged noncompliance with any applicable laws, requirements, specifications, rules and regulations, other than immaterial notices or claims that have been settled or resolved by the Company or its Subsidiaries prior to the date of this Agreement or those that would not have a Company Material Adverse Effect.

Section 3.10 Employee Benefit Matters.

(a) Section 3.10(a) of the Company Disclosure Schedule contains a true and complete list of each U.S. Benefit Plan and each Employment Agreement.

(b) The Company has made available to Purchaser true and complete copies of the following documents, as they have been amended to the date of this Agreement, relating to each U.S. Benefit Plan:

(i) all plan documents;

(ii) the current summary plan description for each U.S. Benefit Plan;

(iii) the Form 5500 for each U.S. Benefit Plan for the three most recent plan years;

(iii) all insurance contracts related to any U.S. Benefit Plan;

(iv) the most recent determination letter from the IRS, if any, and any correspondence to or from the IRS regarding tax qualification of any U.S. Benefit Plan; and

(v) all financial records pertaining to each U.S. Benefit Plan.

(c) Except as set forth in Section 3.10(c) of the Company Disclosure Schedule, with respect to each U.S. Benefit Plan and Employment Agreement, as applicable, except as would not, individually or in the aggregate, have a Company Material Adverse Effect:

(i)the Company and its Subsidiaries have performed all obligations required to be performed by

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such entity thereunder and none of the Company or any of its Subsidiaries is in default under or in violation thereof;

(ii) each U.S. Benefit Plan and Employment Agreement has been established, maintained or performed, as the case may be, in compliance with all applicable Laws, statutes, orders, rules and regulations;

(iii) no prohibited transaction, within the meaning of Section 4975 of the Code or Section 406 of ERISA, has occurred with respect to any U.S. Benefit Plan;

(iv) there are no actions, proceedings, arbitrations, suits or claims pending, or to the knowledge of the Company threatened or anticipated (other than routine claims for benefits) with respect to any U.S. Benefit Plan or Employment Agreement; and

(v) no U.S. Benefit Plan is under audit or investigation by the IRS, the Department of Labor or the Pension Benefit Guarantee Corporation, and to the knowledge of the Company, no such audit or investigation is pending or threatened.

(d) Except as set forth in Section 3.10(d) of the Company Disclosure Schedule or as would not have a Company Material Adverse Effect, the present value of all accrued benefits (whether or not vested) under each U.S. Benefit Plan subject to Title IV of ERISA did not exceed, as of the most recent plan valuation date, and will not exceed, as of the Closing Date, the then current fair market value of the assets of such U.S. Benefit Plan (for purposes of determining the present value of accrued benefits, the actuarial assumptions and methods used under each U.S. Benefit Plan for the most recent plan valuation date shall be used). Except as set forth in Section 3.10(d) of the Company Disclosure Schedule or as would not have a Company Material Adverse Effect,

(i) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred, and the consummation of the transactions contemplated by this agreement will not result in the occurrence of any such reportable event;

(ii) all premiums to the Pension Benefit Guaranty Corporation have been timely paid in full;

(iii) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or is expected to be incurred by the Company or any of its subsidiaries; and

(iv) the PBGC has not instituted proceedings to terminate any such U.S. Benefit Plan and, to the Companys knowledge, no condition exists that presents a risk that such proceedings will be instituted or which would constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such U.S. Benefit Plan.

(e) At no time in the past six years has the Company or any of its Subsidiaries contributed to or been required to contribute to, or incurred any withdrawal liability (within the meaning of Section 4201 of ERISA) to any multi-employer plan within the meaning of Sections 3(37) or 4001(a)(3) of ERISA.

(f) Except as set forth in Section 3.10(f) of the Company Disclosure Schedule, none of the Company or any of its Subsidiaries maintains or contributes to any U.S. Benefit Plan which provides, or has any liability to provide, life insurance, medical or other employee welfare benefits to any Employee upon his retirement or termination of employment, except as may be required by Section 4980B of the Code. The Company or its Subsidiaries may amend or terminate any such plan at any time without incurring any liability thereunder other than in respect of claims incurred prior to such amendment or termination.

