Exhibit 10.1

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

among

SFBC INTERNATIONAL, INC.

SFBC SUB 2004, INC.

and

PHARMANET, INC.

dated as of November 5, 2004

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TABLE OF CONTENTS

Page

ARTICLE I

THE MERGER

2

1.1.

The Merger

2

1.2.

Closing

2

1.3.

Effective Time

2

1.4.

Effects of the Merger

2

1.5.

Certificate of Incorporation

3

1.6.

Bylaws

3

1.7.

Officers and Directors of Surviving Corporation

3

1.8.

Effect on Capital Stock

3

1.9.

Further Assurances

6

ARTICLE II

EXCHANGE AND PAYMENT

6

2.1.

Exchange Agent; Payment Funds

6

2.2.

Exchange Procedures

7

2.3.

No Further Ownership Rights in Company Stock

7

2.4.

Termination of Exchange Fund

8

2.5.

No Liability

8

2.6.

Lost Certificates, Option Agreements or SAR Agreements

8

2.7.

Stock Transfer Books

8

2.8.

Withholding

8

2.9.

Post-Closing Adjustments

9

2.10.

Post-Closing Adjustment to Final Per Share Holdback Amount

9

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF

THE COMPANY

9

3.1.

Organization, Standing and Power

9

3.2.

Subsidiaries

9

3.3.

Capital Structure

10

3.4.

Authority; No Violations

10

3.5.

Compliance; Permits

11

3.6.

Financial Statements

12

3.7.

Board Approval

12

3.8.

Vote Required

12

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3.9.

Absence of Certain Changes or Events; Absence of

Undisclosed Liabilities

12

3.10.

Real Property

13

3.11.

Intellectual Property

13

3.12.

Certain Contracts

13

3.13.

Taxes

14

3.14.

Benefit Plans

15

3.15.

Labor Matters

16

3.16.

Litigation

17

3.17.

Environmental Matters

17

3.18.

Financial Advisors

17

3.19.

Data Room Materials

18

3.20.

Disclaimer of Other Representations and Warranties

18

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT

AND MERGER SUB

18

4.1.

Organization, Standing and Power

18

4.2.

Merger Sub

18

4.3.

Authority; No Violations

18

4.4.

Legal Proceedings

19

4.5.

Investigation

19

4.6.

Disclaimer Regarding Projections

20

4.7.

Board Approvals

20

4.8.

Vote Required

20

4.9.

Financial Advisors

20

4.10.

Disclaimer of Other Representations and Warranties

20

ARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS

21

5.1.

Covenants of the Company

21

5.2.

Control of Other Party’s Business

22

ARTICLE VI

ADDITIONAL AGREEMENTS

22

6.1.

Access; Information and Records; Confidentiality

22

6.2.

HSR Act; Reasonable Best Efforts

23

6.3.

Non-Solicitation

24

6.4.

Employee Benefits Matters

24

ii

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6.5.

Fees and Expenses

25

6.6.

Directors’ and Officers’ Indemnification and Insurance

25

6.7.

Public Announcements

27

6.8.

Parent Board of Directors

27

6.9.

Company Cooperation

27

6.10.

Parent Financing

28

6.11.

FIRPTA Certificate

28

ARTICLE VII

CONDITIONS PRECEDENT

28

7.1.

Conditions to Each Party’s Obligation to Effect the Merger

28

7.2.

Additional Conditions to Obligations of Parent and Merger Sub

29

7.3.

Additional Conditions to Obligations of the Company

30

ARTICLE VIII

TERMINATION AND AMENDMENT

30

8.1.

Termination

30

8.2.

Effect of Termination

31

8.3.

Extension; Waiver

32

ARTICLE IX

INDEMNIFICATION; ESCROW ARRANGEMENTS

32

9.1.

Survival of Representations, Warranties and Agreements

32

9.2.

Indemnification by Parent

33

9.3.

Indemnification by Participating Stockholders

33

9.4.

Exclusive Remedy

36

9.5.

Escrow Arrangements; Distribution upon Termination of

Escrow Period

36

9.6.

Stockholder Representative; Approval of Participating Stockholders.

39

ARTICLE X

GENERAL PROVISIONS

40

10.1.

Notices

40

10.2.

Interpretation

42

10.3.

Counterparts

42

10.4.

Entire Agreement

42

10.5.

No Third-Party Beneficiaries

42

10.6.

Assignment

42

10.7.

Amendment and Modification; No Waiver

42

10.8.

Enforcement; Jurisdiction

43

10.9.

Waiver of Jury Trial

43

iii

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10.10.

Company Disclosure Schedule

43

10.11.

Governing Law

44

10.12.

Severability

44

10.13.

Mutual Drafting

44

10.14.

Definitions

44

iv

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Defined Terms

Page

Acquisition Proposal

44

Affiliate

44

Affiliated Group

15

Aggregate Merger Consideration

44

Agreement

1

Appraisal Shares

6

Audited Financial Statements

12

Blue Sky Laws

11

Board of Directors

44

Books and Records

44

Business Day

44

Bylaws

3

Certificate

3

Certificate of Incorporation

3

Certificate of Merger

2

Closing

2

Closing Date

2

Closing Date Balance Sheet

45

Closing Date Financial Statements

45

Code

45

Common Stock

1

Company

1

Company Board Approval

12

Company Disclosure Schedule

9

Company Employees

48

Company Material Contracts

13

Company Stock

1

Competitive Transaction

44

Confidentiality Agreement

23

Covered Persons

26

Credit Facility

45

Current Assets

45

Current Liabilities

45

Damages

33

DGCL

1

dollars or $

45

Effective Time

2

Environmental Laws

45

Escrow Agent

33

Escrow Period

36

Exchange Act

11

Exchange Agent

6

v

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Exchange Fund

7

Executive Committee Member

45

Expenses

25

Final Balance Sheet

9

Final Holdback Amount

45

Final Per Share Holdback Amount

45

Financing Entity

27

Financing Facility

27

Foreign Benefit Plans

45

Fully Diluted Shares

46

GAAP

12

General Escrow Fund

33

Governmental Authority

11

Guaranteed Per Share Amount

46

Holdback Percentage

46

HSR Act

11

Indemnification Period

32

Indemnified Directors and/or Officers

26

Indemnified Party

34

Indemnifying Party

34

Initial Aggregate Merger Consideration

46

Initial Aggregate Per Share Merger Consideration

46

Initial Holdback Amount

46

Initial Per Share Holdback Amount

.46

Intellectual Property

47

In-the-Money Option

.4

In-the-Money Option Tranche

5

ISO

4

Knowledge of Parent

47

Knowledge of the Company

47

Leased Real Property

13

Licenses and Permits

47

Liens

.10

Material Adverse Effect

47

Materials of Environmental Concern

47

Merger

.1

Merger Sub

1

Most Recent Balance Sheet

..15

Necessary Financing

28

Option Agreements

5

Option Notice

4

Out-of-the-Money Option

5

Out-of-the-Money Option Amount

5

Outstanding Options

4

Outstanding SARs

5

Parent

1

Parent Officer's Certificate

34

Parent Option

4

vi

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Participating Stockholder

2

Pension Plan

16

Permitted Liens

47

Person

48

Preferred Stock

1

Proceeding

.48

Release

48

Required Company Vote

12

Restricted Stock Grant

48

SAR Agreements

5

SAR Notice

5

Section 262

6

Shareholders' Agreements

10

Stockholder Representative

39

Stockholder Representative Agreement

40

Subsidiary

48

Surviving Corporation

2

Tax Return

14

Taxes and Tax

14

Termination Date

31

the other party

48

Third Party Claim

35

U.S. Benefit Plans

48

Violation

11

Virtual Data Room

18

Working Capital Amount

46

Exhibits

Exhibit A     Option Conversion Formulae

Exhibit B     Form of Opinion of Counsel to Company

Exhibit C     Form of Opinion of Counsel to Company for PharmaNet Ltd.

Exhibit D     Form of Opinion of Counsel to Company for PharmaNet AG

Exhibit E     Form of Opinion of Counsel to Parent

vii

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AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of November 5, 2004
(this “Agreement”), among SFBC International, Inc. a Delaware corporation
(“Parent”), SFBC Sub 2004, Inc., a Delaware corporation and a direct
wholly-owned subsidiary of Parent (“Merger Sub”), and PharmaNet, Inc., a
Delaware corporation (the “Company”).

W I T N E S S E T H:

WHEREAS, Parent, Merger Sub and Company wish to amend and restate the Agreement
and Plan of Merger, dated as of November 2, 2004, among the parties;

WHEREAS, the Board of Directors of the Company has determined that it is fair to
and advisable and in the best interests of the Company and its stockholders, and
consistent with and in furtherance of its business strategies and goals, for
Parent to acquire all of the outstanding shares of the Company through the
merger of Merger Sub with and into the Company (the “Merger”) in accordance with
the applicable provisions of the Delaware General Corporation Law (the “DGCL”)
and upon the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of Parent and Merger Sub have each approved and
declared advisable the transactions contemplated by this Agreement;

WHEREAS, in furtherance of such combination, the Boards of Directors of Parent,
Merger Sub and the Company have each adopted this Agreement providing for the
Merger and the Board of Directors of the Company has resolved to recommend that
the holders of the Company common stock and preferred stock vote to adopt this
Agreement providing for the Merger upon the terms and subject to the conditions
contained herein;

WHEREAS, pursuant to the Merger, (i) each outstanding share of common stock, par
value $.01 per share, of the Company (the “Common Stock”), (ii) each outstanding
share of Class A Preferred Stock, par value $.01 per share, of the Company (the
“Preferred Stock”), (iii) each share of Common Stock represented by each
outstanding Option Agreement (as defined in Section 1.8(e)) that entitles the
holder thereof to receive a Guaranteed Per Share Amount in accordance with
Section 1.8(d) and (iv) each hypothetical share of Common Stock represented by
each outstanding SAR Agreement (as defined in Section 1.8(g) (all such shares
referred to in clauses (i) through (iv), collectively referred to as the
“Company Stock”), issued and outstanding or the subject of an outstanding Option
Agreement or SAR Agreement immediately prior to the Effective Time (as defined
in Section 1.3), other than any Company Stock owned or held directly or
indirectly by Parent, Merger Sub or their respective Subsidiaries or the Company
or its Subsidiaries and other than Appraisal Shares (as defined in Section
1.8(i)), will be converted into the right to receive the Aggregate Merger
Consideration, with each such person who accepts any portion of the Aggregate
Merger Consideration referred to herein as a “Participating Stockholder;” and

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WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby and also to prescribe various conditions to the
transactions contemplated hereby.

WHEREAS, the Company and each of the holders of Company Stock understand and
acknowledge that the Merger may result in such holders incurring Taxes under
federal and, where applicable, state, local and other Governmental Authority
laws.

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I
THE MERGER

1.1.

The Merger.  Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, Merger Sub shall be merged with and
into the Company at the Effective Time.  Following the Merger, the separate
corporate existence of Merger Sub shall cease and the Company shall continue as
the surviving corporation (the “Surviving Corporation”).

1.2.

Closing.  The closing of the Merger (the “Closing”) will take place at 10:00
a.m. (New York City time) on the second Business Day after the satisfaction or
waiver of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date) set forth in Article VII (the “Closing Date”),
unless another time or date is agreed to in writing by the parties hereto.  The
Closing shall be held at the offices of Dechert LLP, Princeton Pike Corporate
Center, 997 Lenox Drive, Building 3, Suite 210, Lawrenceville, NJ 08648, unless
another place is agreed to in writing by the parties hereto.

1.3.

Effective Time.  As part of the Closing, the parties hereto shall (a) file a
certificate of merger (the “Certificate of Merger”) with the Secretary of State
of Delaware in such form as is required by and executed in accordance with the
relevant provisions of the DGCL and (b) make all other filings or recordings
required under the DGCL.  The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Delaware Secretary of State or at
such subsequent time as Parent and the Company shall agree and be specified in
the Certificate of Merger (the date and time the Merger becomes effective being
the “Effective Time”).

1.4.

Effects of the Merger.  At and after the Effective Time, the Merger will have
the effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall be vested
in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and duties of the
Surviving Corporation.

2

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1.5.

Certificate of Incorporation.  The Restated Certificate of Incorporation of the
Company as in effect at the Effective Time (the “Certificate of Incorporation”)
shall be the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein and under applicable law.

1.6.

Bylaws.  The bylaws of the Company as in effect at the Effective Time (the
“Bylaws”) shall be the Bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein and under applicable law.

1.7.

Officers and Directors of Surviving Corporation.  The officers of the Company as
of the Effective Time shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or otherwise ceasing to be an
officer or until their respective successors are duly elected and qualified.
 The directors of Merger Sub as of the Effective Time shall be the directors of
the Surviving Corporation until the earlier of their resignation or removal or
otherwise ceasing to be a director or until their respective successors are duly
elected and qualified.

1.8.

Effect on Capital Stock.  At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the holders
of any of the following securities:

(a)

Conversion of Common Stock and Preferred Stock.  Except as otherwise provided
herein, each share of Common Stock and Preferred Stock issued and outstanding
immediately prior to the Effective Time (other than shares canceled pursuant to
Section 1.8(c) and any Appraisal Shares, but including all shares of Common
Stock represented by the Restricted Stock Grant (whether or not vested)) shall
be converted into the right to receive, without interest, upon surrender of a
Certificate formerly representing such share in the manner provided in Section
2.2, less any required withholding taxes, (i) the Guaranteed Per Share Amount
and (ii) a conditional amount equal to the Initial Per Share Holdback Amount.  

(b)

Cancellation of Common Stock and Preferred Stock.  As of the Effective Time, all
shares of Common Stock and Preferred Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be canceled as provided in
Section 1.8(c) and any Appraisal Shares, but including all shares of Common
Stock represented by the Restricted Stock Grant (whether or not vested)) shall
no longer be outstanding and shall automatically be canceled and shall cease to
exist, and each holder of a certificate which immediately prior to the Effective
Time represented any such shares of Common Stock and/or Preferred Stock (a
“Certificate”) shall, to the extent such Certificate represents such shares,
cease to have any rights with respect thereto, except the right to receive the
Aggregate Merger Consideration upon surrender of such Certificate in accordance
with Article II.

(c)

Cancellation of Treasury Stock and Parent-Owned Stock.  Each share of Common
Stock and Preferred Stock held in the treasury of the Company and each share of
Common Stock and Preferred Stock owned or held, directly or indirectly, by the
Company or its Subsidiaries or Parent, Merger Sub or their respective
Subsidiaries, in each case immediately prior to the Effective Time, shall be
canceled and retired without any conversion thereof and no payment of cash or
any other distribution shall be made with respect thereto.

3

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(d)

Conversion of Stock Options.  Not later than thirty (30) days prior to the
Effective Time, the Company will send a notice (the “Option Notice”) to all
holders of options to acquire Common Stock that are outstanding (whether or not
vested) (the “Outstanding Options”) specifying that (x) such Outstanding Options
will not be assumed in connection with the Merger, (y) the vesting of all such
Outstanding Options has, in effect, been accelerated permitting full exercise
thereof, and (z) any Outstanding Options that are not exercised will terminate
and be cancelled no later than at the Effective Time and represent only the
right to receive the consideration, if any, specified in this Section 1.8(d) in
accordance with the terms of this Agreement.  

(i)

Each Outstanding Option that has a per share exercise price less than the
Initial Aggregate Per Share Merger Consideration (an “In-the-Money Option”) will
by virtue of the Merger, and without any action on the part of the holder
thereof, be terminated and cancelled no later than as of the Effective Time and
converted into, and represent only, the right to receive, less any required
withholding taxes, (i) the Guaranteed Per Share Amount and (ii) a conditional
amount equal to the Initial Per Share Holdback Amount.

(ii)

Notwithstanding anything to the contrary set forth in Section 1.8(d)(i), each
In-the-Money Option held by an Executive Committee Member will by virtue of the
Merger, and without any action on the part of the holder thereof, be terminated
and cancelled no later than as of the Effective Time and converted into, and
represent only, the right to receive, less any required withholding taxes,
either (as determined by such Executive Committee Member no later than ten (10)
days prior to the Effective Time): (A) the consideration set forth in Section
1.8(d)(i); or (B) a fully-vested option to purchase that number of Parent common
stock (a “Parent Option”) as determined in accordance with the “Parent Option
Quantity Conversion Formula” set forth on Exhibit A hereto, with such Parent
Option having an exercise price as determined in accordance with the “Parent
Option Exercise Price Conversion Formula” set forth on Exhibit A hereto.
Additionally, the term of any such Parent Option shall be a duration that is
equal to the remaining term of the exchanged In-the-Money Option immediately
prior to its termination.  A portion of any such Parent Options, as determined
in accordance with the “Parent Option Escrowed Formula” set forth on Exhibit A
hereto, shall be placed in the General Escrow Fund and become part of the
Initial Holdback Amount.  Parent shall provide all Executive Committee Members,
no later than 30 days prior to the Effective Time, all information with respect
to Parent that a reasonable investor would require to make an informed
investment decision with respect to the common stock of Parent. Failure of an
Executive Committee Member to notify the Company of his or her determination of
how to treat the termination of any In-the-Money Option held by such Executive
Committee Member no later than ten (10) days prior to the Effective Time, will
result in any such In-the-Money Option representing only the right to receive
the consideration set forth in Section 1.8(d)(i).  Furthermore, to the extent
that an Executive Committee Member elects to receive consideration pursuant to
Section 1.8(d)(ii)(B) for his or her In-the-Money Options that were incentive
stock options under Code Section 422(b) (each, an “ISO”) immediately prior to
the termination of such In-the-Money Options, such Executive Committee Member
shall receive Parent ISOs. In the event that an Executive Committee Member
elects to receive Parent Options in accordance with Section 1.8(d)(ii)(B),

4

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and such Executive Committee Member holds In-the-Money Options with varying
exercise prices (with each grouping of In-the-Money Options having the same
exercise price referred to herein as an “In-the-Money Option Tranche”), the
aggregate number of In-the-Money Options exchanged for Parent Options shall
consist of In-the-Money Options taken from each In-the-Money Option Tranche on a
pro rata basis.

(iii)

Each Outstanding Option that has a per share exercise price greater than the
Initial Aggregate Per Share Merger Consideration (an “Out-of-the-Money Option”)
will by virtue of the Merger, and without any action on the part of the holder
thereof, be terminated and cancelled no later than as of the Effective Time and
converted into, and represent only, the right to receive, less any required
withholding taxes, $0.92 for each share of Common Stock represented by each such
Out-of-the-Money Option (with the aggregate amount paid with respect to all
Out-of-the-Money Options referred to herein as the “Out-of-the-Money Option
Amount”).

(e)

Cancellation or Exchange of Option Agreements.  No later than as of the
Effective Time, all option agreements evidencing one or more Outstanding Options
entitled to be converted into the right to receive any portion of the Aggregate
Merger Consideration in accordance with the provision of Section 1.8(d) (the
“Option Agreements”) shall automatically be canceled and shall cease to exist,
and each holder of an Option Agreement shall cease to have any rights with
respect thereto, except the right to receive a portion of the Aggregate Merger
Consideration upon surrender of such Option Agreement in accordance with Article
II.  

(f)

Conversion of SARs.  Not later than thirty (30) days prior to the Effective
Time, the Company will send a notice (the “SAR Notice”) to all holders of
outstanding stock appreciation rights granted by the Company (the “Outstanding
SARs”) specifying that (x) such Outstanding SARs will not be assumed in
connection with the Merger, (y) the vesting of all such Outstanding SARs has, in
effect, been accelerated permitting full exercise thereof, (z) any Outstanding
SARs that are not exercised will terminate and be cancelled no later than at the
Effective Time, and represent only the right to receive the consideration, if
any, specified in this Section 1.8(f) in accordance with the terms of this
Agreement.  Each Outstanding SAR that has a per share strike price less than the
Initial Aggregate Per Share Merger Consideration will by virtue of the Merger,
and without any action on the part of the holder thereof, be terminated and
cancelled no later than as of the Effective Time and converted into, and
represent only, the right to receive, less any required withholding taxes, (i)
the Guaranteed Per Share Amount and (ii) a conditional amount equal to the
Initial Per Share Holdback Amount.

(g)

Cancellation of SAR Agreements.  As of the Effective Time, all stock
appreciation right grant agreements evidencing one or more Outstanding SARs (the
“SAR Agreements”) shall automatically be canceled and shall cease to exist, and
each holder of a SAR Agreement shall cease to have any rights with respect
thereto, except the right to receive a portion of the Aggregate Merger
Consideration upon surrender of such SAR Agreement in accordance with Article
II.

(h)

Capital Stock of Merger Sub.  Each share of capital stock, par value $.01 per
share, of Merger Sub issued and outstanding immediately prior to the Effective
Time shall,

5

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by virtue of the Merger, be converted into and exchanged for one fully paid and
non-assessable share of the same class and series of capital stock, par value
$.01 per share, of the Surviving Corporation.

(i)

Appraisal Rights.  Notwithstanding anything in this Agreement to the contrary,
shares of Common Stock and Preferred Stock issued and outstanding immediately
prior to the Effective Time that are held by any holder who has not voted in
favor of the Merger or consented thereto in writing and who is entitled to
demand and properly demands and perfects appraisal of such shares (the
“Appraisal Shares”) pursuant to, and who complies in all respects with, the
provisions of Section 262 of the DGCL (“Section 262”) shall not be converted
into the right to receive a portion of the Aggregate Merger Consideration as
provided in this Section 1.8, but instead such holder shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
Section 262.  At the Effective Time, all Appraisal Shares shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and
each holder of Appraisal Shares shall cease to have any rights with respect
thereto, except the right to receive the fair value of such shares in accordance
with the provisions of Section 262.  Notwithstanding the foregoing, if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262 or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by Section
262, then the right of such holder to be paid the fair value of such holder’s
Appraisal Shares under Section 262 shall cease and each such Appraisal Share
shall be deemed to have been converted at the Effective Time into, and shall
have become, the right to receive a portion of the Aggregate Merger
Consideration as provided in this Section 1.8.

1.9.

Further Assurances.  At and after the Effective Time, the officers and directors
of the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of the Company or Merger Sub, any deeds, bills of sale,
assignments or assurances and to take and do, in the name and on behalf of the
Company or Merger Sub, any other actions and things to vest, perfect or confirm
of record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.

ARTICLE II
EXCHANGE AND PAYMENT

2.1.

Exchange Agent; Payment Funds.  (a)  Prior to the Effective Time, Parent shall
appoint a bank or trust company as may be approved by the Company (which
approval shall not be unreasonably withheld) as exchange and paying agent (the
“Exchange Agent”) for the exchange and payment of the Aggregate Merger
Consideration.  The fees and expenses of the Exchange Agent will be paid by the
Parent and the Parent will indemnify the Paying Agent against actions taken by
the Paying Agent pursuant to the terms of this Agreement other than for acts or
omissions which constitute willful misconduct or gross negligence.

(b)

At or prior to the Effective Time, Parent shall deposit with the Exchange Agent
(or the Escrow Agent, as the case may be), in trust for the benefit of holders
of shares of Company Stock, (i) an amount in cash sufficient to make all
payments pursuant to

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Section 2.2.  Any cash and/or Parent Options deposited with the Exchange Agent
in trust for the benefit of holders of shares of Company Stock shall hereinafter
be referred to as the “Exchange Fund.”

2.2.

Exchange Procedures.  Promptly after the Effective Time, Parent shall cause the
Exchange Agent to mail to each record holder of a Certificate immediately prior
to the Effective Time and each holder of an Option Agreement and SAR Agreement
(a) a letter of transmittal which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates, Option Agreements and SAR
Agreements shall pass, only upon delivery of the Certificates, Option Agreements
or SAR Agreements to the Exchange Agent, and which letter shall be in customary
form and have such other provisions as Parent and the Company may reasonably
agree upon and (b) instructions for effecting the surrender of such
Certificates, Option Agreements or SAR Agreements in exchange for a portion of
the Aggregate Merger Consideration. Upon surrender of a Certificate, Option
Agreement or SAR Agreement to the Exchange Agent together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, the holder of such Certificate, Option Agreement or SAR Agreement shall
be entitled to receive in exchange �herefore the Guaranteed Per Share Amount (as
provided for in Section 1.8 of this Agreement), for each share of Company Stock
formerly represented by such Certificate, Option Agreement or SAR Agreement and
such Certificate, Option Agreement or SAR Agreement shall then be canceled.  In
addition, such holder shall be entitled to receive in exchange thereof, after
the expiration of the Escrow Period, the Final Per Share Holdback Amount for
each share of Company Stock formerly represented by such Certificate, Option
Agreement or SAR Agreement (as provided for in Section 1.8 and Article IX). No
interest will be paid or will accrue for the benefit of holders of the
Certificates, Option Agreements or SAR Agreements on the Aggregate Merger
Consideration payable upon the surrender of the Certificates, Option Agreements
or SAR Agreements.  In the event of a transfer of ownership of Company Stock
which is not registered in the transfer records of the Company, payment of the
Aggregate Merger Consideration may be made with respect to such Company Stock to
such a transferee if the Certificate formerly representing such shares of
Company Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid or is not applicable.  No
interest shall be paid or accrued, upon surrender of a Certificate, Option
Agreement or SAR Agreement for the benefit of the holder of the Certificate,
Option Agreement or SAR Agreement on any Aggregate Merger Consideration.

2.3.

No Further Ownership Rights in Company Stock.  The Aggregate Merger
Consideration paid upon conversion of shares of Common Stock and Preferred
Stock, Outstanding Options and Outstanding SARs in accordance with the terms of
Article I and this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to such securities. If any Certificates,
Option Agreements or SAR Agreements shall not have been surrendered prior to
twelve (12) months after the Effective Time (or immediately prior to such
earlier date on which any Aggregate Merger Consideration in respect to such
Certificate, Option Agreement or SAR Agreement would otherwise escheat to or
become the property or any Governmental Authority), any such cash shall, to the
extent permitted by applicable law, become property of the Parent, free and
clear of all claims or interest of any person previously entitled thereto. If,
after the Effective Time, subject to the terms and conditions of this Agreement,

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Certificates, Option Agreements or SAR Agreements formerly representing shares
of Company Stock are presented to the Surviving Corporation, they shall be
cancelled and exchanged for Aggregate Merger Consideration in accordance with
this Article II.

2.4.

Termination of Exchange Fund.  Any portion of the Exchange Fund constituting the
Aggregate Merger Consideration that remains undistributed to the holders of
Certificates, Option Agreements or SAR Agreements for two (2) years after the
Effective Time shall be delivered to the Surviving Corporation or otherwise on
the instruction of the Surviving Corporation, and any holders of the
Certificates, Option Agreements or SAR Agreements who have not theretofore
complied with this Article II shall thereafter look only to the Surviving
Corporation and Parent for the Aggregate Merger Consideration with respect to
the shares of Company Stock formerly represented thereby to which such holders
are entitled pursuant to Section 1.8 and Section 2.2.

2.5.

No Liability.  None of Parent, Merger Sub, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of
any Aggregate Merger Consideration from the Exchange Fund properly delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.

2.6.

Lost Certificates, Option Agreements or SAR Agreements.  If any Certificate,
 Option Agreement, or SAR Agreement shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate, Option Agreement or SAR Agreement to be lost, stolen or destroyed
and, if required by the Surviving Corporation, the posting by such Person of a
bond in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, Option Agreement or SAR Agreement, the Exchange Agent will deliver
in exchange for such lost, stolen or destroyed Certificate Option Agreement or
SAR Agreement the Aggregate Merger Consideration with respect to the shares of
Company Stock formerly represented thereby.

2.7.

Stock Transfer Books.  At the Effective Time, the stock transfer books of the
Company shall be closed and there shall be no further registration of transfers
of shares of Company Stock thereafter on the records of the Company.  From and
after the Effective Time, the holders of Certificates, Option Agreements or SAR
Agreements shall cease to have any rights with respect to such shares of Company
Stock formerly represented thereby, except as otherwise provided herein or by
law. On or after the Effective Time, any Certificates, Option Agreements or SAR
Agreements presented to the Exchange Agent or Parent for any reason shall be
exchanged for a portion of the Aggregate Merger Consideration with respect to
the shares of Company Stock formerly represented thereby.

2.8.

Withholding.  The Exchange Agent shall be entitled to deduct and withhold from
the Aggregate Merger Consideration otherwise payable pursuant to this Agreement
to any Participating Stockholder, such amounts as the Exchange Agent is required
to deduct and withhold with respect to the making of such payment under the
Code, the rules and regulations promulgated thereunder, or any provision of
state, local or foreign tax law.  To the extent that

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amounts are so withheld by the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been received by the
Participating Stockholder in respect of which such deduction or withholding was
made by the Exchange Agent.

2.9.

Post-Closing Adjustments.  As promptly as possible following the Effective Time,
but in any event no later than sixty (60) days after the Closing Date,
PricewaterhouseCoopers LLP (Philadelphia, Pennsylvania office) shall audit the
Closing Date Balance Sheet (in accordance with the same accounting methodologies
employed in the audit conducted on the Company’s financial statements for year
end December 31, 2003) with the balance sheet resulting from such audit referred
to herein as the “Final Balance Sheet.” The Final Balance Sheet shall be
conclusive and binding upon the Stockholder Representative, each of the
Participating Stockholders, the Surviving Corporation and the Parent. The
Initial Aggregate Merger Consideration shall be increased, or the Initial
Holdback Amount shall be decreased, as the case may be, on a dollar-for-dollar
basis, to the extent that the sum of the Working Capital Amount set forth on the
Final Balance Sheet is different from the sum of the Working Capital Amount set
forth on the Closing Date Balance Sheet.  Any increased amount in the Aggregate
Merger Consideration shall be delivered by the Parent to the Exchange Agent on
behalf of the Participating Stockholders within ten (10) Business Days of the
date of receipt by Parent of the Final Balance Sheet by wire transfer of
immediately available funds to an account designated by the Exchange Agent.  Any
amount owed to the Parent from the Initial Holdback Amount as a result of this
Section 2.9 shall be delivered to the Parent by the Escrow Agent within ten (10)
Business Days of the date of receipt by the Stockholder Representative of the
Final Balance Sheet in accordance with the provisions of Article IX.

2.10.

Post-Closing Adjustment to Final Per Share Holdback Amount.  The Initial Per
Share Holdback Amount may be reduced from time to time in accordance with the
provisions of Section 2.9 and Article IX. Any reduction to the Initial Per Share
Holdback Consideration pursuant to Section 2.9 and/or Article IX shall be made
by the Exchange Agent paying Parent the amount to which the holders of the
Company Stock are no longer entitled.  The Final Per Share Holdback Amount shall
be paid upon the expiration of the Indemnification Period as provided in Section
9.1.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the Disclosure Schedule delivered by the Company to
Parent concurrently with the execution of this Agreement (the “Company
Disclosure Schedule”), the Company (except where otherwise indicated) represents
and warrants to Parent as of the date hereof as follows:

3.1.

Organization, Standing and Power.  The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, has all requisite power and authority to own, lease and operate its
properties and to carry on the business of the Company as now being conducted
and is duly qualified and in good standing to do business in each jurisdiction
set forth in Section 3.1 of the Company Disclosure Schedule.  

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The copies of the Certificate of Incorporation and Bylaws, which were previously
made available to Parent, are true, complete and correct copies of such
documents as in effect on the date of this Agreement.

3.2.

Subsidiaries.  Section 3.2(a) of the Company Disclosure Schedule sets forth each
of the Company’s Subsidiaries (as defined in Section 10.14) and each such
Company Subsidiary is a corporation duly incorporated or otherwise organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted and each domestic Company Subsidiary is duly qualified and in good
standing to do business in each foreign jurisdiction set forth in Section 3.2(b)
of the Company Disclosure Schedule.

3.3.

Capital Structure.

(a)

As of the date hereof, the authorized capital stock of the Company consists of
(A) 20,000,000 shares of Common Stock, of which 13,782,261 shares are
outstanding (including shares in treasury) and (B) 6,000,000 shares of Series A
Convertible Preferred Stock, of which 4,635,000 shares are outstanding
(including shares in treasury). All issued and outstanding shares of the capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, and, except as may be provided in the shareholders’ agreements
set forth in Section 3.3(a)(i) of the Company Disclosure Schedule (the
“Shareholders’ Agreements”), no class of capital stock is entitled to preemptive
rights. Set forth in Section 3.3(a)(ii) of the Company Disclosure Schedule are
all options, warrants, calls, commitments, agreements or other rights to acquire
capital stock of the Company or any of its Subsidiaries as of the date of this
Agreement.  As of the date of this Agreement, there are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
Subsidiaries.