(g) Except as set forth in Section 3.10(g) of the Company Disclosure Schedule, the execution of, and performance of the transactions contemplated in, this Agreement,

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whether alone or in conjunction with any other event, will not result in any material payment (whether of severance pay or otherwise), acceleration, forgiveness of Indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee. No payment or benefit which will or may be made by the Company or any of its Subsidiaries with respect to any Employee will be characterized as an excess parachute payment, within the meaning of Section 280G(b)(1) of the Code.

(h) Section 3.10(h) of the Company Disclosure Schedule contains a true and complete list of each Foreign Plan. Each Foreign Plan complies with its terms and all applicable Laws in all material respects. All contributions, insurance premiums, social security payments, taxes, expenses and levies required to have been made to all Foreign Plans have been made and all liabilities required have been accrued in accordance with generally accepted accounting principles and tax laws applicable to the Company and the Subsidiaries. There are no claims, actions, suits, proceedings, investigations or governmental audits pending or, to the knowledge of the Company, threatened with respect to the Foreign Plans (other than routine claims for benefits).

(i) There does not now exist, nor do any circumstances exist that could result in, any material Controlled Group Liability that could be a liability of the Company or any of its Subsidiaries following the Closing. Without limiting the generality of the foregoing, neither the Company nor any of its Subsidiaries, nor any of their respective ERISA Affiliates, has engaged in any transaction described in Section 4069 or Section 4204 or 4212 of ERISA. Section 3.10(i) of the Company Disclosure Schedule contains a true, correct, and complete list of any Benefit Plan subject to Title IV of ERISA that is sponsored or contributed to by any ERISA Affiliate of the Company or any of its Subsidiaries.

Section 3.11 Taxes.

Except as set forth in Section 3.11 of the Company Disclosure Schedule,

(a) the Company and each of its Subsidiaries has filed all material Tax Returns required to be filed by or with respect to it prior to the Closing Date;

(b) such Tax Returns were true, correct and complete in all material respects;

(c) the Company and each of its Subsidiaries has paid all Taxes due with respect to such Tax Returns and has paid all other material Taxes with respect to which Tax Returns are not required to be filed;

(d) none of the Company or any of its Subsidiaries has waived or has been requested to waive any statute of limitations affecting any material Tax liability or agreed to any extension of time during which a material Tax assessment or deficiency assessment may be made, which waiver, extension or request is still outstanding;

(e) there are no ongoing or pending material Tax audits of the Company or any of its Subsidiaries and no such Person has received written notice of any material Tax audit;

(f) the Company and its Subsidiaries have complied in all material respects with all Laws relating to the payment and withholding of Taxes, including with respect to payments made to employees or other third parties;

(g) none of the Company or any of its Subsidiaries is or has been a party to any Tax sharing agreement that includes any party other than the Company and its Subsidiaries;

(h) the Company and its Subsidiaries have paid any material deficiencies or assessments asserted by any Tax authority;

(i) the Company and each of its Subsidiaries have never been a member of an affiliated, combined, consolidated or unitary Tax group (other than a group of which the Company or one of its Subsidiaries was the common parent);

(j) the Company is not, nor has it ever been, a United States real property holding

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corporation within the meaning of Section 897(c)(2) of the Code;

(k) none of the Company or any of its Subsidiaries will be required (as a result of any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign Law), any closing agreement as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law), any installment sale or any disposition reported as an open transaction or intercompany transaction (under Treasury Regulation Section 1.1502-13 or otherwise) made on or prior to the Closing Date, or any prepaid amount received on or prior to the Closing Date) to include any material item of income or exclude any material item of deduction from any Tax period ending on or after the Closing Date;

(l) no closing agreements, private letter rulings or similar agreements have been entered into or issued by any Taxing authority with respect to the Company or any of its Subsidiaries;

(m) the Company has made available to Purchaser copies of all U.S. federal income Tax Returns filed by the Company and its Subsidiaries in the past three years;

(n) within the past two years, neither the Company nor any of its Subsidiaries has been a distributing corporation or a controlled corporation in a distribution intended to qualify under Section 355(a) of the Code;

(o) neither the Company nor any of its Subsidiaries has participated in any listed transaction within the meaning of Treasury Regulations Section 1.6011-4;

(p) no claim has been made in writing by any Tax authority that the Company or any Subsidiary of the Company is or may be subject to taxation by a jurisdiction in which it does not file Tax Returns;

(q) all persons classified by the Company or any of its Subsidiaries as independent contractors are correctly classified for purposes of taxation and tax reporting; and

(r) neither the Company nor any Subsidiary of the Company has any material present or contingent liabilities for Taxes (calculated without regard to any deduction arising from the transactions contemplated hereby), other than Taxes that either

(i) have been reflected as a liability on the most recent balance sheet included in the SEC Documents or

(ii) with respect to taxable periods or portions of taxable periods following the date of the most recent balance sheet included in the SEC Documents, are in amounts consistent with prior years.

Section 3.12 Intellectual Property.

(a) Section 3.12(a) of the Company Disclosure Schedule sets forth a list of all Company Intellectual Property owned by the Company or any of its Subsidiaries which has been registered or issued, or for which applications to register or obtain issuance have been filed and are pending anywhere in the world, an indication of the jurisdictions in which such filings have been made and the status thereof. To the extent indicated in Section 3.12(a) of the Company Disclosure Schedule, such Company Intellectual Property has been duly registered in, filed in or issued by the United States Copyright Office, the United States Patent and Trademark Office or any similar national or local foreign intellectual property authority. To the knowledge of the Company, since July 31, 2002, no application or registration for any Company Intellectual Property that is owned by the Company which is material to the business of the Company as presently conducted has been finally rejected on the merits of such filing without right to further appeal.

(b) Except as set forth in Section 3.12(b) of the Company Disclosure Schedule:

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(i) each of the Company and its Subsidiaries possesses all right, title and interest in and to the Company Intellectual Property which it owns, free and clear of any Lien or license other than Permitted Liens, and all registered patents, trademarks, service marks and copyrights listed in Section 3.12(a) of the Company Disclosure Schedule are valid and subsisting, in full force and effect, and have not been canceled, expired or abandoned;

(ii) except as would not, individually or in the aggregate, have a Company Material Adverse Effect, to the knowledge of the Company, all employees, agents, consultants or contractors who have contributed to the creation or development of any Intellectual Property on behalf of the Company or any of its Subsidiaries, as applicable, either:

(i) created such materials in the scope of his or her employment as an employee of the Company or any of its Subsidiaries, as applicable, at the time of creation of such materials;

(ii) is a party to a work-for-hire agreement under which the Company or any of its Subsidiaries, as applicable, is deemed to be the original owner/author of all rights, title and interest therein; or

(iii) has executed an assignment in favor of the Company or any of its Subsidiaries, as applicable, of all right, title and interest in such material;

(iii) except as would not, individually or in the aggregate, have a Company Material Adverse Effect, the Company Intellectual Property and the business of the Company and its Subsidiaries as conducted on the date of this Agreement do not infringe upon any Intellectual Property rights of third parties; there is no pending or threatened opposition, interference or cancellation proceeding before any court, patent office or registration authority in any jurisdiction against the Company Intellectual Property; and since December 31, 2003, none of the Company or any of its Subsidiaries has received any written notice (or, to the knowledge of the Company, any oral or other notice) from any other Person challenging its use or ownership of any Company Intellectual Property or the validity or enforceability thereof;

(iv) to the knowledge of the Company, no third party has infringed upon, misappropriated, diluted or violated any rights of the Company or any of its Subsidiaries with respect to any Company Intellectual Property, except as would not have a Company Material Adverse Effect;

(v) the Company and its Subsidiaries have taken all commercially reasonable action to maintain and preserve material Company Intellectual Property, including without limitation entering into valid and effective confidentiality/non-disclosure agreements with all third parties to whom it discloses any confidential information or trade secrets which are Company Intellectual Property, and making all filings and all payments of all maintenance and similar fees for any Company Intellectual Property listed in Section 3.12(a) of the Company Disclosure Schedule;

(vi) the consummation of the transactions contemplated by this Agreement will not materially impair or materially alter any of the Companys and its Subsidiaries rights in any Company Intellectual Property; and

(vii) except as would not, individually or in the aggregate, have a Company Material Adverse Effect, since July 31, 2002, there have been no settlements,

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forbearances to sue, consents, judgments or orders that do or may

(A) restrict the rights of the Company or any of its Subsidiaries to use any Company Intellectual Property,

(B) restrict the conduct of the business of the Company or any of its Subsidiaries in order to accommodate a third partys Intellectual Property or

(C) permit third parties to use any Company Intellectual Property.