(b)

Except as set forth in Section 3.3(b) of the Company Disclosure Schedule and
Liens (defined below) granted in connection with the Credit Facility, all of the
outstanding shares of capital stock of each of the Company’s material
Subsidiaries are beneficially owned by the Company, directly or indirectly, and
all such shares have been validly issued and are fully paid and nonassessable
and are owned by either the Company or one or more of its Subsidiaries, free and
clear of all liens, charges, mortgages, pledges, security interests or other
encumbrances (collectively, “Liens”).

(c)

As of the date of this Agreement, no bonds, debentures, notes or other
indebtedness of the Company having the right to vote on any matters on which
stockholders may vote are issued or outstanding.

3.4.

Authority; No Violations.

(a)

The Company has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, subject in the
case of the consummation of the Merger to the adoption of this Agreement by the
Required Company Vote (as defined in Section 3.8). The execution and delivery of
this Agreement and the

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consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject in the
case of the consummation of the Merger to the adoption of this Agreement by the
Required Company Vote.  This Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding agreement of the Company
enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting creditors rights generally,
by general equity principles.

(b)

Except as set forth in Section 3.4(b) of the Company Disclosure Schedule and
except as would not have a Material Adverse Effect, the execution, delivery and
performance by the Company of this Agreement do not, and the consummation by the
Company of the Merger and the other transactions contemplated hereby will not,
result in any violation of, or constitute a default (with or without notice or
lapse of time, or both) under, conflict with or give rise to the creation of a
Lien on any assets (any such conflict, violation, default or creation, a
“Violation”) pursuant to: (i) any provision of the Certificate of Incorporation
or Bylaws or the comparable governing documents of any of the Company’s
Subsidiaries or (ii) subject to obtaining or making the consents, approvals,
orders, permits, authorizations, registrations, declarations, notices and
filings referred to in Section 3.4(c), any loan or credit agreement, note,
mortgage, bond, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries or their respective properties or assets.

(c)

Except as set forth in Section 3.4I of the Company Disclosure Schedule and
except as would not have a Material Adverse Effect, no consent, approval, order,
permit or authorization of, or registration, declaration, notice or filing with,
any federal, state, municipal or other governmental body, department,
commission, board, bureau, agency, court or instrumentally thereof, domestic or
foreign (a “Governmental Authority”), is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the consummation by the Company of the
Merger and the other transactions contemplated hereby, except for those required
under or in relation to (i) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the “HSR Act”), (ii) applicable foreign antitrust laws, (iii)
state securities or “blue sky” laws (the “Blue Sky Laws”), (iv) the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the “Exchange Act”), (v) the DGCL with respect to the filing of the
Certificate of Merger and (vi) the Securities Act of 1933.

3.5.

Compliance; Permits.  Except as set forth in Section 3.5 of the Company
Disclosure Schedule and except as would not have a Material Adverse Effect:

(a)

the Company and each of its Subsidiaries owns or possess all Licenses and
Permits;

(b)

no loss of any Licenses and Permits is pending in any Proceeding or, to the
Knowledge of the Company, has been threatened in writing by a Governmental
Authority, except for normal expirations in accordance with the terms thereof or
applicable law or regulation; and

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(c)

the Company and each of its Subsidiaries has complied in all material respects
with (i) all terms and conditions of all material Licenses and Permits and (ii)
all laws and regulations of all Governmental Authorities applicable to the
business of the Company and each of its Subsidiaries, and, to the Knowledge of
the Company, it has not received any written notice of any pending Proceeding
alleging a failure to comply with either (i) or (ii) of this Section 3.5I.

3.6.

Financial Statements.  The Company has made available to the Parent (a) audited
consolidated financial statements for each of 2000, 2001, 2002 and 2003 (each
such set of consolidated audited financial statements, the “Audited Financial
Statements”), and (b) a consolidated unaudited quarterly financial statement
dated September 30, 2004.  Each of the financial statements made available to
the Parent by the Company (including the related notes) presents fairly, in all
material respects, the consolidated financial position and consolidated results
of operations and cash flows of the Company and its consolidated Subsidiaries as
of the respective dates or for the respective periods set forth therein, all in
conformity with United States generally accepted accounting principles (“GAAP”)
consistently applied during the periods involved, except as otherwise noted
therein, and subject, in the case of the unaudited interim financial statements,
to the absence of footnotes and to normal year-end adjustments that have not
been and are not expected to be material in amount.  

3.7.

Board Approval.  The Board of Directors of the Company, by resolutions duly
adopted at a meeting duly called and held (the “Company Board Approval”), has
approved this Agreement and (a) determined that this Agreement and the Merger
are advisable and fair to and in the best interests of the Company and the
holders of Common Stock and Preferred Stock, (b) approved the transactions
contemplated by this Agreement, including the Merger, and (c) recommended that
the holders of the Common Stock and Preferred Stock adopt this Agreement and the
Merger.  No other corporate proceedings on the part of the Company are necessary
to authorize the Merger other than as described in Section 3.8.

3.8.

Vote Required.  The affirmative vote of (a) the holders of a majority of the
total number of outstanding shares of Common Stock and Preferred Stock, voting
together as a single class, and (b) the holders of a majority of the total
number of outstanding shares of Preferred Stock, voting as a separate class, to
adopt this Agreement (the “Required Company Vote”) are the only votes of the
holders of any class or series of Company capital stock necessary to adopt this
Agreement and approve the transactions contemplated hereby.

3.9.

Absence of Certain Changes or Events; Absence of Undisclosed Liabilities.

(a)

Except as set forth in Section 3.9(a) of the Company Disclosure Schedule, as
contemplated hereby or as permitted by Section 5.1, since September 30, 2004,
the business of the Company and its Subsidiaries has been conducted in the
ordinary course in all material respects and there has been no Material Adverse
Effect.

(b)

Except as set forth in Section 3.9(b) of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries has any material Liabilities of
a nature required by GAAP to be reflected in a consolidated corporate balance
sheet, except (i) Liabilities that are accrued or reserved against in the
consolidated financial statements of the Company (or the notes

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thereto), (ii) Liabilities which have arisen since September 30, 2004 that were
incurred in the ordinary course of business and which would not result in a
Material Adverse Effect on the Company or its Subsidiaries, and (iii)
Liabilities otherwise disclosed (or within any materiality threshold contained
in any other representation) in this Agreement or the Company Disclosure
Schedule.

(c)

Except as set forth in Section 3.9I of the Company Disclosure Schedule, to the
Company’s Knowledge, neither the Company nor any of its Subsidiaries has been
given written or oral notice that any client intends to terminate any Company
Material Contract or reduce the size, scope or monetary amount of any effective
work order agreement under any Company Material Contract.

(d)

None of the employees whose names are set forth in Section 3.9(d) of the Company
Disclosure Schedule, has given written or oral notice to the Company that such
person intends to terminate his or her employment with the Company following the
Closing.

3.10.

Real Property.  Section 3.10(a) of the Company Disclosure Schedule sets forth
all the real property leased by the Company and its Subsidiaries (the “Leased
Real Property”).  Except as set forth in Section 3.10 of the Company Disclosure
Schedule and except as would not have a Material Adverse Effect on the Company,
the Company has a valid leasehold interest in all Leased Real Property.  Section
3.10(b) of the Company Disclosure Schedule sets forth those lease agreements
pertaining to the Leased Real Property that require the Company to notify or
obtain the approval of the lessor or that may be terminated by the lessor as a
result of the Merger.

3.11.

Intellectual Property.

(a)

Section 3.11(a) of the Company Disclosure Schedule sets forth all of the
material patents, patent applications, copyrights and registrations and
applications for registration of trademarks and service marks that are owned by
the Company and its Subsidiaries and are utilized in the business of the Company
and/or its Subsidiaries as currently conducted.

(b)

Except as set forth in Section 3.11(b) of the Company Disclosure Schedule and
except as would not have a Material Adverse Effect, (i) the Company and/or its
Subsidiaries own the Intellectual Property set forth on Section 3.11(a) of the
Company Disclosure Schedule, free and clear of all Liens except Permitted Liens,
(ii) there are no pending Proceedings challenging the validity, or the
ownership, of the patents and registrations set forth on Section 3.11(a) of the
Company Disclosure Schedule, (iii) to the Knowledge of the Company, the patents
and registrations set forth on Section 3.11(a) of the Company Disclosure
Schedule are in force and none are now being infringed by others; and (iv) to
the Knowledge of the Company, the operation of the business of the Company and
its Subsidiaries as currently conducted does not infringe any Intellectual
Property owned by third parties.

3.12.

Certain Contracts.  All written agreements to which the Company or any of its
Subsidiaries is a party having a dollar value of $1,000,000 or more (“Company
Material Contracts”) are valid and in full force and effect except to the extent
they have previously expired in accordance with their terms or if the failure to
be in full force and effect would not have a Material Adverse Effect on the
Company. Neither the Company nor any of its

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Subsidiaries has violated any provision of, or committed or failed to perform
any act which, with or without notice, lapse of time or both, would constitute a
default under the provisions of, any Company Material Contract, except in each
case for those violations and defaults which would not result in a Material
Adverse Effect on the Company. Section 3.12 of the Company Disclosure Schedule
sets forth a true and correct written backlog of all Material Contracts with
clients of the Company and certain other revenue-producing contracts with
clients of the Company as of October 22, 2004.

3.13.

Taxes.  

(a)

Except as disclosed in Section 3.13(a) of the Company Disclosure Schedule, (i)
the Company and each of its Subsidiaries, and any consolidated, combined,
unitary or aggregate group for tax purposes of which the Company or any of its
Subsidiaries is or has been a member has filed all material Tax Returns (as
defined below) required to be filed by it in the manner provided by law (taking
into account all applicable extensions), (ii) all material Tax Returns were
true, correct and complete in all respects, (iii) all Taxes (as defined below)
shown thereon to be due and payable have been paid in full or have been
adequately provided for on the reserves on the financial statements, and (iv) no
other Taxes are payable by the Company and its Subsidiaries with respect to the
periods (or portions thereof) ending on or before December 31, 2003, in excess
of amounts set forth on the Company’s 2003 Audited Financial Statements except
for matters which, in each case, would not reasonably be expected to result in a
Material Adverse Effect on the Company.  For purposes of this Agreement, “Taxes”
and “Tax” means any federal, state, local and foreign income, payroll,
withholding, excise, sales, use, personal property, use and occupancy, business
and occupation, mercantile, real estate, gross receipts, license, employment,
severance, stamp, windfall profits, social security (or similar unemployment),
disability, transfer, registration, value added, alternative, or add-on minimum,
estimated, capital stock, or franchise tax, or any other tax, custom, duty,
environmental (including taxes under Section 59A of the Code), governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or penalty or additional amount imposed by any Governmental Authority.
 “Tax Return” means any return, report or similar statement required to be filed
with respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return, return
filed pursuant to an extension or declaration of estimated Tax.

(b)

Except as set forth in Section 3.13(b) of the Company Disclosure Schedule, (i)
to the Company’s Knowledge, no Tax Return of the Company or its Subsidiaries are
under audit or examination by any Governmental Authority, (ii) neither the
Company nor its Subsidiaries has received from any Governmental Authority any
written (A) notice indicating an intent to open an audit or other review, (B)
request for information related to Tax matters, or (C) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
Governmental Authority against Company or any of its Subsidiaries and (iii) no
claim has ever been made by a Governmental Authority in a jurisdiction where
Company or its Subsidiaries do not file Tax Returns that it is or may be subject
to taxation by that jurisdiction.

(c)

With regard to the Company and its Subsidiaries, there is no agreement or other
document extending, waiving or having the effect of extending or waiving, the
period of assessment or collection of any Taxes and no power of attorney with
respect to any Taxes has been executed or filed with any Governmental Authority.

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(d)

To the Company’s Knowledge, no liens for Taxes exist with respect to any assets
or properties of the Company or its Subsidiaries, except for liens for Taxes not
yet due.

(e)

Neither the Company nor its Subsidiaries are liable for Taxes of any other
person (other than Taxes of the Company and its Subsidiaries) or is a party to
or is bound by any Tax sharing agreement, Tax indemnity obligation or similar
agreement, arrangement or practice with respect to Taxes (including any advance
pricing agreement, closing agreement or other agreement relating to Taxes with
any Governmental Authority).  Other than the current consolidated group, neither
the Company nor its Subsidiaries (i) have been a member of an Affiliated Group
filing a consolidated Federal income Tax Return or (ii) has any liability for
the Taxes of any other person or entity under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.

(f)

As used in this Agreement, “Affiliated Group” means any affiliated group within
the meaning of Section 1504(a) of the Code or any similar group defined under a
similar provision of state, local or foreign law.

(g)

The unpaid Taxes of the Company and its Subsidiaries (i) did not, as of and for
the nine (9) months ended September 30, 2004, exceed the reserve for Tax
liability (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the face of the
balance sheet dated September 30, 2004 (the “Most Recent Balance Sheet”) (rather
than any notes thereto) and (ii) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Company and its Subsidiaries in filing their Tax Returns.  Since
the date of the Most Recent Balance Sheet, neither the Company nor any of its
Subsidiaries has incurred any liability for Taxes arising from extraordinary
gains or losses, as the term is used in GAAP, outside of the ordinary course of
business consistent with past custom and practice.

(h)

The Company and its Subsidiaries have withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party.

3.14.

Benefit Plans.

(a)

Section 3.14(a) of the Company Disclosure Schedule sets forth a list of all U.S.
Benefit Plans.

(b)

As applicable with respect to each U.S. Benefit Plan, the Company has made
available to the Parent, copies of (i) each current U.S. Benefit Plan document,
including any amendments, (ii) all trust documents and custodial agreements
relating thereto, (iii) the current summary plan description and each summary of
material modifications thereto, (iv) the most recently filed annual report (Form
5500 and all schedules thereto) and (v) the most recent IRS determination
letter.

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(c)

Except as otherwise disclosed on Section 3.14I of the Company Disclosure
Schedule:

(i)

each U.S. Benefit Plan has been maintained, operated and administered in
compliance in all material respects with its terms and with the applicable
provisions of ERISA and the Code except where failure to so comply would not
result in a Material Adverse Effect on the Company and its Subsidiaries;

(ii)

no U.S. Benefit Plan is subject to Title IV of ERISA and no U.S. Benefit Plan is
a “multiemployer plan” as defined in Section 3(37) of ERISA;

(iii)

the U.S. Benefit Plans which are “employee pension benefit plans” within the
meaning of Section 3(2) of ERISA and which are intended to meet the
qualification requirements of Section 401(a) of the Code (each a “Pension Plan”)
have received determination letters from the IRS to the effect that such Pension
Plans are qualified and the related trusts are exempt from federal income taxes
and no determination letter with respect to any Pension Plan has been revoked;

(iv)

no U.S. Benefit Plan provides death or medical benefits, beyond termination of
service or retirement other than (A) coverage mandated by law, or (B) death or
retirement benefits under a U.S. Benefit Plan qualified under Code Section
401(a); and

(v)

there are no pending or, to the Knowledge of the Company, threatened claims,
assessments or legal proceedings with respect to any U.S. Benefit Plans, other
than ordinary and usual claims for benefits by participants and beneficiaries.

(d)

Section 3.14(d) of the Company Disclosure Schedule sets forth a list of all
Foreign Benefit Plans.

(e)

Except as otherwise disclosed on Section 3.14(e) of the Company Disclosure
Schedule:

(i)

each Foreign Benefit Plan has been maintained, operated and administered in
compliance in all material respects with its terms and the laws of each
applicable jurisdiction, except where the failure to so comply would not result
in a Material Adverse Effect on the Company or its Subsidiaries; and

(ii)

there are no pending or, to the Knowledge of the Company, threatened claims,
assessments or legal proceedings with respect to any Foreign Benefit Plan, other
than ordinary and usual claims for benefits by participants and beneficiaries.

3.15.

Labor Matters.  Except as set forth in Section 3.15(a) of the Company Disclosure
Schedule, the Company and each of its Subsidiaries is in compliance with all
applicable Laws respecting employment practices, terms and conditions of
employment, management-labor relations and wages and hours which are in effect
as of the date of this Agreement, except where

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the failure to comply would not result in a Material Adverse Effect on the
Company or its Subsidiaries.  Except as would not have a Material Adverse Effect
on the Company or its Subsidiaries or as set forth in Section 3.15(b) of the
Company Disclosure Schedule, there is no unfair labor practice, charge or
complaint against the Company or its Subsidiaries pending or, to the Knowledge
of the Company, threatened before any Governmental Authority.  Except as would
not have a Material Adverse Effect on the Company or its Subsidiaries, there is
no labor strike or labor disturbance pending or, to the Knowledge of the
Company, threatened against the Company or its Subsidiaries nor is any grievance
currently being asserted.  Except as would not have a Material Adverse Effect,
neither the Company nor its Subsidiaries have experienced a work stoppage or
work slowdown at any time during the three years immediately preceding the date
of this Agreement. As of the date hereof, the Company and its Subsidiaries have
approximately seven hundred and twenty-five (725) employees.

3.16.

Litigation.  Except as set forth in Section 3.16 of the Company Disclosure
Schedule, or as would not result in a Material Adverse Effect on the Company or
its Subsidiaries, there are no Proceedings or orders pending against or to the
Knowledge of the Company threatened against the Company or its Subsidiaries
before or by any Governmental Authority.  Neither the Company nor any of its
Subsidiaries is subject to any order, writ, judgment, injunction, decree or
award of any court or any Governmental Authority which would result in a
Material Adverse Effect on the Company or its Subsidiaries.

3.17.

Environmental Matters.  Except as set forth in Section 3.17 of the Company
Disclosure Schedule or as would result in a Material Adverse Effect on the
Company or its Subsidiaries:

(a)

the Company and its Subsidiaries own or possess all environmental Licenses and
Permits and are in compliance with all applicable Environmental Laws;

(b)

to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries:

(i)

has caused any Release of Materials of Environmental Concern at any of the
properties it leases, which Release would result in liability to the Company or
its Subsidiaries under any applicable Environmental Laws;

(ii)

has received any written notice of any judicial, administrative, or arbitral
proceeding pending or threatened against it under any applicable Environmental
Laws, which proceeding has not been resolved;

(iii)

has received a written request for information or demand letter pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, or similar law alleging that the Company or its Subsidiaries is a
responsible party for the Release of Materials of Environmental Concern which
would result in liability to the Company or its Subsidiaries; and

(iv)

has entered into any consent decree or other agreement in settlement of any
alleged violation of or liability under any applicable Environmental Law, under
which decree or agreement the Company or its Subsidiaries has any unfulfilled
obligations.  

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Notwithstanding any other representations and warranties in this Agreement, the
representations and warranties in this Section 3.17 shall be deemed the only
representations and warranties in this Agreement with respect to matters
relating to Environmental Laws or to Materials of Environmental Concern.

3.18.

Financial Advisors.  Except as set forth in Section 3.18 of the Company
Disclosure Schedule, no agent, broker, investment banker, financial advisor or
other firm or Person is or will be entitled to any broker’s or finder’s fee or
any other similar commission or fee in connection with any of the transactions
contemplated by this Agreement based on arrangements made by or on behalf of the
Company or its Subsidiaries.

3.19.

Data Room Materials.  To the Company’s Knowledge, the information contained in
the virtual data room to which access has been granted to Parent and Merger Sub
and their respective representatives (the “Virtual Data Room”), does not omit
any information necessary to make any of the information contained in the
Virtual Data Room not misleading in any material respect. The Company’s
projections relating to the future statements of operations, statements of cash
flows and balance sheets contained in the Virtual Data Room for the years ended
December 31, 2004 and December 31, 2005 have been accepted by the Board of
Directors.

3.20.

Disclaimer of Other Representations and Warranties.  The Company acknowledges
and agrees that (a) Parent does not make, and has not made, any representations
or warranties relating to Parent or in connection with the transactions
contemplated hereby other than those expressly set forth in Article IV and (b)
no Person has been authorized by Parent to make any representation or warranty
relating to Parent or any of its Subsidiaries, the businesses of Parent or
otherwise in connection with the transactions contemplated hereby except as set
forth in Article IV and, if made, any such representation or warranty must not
be relied upon as having been authorized by Parent.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Each of Parent and Merger Sub represents and warrants, jointly and severally, to
the Company as follows:

4.1.

Organization, Standing and Power.  Each of Parent and Merger Sub is a
corporation duly incorporated or otherwise organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization.

4.2.

Merger Sub.  Merger Sub is a direct wholly-owned subsidiary of Parent and was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement.  Except for Liabilities incurred by Merger Sub in connection
with its incorporation or organization and the transactions contemplated by this
Agreement and except for this Agreement, Merger Sub has not incurred, directly
or indirectly, through any of its Affiliates, any Liability or engaged in any
business activities of any type or kind whatsoever or entered into any agreement
or arrangements with any person.  Merger Sub has no Subsidiaries.

4.3.

Authority; No Violations.

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(a)

Each of Parent and Merger Sub has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on the part of Parent and
Merger Sub.  This Agreement has been duly executed and delivered by each of
Parent and Merger Sub and constitutes a valid and binding agreement of each of
Parent and Merger Sub, enforceable against each of them in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting creditors
rights generally, or by general equity principles.  

(b)

Except for the consent which Parent is required to obtain from Wachovia Bank,
N.A. in accordance with the terms and conditions of the current Lending Facility
by and between Parent and Wachovia Bank, N.A. or as would not impede, interfere
with, prevent or materially delay the transactions contemplated by this
Agreement, the execution and delivery of this Agreement by Parent and Merger Sub
do not, and the consummation by Parent and Merger Sub of the Merger and the
other transactions contemplated hereby will not, result in a Violation pursuant
to: (i) any provision of the certificate of incorporation or bylaws of Parent or
Merger Sub or (ii) any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any Subsidiary of Parent
or their respective properties or assets, subject to obtaining or making the
consents, approvals, orders, permits, authorizations, registrations,
declarations, notices and filings referred to in Section 4.3(c).

(c)

Except as would not impede, interfere with, prevent or materially delay the
transactions contemplated by this Agreement, no material consent, approval,
order, permit or authorization of, or registration, declaration, notice or
filing with, any Governmental Authority is required by or with respect to Parent
or any Subsidiary of Parent in connection with the execution and delivery of
this Agreement by Parent or Merger Sub or the consummation by Parent and Merger
Sub of the Merger and the other transactions contemplated hereby, except for
those required under or in relation to (i) the HSR Act, (ii) applicable foreign
antitrust laws, (iii) the Blue Sky Laws, (iv) the Exchange Act, (v) the DGCL
with respect to the filing of the Certificate of Merger and (vi) the Securities
Act of 1933.

4.4.

Legal Proceedings.  There are no Proceedings or orders pending, or to Knowledge
of Parent, threatened against or affecting Parent or any of its Subsidiaries, at
law or in equity, before or by any Governmental Authority, and neither Parent
nor any of its Subsidiaries is subject to any order, writ, injunction, judgment
or decree of any court or any Governmental Authority rendered specifically
against Parent or any of its Subsidiaries, which, would or seeks to, enjoin,
rescind or materially delay the transactions contemplated by this Agreement or
otherwise hinder Parent from timely complying with the terms and provisions of
this Agreement.

4.5.

Investigation.  Parent acknowledges that, except for the matters that are
expressly covered by the provisions of this Agreement, Parent is relying on its
own investigation and analysis and its review of the materials set forth in the
Virtual Data Room in entering into the transactions contemplated hereby.  Parent
is knowledgeable about the industries in which the

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Company operates and is capable of evaluating the merits and risks of the Merger
as contemplated by this Agreement and is able to bear the substantial economic
risk of such investment for an indefinite period of time. Parent has been
afforded full access to the Books and Records, facilities and personnel of the
Company for purposes of conducting a due diligence investigation and has
conducted a full due diligence investigation of the Company.  Except to the
extent Parent has otherwise advised the Company in writing, neither Parent nor
any of its Subsidiaries is aware of any of the representations or warranties
contained in Article III being untrue or incorrect.

4.6.

Disclaimer Regarding Projections.  In connection with Parent’s investigation of
the Company and its business, Parent has received from the Company and its
Affiliates and agents certain projections and other forecasts, including
projected financial statements, cash flow items, certain business plan
information and other data of the business of the Company.  Parent acknowledges
that (a) there are uncertainties inherent in attempting to make such
projections, forecasts and plans and, accordingly, is not relying on them, (b)
Parent is familiar with such uncertainties and is taking full responsibility for
making its own evaluation of the adequacy and accuracy of all projections,
forecasts and plans so furnished to it and (c) Parent shall have no claim
against anyone with respect to any of the foregoing.  Accordingly, Parent
acknowledges that the Company has made no representation or warranty with
respect to such projections and other forecasts and plans.

4.7.

Board Approvals.

(a)

The Board of Directors of Parent, by resolutions duly adopted at a meeting duly
called and held, has approved the transactions contemplated by this Agreement,
including the Merger.  No other corporate proceedings on the part of Parent are
necessary to authorize the transaction contemplated by this Agreement.

(b)

The Board of Directors of Merger Sub has duly (i) determined that this Agreement
and the Merger are advisable and in the best interests of Merger Sub and its
stockholder and (ii) approved this Agreement and the Merger.  No other corporate
proceedings on the part of Merger Sub are necessary to authorize the
transactions contemplated by this Agreement other than as described in Section
4.8.

4.8.

Vote Required.  Parent, as the sole stockholder of Merger Sub, has approved and
adopted this Agreement.  No other vote of the holders of any class or series of
capital stock of Parent or Merger Sub is required to adopt this Agreement and
approve the transactions contemplated hereby.

4.9.

Financial Advisors.  Except for Jefferies & Company, Inc., no agent, broker,
investment banker, financial advisor or other firm or Person is or will be
entitled to any broker’s or finder’s fee or any other similar commission or fee
in connection with any of the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent.

4.10.

Disclaimer of Other Representations and Warranties.  Parent and Merger Sub each
acknowledges and agrees that (a) the Company does not make, and has not made,
any representations or warranties relating to the Company, its Subsidiaries, the
business of the

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Company or any of its Subsidiaries or otherwise in connection with the
transactions contemplated hereby other than those expressly set forth in Article
III, (b) no Person has been authorized by the Company to make any representation
or warranty relating to the Company, its Subsidiaries, the business of the
Company or its Subsidiaries or otherwise in connection with the transactions
contemplated hereby except as set forth in Article III and, if made, such
representation or warranty must not be relied upon as having been authorized by
the Company, and (c) any estimates, projections, predictions, data, financial
information, memoranda, presentations or any other materials or information
provided or addressed to Parent are not and shall not be deemed to be or to
include representations or warranties of the Company or any of its Affiliates.

ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS

5.1.

Covenants of the Company.  During the period from the date of this Agreement and
continuing until the Effective Time, the Company agrees as to itself and its
Subsidiaries that (except as expressly contemplated or permitted by this
Agreement, including those actions (A) contemplated in Section 5.1 of the
Company Disclosure Schedule, (B) in this Article V, or (C) as required by a
Governmental Authority or by applicable law, rule or regulation, or to the
extent that Parent shall otherwise consent in writing (which consent shall not
to be unreasonably delayed or withheld), the Company shall, and shall cause its
Subsidiaries to, conduct their respective businesses in the ordinary course and
consistent with past practice in all material respects and shall not do any of
the following:

(a)

(i)  declare or pay any dividends on or make other distributions in respect of
any of their capital stock other than (A) by a wholly owned Subsidiary or by a
partially owned Subsidiary (provided that the Company or a Subsidiary of the
Company receives its proportionate share of such dividend or distribution), or
(B) dividends required to be paid on any preferred stock in accordance with
their terms; (ii) split, combine or reclassify any of their capital stock or
issue or authorize or propose the issuance of any other securities in respect
of, in lieu of, or in substitution for, shares of its capital stock; or (iii)
redeem, repurchase or otherwise acquire any shares of their capital stock other
than (A) redemptions, repurchases and other acquisitions of shares of capital
stock in the ordinary course of business consistent with past practice
including, without limitation, (1) repurchases, redemptions and other
acquisitions in connection with the administration of the U.S. Benefit Plans
and/or the Foreign Benefit Plans and dividend reinvestment plans of the Company
as in effect on the date hereof in the ordinary course of the operation of such
plans,  (2) redemptions, purchases or other acquisitions required by the terms
of any series of preferred stock of any Subsidiary or (3) repurchases,
redemptions and other acquisitions in connection with the Stockholders’
Agreements and (B) intercompany acquisitions of capital stock;

(b)

(i)  acquire any assets for a value in excess of $500,000 other than pursuant to
the current capital expenditure budget and other than purchases in the ordinary
course of business; (ii) dispose of any assets with a value in excess of
$500,000 other than pursuant to agreements in effect on the date hereof and
other than in the ordinary course of business; or (iii) incur any indebtedness
for borrowed money or issue any debt securities or make any loans or advances in
excess of $500,000, except for loans and advances in the ordinary course of
business; provided, however, that notwithstanding anything to the contrary set
forth in this Section 5.1(b),

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the Company shall not assume or guarantee the obligations of any other Person
except liabilities of a Subsidiary which would be reflected on the Company’s
consolidated balance sheet.

(c)

increase or pay any payment or benefit not required by any existing U.S. Benefit
Plan or Foreign Benefit Plan or increase any salaries or wages of the Company’s
employees, other than (i) in the ordinary course of business, (ii) as may be
required by a Governmental Authority, works council agreement or applicable law,
or (iii) in accordance with regularly scheduled periodic increases or payments;

(d)

enter into, modify, terminate (except in accordance with its terms) or renew
(except in accordance with its terms) any Company Material Contract, except in
the ordinary course of business;

(e)

permit any material amount of assets to become subject to any Lien, except for
Permitted Liens, unless such Lien is to be released upon or prior to Closing;

(f)

enter into or offer to enter into any employment or consulting agreement with
any person who is an employee of the Company, except in connection with
promotions or new hires in the ordinary course of business;

(g)

issue any shares of capital stock or rights to purchase the capital stock of the
Company, except for (i) the issuance of Common Stock or stock options, stock
appreciation or similar rights, as the case may be, pursuant to any U.S. Benefit
Plan or Foreign Benefit Plan or dividend reinvestment plans of the Company as in
effect on the date hereof in the ordinary course of the operation of such plans
and (ii) the issuance by a Subsidiary of shares of its capital stock to its
parent; or

(h)

make any changes in accounting methods, other than in the ordinary course of
business and consistent with past practice, as required by GAAP or as a result
of a change in law.

5.2.

Control of Other Party’s Business.  Nothing contained in this Agreement shall be
deemed to give Parent, directly or indirectly, the right to control or direct
the Company’s operations prior to the Effective Time.  Nothing contained in this
Agreement shall be deemed to give the Company, directly or indirectly, the right
to control or direct Parent’s operations prior to the Effective Time.  Prior to
the Effective Time, each of the Company and Parent shall exercise, consistent
with the terms and conditions of this Agreement, complete control and
supervision over its respective operations.

ARTICLE VI
ADDITIONAL AGREEMENTS

6.1.

Access; Information and Records; Confidentiality.  

(a)

During the period commencing on the date hereof and ending on the Closing Date,
the Company shall, upon reasonable request and notice of Parent, and at Parent’s
expense, afford to Parent, its counsel, accountants and other authorized
representatives reasonable access during normal business hours to its
properties, senior management, and Books and

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Records; provided that any such access shall be approved in advance by the
persons identified in Section 6.1(a) of the Company Disclosure Schedule.

(b)

Without the prior written consent of the Company, which consent may not be
unreasonably withheld, Parent shall not contact any suppliers to, employees
(except pursuant to Section 6.1(a)) or customers of, or Governmental Authorities
with jurisdiction over, the Company in connection with or pertaining to any
subject matter of this Agreement.

(c)

Without the prior written consent of the Company, which consent may be withheld
in the Company’s sole discretion, Parent shall not conduct any environmental
sampling or testing on any Leased Real Property.

(d)

Parent will hold, and will cause its respective directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any nonpublic information in confidence in accordance with
the provisions of the letter dated July 28, 2004 between the Company and Parent
(the “Confidentiality Agreement”), the terms of which are incorporated herein by
reference.

(e)

The Company, its Subsidiaries and each of their respective officers and
directors shall not purchase or sell any of the securities of Parent until after
the Effective Date or the termination of this Agreement, except as investors in
diversified publicly traded mutual funds (or other similar passive investment
vehicles) where they do not control the timing of fund investments or
dispositions.