(c) Section 3.12(c) of the Company Disclosure Schedule contains a list and description of all material computer software programs and software systems, and all proprietary rights thereto, including all databases, compilations, tool sets, compilers, higher level or proprietary languages, related documentation and materials, whether in source code, object code or human readable form (the Material Software), owned by, licensed to or used by the Company or any Subsidiary in the conduct of its business, in each case specifying whether such Software is owned or licensed; provided that Section 3.12(c) of the Company Disclosure Schedule does not list mass market Software licensed to the Company or any Subsidiary that is commercially available and subject to shrink-wrap or click-through license agreements.

Section 3.13 Material Contracts.

(c) Section 3.13(a) of the Company Disclosure Schedule sets forth a true, correct and complete list of all the Material Contracts of the Company and its Subsidiaries that are outstanding or in effect on the date of this Agreement. As used herein, Material Contracts means all of the following:

(i) any Contract restricting the ability of the Company or any of its Subsidiaries to enter into or engage in any line of business or compete with any Person (other than pursuant to any radius restriction contained in any lease, reciprocal easement or development, construction, operating or similar agreement);

(ii) any lease or similar Contract under which:

(A) the Company or any of its Subsidiaries is lessee of, or holds or uses, any machinery, equipment, vehicle or other tangible personal property owned by any third party involving payment by the Company or any of its Subsidiaries of more than $1,000,000 on an annual basis (unless terminable without payment or penalty upon no more than 60 days notice); or

(B) the Company or any of its Subsidiaries is a lessor or sublessor of, or makes available for use by any third party, any tangible personal property owned or leased by the Company or any of it Subsidiaries in any such case that has a liability or receivable, as the case may be, in excess of $500,000 per annum;

(iii) any Contract under which the Company or any of its Subsidiaries has incurred Indebtedness or directly or indirectly guaranteed Indebtedness, liabilities or obligations of any other Person (other than

(A) endorsements for the purpose of collection in the ordinary course of business,

(B) Indebtedness owed by the Company or one of its Subsidiaries to the Company or one of its Subsidiaries and

(C) where the Company or any of its Subsidiaries has guaranteed Indebtedness of a Subsidiary of the Company to a third party) that, individually, is in excess of $1,000,000;

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(iv) any Contract granting a Lien (other than a Permitted Lien) upon any of the material assets of the Company or any of its Subsidiaries;

(v) any Contract (excluding a purchase order) involving annual payments by the Company or any of its Subsidiaries of more than $2,500,000;

(vi) any Contract (excluding a purchase order) involving the obligation of the Company or any of its Subsidiaries to deliver products or services for annual payments of more than $5,000,000;

(vii) any Contract relating to the establishment of a joint venture or partnership;

(viii) any Contract used to effectuate a material acquisition, divestiture, merger or similar transaction that has not been consummated or that has been consummated since July 31, 2002, but contains representations, covenants, indemnities or other obligations that are still in effect;

(ix) any Contract for the purchase or sale of material real property entered into since July 31, 2002;

(x) any material Contract that grants exclusivity rights to a sales representative, distributor, broker or similar person;

(xi) any Contract relating to capital expenditures and involving future payments in excess of $1,500,000;

(xii) any material license agreement pursuant to which the Company or any of its Subsidiaries licenses in or out Company Intellectual Property; and

(xiii) any other Contract to which the Company or any of its Subsidiaries is a party, not otherwise covered by clauses (i) through (xii) above, the loss of which would result in a Company Material Adverse Effect.

(b) Except as disclosed in Section 3.13(b) of the Company Disclosure Schedule, none of the Company or any of its Subsidiaries is (with or without the lapse of time or the giving of notice, or both) in breach or default of or under any Material Contract and, to the knowledge of the Company, no other party to any such Material Contract is (with or without the lapse of time or the giving of notice, or both) in breach or default thereunder, except for breaches and defaults that would not result in a Company Material Adverse Effect. None of the Company or any of its Subsidiaries has, except as disclosed in Section 3.13(b) of the Company Disclosure Schedule, received any written notice (or, to the knowledge of the Company, any oral or other notice) of the intention of any Person to terminate, nor has there been any termination of, any Material Contract, except for such notices and terminations as would not have a Company Material Adverse Effect. Complete and correct copies of all Material Contracts have been made available to Purchaser.