6.2.

HSR Act; Reasonable Best Efforts.

(a)

Each party hereto shall (i) make the filings required of it or any of its
affiliates under the HSR Act in connection with this Agreement and the
transactions contemplated hereby as soon as practicable, but in any event no
later than five Business Days following the date hereof, (ii) comply at the
earliest practicable date and after consultation with the other party hereto
with any request for additional information or documentary material received by
it or any of its Affiliates from any applicable Governmental Authority, (iii)
cooperate with one another in connection with any filing under the HSR Act and
in connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement initiated by any Governmental
Authority, (iv) use its reasonable best efforts to secure the termination of any
waiting periods under the HSR Act in order to permit the consummation of the
transactions contemplated hereby at the earliest possible date and (v) engage
Dechert LLP to accomplish all filings required of it or any of its affiliates
under the HSR Act in connection with this Agreement and the transactions
contemplated hereby.  For purposes of this Section 6.2, without limiting the
foregoing, required actions by Parent shall include acceptance by Parent of any
and all divestitures of the businesses or assets of it or its Subsidiaries or
its Affiliates or of the Company or its Subsidiaries or acceptance of an
agreement to hold any assets of Parent or its Subsidiaries or its Affiliates or
of the Company or its Subsidiaries separate, in each case, as may be required in
any Proceeding by any applicable Governmental Authority in connection with the
transactions contemplated by this Agreement.  Each party hereto shall promptly
inform the other party of any material communication made to, or received by
such party from any other Governmental

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Authority regarding any of the transactions contemplated hereby.  The filing
fees assessed under the HSR Act shall be paid by Parent.  

(b)

Subject to the terms and conditions of this Agreement, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, using its reasonable best efforts (i)
to obtain, in addition to the approvals discussed in Section 6.2(a), any other
consents or approvals as are necessary in connection with the consummation of
the transactions contemplated hereby, (ii) to effect, in addition to filings
discussed in Section 6.2(a), all registrations and filings as are necessary or
desirable in connection with the consummation of the transactions contemplated
hereby, (iii) to defend any lawsuits or other legal proceedings, whether
judicial or administrative, whether brought by private parties or Governmental
Authorities or officials, challenging this Agreement or the consummation of the
transactions contemplated hereby, and (iv) to furnish to each other such
information and assistance and to consult with respect to the terms of any
registration, filing, application or undertaking as may be reasonably requested
in connection with the foregoing.

(c)

Notwithstanding the foregoing or any other provision of this Agreement, nothing
in this Section 6.2 shall limit a party’s right to terminate this Agreement
pursuant to Section 8.1(b) or 8.1(c) so long as such party has up to then
complied in all respects with its obligations under this Section 6.2.

6.3.

Non-Solicitation.

(a)

From the date hereof until the Effective Time or, if earlier, the termination of
this Agreement, the Company shall not (i) solicit or initiate any Acquisition
Proposal, (ii) engage in discussions or negotiations with, or disclose any
non-public information relating to the Company or its Subsidiaries or afford
access to the properties, books or records of the Company or its Subsidiaries
to, any Person (other than Parent or its representatives) concerning an
Acquisition Proposal, or (iii) following receipt of an Acquisition Proposal,
withhold, withdraw, modify or change in a manner adverse to Parent, or fail to
make, its recommendations in favor of the transactions contemplated hereby or
approve, endorse or recommend such Acquisition Proposal.  Upon its receipt
thereof, except to the extent prohibited by nondisclosure agreements in effect
as of the date hereof, the Company shall promptly provide Parent with a copy of
any written Acquisition Proposal received and a written statement with respect
to any non-written Acquisition Proposal received, which statement shall include
the identity of the parties making the Acquisition Proposal and the terms
thereof, and shall promptly advise Parent of any material modification or
proposed modification thereto.  

(b)

The Company shall immediately cease and cause to be terminated any existing
discussions or negotiations with any third party (other than Parent) conducted
heretofore with respect to any Acquisition Proposal, except that the Company may
request any such parties in possession of confidential information about the
Company that was furnished by or on behalf of the Company in connection with any
Acquisition Proposal to return or destroy all such information in the possession
of any such Person or in the possession of any representative of any such
Person.

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6.4.

Employee Benefits Matters.

(a)

Obligations of Parent. Parent shall, or shall cause the Surviving Corporation
to, assume all employment-related obligations and agreements with respect to any
Company Employees (as defined in Section 10.14(kk)) (including, but not limited
to, all obligations under the U.S. Benefit Plans and the Foreign Benefit Plans),
which obligations and agreements shall be performed in accordance with their
terms. Additionally, base pay and employee benefits of Company Employees, who
are employed by the Surviving Corporation immediately following the Effective
Time, shall not be decreased (nor their employment terminated) by the Parent,
Surviving Corporation or their Affiliates during the consecutive twelve (12)
month period immediately following the Effective Time, without the approval of
Jeffrey P. McMullen, or his successor as Chief Executive Officer (or comparable
position) of the Surviving Corporation.

(b)

Pre-Existing Limitations; Deductible; Service Credit.  With respect to any
benefit plans of Parent, the Surviving Corporation or their Affiliates in which
Company Employees participate after the Effective Time, Parent shall, or shall
cause the Surviving Corporation or such Affiliates to (i) waive all limitations
as to pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to Company Employees, (ii)
provide each Company Employee with credit for any co-payments and deductibles
paid prior to participation in such Parent benefit plan in satisfying any
applicable deductible or out-of-pocket requirements under any welfare benefit
plan, and (iii) recognize all service of Company Employees with the Company and
its current and former affiliates for all purposes (including, without
limitation, purposes of eligibility to participate, vesting credit, form of
payment, entitlement for benefits, and benefit accrual) in any benefit plan, to
the same extent taken into account under a comparable U.S. Benefit Plan or
Foreign Benefit Plan, as the case may be, immediately prior to the Effective
Time.

6.5.

Fees and Expenses.

Whether or not the Merger is consummated, except as otherwise provided herein,
all Expenses (as defined below) incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
Expenses, except (a) if the Merger is consummated, the Surviving Corporation
shall pay, or cause to be paid, any and all property, transfer or similar taxes
imposed on the Company or its Subsidiaries and any stock transfer tax imposed on
any holder of shares of capital stock of the Company resulting from the Merger,
and (b) as provided in Sections 6.2(a) and 8.2.  As used in this Agreement,
“Expenses” includes all out-of-pocket expenses (including all fees and expenses
of counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation of any filing required by the HSR Act and all matters
related to the transactions contemplated hereby. For the purposes of clarity,
(x) as set forth in the definition of “Current Assets” in Section 10.14(j), up
to $4,000,000 of Expenses incurred or paid by the Company at or prior to the
Closing Date will be added to the Current Assets of the Company and (y) all
Expenses incurred by the Parent will be paid by Parent.

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6.6.

Directors’ and Officers’ Indemnification and Insurance.

(a)

After the Effective Time through the sixth (6th) anniversary of the Effective
Time, Parent and the Surviving Corporation shall, jointly and severally,
indemnify and hold harmless each present (as of the Effective Time) or former
officer, director or employee of the Company and its Subsidiaries (the
“Indemnified Directors and/or Officers”), against all claims, losses,
liabilities, damages, judgments, fines and reasonable fees, costs and expenses
(including attorneys’ fees and expenses) incurred in connection with any claim,
action, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to (i) the fact that the Indemnified
Director or Officer is or was an officer, director or employee of the Company or
any of its Subsidiaries or (ii) matters existing or occurring at or prior to the
Effective Time (including this Agreement and the transactions and actions
contemplated hereby), whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent permitted under applicable law; provided,
that no Indemnified Director or Officer may settle any such claim without the
prior approval of Parent, unless such approval is unreasonably withheld or
delayed.  Each Indemnified Director and Officer will be entitled to advancement
of expenses incurred in the defense of any claim, action, proceeding or
investigation from Parent or the Surviving Corporation within ten (10) Business
Days of receipt by Parent or the Surviving Corporation from the Indemnified
Director or Officer of a request �herefore; provided, that any person to whom
expenses are advanced provides an undertaking, to the extent required by the
DGCL, to repay such advances if it is ultimately determined that such person is
not entitled to indemnification.

(b)

Parent shall cause the Surviving Corporation to maintain in effect (i) in its
certificate of incorporation and bylaws for a period of six (6) years after the
Effective Time, the current provisions regarding elimination of liability of
directors and indemnification of, and advancement of expenses to, officers,
directors and employees contained in the certificate of incorporation and bylaws
of the Company and (ii) for a period of six (6) years after the Effective Time,
the current policies of directors’ and officers’ liability insurance and
fiduciary liability insurance maintained by the Company (provided, that the
Surviving Corporation may substitute �herefore policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured) with respect to claims arising
from facts or events that occurred on or before the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to expend
in any one year an amount in excess of 300% of the annual premiums currently
paid by the Company for such insurance; and, provided, further, that if the
annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.

(c)

The Surviving Corporation shall honor and fulfill in all respects the
obligations of the Company pursuant to indemnification agreements and employment
agreements (the parties under such agreements being referred to as the “Covered
Persons”) with the Company’s directors and officers existing at or before the
Effective Time.

(d)

Notwithstanding any time limit herein to the contrary, if any claim, action,
proceeding or investigation (whether arising before, at or after the Effective
Time) is made against any Indemnified Director or Officer on or prior to the
sixth (6th) anniversary of the Effective

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Time, the provisions of this Section 6.6 (without regard to any such time limit)
shall continue in effect until the final disposition of such claim, action,
proceeding or investigation.

(e)

In the event that Parent or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any Person, then, and in each such case, proper
provision shall be made so that the successors or assigns of Parent or the
Surviving Corporation, as the case may be, shall succeed to the obligations set
forth in this Section 6.6.

(f)

This Section 6.6 shall survive the consummation of the Merger at the Effective
Time, is intended to benefit the Company, the Surviving Corporation, the
Indemnified Directors and Officers and the Covered Persons, shall be binding on
all successors and assigns of the Surviving Corporation and shall be enforceable
by the Indemnified Directors and Officers and the Covered Persons.

6.7.

Public Announcements.  The Company and Parent shall develop a joint
communications plan and each party shall (a) ensure that all press releases (or
portions thereof) and other public statements with respect to this Agreement or
the transactions contemplated hereby shall be consistent with such joint
communications plan, and (b) obtain the approval of the other party prior to
issuing any press release or otherwise making any public statement with respect
to this Agreement or the transactions contemplated hereby. For the purposes of
this Section 6.7, the individuals authorized to approve any press release or
other public announcement with respect to this Agreement or the transactions
contemplated hereby (x) with respect to the Company, are set forth in Section
6.7(x) of the Company Disclosure Schedule and (y) with respect to the Parent and
Merger Sub, are set forth in Section 6.7(y) of the Company Disclosure Schedule.

6.8.

Parent Board of Directors.  As promptly as possible after the Closing Date, but
in no event later than the next annual meeting of the Parent’s stockholders
after the Closing Date, Parent shall take all required actions to have the
Executive appointed to the Board of Directors.  The Company hereby agrees that
it shall take all commercially reasonable actions to (a) nominate Jeffrey P.
McMullen for election to the board of directors of Parent and (b) have Jeffrey
P. McMullen elected by the stockholders of Parent as a member of the board of
directors of Parent. From the Effective Time until Jeffrey P. McMullen becomes a
member of the board of directors of Parent, he shall have the right to receive
notice of and observe and participate in all meetings of the Board of Directors
and, in this respect, Parent shall give Jeffrey P. McMullen copies of all
notices, minutes, consents and other materials that it provides to the members
of its board of directors.

6.9.

Company Cooperation.  The Company shall use commercially reasonable efforts to
cooperate with Parent, and the entity (the “Financing Entity”) providing Parent
with financing  in connection with the transactions contemplated by this
Agreement (a “Financing Facility”) to:

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(a)

promptly prepare and provide all financial and other information as may be
reasonably requested with respect to the Company and its Subsidiaries and the
transactions contemplated by this Agreement, including but not limited to
financial projections;

(b)

ensure that the syndication efforts of the Financing Entity benefit materially
from existing lending relationships of the Company and its Subsidiaries;

(c)

make available, with reasonable notice and during normal business hours, to
prospective members of the lending syndication, senior management of the Company
and its Subsidiaries;

(d)

host or attend one or more meetings with prospective members of the lending
syndication;

(e)

assist Parent and the Financing Entity in the preparation of one or more
confidential information memoranda satisfactory to the Financing Entity and
other marketing materials to be used in connection with the recruitment of
prospective members of the lending syndication; and

(f)

assist Parent, at Parent’s own expense, to obtain monitored public ratings of
any Financing Facility from Moody’s Investors Service and Standard & Poor’s
Ratings Group and to participate actively in securing such ratings, to include
making senior management of the Company and its Subsidiaries available to meet
with such rating agencies.

6.10.

Parent Financing.  Parent shall use its best efforts to consummate one or more
Financing Facility agreements prior to, or on, the Termination Date, as may be
necessary for Parent to deliver the Aggregate Merger Consideration to the
Participating Stockholders in accordance with the terms and provisions of this
Agreement (the “Necessary Financing”). For the purposes of clarity, Parent
acknowledges and agrees that in the event Parent is not able to obtain the
Necessary Financing prior to, or on, the Termination Date, the Company shall
have the right to (a) terminate this Agreement in accordance with Section 8.1(f)
and (b) receive from Parent within five (5) Business Days of such termination,
the sum of $6,125,000 in accordance with Section 8.2(c).

FIRPTA Certificate.  At or prior to Closing, the Company shall deliver to Parent
a certificate, issued by the Company pursuant to Sections 1.987-2(h) and
1.1445-2I of the U.S. Treasury Regulations, certifying that the Company Stock is
not a U.S. real property interest.

ARTICLE VII
CONDITIONS PRECEDENT

7.1.

Conditions to Each Party’s Obligation to Effect the Merger.  The obligations of
the Company, Parent and Merger Sub to effect the Merger are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:

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(a)

Stockholder Approval.  The Company shall have obtained the Required Company Vote
by the holders of the Common Stock and Preferred Stock for the adoption of this
Agreement.

(b)

No Injunctions or Restraints; Illegality.  No federal, state, local or foreign
law, statute, regulation, code, ordinance or decree shall have been adopted or
promulgated, and no temporary restraining order, preliminary or permanent
injunction or other order issued by a court or other Governmental Authority of
competent jurisdiction shall be in effect, having the effect of making the
Merger illegal or otherwise prohibiting consummation of the Merger; provided,
however, that the provisions of this Section 7.1(b) shall not be available to
any party whose failure to fulfill its obligations pursuant to Section 6.2 shall
have been the cause of, or shall have resulted in, such order or injunction;
provided, further, that the parties invoking this condition shall have used
their best efforts to have such injunction, order or decree vacated or denied.

(c)

Antitrust Clearances.  The waiting period or approval process (or, in either
case, any extension thereof) applicable to the Merger under the HSR Act,  or any
other applicable anti-competition filing required by a Governmental Authority
shall have expired, been terminated, or achieved, as the case may be.

7.2.

Additional Conditions to Obligations of Parent and Merger Sub.  The obligations
of Parent and Merger Sub to effect the Merger are subject to the satisfaction
of, or waiver by Parent, on or prior to the Closing Date of the following
additional conditions:

(a)

Representations and Warranties.  The representations and warranties of the
Company contained in this Agreement which are not qualified as to materiality
shall be true and accurate in all material respects as of the Closing Date as if
made at and as of such date and the representations and warranties of the
Company contained in this Agreement which are qualified as to materiality shall
be true and accurate as of the Closing Date as if made at and as of such date
(except those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time, which need
only be true and accurate (or true and accurate in all material respects, as
applicable) as of such date or with respect to such period); and Parent shall
have received a certificate of the chief executive officer or the chief
financial officer of the Company to such effect.

(b)

Performance of Obligations of the Company.  The Company shall have performed or
complied in all material respects with all material agreements and covenants
required to be performed by it under this Agreement at or prior to the Closing
Date, and Parent shall have received a certificate of the chief executive
officer or the chief financial officer of the Company to such effect.

(c)

 No Material Adverse Effect. There shall not have occurred, since September 30,
2004, any event which constitutes a Material Adverse Effect with respect to the
Company.

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(d)

Consents.  The Company shall have obtained all third-party consents required by
any Company Material Contract.

(e)

Legal Opinion.  The Company shall have delivered to Parent and the Merger Sub an
opinion of its counsel, the form of which is attached hereto as Exhibit B.

(f)

Certain Foreign Subsidiary Legal Opinions.  The Company shall have delivered to
Parent and the Merger Sub an opinion of its counsel with respect to PharmaNet,
Ltd. and PharmaNet AG, the forms of which are attached hereto as Exhibit C and
Exhibit D, respectively.

(g)

Lien Releases.  All liens issued in connection with the Credit Facility and any
liens or other similar charges affecting any of the assets of the Company and
its Subsidiaries from indebtedness (excluding capital leases) that would prevent
Parent from securing a Financing Facility shall be released as of the Closing
Date.

7.3.

Additional Conditions to Obligations of the Company.  The obligations of the
Company to effect the Merger are subject to the satisfaction of, or waiver by
the Company, on or prior to the Closing Date of the following additional
conditions:

(a)

Representations and Warranties.  The representations and warranties of Parent
contained in this Agreement which are not qualified as to materiality shall be
true and accurate in all material respects as of the Closing Date as if made at
and as of such date and the representations and warranties of Parent contained
in this Agreement which are qualified as to materiality shall be true and
accurate as of the Closing Date as if made at and as of such date (except those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time, which need only be true and
accurate (or true and accurate in all material respects, as applicable) as of
such date or with respect to such period); and the Company shall have received a
certificate of the chief executive officer or the chief financial officer of
Parent to such effect.

(b)

Performance of Obligations of Parent.  Parent shall have performed or complied
in all material respects with all material agreements and covenants required to
be performed by it under this Agreement at or prior to the Closing Date, and the
Company shall have received a certificate of the chief executive officer or the
chief financial officer of Parent to such effect.

(c)

No Material Adverse Effect. There shall not have occurred, since September 30,
2004, any event which constitutes a Material Adverse Effect with respect to
Parent or Merger Sub.  For the purposes of this Section 7.3I only, “Material
Adverse Effect” shall have the meaning ascribed to such term in Section
10.14(bb), except that (i) subsections (i) and (ii) of Section 10.14(bb) shall
not be considered, (ii) all references to Company shall be deemed to be
references to Parent and Merger Sub and (iii) the reference to Parent and Merger
Sub shall be deemed to be a reference to the Company.

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(d)

Legal Opinion.  Parent shall have delivered to the Company an opinion of its
counsel, the form of which is attached hereto as Exhibit E.

 

ARTICLE VIII
TERMINATION AND AMENDMENT

8.1.

Termination.  This Agreement may only be terminated as provided in this Section
8.1.  This Agreement may be terminated at any time prior to the Effective Time,
by action taken or authorized by the Board of Directors of the terminating party
or parties, whether before or after approval of the matters presented in
connection with the Merger by the holders of the Common Stock and Preferred
Stock:

(a)

By mutual written consent of Parent and the Company, by action of their
respective Boards of Directors;

(b)

By either the Company or Parent if the Effective Time shall not have occurred on
or before December 31, 2004 (the “Termination Date”); provided, however, that
the right to terminate this Agreement under this Section 8.1(b) shall not be
available to any party who has failed to comply with any obligation under this
Agreement and such failure has been the primary cause of the failure of the
Effective Time to occur on or before the Termination Date; provided, further,
however that the Termination Date (i) shall automatically be extended for up to
forty-five (45) days in the event that the sole reason (other than for the
reason set forth in Section 8.1(b)(ii)) the Effective Time has not occurred on
or before December 31, 2004 is due to the failure of the waiting period or
approval process (or, in either case, any extension thereof) applicable to the
Merger under the HSR Act, or any other applicable anti-competition filing
required by a Governmental Authority, to have expired, been terminated, or
achieved, as the case may be, on or before December 31, 2004 and (ii) may be
extended, solely at the option of the Company, for up to ninety (90) days in the
event that the sole reason (other than for the reason set forth in Section
8.1(b)(i)) the Effective Time has not occurred on or before December 31, 2004 is
due to Parent’s failure to obtain the Necessary Financing on or before December
31, 2004.

(c)

By either the Company or Parent if any Governmental Authority shall have issued
an order, decree or ruling or taken any other action (which the parties shall
have used reasonable best efforts to resist, resolve or lift, as applicable, in
accordance with Section 6.2) permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement under this Section
8.1I shall not be available to any party whose failure to comply with Section
6.2 has been the primary cause of such action or inaction;

(d)

By either the Company or Parent if the approval by the holders of the Common
Stock and Preferred Stock required for the consummation of the Merger shall not
have been obtained by reason of the failure to obtain the Required Company Vote;

(e)

By Parent, if neither Parent nor Merger Sub is in material breach of its
obligations under this Agreement, and if (i) at any time that any of the
representations and

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warranties of the Company herein become untrue or inaccurate such that Section
7.2(a) would not be satisfied or (ii) there has been a breach on the part of the
Company of any of its covenants or agreements contained in this Agreement such
that Section 7.2(b) would not be satisfied, and, in both case (i) and case (ii),
such breach (if curable) has not been cured within thirty (30) days after notice
to the Company; or

(f)

By the Company, if it is not in material breach of its obligations under this
Agreement, and if (i) at any time that any of the representations and warranties
of Parent or Merger Sub herein become untrue or inaccurate such that Section
7.3(a) would not be satisfied or (ii) there has been a breach on the part of
Parent or Merger Sub of any of their respective covenants or agreements
contained in this Agreement such that Section 7.3(b) would not be satisfied,
and, in both case (i) and case (ii), such breach (if curable) has not been cured
within thirty (30) days after notice to Parent.

8.2.

Effect of Termination.

(a)

In the event of termination of this Agreement by either the Company or Parent as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Parent or the Company or
their respective officers or directors except for this Section 8.2 and Article
IX.

(b)

In recognition of the time, efforts and expenses expended and incurred by the
Parent with respect to the transactions contemplated by this Agreement, if this
Agreement is terminated pursuant to Section 8.1(e), then the Company shall pay
to Parent the fees and expenses incurred by Parent in connection with the
transactions contemplated by this Agreement up to an amount equal to $500,000
within five (5) Business Days of such termination of this Agreement.
Furthermore, in the event that this Agreement is terminated pursuant to Section
8.1(e) and within six (6) months of the date of such termination the Company
consummates a Competitive Transaction, then the Company shall pay to the parent
the sum of $6,125,000 within five (5) Business Days of the consummation of such
Competitive Transaction.  

(c)

In recognition of the time, efforts and expenses expended and incurred by the
Company with respect to the transactions contemplated by this Agreement and the
opportunity that the transactions contemplated by this Agreement presents to the
Company, as well as the opportunities that may be lost by the Company should the
transactions contemplated by this Agreement not be consummated, if this
Agreement is terminated pursuant to Section 8.1(f), then Parent shall pay to the
Company the sum of $6,125,000 within five (5) Business Days of such termination
of this Agreement.

8.3.

Extension; Waiver.  At any time prior to the Effective Time, each party hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (c) waive compliance by the other party
with any of the agreements or conditions contained herein.  Any agreement on the
part of either party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.  The
failure of a party to assert any of its rights hereunder shall not constitute a
waiver of such rights, and no single or

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partial exercise of any right, remedy, power or privilege shall preclude any
other or further exercise thereof by any party.  The waiver by any party of any
breach of this Agreement, or the failure of any party to require the performance
or satisfaction of any term or obligation of this Agreement, shall not prevent
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

ARTICLE IX
INDEMNIFICATION; ESCROW ARRANGEMENTS

9.1.

Survival of Representations, Warranties and Agreements.  The representations,
warranties and covenants made by the Company, the Parent and the Merger Sub
(including the representations and warranties set forth in this Agreement and
the representations and warranties set forth in any certificate delivered by the
Company, the Parent and the Merger Sub in connection with this Agreement) shall
survive the Closing and shall remain in full force and effect and shall survive
until twelve (12) months after the Closing (the “Indemnification Period”).

9.2.

Indemnification by Parent.  The Parent will indemnify and hold harmless the
holders of Common Stock and their respective personal representatives,
successors, assigns and agents from and against any liabilities, costs or
expenses (including reasonable attorneys’ fees), judgments, fines, losses,
claims, damages, amounts paid in settlement, deficiencies, interest, penalties,
impositions, assessments or fines incurred (“Damages”) arising from or as a
result of:

(i)

any inaccuracy in or breach of any representation or warranty contained in this
Agreement or in any certificate delivered by the Parent or the Merger Sub in
connection with this Agreement; or

(ii)

any breach of any covenant or obligation of the Parent or the Merger Sub
contained in this Agreement; or

(iii)

any legal proceeding relating to any inaccuracy, breach or expense of the type
referred to in clause (i) or (ii) above (including any legal proceeding
commenced by the Stockholder Representative for the purpose of enforcing any of
the rights under this Article IX if the Stockholder Representative is the
prevailing party in any such legal proceeding).

9.3.

Indemnification by Participating Stockholders.

(a)

General Escrow Fund.  As security for the indemnity provided for in this Section
9.3 and as soon as practicable after the Effective Time, the Initial Holdback
Amount will be deposited with the Exchange Agent, or another institution
acceptable to Parent, in its reasonable discretion, to act as escrow agent which
institution shall execute a joinder hereto or an escrow agreement containing
provisions substantially similar to this Section 9.3 (the “Escrow Agent”), such
deposit to constitute an escrow fund (the “General Escrow Fund”) to be governed
by the terms set forth herein.  The Escrow Agent may execute this Agreement
following the date hereof and prior to the Effective Time, and such later
execution, if so executed after the date hereof, shall not affect the binding
nature of this Agreement as of the date hereof between the other signatories
hereto.  From and after the Closing Date, the Participating Stockholders shall
hold harmless and indemnify Parent, Merger Sub, the Surviving Corporation and
each of its

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respective directors, officers and employees and shall hold each of them
harmless from and against, and shall compensate and reimburse each of them for,
any Damages which are suffered or incurred by them or to which they may
otherwise become subject (regardless of whether or not such Damages relate to
any third-party claim) and which arise from or as a result of:  

(i)

any inaccuracy in or breach of any representation or warranty contained in this
Agreement or in any certificate delivered by the Company in connection with this
Agreement;

(ii)

any breach of any covenant or obligation of the Company contained in this
Agreement; or

(iii)

any legal proceeding relating to any inaccuracy, breach or expense of the type
referred to in clause (i) or (ii) above (including any legal proceeding
commenced by

Parent or Merger Sub for the purpose of enforcing any of its rights under this
Article IX if Parent or Merger Sub is the prevailing party in any such legal
proceeding).

No Participating Stockholder shall have any right to contribution, right of
indemnity or other right or remedy from the Company or the Surviving Corporation
for any claim made by Parent after the Effective Time.

For the purposes of this Article IX, any party claiming an indemnification right
under this Article IX shall be referred to as the “Indemnified Party” and any
party from whom such indemnification is sought shall be referred to as the
“Indemnifying Party.”

(b)

Certain Limitations on Indemnification by Participating Stockholders.

(i)

Notwithstanding anything to the contrary set forth herein, in no event shall the
aggregate amount for which Participating Stockholders are required to indemnify
any Indemnified Party under Section 9.3(a) exceed the amount deposited in the
General Escrow Fund.

(ii)

Notwithstanding anything to the contrary set forth herein, in no event shall the
Participating Stockholders be liable to any Indemnified Party under this Article
IX for Damages for a breach of a representation or warranty unless the
cumulative total of Damages under Section 9.3(a) exceeds $3,062,500, whereupon
the Indemnified Parties shall be entitled to indemnification of all Damages
including the initial $3,062,500. Furthermore, the Participating Stockholders
shall not have any liability under Section 9.3(a) with respect to any individual
matter unless and until the amount of the Damages with respect to such matter
exceeds $150,000.

(iii)

Each of the Parent and Merger Sub hereby acknowledges and agrees that the
Participating Stockholders shall not have any liability under any provision of
this Agreement for any Damages to the extent that such Damages relate to (A)
actions taken by or omitted to be taken by any Indemnified Party after the
Effective Time or (B) events or conditions

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known to the Parent prior to the Closing or (C) loss of profit or consequential
damages.  Each of the Indemnified Parties shall take or cause to be taken all
reasonable steps to mitigate any Damages upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto, including incurring
costs only to the minimum extent necessary to remedy the breach which gives rise
to the Damages.

(iv)

All claims for indemnification will be determined net of any insurance coverage
proceeds or Tax benefit to be received by the Indemnified Party with respect to
such claim.

(c)

Procedures Relating to Non-Third Party Indemnification Claims.

(i)

Subject to Section 9.3I(ii) and Section 9.3I(iii), sixty (60) days after receipt
by the Escrow Agent at any time on or before the last day of the applicable
Escrow Period of a certificate signed by any officer of Parent (the “Parent
Officer’s Certificate”) (A) stating that an Indemnified Party has paid or may be
required to make a payment for Damages and (B) specifying in reasonable detail
the individual items of Damages included in the amount so stated and the nature
of the misrepresentation, breach of warranty or covenant to which such item is
related, the Escrow Agent shall, subject to the provisions of Section 9.3(c)(ii)
and Section 9.3(c)(iii), deliver to Parent out of the General Escrow Fund, as
promptly as practicable, an amount in cash and/or Parent Options equal to the
amount of such Damages.

(ii)

At the time of delivery of any Parent Officer’s Certificate to the Escrow Agent,
a duplicate copy of such certificate shall be delivered to the Stockholder
Representative, and for a period of sixty (60) days after such delivery, the
Escrow Agent shall make no delivery to Parent of any amounts in the General
Escrow Fund pursuant to Section 9.3I(i) unless the Escrow Agent shall have
received written authorization from the Stockholder Representative to make such
delivery.  After the expiration of such sixty (60) day period, the Escrow Agent
shall make delivery of an amount in cash and/or Parent Options from the General
Escrow Fund in accordance with Section 9.3I(i); provided, however, that no such
payment or delivery may be made if the Stockholder Representative shall object
in a written statement to the claim made in the Parent Officer’s Certificate,
and such statement shall have been delivered to the Escrow Agent prior to the
expiration of such sixty (60) day period.

(iii)

In case the Stockholder Representative shall object in writing to any claim or
claims made in any Parent Officer’s Certificate, the Stockholder Representative
and Parent shall attempt in good faith to agree upon the rights of the
respective parties with respect to each of such claims. If the Stockholder
Representative and Parent should so agree, a memorandum setting forth such
agreement shall be prepared and signed by both the Stockholder Representative
and Parent and shall be furnished to the Escrow Agent. The Escrow Agent shall be
entitled to rely on any such memorandum and distribute an amount in cash and/or
Parent Option from the General Escrow Fund in accordance with the terms thereof.
 Absent the delivery of any such memorandum, the Escrow Agent shall not
distribute or release any portion of the General Escrow Fund until so directed
by a court of competent jurisdiction.

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(d)

Procedures Relating to Third Party Indemnification Claims.

(i)

In order for any Indemnified Party to be entitled to any indemnification
provided for under Section 9.2 or Section 9.3 in respect of, arising out of or
involving a claim or demand made by any third person, firm, government authority
or corporation against an Indemnified Party (a “Third Party Claim”), such
Indemnified Party must notify the Indemnifying Party in writing of the Third
Party Claim within five (5) Business Days after receipt by such Indemnified
Party of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except (A) to the extent the Indemnifying Party have been prejudiced
as a result of such failure and (B) that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnified
Party failed to give notice. Thereafter, the Indemnified Party shall deliver to
the Indemnifying Party, within five (5) Business Days after the Indemnified
Party’s receipt thereof, copies of all notices and documents (including court
papers) received by the Indemnified Party relating to the Third Party Claim.

(ii)

If a Third Party Claim is made against an Indemnified Party, the Indemnifying
Party will be entitled to participate in the defense thereof and, if it so
chooses assume and control the defense thereof with counsel selected by the
Indemnifying Party; provided, however,  that, if the Indemnifying Party assumes
such defense, the Indemnified Party shall have the right to participate in, but
not control, the defense thereof and employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party.  Should the
Indemnifying Party elect to assume and control the defense of a Third Party
Claim, the Indemnifying Party shall be entitled to settle, compromise or
discharge such Third Party claim.