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Section 3.14 Brokers and Finders; Transaction Expenses. In connection with this Agreement and the transactions contemplated hereby, no broker, finder or investment bank has acted directly or indirectly for the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has incurred, nor will any of them incur, directly or indirectly, any obligation to pay any brokerage, finders or other fee or commission to any Person, other than to the Persons disclosed in Section 3.14 of the Company Disclosure Schedule. Such fees or commissions shall have either been paid prior to Closing or shall be taken into account in the definition of Transaction Expenses.

Section 3.15 Absence of Certain Changes. Except as disclosed in Section 3.15 of the Company Disclosure Schedule or as otherwise contemplated by this Agreement, since December 31, 2005: the business of the Company and each of its Subsidiaries has been conducted only in the ordinary course consistent with past practice; there have not been any events, changes or developments that have had or would have a Company Material Adverse Effect or prevent or materially delay the consummation of the transactions contemplated hereby.

Section 3.16 Environmental Matters. Except as set forth in the Environmental Reports or in Section 3.16 of the Company Disclosure Schedule, and except for those matters that, individually or in the aggregate would not have a Company Material Adverse Effect, to the knowledge of the Company:

(a) the Company and its Subsidiaries have for the past three years been, and are, in compliance with all applicable Environmental Laws;

(b) the Company and its Subsidiaries have obtained, and are in compliance with, all permits, licenses, authorizations, registrations, and other governmental consents required by applicable Environmental Laws (Environmental Permits);

(c) there has been no release at any time of any Hazardous Substances at, on, or about, under or within any of the Owned Real Property or the Leased Real Property or any real property formerly owned, leased, operated or controlled by the Company or any of its Subsidiaries or any of their predecessors, in each of the foregoing cases which would reasonably be expected to give rise to any liabilities of the Company or its Subsidiaries pursuant to Environmental Laws;

(d) the Company and its Subsidiaries have, within the past five years, received no written claims or notices (including, without limitation, notices that the Company or any of its Subsidiaries is a potentially responsible person or otherwise liable in connection with any waste disposal or other site containing Hazardous Substances), and there are no civil, criminal or administrative actions, suits, hearings, investigations, inquiries or proceedings pending or threatened against the Company or any of its Subsidiaries, that are based on or allege liabilities pursuant to Environmental Laws;

(e) none of the Company or any of its Subsidiaries, or any of their predecessors has used any waste disposal site, or otherwise disposed of, transported, or arranged

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for the disposal of, any Hazardous Substances to any place or location

(A) in violation of any Environmental Laws or

(B) listed on the National Priorities List or any comparable list of state sites, where the association with any such location would reasonably be expected to give rise to any liabilities of the Company or its Subsidiaries pursuant to Environmental Laws;

(f) the representations and warranties contained in this Section 3.16 are the sole and exclusive representations and warranties of the Company with respect to any Environmental Matters, including without limitation any matters arising under Environmental Laws; and

(g) all material environmental audits, assessments, investigations, studies or other analyses in the Companys possession or under its reasonable control and which relate to the Owned Real Property or the Leased Real Property have been made available to Purchaser.

Section 3.17 Labor and Employee Matters.

(a) Except as would not have a Company Material Adverse Effect, the Company and its Subsidiaries are in compliance with all applicable federal, state and local Laws, rules and regulations (domestic and foreign) respecting employment, including, but not limited to, the Worker Adjustment and Retraining Notification Act.