(iii)

Whether or not the Indemnifying Party shall have assumed the defense of a Third
Party Claim, the Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
Indemnifying Party’s prior written permission, which shall not be unreasonably
withheld, unless (A) there is no finding or admission of any violation of
federal, state, local, municipal, foreign, international, multinational or other
administrative order, law ordinance, principal of common law, regulation,
statute or treaty or any violation of the rights of any person and no effect on
any other claims that may be made against the Indemnified Party and (B) the sole
relief provided is monetary damages that will be paid in full.

9.4.

Exclusive Remedy.  

All parties acknowledge and agree that, from and after the Effective Time, the
sole and exclusive remedy of each party with respect to any and all claims
relating to and arising out of misrepresentation or breach of any
representation, warranty, covenant or agreement made by the other party to this
Agreement, or otherwise in connection with the transactions contemplated by this
Agreement, will be pursuant to the provisions of this Article IX; provided,
however, that no limitation or condition of liability provided in this Article
IX shall apply to (a) any claim a Participating Stockholder may have against
Parent or any of its Affiliates as a result of its status as a stockholder of
any such entity or (b) any misrepresentation or breach of warranty contained
herein if such misrepresentation or breach of warranty was made knowingly,
willfully or with intent to deceive.

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9.5.

Escrow Arrangements; Distribution upon Termination of Escrow Period.  Subject to
the following requirements, the General Escrow Fund shall be in existence
immediately following the Effective Time and shall terminate on the last day of
the Indemnification Period (such period being the “Escrow Period”); provided,
however, that the Escrow Period shall not terminate with respect to any amount
of an unsatisfied claim specified in any Parent Officer’s Certificate (as
defined below) delivered to the Escrow Agent prior to termination of such Escrow
Period.  The General Escrow Funds not subject to unsatisfied claims as
contemplated by this Article IX shall be delivered to the Participating
Stockholders as the Final Per Share Holdback Amount in accordance with Section
2.2.  As soon as all such claims have been resolved the Escrow Agent shall
deliver to the Participating Stockholders the remaining portion, if any, of the
General Escrow Fund not required to satisfy such claims as additional Final Per
Share Holdback Amounts.  

(a)

Protection of the General Escrow Fund.

(i)

The Escrow Agent shall hold and safeguard the General Escrow Fund during the
Escrow Period, shall treat such fund as a trust fund in accordance with the
terms of this Agreement and not as the property of Parent and shall hold and
dispose of the General Escrow Fund only in accordance with the terms hereof.

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(ii)

Any interest earned in respect of the General Escrow Fund which has not been
released from the General Escrow Fund shall be added to the General Escrow Fund
and become a part thereof.

(b)

Escrow Agent’s Duties.

(i)

The Escrow Agent shall be obligated only for the performance of such duties as
are specifically set forth herein, and as set forth in any additional written
escrow instructions which the Escrow Agent may receive after the date of this
Agreement which are signed by an officer of Parent and the Stockholder
Representative, and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed to be genuine and to have been
signed or presented by the proper party or parties.  The Escrow Agent shall not
be liable for any act done or omitted hereunder as Escrow Agent while acting in
good faith and in the exercise of reasonable judgment, and any act done or
omitted pursuant to the advice of counsel shall be conclusive evidence of such
good faith.

(ii)

The Escrow Agent is hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person, excepting
only orders or process of courts of law, and is hereby expressly authorized to
comply with and obey orders, judgments or decrees of any court.  In case the
Escrow Agent obeys or complies with any such order, judgment or decree of any
court, the Escrow Agent shall not be liable to any of the parties hereto or to
any other person by reason of such compliance. Notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

(iii)

The Escrow Agent shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver this Agreement or any documents or papers deposited or called
for hereunder.

(iv)

The Escrow Agent shall not be liable for the expiration of any rights under any
statute of limitations with respect to this Agreement or any documents deposited
with the Escrow Agent.

(v)

In performing any duties under the Agreement, the Escrow Agent shall not be
liable to any party for damages, losses, or expenses, except for negligence or
willful misconduct on the part of the Escrow Agent.  The Escrow Agent shall not
incur any such liability for (A) any act or failure to act made or omitted in
good faith, or (B) any action taken or omitted in reliance upon any instrument,
including any written statement or affidavit provided for in this Agreement that
the Escrow Agent shall in good faith believe to be genuine, nor will the Escrow
Agent be liable or responsible for forgeries, fraud, impersonations, or
determining the scope of any representative authority.  In addition, the Escrow
Agent may consult with the legal counsel in connection with Escrow Agent’s
duties under this Agreement and shall be fully protected in any act taken,
suffered, or permitted by him/her in good faith in accordance with the advice of
counsel.  The Escrow Agent is not responsible for determining and verifying the
authority of any person acting or purporting to act on behalf of any party to
this Agreement.

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(vi)

If any controversy arises between the parties to this Agreement, or with any
other party, concerning the subject matter of this Agreement, its terms or
conditions, the Escrow Agent will not be required to determine the controversy
or to take any action regarding it.  The Escrow Agent may hold the General
Escrow Fund and all documents and may wait for settlement of any such
controversy by final appropriate legal proceedings or other means as, in the
Escrow Agent’s discretion, the Escrow Agent may be required, despite what may be
set forth elsewhere in this Agreement.  In such event, the Escrow Agent will not
be liable for damage.  Furthermore, the Escrow Agent may at its option, file an
action of interpleader requiring the parties to answer and litigate any claims
and rights among themselves.  The Escrow Agent is authorized to deposit with the
clerk of the court the General Escrow Fund and all documents held in escrow,
except all cost, expenses, charges and reasonable attorney fees incurred by the
Escrow Agent due to the interpleader action and which the parties jointly and
severally agree to pay.  Upon initiating such action, the Escrow Agent shall be
fully released and discharged of and from all obligations and liability imposed
by the terms of this Agreement.

(vii)

The parties and their respective successors and assigns agree jointly and
severally to indemnify and hold Escrow Agent harmless against any and all
losses, claims, damages, liabilities, and expenses, including reasonable costs
of investigation and counsel fees, including but not limited to any litigation
arising from this Agreement or involving its subject matter other than to the
extent arising out of its negligence or willful misconduct.

(viii)

The Escrow Agent may resign at any time upon giving at least thirty (30) days
written notice to the parties; provided, however, that no such resignation shall
become effective until the appointment of a successor escrow agent which shall
be accomplished as follows: the parties shall use their best efforts to mutually
agree on a successor escrow agent within thirty (30) days after receiving such
notice.  If the parties fail to agree upon a successor escrow agent within such
time, the Escrow Agent shall appoint a successor escrow agent.  The successor
escrow agent shall execute and deliver an instrument accepting such appointment
and it shall, without further acts, be vested with all the estates, properties,
rights, powers, and duties of the predecessor escrow agent as if originally
named as escrow agent.  Upon appointment of a successor escrow agent, the Escrow
Agent shall be discharged from any further duties and liability under this
Agreement.

(c)

Tax Treatment.  Pursuant to Section 671 and 675(4)I of the Code, the Parent is
intended to be, and shall be treated as, the owner for income tax purposes of
the monies held in the General Escrow Fund (and any other corpus and income held
in the General Escrow Fund) and of all of the items of income, deductions and
credits attributable to the General Escrow Fund (and attributable to all of such
other corpus and interest).  The provisions of this Article IX shall be
construed and interpreted accordingly, and all parties hereto shall file Tax
returns and statements consistent with such treatment, it being understood that
the Escrow Agent shall not be responsible for any Tax reporting responsibilities
of the Parent, the Merger Sub, the Surviving Corporation or the Company.

(d)

Fees.  All fees and expenses of the Escrow Agent for performance of its duties
hereunder shall be paid by Parent as Parent and the Escrow Agent shall agree.
 It is understood that the fees and usual charges agreed upon for services of
the Escrow Agent shall be

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considered compensation for ordinary services as contemplated by this Agreement.
 In the event that the conditions of this Agreement are not promptly fulfilled,
or if the Escrow Agent renders any service not provided for in this Agreement,
or if the parties request a substantial modification of its terms, or if any
controversy arises, or if the Escrow Agent is made a party to, or intervenes in,
any litigation pertaining to the Escrow Fund or its subject matter, the Escrow
Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all reasonable costs, attorney’s fees and expenses occasioned by
such default, delay, controversy or litigation.

(e)

Consequential Damages.  In no event shall the Escrow Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Escrow Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
action.

(f)

Successor Escrow Agents.  Any corporation into which the Escrow Agent in its
individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Agreement without further act.

9.6.

Stockholder Representative; Approval of Participating Stockholders.

(a)

Omnivest (Bermuda) Ltd. shall be constituted and appointed as agent
(“Stockholder Representative”) for and on behalf of the Participating
Stockholders to give and receive notices and communications, to authorize
distribution to Parent or any Indemnified Party of all or a portion of the
General Escrow Fund in satisfaction of claims by Parent or any Indemnified
Party, to object to such distribution to Parent or any Indemnified Party of the
General Escrow Fund, to agree to, negotiate, enter into settlements and
compromises of, and demand arbitration and comply with orders of courts and
awards of arbitrators with respect to such claims, and to take all actions
necessary or appropriate in the judgment of the Stockholder Representative for
the accomplishment of the foregoing.  The authority conferred under this Section
9.6 will be an agency coupled with an interest, and all authority conferred
hereby is irrevocable and not subject to termination by any of the Participating
Stockholders, or by operation of law, whether by the death or incapacity of any
Participating Stockholder, the termination of any trust or estate or the
occurrence of any other event. If any Participating Stockholder should die or
become incapacitated, if any trust or estate should terminate or if any other
such event should occur, any action taken by the Stockholder Representative
pursuant to this Agreement shall be as valid as if such death or incapacity,
termination or other event had not occurred, regardless of whether or not the
Stockholder Representative had received notice of such death, incapacity,
termination or other event.  Notices or communications to or from the
Stockholder Representative shall constitute notice to or from each of the
Participating Stockholders.  

(b)

No bond shall be required of the Stockholder Representative, and the Stockholder
Representative shall receive no compensation for his/her services.
 Notwithstanding anything to the contrary set forth herein, the General Escrow
Fund shall be available to pay the expenses incurred by the Stockholder
Representative in connection with the exercise of his, her or

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its duties set forth in this Agreement (including, but not limited to, the
Stockholder Representative’s rights to indemnification from the Participating
Stockholders pursuant to the Stockholder Representative Agreement (as defined
below)).  

(c)

The Stockholder Representative shall not be liable for any act done or omitted
hereunder as Stockholder Representative while acting in good faith and not in a
manner constituting intentional misconduct or knowing violation of the law, and
any act done or omitted pursuant to the advice of counsel shall be conclusive
evidence of such good faith.  

(d)

Each of the Parent and the Merger Sub acknowledges, understands and recognizes
that the Stockholder Representative has been appointed to act as the sole and
exclusive representative of each of the Participating Stockholders for any
purpose provided for by this Agreement.

(e)

The approval by the holders of the Common Stock and Preferred Stock of the
Merger shall be deemed to be approval of the terms of the provisions of this
Article IX, including the appointment of the Stockholder Representative.  In
addition, each holder of the Common Stock and Preferred Stock and each holder of
an Option Agreement and SAR Agreement will be required to confirm his, her or
its (i) appointment of the Stockholder Representative pursuant to this Agreement
and (ii) agreement to be bound by the provisions of this Agreement and the
Stockholder Representative Agreement, dated the date hereof, by and among the
Company, the Stockholder Representative and the Participating Stockholders (the
“Stockholder Representative Agreement”), in the letter of transmittal required
to be completed, executed and delivered pursuant to Section 2.2 as  condition to
receiving his, her or its Aggregate Merger Consideration.

(f)

A decision, act, consent or instruction of the Stockholder Representative shall
constitute a decision of all Participating Stockholders and shall be final,
binding and conclusive upon each Participating Stockholder, and Parent and
Merger Sub may rely upon any such decision, act, consent or instruction of the
Stockholder Representative as being the decision, act, consent or instruction of
every such Participating Stockholder.  Parent and Merger Sub are hereby relieved
from any liability to any person for any acts done by them in accordance with
such decision, act, consent or instruction of the Stockholder Representative.

ARTICLE X
GENERAL PROVISIONS

10.1.

Notices.  All notices and other communications hereunder shall be in writing and
shall be deemed duly given (x) if delivered personally, on the date of delivery,
or, if delivered by facsimile, upon confirmation of receipt, (y) on the first
Business Day following the date of dispatch if delivered by a recognized
next-day courier service, or (z) on the third Business Day following the date of
mailing if delivered by registered or certified first-class mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:

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(a)

if to Parent or Merger Sub, to:

SFBC International, Inc.

11190 Biscayne Boulevard

Miami, Florida 33181

Fax: (305) 895-4204

Attention: Arnold Hantman, Chief Executive Officer

with a copy to (which shall not constitute notice):

Michael Harris, P.A.

1555 Palm Beach Lakes Boulevard

Suite 310

West Palm Beach, Florida 33401

Fax:  (561) 478-1817

Attention:  Michael D. Harris, Esq.

(b)

if to the Company to:

PharmaNet, Inc.

504 Carnegie Center

Princeton, New Jersey 08540-6242

Fax:  (609) 951-6821

Attention:  Jeffrey P. McMullen, Chief Executive Officer

with a copy to (which shall not constitute notice):

Dechert LLP

Princeton Pike Corporate Center

997 Lenox Drive, Building 3, Suite 210

Lawrenceville, New Jersey

Fax:  (609) 620-3259

Attention:  Todd D. Johnston, Esq.

(c)

If to the Stockholder Representative to:

Omnivest (Bermuda) Ltd.

11 Inglewood Lane

Paget PG 06

Bermuda

Fax:  (609) 951-9417

Attention:  Gerrit F. Besselaar

with a copy to (which shall not constitute notice):

Dechert LLP

30 Rockefeller Plaza

New York, New York 10112-2200

Fax:  (212) 698-3599

Attention:  Sang H. Park, Esq.

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10.2.

Interpretation.  References in this Agreement to any gender include references
to all genders, and references to the singular include references to the plural
and vice versa.  The words “include,” “includes” and “including” when used in
this Agreement shall be deemed to be followed by the phrase “without
limitation.”  Unless the context otherwise requires, references in this
Agreement to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement.  Unless the context otherwise requires, the words “hereof,” “hereby”
and “herein” and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Article, Section or
provision of this Agreement.  All references to contracts, agreements, leases or
other arrangements shall refer to oral as well as written matters. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.

10.3.

Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which together shall
be deemed to be one and the same instrument.

10.4.

Entire Agreement.  This Agreement (including any exhibits or annexes hereto, the
documents referred to herein and the Company Disclosure Schedule) constitutes
the entire agreement among all the parties hereto and supersedes all prior
agreements, understandings, oral and written, among all the parties with respect
to the subject matter hereof.

10.5.

No Third-Party Beneficiaries.  This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns
and nothing in this Agreement, express or implied, is intended to or shall
confer upon any Person other than the parties hereto or their respective
successors and assigns, any rights, remedies or liabilities under or by reason
of this Agreement, other than Article IX and Section 10.6 (which is intended to
be for the benefit of the Persons covered thereby and may be enforced by such
Persons).

10.6.

Assignment.  Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.

10.7.

Amendment and Modification; No Waiver.  This Agreement may be amended, modified
and supplemented by a written instrument authorized and executed on behalf of
Parent and the Company at any time prior to the Closing Date with respect to any
of the terms contained herein. Except as provided in the preceding sentence, no
action taken pursuant to this Agreement, including any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants, or
agreements contained herein, and in any documents delivered or to be delivered
pursuant to this Agreement and in connection with the Closing hereunder.

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10.8.

Enforcement; Jurisdiction.  The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
 It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New Jersey, this being in addition to any other remedy
to which they are entitled at law or in equity subject to the terms hereof.  In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the federal courts of the United States located in the
State of New Jersey or any court of the State of New Jersey in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction or venue by motion or other request for leave from any
such court and (c) agrees that it will not bring any Proceeding relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than such courts sitting in the State of New Jersey.  By the execution and
delivery of this Agreement, Parent appoints Michael Harris, P.A., 1555 Palm
Beach Lakes Boulevard, Suite 310, Wet Palm Beach, Florida 33401, as its agent
upon which process may be served in any such Proceeding.  Service of process
upon such agent, together with notice of such service given to Parent in the
manner specified in Section 10.1, shall be deemed in every respect effective
service of process upon Parent in any Proceeding.  Nothing herein shall in any
way be deemed to limit the ability of the Company to serve any writs, process or
summons in any other manner permitted by applicable law or to obtain
jurisdiction over Parent in such other jurisdictions and in such manner as may
be permitted by applicable law.  