(b) No work stoppage or labor strike against the Company or any of its Subsidiaries by Employees is pending or to the knowledge of the Company threatened, except for work stoppages and labor strikes that would not, individually or in the aggregate, have a Company Material Adverse Effect. Except as set forth in Section 3.17(b) of the Company Disclosure Schedule, none of the Company or any of its Subsidiaries

(i) is involved in or to the knowledge of the Company threatened with any labor dispute, grievance, or litigation relating to labor matters involving any Employees except for such disputes, grievances or litigation that would not, individually or in the aggregate, have a Company Material Adverse Effect;

(ii)has engaged in any unfair labor practices within the meaning of the National Labor Relations Act or the Railway Labor Act; or

(iii) is presently, nor has been since the later of December 24, 1990 and the date of its formation a party to, or bound by, any collective bargaining agreement or union contract with respect to Employees and no such agreement or contract is currently being negotiated by the Company or any of its Subsidiaries. Except as set forth in Section 3.17(b) of the Company Disclosure Schedule, no Employees are currently represented by any labor union for purposes of collective bargaining and no activities the purpose of which is to achieve such representation of all or some of such Employees are to the knowledge of the Company threatened or ongoing.

Section 3.18 Related Party Transactions. Except as disclosed in Section 3.18 of the Company Disclosure Schedule, no current or former stockholder, director, officer or employee of the Company or any of its Subsidiaries, or any current or former Affiliate of any of the foregoing Persons or of the Company or any of its Subsidiaries is presently, or since the latest of

(i) December 31, 2003,

(ii) the organization of such Subsidiary of the Company or

(iii) the acquisition of such Subsidiary by the Company or one of its Subsidiaries, has been, directly or

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indirectly through such Persons affiliation with any other Person, a party to any agreement (whether oral or written) or transaction with the Company or any of its Subsidiaries, other than, in the case of such Person, ordinary course employment and benefit agreements entered into in connection with any such Persons duties as a director, officer or employee of the Company or any of its Subsidiaries.

Section 3.19 Real Property; Title to Assets.

(d) Section 3.19(a) of the Company Disclosure Schedule contains a complete and correct list of all of the Leased Real Property. With respect to each Leased Real Property, the Company or a Subsidiary of the Company owns a leasehold estate in each Leased Real Property, free and clear of all Liens except Permitted Liens. Except as set forth in Section 3.19(a) of the Company Disclosure Schedule,

(i) no default by the Company or any of its Subsidiaries, or to the knowledge of the Company, the applicable landlord or subtenant exists under any lease or sublease with respect to the Leased Real Property and

(ii) each lease and sublease with respect to the Leased Real Property is legal, valid, binding and enforceable and in full force and effect other than, in the case of clauses (i) and (ii) above as would not, individually or in the aggregate, have a Company Material Adverse Effect.

(b) Section 3.19(b) of the Company Disclosure Schedule sets forth a complete and correct list of all Owned Real Property. With respect to each Owned Real Property,

(i) either the Company or a Subsidiary of the Company owns title in fee simple to such Owned Real Property, free and clear of all Liens except for Permitted Liens,

(ii) there are no outstanding options or rights of first refusal in favor of any other party to purchase such Owned Real Property or any portion thereof or interest therein and

(iii) there are no leases, subleases, licenses, options, rights, concessions or other agreements affecting any portion of such Owned Real Property, except as may be set forth in Section 3.19(a) of the Company Disclosure Schedule, other than, in the case of clauses (ii) or (iii) above as would not, individually or in the aggregate, have a Company Material Adverse Effect.

(c) Except as set forth in Section 3.19(c) of the Company Disclosure Schedule, the Company or one of its Subsidiaries has good title to all of the material assets (other than Owned Real Property) reflected on the Latest Balance Sheet as being owned and all of the material assets thereafter acquired by the Company or any Subsidiary (except to the extent that such assets have been disposed of after the date of the Latest Balance Sheet in the ordinary course of business consistent with past practice), free and clear of all Liens other than Permitted Liens, and all other material assets used in their respective businesses are leased or licensed by the Company or one of its Subsidiaries.

Section 3.20 Insurance. Section 3.20 of the Company Disclosure Schedule sets forth a correct and complete list of each material insurance policy that is currently in effect which is presently owned or held by the Company or any of its Subsidiaries, insuring the products, physical properties, assets, business, operations, employees, or officers and directors of the Company or any of its Subsidiaries. All premiums due on such policies have been paid and no notice of cancellation or termination or intent to cancel, in each case which has not been rescinded, has been received in writing by the Company or any of its Subsidiaries with respect to any such insurance policy, in each case, except where such failure, cancellation or termination

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would not have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries has been refused any insurance with respect to any of its assets or operations, nor has its coverage been limited, by any insurance carrier to which it has applied for any such insurance or with which it has c