10.9.

Waiver of Jury Trial.  THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY
FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE
TRIAL BY JURY AND THAT ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

10.10.

Company Disclosure Schedule.  The Company has heretofore delivered to the Parent
and the Merger Sub the Company Disclosure Schedule, which is divided into
sections that correspond to the sections of Article III.  Any item, information
or facts set forth in the Company Disclosure Schedule shall be deemed adequate
to disclose an exception to a representation and warranty unless a reasonable
person would not understand the exception taken from the item, information or
facts. In addition, any item, information or facts disclosed in one section or
subsection of the Company Disclosure Schedule will be deemed to be disclosed in
all other applicable sections or subsections of the Company Disclosure Schedule.
Information disclosed in the data room materials which the Parent and its
representatives were afforded the opportunity to review are deemed to be
disclosed in the Company Disclosure Schedule.  Certain matters

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disclosed in the Company Disclosure Schedule may not be material and have been
disclosed for informational purposes only.  

10.11.

Governing Law.  This Agreement shall be governed by, construed and interpreted
in accordance with the laws of the State of Delaware.

10.12.

Severability.  The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.  If any provision of
this Agreement, or the application thereof to any Person or any circumstance, is
found to be invalid or unenforceable in any jurisdiction, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid or enforceable, such provision and (b) the remainder of this
Agreement and the application of such provision to other persons or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.

10.13.

Mutual Drafting.  The parties hereto have been represented by counsel who have
carefully negotiated the provisions hereof.  As a consequence, the parties do
not intend that the presumptions of any laws or rules relating to the
interpretation of contracts against the drafter of any particular clause should
be applied to this Agreement and therefore waive their effects.

10.14.

Definitions.  As used in this Agreement:

(a)

“Acquisition Proposal” means, other than the transactions contemplated hereby
and transactions permitted under Section 5.1 hereof and any offer or proposal
made by Parent or any of its Affiliates), any offer or proposal for a merger,
consolidation, recapitalization, liquidation or other business combination
involving the Company or the acquisition or purchase of over 50% or more of any
class of equity securities of the Company, or any tender offer or exchange offer
that if consummated would result in any Person beneficially owning 50% or more
of any class of equity securities of the Company, or all or substantially all of
the consolidated assets of the Company.  A transaction underlying any
Acquisition Proposal is referred to herein as a “Competitive Transaction.”

(b)

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.

(c)

“Aggregate Merger Consideration” means an amount in cash and Parent Options
equal to the Initial Aggregate Merger Consideration, as such amount may be
adjusted from time-to-time in accordance with Section 2.9 or Article IX.

(d)

“Board of Directors” means the Board of Directors of any specified Person and
any committees thereof.

(e)

“Books and Records” means the collective reference to all agreements, documents,
books, records and files, including records and files stored on computer disks
or tapes or any other storage medium relating to the business of the Company.

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(f)

“Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day
on which banks are authorized to close in The City of New York.

(g)

“Closing Date Balance Sheet” means the Company’s unaudited balance sheet
(without any adjustments made as a result of the occurrence of the Closing)
delivered by the Company to the Parent on the Closing Date, along with the
Company’s unaudited statement of operations and retained earnings and unaudited
statements of cash flows and shareholders’ equity for the eleven (11) month
period ended November 30, 2004 (collectively, the “Closing Date Financial
Statements”), each (i) prepared in accordance with generally accepted accounting
principles consistently applied and (ii) certified by the Company’s Chief
Financial Officer.

(h)

“Code” means the Internal Revenue Code of 1986, as amended.

(i)

“Credit Facility” means the Credit Agreement, dated as of August 2, 2001, by and
between the Company and Fleet National Bank, as amended to date.

(j)

“Current Assets” means the sum of (i) the current assets set forth on the
applicable Company balance sheet (including cash and cash equivalents), plus
(ii) up to $4,000,000 in Expenses incurred or paid by the Company at or prior to
the Closing Date.

(k)

“Current Liabilities” means the current liabilities set forth on the applicable
Company balance sheet (including long-term customer advances, indebtedness and
capitalized leases not otherwise classified in current liabilities on such
Company balance sheet, but excluding any liabilities with respect to restricted
stock, stock options or stock appreciation rights).

(l)

“dollars” or “$” means United States dollars.

(m)

“Environmental Laws” means any and all laws, statutes, codes, rules,
regulations, ordinances, decrees or orders of the United States, or any foreign,
state, local, or municipal authority, regulating, relating to or imposing
liability or standards of conduct concerning pollution or protection of surface
water, groundwater, ambient air, surface or subsurface soil, wildlife habitat,
or related aspects of the environment, in effect as of the date hereof.

(n)

“Executive Committee Member” means any individual listed on Section 10.14(i)
through 10.14(xv) of the Company Disclosure Schedule.

(o)

“Final Holdback Amount” means the Initial Holdback Amount, as same may be
adjusted from time-to-time in accordance with Section 2.9 and Article IX.

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(p)

“Final Per Share Holdback Amount” means the Initial Per Share Holdback Amount,
as same may be adjusted from time-to-time in accordance with Section 2.9 and
Article IX.

(q)

“Foreign Benefit Plans” means all material pension, retirement, savings,
welfare, deferred compensation, excess benefit, incentive, stock bonus, stock
purchase, stock option, restricted stock, severance, salary continuation,
termination, change in control and fringe benefit plan, program or arrangement
maintained, contributed to, or required to be contributed to, by the Company or
any of its Subsidiaries and as to which the Company or any of its Subsidiaries
has any liability with respect to any Company Employees and which are outside
the jurisdiction of the United States District Courts but excluding any plan,
program or arrangement required to be maintained or contributed to by the law of
the applicable jurisdiction.

(r)

“Fully Diluted Shares” means the sum of (i) all shares of Common Stock and
Preferred Stock outstanding immediately prior to the Effective Time (including
all shares of Common Stock represented by the Restricted Stock Grant (whether or
not vested)), plus (ii) all shares of Common Stock issuable immediately prior to
the Effective Time on full exercise of all In-the-Money Options (whether or not
vested) that receive a Guaranteed Per Share Amount in accordance with Section
1.8(d), plus (iii) all hypothetical shares of Common Stock represented by all
Outstanding SARs that receive a Guaranteed Per Share Amount in accordance with
Section 1.8(f)

(s)

“Guaranteed Per Share Amount” means an amount in cash and/or Parent Options
equal to (i) the Initial Aggregate Per Share Merger Consideration, multiplied by
(ii) (A) (1) the Initial Aggregate Merger Consideration, minus (2) the Initial
Holdback Amount, plus or minus, as the case may be, (3) the Working Capital
Amount (as set forth on the Closing Date Balance Sheet), minus (4) the
Out-of-the-Money Option Amount, divided by (B) (1) the Initial Aggregate Merger
Consideration, plus or minus, as the case may be, (2) the Working Capital
Amount, minus (3) the Out-of-the-Money Option Amount.

(t)

“Initial Aggregate Merger Consideration” means an amount in cash and Parent
Options equal to $245,000,000; provided, however, that the maximum portion of
Initial Aggregate Merger Consideration that may consist of Parent Options is set
forth in the terms and conditions of Section 1.8(d)(ii) and Exhibit A hereto.

(u)

“Initial Aggregate Per Share Merger Consideration” means an amount in cash
and/or Parent Options equal to (i) (A) the Initial Aggregate Merger
Consideration, plus or minus, as the case may be, (B) the sum of Current Assets
less Current Liabilities (the “Working Capital Amount”) (each, as set forth on
the Closing Date Balance Sheet), plus (C) the aggregate exercise price of all
In-the-Money Options, plus (D) the aggregate grant price of all SARs, minus (E)
the Out-of-the-Money Option Amount, divided by (ii) the Fully Diluted Shares;
provided, however, that the Initial Aggregate Per Share Merger Consideration
with respect to each In-the-Money Option and each Outstanding SAR shall be
reduced by its respective exercise or grant price, as the case may be.

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(v)

“Initial Holdback Amount” means an amount in cash and/or Parent Options equal to
$18,375,000 (as such number may be adjusted as a result of the application of
the formulae set forth on Exhibit A hereto); provided, however, that the maximum
portion of Initial Holdback Amount that may consist of Parent Options is set
forth in the terms and conditions of Section 1.8(d)(ii) and Exhibit A hereto.

(w)

“Initial Per Share Holdback Amount” means an amount in cash and/or Parent
Options equal to (i) the Initial Aggregate Per Share Merger Consideration,
multiplied by (A) the Initial Holdback Amount, divided by (B) (1) the Initial
Aggregate Merger Consideration, plus or minus, as the case may be, (2) the
Working Capital Amount, minus (3) the Out-of-the-Money Option Amount (with the
resulting percentage from the quotient of (A) and (B) referred to herein as the
“Holdback Percentage”)..

(x)

“Intellectual Property” means any and all intellectual property rights,
including (i) patents, inventions, discoveries, processes, technology and
know-how; (ii) copyrights and copyrightable works (including software, databases
and related items); (iii) trade secrets, specifications, designs, plans, manuals
and drawings, research and all other confidential or proprietary information;
(iv) trademarks, service marks, trade names, domain names, logos and other
source indicators; (v) rights in databases, whether registered or not; and (vi)
all rights of enforcement thereto.

(y)

“Knowledge of the Company” means, with respect to any matter in question, the
actual knowledge of those individuals listed in Section 10.14(y) of the Company
Disclosure Schedule.

(z)

“Knowledge of Parent” means, with respect to any matter in question, the actual
knowledge of those individuals listed in Section 10.14(z) of the Company
Disclosure Schedule.

(aa)

“Licenses and Permits” means all licenses, permits, exemptions, orders,
consents, franchises, certificates, approvals and other authorizations that are
required by Governmental Authorities to conduct the business of the Company as
it is presently conducted.

(bb)

“Material Adverse Effect” means, when used in connection with the Company or any
of its Subsidiaries, any event, change, circumstance or effect that is
materially adverse to the business, financial condition or results of operations
of the Company and its Subsidiaries taken as a whole, excluding any effects
related to or resulting from (i) the Parent’s refusal to permit the Company upon
the Company’s request to the Parent to take any of the actions set forth in
Section 5.1, (ii) actions or omissions of the Company taken with the prior
consent of the Parent, (iii) events affecting the United States or global
economy or capital or financial markets generally, (iv) changes in conditions in
the industries in which the Company and its Subsidiaries or their customers
operate, (v) seasonal fluctuations in the business of the Company and its
Subsidiaries, (vi) changes in laws, regulations or GAAP, or in the authoritative
interpretations thereof or in regulatory or interpretive guidance related
thereto, (vii) earthquakes or similar catastrophes, or acts of war, sabotage,
terrorism, military action or any escalation or worsening thereof, or (viii)
this Agreement, the announcement thereof and the identity or involvement by
Parent, Merger Sub or their respective Affiliates.

48

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(cc)

“Materials of Environmental Concern” means any hazardous or toxic substances,
materials or wastes, pollutants or contaminants (including petroleum, petroleum
products, polychlorinated hydrocarbons and asbestos) defined as such in or
regulated under any applicable Environmental Law.

(dd)

“Permitted Liens” means, collectively, (i) Liens for Taxes not yet due and
payable or the validity of which are being contested in good faith by
appropriate proceedings, (ii) mechanics’, workmen’s, repairmen’s,
warehousemen’s, landlord’s, carrier’s, materialmen’s or other like Liens,
including all statutory Liens arising or incurred in the ordinary course of
business consistent with past practice, (iii) any minor imperfection of title or
similar Lien which does not and would not reasonably be expected to impair in
any material respect the operations of the business of the Company, (iv) any
conditions that might be shown by a current, accurate survey or physical
inspection, (v) Liens to secure capital lease obligations to the extent the
incurrence of such obligations does not violate this Agreement, (vi) any Liens
incurred pursuant to equipment leases in the ordinary course of business, (vii)
Liens incurred pursuant to actions of Parent or its Affiliates, and (viii) Liens
that, individually or in the aggregate, do not and would not reasonably be
expected to have a Material Adverse Effect.

(ee)

“Person” means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group.

(ff)

“Proceeding” means any action, suit, dispute, litigation, proceeding, hearing or
claim before any Governmental Authority, at law or in equity.

(gg)

“Release” has the same meaning as in Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601.

(hh)

“Restricted Stock Grant” means the Company’s grant of that number of shares of
Common Stock equal to, at the Effective Time, $300,000 issued in accordance with
the Restricted Stock Grant Letter Agreement by and between the Company and
Dalvir S. Gill, dated as of February 10, 2004.

(ii)

“Subsidiary” means any corporation, limited liability company, partnership,
joint venture, trust, association, organization or other entity in which a
Person directly or indirectly owns 50% or more of the aggregate voting stock.
 For purposes of this definition, “voting stock” means stock or other interests
that ordinarily has voting power for the election of directors or managers.

(jj)

“the other party” means, (i) with respect to the Company, the Parent and (ii)
with respect to Parent, the Company.

(kk)

“U.S. Benefit Plans” means each (i) “employee benefit plan” as defined in
Section 3(3) of ERISA (including any “multiemployer plan” as defined in Section
3(37) of ERISA) and (ii) all other material deferred compensation, excess
benefit, incentive, stock bonus, stock purchase, stock option, restricted stock,
severance, salary continuation, termination, change in control and fringe
benefit plan, program or arrangement maintained, contributed to, or required to
be contributed to, by the Company or any of its Subsidiaries and as to which the
Company or any of its Subsidiaries has any liability with respect to any current
or former employees or directors of the Company or any of its Subsidiaries (the
“Company Employees”) and which are within the jurisdiction of the United States
District Courts.

49

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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first above written.

PHARMANET, INC.

By: /s/ Jeffery P. McMullen

Name:  Jeffery P. McMullen

Title:    President and Chief Executive Officer

SFBC International, Inc.

By: /s/ Arnold Hantman

Name:  Arnold Hantman

Title:    Chief Executive Officer

SFBC Sub 2004, Inc.

By: /s/ Arnold Hantman

Name:  Arnold Hantman

Title:    Chief Executive Officer

--------------------------------------------------------------------------------

Acknowledged by:

[ESCROW AGENT]

By:

______________________________

Name:

Title:

--------------------------------------------------------------------------------

The following Exhibits and Schedules have been omitted, but will be furnished to
the Commission upon request.

--------------------------------------------------------------------------------

Exhibit A

Option Conversion Formulae

--------------------------------------------------------------------------------

Exhibit B

Form of Opinion of Counsel to Company

--------------------------------------------------------------------------------

Exhibit C

Form of Opinion of Counsel to Company for PharmaNet Ltd.

--------------------------------------------------------------------------------

Exhibit D

Form of Opinion of Counsel to Company for PharmaNet AG

--------------------------------------------------------------------------------

Exhibit E

Form of Opinion of Counsel to Parent

 

--------------------------------------------------------------------------------

DISCLOSURE SCHEDULE

TO

AGREEMENT AND PLAN OF MERGER

The disclosure schedule has been omitted in its entirety. The registrant agrees
to furnish a copy of the omitted schedules to the Commission upon request. The
following list identifies the contents of the omitted schedules.

 

3.1

Organization, Standing and Power 

                      

            

   

3.2

Subsidiaries

     

3.3

Capital Structure

     

3.4

Authority; No Violations

     

3.5

Compliance; Permits

     

3.6

Financial Statements

     

3.7

Board Approval

     

3.8

Vote Required

     

3.9

Absence of Certain Changes; Absence of Undisclosed Liabilities

     

3.10

Real Property

     

3.11

Intellectual Property

     

3.12

Certain Contracts

     

3.13

Taxes

     

3.14

Benefit Plans

     

3.15

Labor Matters

     

3.16

Litigation

     

3.17

Environmental Matters

     

3.18

Financial Advisors

     

3.19

Data Room Materials

     

3.20

Disclaimer of Other Representations and Warranties

     

5.1

Covenants of the Company

     

6.1

Access; Information and Records; Confidentiality

     

6.7

Public Announcements

     

10.14

Definitions

     

Annex A  

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